You have to assign an independent auditor if you are required by law to prepare audited financial statements. You might also wish to appoint an auditor for compliance reasons or for reasons of uniformity across borders or to enhance the quality of your reporting. In every case, our audit and assurance expertise will assist you to comply. We will perform our audit according to the International Auditing Standards and help you prepare the accounts according to the International Financial Reporting Standards (IFRS) as they are adopted by the European union. We will also assist you with providing additional professional services which are close related to audit such as other legal frameworks that you must comply if applicable. Find out if you are obligated to prepare Audited Financial Statements in Cyprus by reading more below.
Audit is a compulsory procedure for all Cypriot limited liability companies and other entities which are required to prepare audited financial statements and submit an income tax return based on them. However, an audit is not just a compliance issue. Although the auditor is not a business analyst, it is a service that will assist your business in many aspects. An auditor will assess and test the business internal controls or report to the shareholders of the company of any significant material findings. The auditor may be able to identify material weaknesses and provide professional recommendations, gain an insight of your business and can assist in the continuation of the going concern ability of the entity. Although the auditor will not tell you how to run your business, an audit will expose many of the issues that a business analyst would.
An Audit has other benefits as well:
- It means that you can compare your business with other companies on similar terms.
- It provides a form of assurance for future investors and shareholders.
- It provides an assurance for your stakeholders such as your suppliers and customers.
- It will help the procedure for financial assistance as most financial institutions consider it a must for an application.
- It will prove invaluable for mergers or partnership deals It will bring to light some of the weaknesses in your control systems
Audit Requirements in Cyprus
The following entities are obliged to prepare audited financial statements in Cyprus:
- Limited liability companies – Including: Dormant companies, Limited companies by guarantee, Not for profit limited liability companies
- Individuals with a Gross Income of more than 70,000 euros in a financial year
- Not for profit organisations such as Foundations, Trusts and Associations
- Some entities which were created by a law.
Limited Liability Companies which are tax residences of Cyprus are required by the companies law of Cyprus to prepare audited financial statements and once a year submit a copy attached to the annual report to the Registrar Of Companies.
In addition, the inland revenue department requires that all limited liability companies to submit an income tax return based on their Audited Financial Statements.
All Limited Liability Companies who are tax residences of the Republic must prepare Audited Financial Statements regardless of size.
For Non Tax Resident Companies which were incorporated in Cyprus please ask for our advice here.
Our audit tests include testing the information contained in the financial statements and testing the control procedures of the business. To provide the audit opinion we must apply relevant knowledge, skills, and exercise professional judgement in analyzing, evaluating, concluding and reporting on the assurance engagement and other audit and assurance issues in the context of best practice and current developments.