Proposals to ease auditing burden on SMEs welcomed

The State’s main accountancy body has welcomed proposals to ease the financial and reporting burden on small firms.

In particular, the Association of Chartered Certified Accountants (ACCA) welcomed a proposal to amend the procedure that sees SMEs lose their audit exemption for two years for the late filing of their annual return.

“The impediment of having to be audited for two years sees SMEs having to pay significant audit fees on top of the costs of reporting financial accounts and tax preparations, which they can ill afford with inputs and supply chain costs having risen considerably in the last 18 months,” it said.

Under the new proposals, firms would not lose their audit exemption the first time they filed late accounts in any given five-year period “but would be liable to lose this exemption for any subsequent late filing,” it said. Small or micro companies are automatically exempt from having to audit their accounts.

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Minister of State for Trade Promotion, Digital and Company Regulation, Dara Calleary, is conducting a review of the Companies Act 2014 and a public consultation on specific proposals to streamline the auditing requirements for SMEs.

Stephen Noonan, head of ACCA Ireland, said: “I’d like to commend the proposals set out by Minister Calleary which represent a practical and prudent approach to the filing of late accounts and I’d strongly call on the business community to support this proposal.”

“Many small businesses are struggling both with financial and administrative burdens, particularly in the current volatile economic environment, and this new, more flexible approach to auditing will help SMEs focus on building sustainable businesses for the future,” he said.

“As we approach a crucially important period for the future of the economy, this proposal – along with the other changes set out within the Companies Act 2014 – will help create certainty for SMEs, supporting growth and enabling job creation,” Mr Noonan said.

Minister Calleary said auditing and accounting is a key driver of enterprise and Ireland’s economy more broadly.

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“Accounting professionals have an important role as navigators for businesses, not simply to comply with new regulatory asks or deal with challenges but also to drive awareness of new opportunities to guide businesses to stabilise, grow and scale,” he said.

“With this in mind, I would urge businesses and their advisers to take the time to consider the public consultation and the specific proposals on areas of corporate governance, company law enforcement and supervision, company law administration and corporate insolvency. I want to hear your views so you can help to shape the future of Ireland’s company law.”

The consultation runs until June 9th.