Updates
.
02
Audit exemption for small companies
01.07.2015
The Companies (Amendment) Bill was passed by Parliament in October 2014 and the legislative changes to the Companies Act will be effected in two phases. The first phase will be implemented on 1 July 2015. The second phase will commence in the first quarter of 2016.
One of the key legislative changes that will take effect from 1 July 2015 is the "small company" concept for audit exemption. More SMEs will qualify for audit exemption! A company no longer needs to be an exempt private company to be exempted from audit.
A company qualifies as a small company if:
(a) it is a private company in the financial year in question; and
(b) it meets at least 2 of 3 following quantitative criteria for the immediate past two financial years:
(i) total annual revenue ≤ $10m;
(ii) total assets ≤ $10m;
(iii) no. of employees ≤ 50.
This replaces the current audit exemption for exempt private companies with annual revenue of $5m or less for the financial year in question.
For a company which is part of a group:
(a) the company must qualify as a small company; and
(b) entire group must be a "small group" to qualify for the audit exemption.
For a group to be a small group, it must meet at least 2 of the 3 quantitative criteria on a consolidated basis for the immediate past two consecutive financial years.
For more details, refer to ACRA website: