Small firms face audit relief delay

Thousands of small Irish firms will have to wait another year before they are freed from the need to carry out a statutory audit on their businesses.

Last December, the Government announced it would lift the requirement for an annual statutory audit on firms with turnover of less than €1.5 million, in the Companies (Auditing and Accounting) Act 2003. But it has been attacked by accountancy bodies and small business groups for stalling on the introduction of the measure.

Yesterday, it said the dispensation would come into effect for financial years starting on or after July 1st, 2004.

The Institute of Certified Public Accountants (CPA)accused the Government of "delivering another blow to small companies" by "unnecessarily delaying" the introduction of the new audit exemption threshold.

Currently, all firms doing business of more than €317,000 have had to pay the cost of such an audit each year.

But an amendment to the Companies Act raised this to bring it in line with the then British threshold of £1 million.

Mr Pat Delaney of the Small Firms Association says the higher threshold will cover around 68 per cent of all Irish businesses.

Mr Eamonn Siggins, CPA chief executive, said the date announced yesterday meant most firms would have to wait another year to feel the benefits.

"The requirement to have an audit is a costly, unnecessary regulatory burden which, in many cases, serves no purpose for small family-run companies," Mr Siggins said. "Such companies would benefit much more from value-added business advisory services from their accountant."

Most firms do not operate on a calendar-year basis, while many of the remainder have a fiscal year to the end of March.

Mr Siggins points out that the UK has raised its threshold to £5.6 million (€8.5 million), a step that means "the new thresholds will be out of date before they can even be implemented".

The Institute of Chartered Accountants in Ireland welcomed the announcement of a definitive date but said much work remained to be done on other key sections of the Act.