Mary Mitchell O'Connor (Dún Laoghaire, Fine Gael) | Oireachtas source

There is a belief that companies have a right to be exempted. That is not the case. For example, there is a long-standing rule that a company loses its entitlement to an exemption from an audit if it files its annual returns late. I agree the audit exemption is an important cost-saving benefit for companies, as well as for transparency. It is important for employees and creditors to know exactly how companies are operating. I believe this provision is the proper way to go.

EU law specifically envisages that member states may impose an audit on small companies. For example, recital 43 of the accounting device clearly states the directive should not prevent member states from imposing an audit on their small companies. It also states member states should take into account the specific conditions and needs of the users of financial statements, not just the requirements of the small companies. Users require that information to be accurate, meaningful and on time. Accordingly, imposing an audit on small companies which are late in filing in their annual returns is an appropriate response when one considers the needs of users of financial statements.