The Department of Jobs, Enterprise and Innovation has launched a consultation on whether companies should be allowed to avail of audit exemption when two of the three criteria required for eligibility are met.

Currently, the criteria for audit exemption are set out in a European Directive on company accounts for limited liability companies. The Directive allows a company to be audit exempt if it meets two of the following three criteria:

• Its balance sheet total does not exceed €4.4m
• Its net turnover does not exceed €8.8m
• It employs an average of not more than 50 employees during the financial year

In enacting the Directive, Ireland enforced the maximum thresholds, requiring all three criteria to be satisfied in order to qualify for audit exemption.  The consultation considers whether Ireland should permit the audit exemption if two of the three criteria are met.

The consultation also looks at the European Commission’s proposed Accounting Directive which will, if passed, decrease the balance sheet threshold and net turnover threshold.

While the Companies Bill 2012 has not changed any of the thresholds, it does propose to extend the audit exemption to companies limited by guarantee, a parent or a subsidiary company and to dormant companies.

The deadline for submitting responses is 31 May 2013.

Contributed by Stephanie Tao.

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