Niall Collins (Limerick County, Fianna Fail)
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52. To ask the Minister for Jobs, Enterprise and Innovation the reason section 9 of the Statutory Audits Bill 2017 deletes subsection (7) of the Companies Act 2014 (details supplied); her plans to retain the audit exemption for small and micro sized companies as provided for in most other EU member states. [48618/17]

Frances Fitzgerald (Dublin Mid West, Fine Gael)
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Section 9 of the Companies (Statutory Audits) Bill 2017 repeals section 343(7) of the Companies Act 2014.  Section 343(7) provided for a company to apply to the District Court for an extension of time to file its annual return. A consequence of getting such an Order from the Court was that the company concerned retained an exemption from audit.

Section 343(7) replaced a previous scheme whereby a company could apply to the Registrar of Companies for its late filing fees to be waived. A consequence of getting such a waiver from the Registrar was the company lost the audit exemption as it was still late filing its annual return.

Section 343(7) was commenced on 1 June 2015. The number of Orders granted by the District Court in the course of 2016 was more than double the number of waivers granted by the Registrar in 2014 under the previous scheme. This is a matter for concern as the timely filing of annual returns and financial statements by companies is an important transparency measure and safeguard for third parties such as suppliers, employees and other creditors. Companies have up to 10 months to prepare and file their financial statements. Any further delay risks making that information less meaningful to those third parties.

For this reason, section 9 of the Companies (Statutory Audits) Bill 2017 repeals section 343(7) and section 10 of the Bill replaces that repealed subsection with a new section 343A, to be inserted into the Companies Act 2014. The new section 343A provides that a company may apply to the District Court for an Order waiving the fee required for the late filing of its annual return. This is similar to the position that obtained before the enactment of the Companies Act 2014, whereby a company could apply to the Registrar.

Companies that meet the thresholds for either the “small” or “micro” categories will continue to qualify for the audit exemption. The Companies (Accounting) Act 2017, which was commenced in June of this year, raised the thresholds for the “small” category to the maximum allowed under EU law, so as many Irish registered companies as possible will be able to claim the audit exemption.