The Chartered Accountants Ireland does not
expect the government’s plan to exempt more businesses from
mandatory audit to have a big impact on the profession.

“At this stage we would not anticipate a huge
drop in revenue,” Chartered Accountants Ireland technical director
Aidan Lambe said.

Grant Thornton Ireland partner Patrick Burke
is in agreement saying the firm does not anticipate a material
impact on revenues either.

“There is a greater scrutiny of financial
statements in this difficult trading period. Those advancing
credit, suppliers or particularly financial institutions, require
this process to be as informed and less risky as possible,
therefore the requirement for audited financial statements will
probably still continue to remain high,” Burke said.

This month the Irish government announced
plans to increase the number of businesses exempt from mandatory
audit to the maximum level permitted under European law.

The new thresholds will allow companies with a turnover of less
than €8.8m ($12.5m), a balance sheet of €4.4m and fewer then 50
employees to be exempt from the statutory audit requirement. The
previous threshold was 20% less.

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Lambe said among the reasons these changes
will have a limited impact is the fact that the law only applies to
individual companies and not to groups, smaller regulatory entities
in the financial service sector or dormant subsidiaries.
On top of this, in Ireland there is a large credit union sector
which traditionally is audited by smaller auditing firms, Lambe

“So, pushing up the threshold will, yes bring some more companies
into the audit exemption net but our member firms say this will not
have a significant impact on the level of business that smaller
accounting firms are providing”.

What’s more, Lambe stresses, “company-law will
still require these businesses to prepare a ‘true and fair view’
and to file a bridge-information with the companies’ offices so to
that extent these companies will still need to employ the technical
expertise that the accounting firms have”.

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