Small Group Audit Exemption

A ‘small’ group may now also avail of the audit exemption if the parent company, together with all of its subsidiaries, satisfies two out of three of the same criteria set out above. This is a significant change for small groups which previously had to have an audit due to being part of a group.

Section 359 outlines the main conditions that a group must meet in order for it to be entitled to avail of an audit exemption. The conditions essentially mirror those for a small company and to summarise are:

The conditions that a company must meet in the current and preceding financial years in order to be able to avail of an audit exemption are:

Must satisfy at least two:(in current and preceding financial year) Small-sized company
Turnover (proportionately adjust if not 12 months) €8,800,000
Balance sheet total (fixed + current assets) €4,400,000
Average no. of employees 50
  • that the group (holding company and all of its subsidiaries) meet at least two of the conditions outlined above for two consecutive financial years (where it is not the first financial year of the holding company) and does not fail the conditions for two consecutive financial years (Section 359);
  • that a statement that the directors are availing of an audit exemption is contained at the foot of the group balance sheet and the holding company balance sheet immediately before the signatures of the directors (amended from the disclosure by a small company to refer to the appropriate sections);
  • that the small group is not excluded by virtue of Schedule 5 or Section 362 (a credit institution, insurance undertaking, entities whose securities are traded or a relevant securitisation company);
  • that the turnover figure for the group is proportionately adjusted for financial years which are not in fact a year;
  • that notice has not been served in accordance with Section 334 (see above) on any of the subsidiaries (in which case the subsidiary cannot avail of the audit exemption) or on the holding company (in which case the entire group cannot avail of the audit exemption); and
  • that the annual returns of the holding company and all other members of the group have been filed on time for the current and preceding financial years.


An important point to note when calculating the ‘amount of turnover’ with respect to the group (ie the holding company together with all of its subsidiaries) is that the ‘amount of turnover’ is that as shown in the holding company’s and other group company’s entity profit and loss accounts eliminated for intragroup sales (Section 359(8b)). Similarly, when calculating balance sheet total (ie sum of fixed and current assets), intragroup balances should be eliminated (Section 359(7b)).


CA 2014 summary of changes – small group audit exemption

  • A  small group can now avail of an audit exemption