The Cyprus Parliament approved amendments to the Companies Law and to the Assessment and Collection of taxes law (“the laws”) on 9 June 2022, in order to introduce the Limited Assurance Review procedure as an alternative to the full scope audit. The purpose of the amendments is to simplify the procedure of auditing the financial statements of small and medium-sized enterprises (SMEs) and reduce the administrative burden involved.
Businesses which meet specified thresholds in terms of turnover and total assets will be entitled to have their financial statements subject to a Limited Assurance Review, to be performed by statutory and licensed auditors. The amendments were considered necessary for reducing the administrative burden and unnecessary costs on SMEs and audit firms alike.
The businesses to whom the laws apply and the relevant thresholds are as follows:
The relaxations do not apply to parent companies that are required to prepare consolidated financial statements and to subsidiaries of such companies. They also do not apply to companies which are regulated and supervised by the Central Bank of Cyprus, the Cyprus Securities and Exchange Commission and the Commissioner of Insurance and companies which hold a qualifying participation in such companies.