ICAI welcomes new audit exemption threshold of €1.5m

The Institute of Chartered Accountants in Ireland (ICAI) has expressed its approval of the new audit exemption threshold set out in the Companies Act 2004.

The move removes the legal obligation to conduct a compulsory audit for firms with a turnover of less than €1.5m, and replaces the previous threshold of €317,000.

The commencement order will be the first signed in respect of the Companies (Auditing and Accounting Act), 2003. The exemption is to come into force for the financial year starting 1 July 2004.

However, the Institute warned that considerable work lay ahead for the Government in respect of other sections of the Act.

“While we welcome this progress, it remains the case that the most significant element of the Act, the establishment of the Irish auditing and accounting supervisory authority on a statutory basis, is yet to be commenced. As a result work on developing procedures to facilitate the commencement of other sections of the Act will be inevitably delayed,” said ICAI deputy president Terence O'Rourke.

O'Rourke said: “It should also be noted that at the time the decision to move to a turnover threshold of €1.5m was decided upon the comparative figure in Northern Ireland was only £1m (€1.51m).

However, only last month it was decided by the UK Government that the figure in Northern Ireland should be increased to £5.6m (€8.47m), with effect from next month, and while this move initially generated a mixed response from the professional bodies in the UK, the fact remains that Irish companies are once again at a competitive disadvantage vis a vis their northern counterparts,” he added.