Preparation of statutory financial statements and coordination with auditors on statutory audits

Audit Exemption  

The Companies (Amendment) Act 2014 introduced the concept of a “small company” which came into effect on July 1, 2015.

The Act states that a company is considered to be a small company if it fulfils at least two out of the following three conditions:

 

A company qualifies as a ‘small company’ if:

  1. It is a private company in the financial year in question; and

  2. It meets at least 2 of the 3 following criteria for immediate past two consecutive financial years:  

  • Total annual revenue ≤ $10m;

  • Total assets ≤ $10m

  • No. of employees ≤ 50

 

In addition to small companies, dormant companies are also exempt from the annual audit requirements.

 

For a company which is part of a group:

  1. The company must qualify as a small company and

  2. The entire group must be a ‘small group’ to qualify to the audit exemption

 

For a group to be a small group, it must then meet at least 2 of the 3 quantitative criteria on a consolidated basis for the immediate past two consecutive financial years.

  1. Total consolidated annual revenue ≤ $10m;

  2. Total consolidated assets ≤ $10m

  3. No. of employees of the group ≤ 50

 

Once a company acquires the “small company” status it continues to enjoy the audit exemption benefit unless the company is disqualified. Disqualification of a company occurs if the company:

  • Ceases to operate as a private company in the financial year or

  • Does not satisfy the “small company” qualifying conditions for the two immediately preceding financial years.

 

We understand that being audited is extremely crucial to verify the accountability of the numbers presented in the Company’s accounts/records and thus reduce material financial misrepresentation or errors that exist in the Company’s set of books. Audit can be very time and resource consuming for Business’s owners and management.

 

At Ceres Pacific, we assist our clients to coordinate their audit and taking care of their auditor queries and also assist to prepare reports which their auditors request from time to time during the entire course of audit. We  take the extra mile to ensure that we keep up to date with any changes to the FRS and ensure that you are in full compliance with the standards. With us, you can be rest assured that your financial statements are compiled with professional competence and due care.

 

Even in the case whereby your company is exempted from an audit, you are still required to prepare a full set of financial statements

including explanatory notes, accompanied by the director’s report, statement by directors, and prepared in compliance with the Financial Reporting Standards (FRS).

 

If you require assistance with preparing your financial statements, do not hesitate to contact us and talk to our experienced accountants.

Preparing statutory financial statements and coordination with auditors on statutory audit.