Written answers

Thursday, 11 May 2023

Department of Enterprise, Trade and Employment

Small and Medium Enterprises

Photo of Michael MoynihanMichael Moynihan (Cork North West, Fianna Fail)
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64. To ask the Minister for Enterprise, Trade and Employment if he has any plans to review the audit exemption regime for small and micro companies; and if he will make a statement on the matter. [22083/23]

Photo of Dara CallearyDara Calleary (Mayo, Fianna Fail)
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In recognition of the burdens on small business, company law was amended in 1999 to provide audit exemption for those companies who meet their filing obligations. These long-standing provisions have been, and continue to be, of significant benefit to compliant companies. There is a considerable incentive on companies and their advisers to ensure timely filing of annual returns, thereby safeguarding the audit exemption and avoiding late filing penalties and possible prosecution.

Against this background, there has been a very significant increase in the compliance rate for the filing of annual returns, moving from a widespread culture of non-compliance up to the 1990s to a situation, where in the region of 94% of companies met their filing obligations on time in 2022.

However, I am cognisant of the impact that the loss of audit exemption can have for small and micro sized companies who do not file on time. To that end, I intend making a change to company law by introducing a two-step graduated approach to deal with late filing. On the occasion of the first instance of late filing, late filing fees would be incurred by the company without the loss of audit exemption. If there was a further instance of late filing, within the following five-year period, late filing fees would be incurred and the entitlement to audit exemption would be lost for the following two financial years, with the company required to file audited financial statements for these years.

I have recently launched a public consultation on proposed changes to company law, including the aforementioned change to audit exemption. I look forward to considering the responses received with a view to finalising the proposals to amend the legislation in the coming months.

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