Irish small businesses will be left at a competitive disadvantage because the exemption thresholds for a new auditing regime are set too low, according to the Institute of Chartered Accountants in Ireland (ICAI).
In its 2006 statement, the ICAI said the introduction this year of new auditing rules, the International Standards on Auditing (ISAs), would have a significant impact on audit costs.
This year will also be the first full year of reporting using the International Financial Reporting Standards (IFRS). But unlike IFRS, which is mandatory only for listed companies, the ISAs are applied to all companies that face a statutory audit.
The accountancy body repeated its concerns yesterday about the impact of the new rules on small and medium enterprises. (SMEs). It said the problem was particularly acute in the Republic because the exemption threshold was lower here than in other EU countries. The threshold in the Republic is set at a turnover of €1.5 million, around €5 million lower than the European average, according to the ICAI.
The differences in the thresholds mean that some Irish SMEs face the burden of a statutory audit in cases where their UK and other EU counterparts do not. This audit will now be more rigorous and more costly, ICAI president John Greely said yesterday.
Mr Greely said the recent establishment of the Irish Auditing and Accounting Supervisory Authority (IAASA) and the expected publication of the Consolidated Companies Bill would also be important for accountants in 2006.
