Requirements for audit exemption
Qualification for audit exemption
A Company is exempted from audit requirements if it meets the following criteria as a “Small Company”:
- It is a private company in the financial year in question; and
- It meets at least 2 of 3 following criteria for immediate past two consecutive financial years:
- Total annual revenue ≤ $10m;
- Total assets ≤ $10m;
- No. of employees ≤ 50.
For a company which is part of a group, it should meet the following criteria for audit exemption:
- The company must qualify as a small company; and
- Entire group must be a “small group”. For a group to be a small group, it must meet at least 2 of the 3 following quantitative criteria on a consolidated basis for the immediate past two consecutive financial years.
- Total annual revenue ≤ $10m;
- Total assets ≤ $10m;
- No. of employees ≤ 50.
Disqualification for audit exemption
Where a company has qualified as a small company, it continues to be a small company for subsequent financial years until it is disqualified.
A small company is disqualified if:
- it ceases to be a private company at any time during a financial year; or
- it does not meet at least 2 of the 3 the quantitative criteria for the immediate past two consecutive financial years.
Where a group has qualified as a small group, it continues to be a small group for subsequent financial years until it does not meet at least 2 of the 3 the quantitative criteria for the immediate past two consecutive financial years.
