Further to recent amendments to the Cyprus Companies Law Cap 113 regarding the financial reporting obligations of Cyprus Companies which meet the criteria listed below, these companies can submit their financial statements for a “review” by a statutory auditor instead of a statutory audit as per the provisions of the International Standard on Review Engagements 2400. The criteria are as follows:
- the Company must be a private limited liability company and
- not to be required to prepare consolidated financial statements and
- is not regulated and supervised by independent authorities and
- its net turnover and total gross assets do not exceed or should cease to exceed the criteria of EUR200.000 and EUR500.000 respectively in two consecutive financial years.
The amendments will apply from 1 January 2023, therefore applicable to the financial year 2022 onwards. Additional guidance will be revealed as the legislation unravels.
What is a review engagement?
A review engagement is also known as a limited assurance engagement. Auditors conduct a review engagement after an accountant completed the bookkeeping records of the Company and prepared the financial statements, and therefore, the auditor provides moderate assurance on the accuracy of the financial statements. During the engagement, the auditor performs inquiries and analytical review procedures to provide a moderate level of assurance required to provide a negative assurance report.
- A review engagement is a type of engagement that provides a limited level of assurance that a company’s financial statements comply with the applicable financial reporting framework.
- It gives users limited assurance on the accuracy or correctness of financial statements.
- A review engagement takes less time than an audit engagement since there is less effort involved.
If you wish to obtain more information on this development, we can arrange a consultation with one of our auditors to discuss further. Contact us here to arrange for a consultation.