The Companies Amending Law 88(I) of 2022 (the “Amending Law”) which was published in the Official Gazette of the Republic of Cyprus on 24/06/2022, introduced certain changes to the Companies Law, in relation to the requirement of audit or review of financial statements of companies.
The amendment enters into force on 1 January 2023 and applies to the financial statements for the year/period ending on 31 December 2022 or any subsequent date thereafter. The purpose of the amendments is to simplify the audit procedures for small size companies and reduce the administrative burden involved.
According to this Amending Law, companies, whose net turnover, on the date of closing their balance sheet, does not exceed the amount of €200,000 and the total value of the assets does not exceed the amount of €500,000 for at least 2 consecutive years, may elect to have their financial statements reviewed instead of audited. Such companies may submit to the Authorities their reviewed instead of the audited financial statements, effected by a statutory auditor or statutory audit firm, according to the International Standard on Review Engagements (ISRE) 2400, “Engagements to Review Financial Statements”.
The above exception applies also to individuals with turnover and any other income from sources defined in certain articles of the Income Tax law exceeding €70,000. Individuals whose turnover is less than EUR 70,000 are not obliged to prepare financial statements
The above amendments do not apply to parent companies that are required to prepare consolidated financial statements and to subsidiaries of such companies. They also do not apply to companies which are regulated and supervised by the Central Bank of Cyprus, the Cyprus Securities and Exchange Commission and the Commissioner of Insurance and companies which hold a qualifying participation in such companies.
We remain at your disposal for any further clarifications may be needed.