Too many small Irish businesses are being forced to pay for unnecessary audits because the threshold for audit exemptions is too low compared to the rest of Europe and the UK.
Business organisation IBEC has urged the Company Law Review Group to raise the threshold to free many more small businesses from the requirement to audit their finances and to encourage more start-ups to set up in Ireland. IBEC cited support from The Institute of Chartered Accountants for the move.
Marie Daly, head of legal and regulatory affairs at IBEC, argued the small business audit exemption threshold was too low, saddling many small companies with bureaucratic requirements designed for bigger companies and forcing them to pay unnecessarily
costly audit fees.
“We’re way, way behind,” she said, “and we risk losing the start up companies we desperately need.” Raising the threshold could save many small businesses anywhere from €4,000 to €7,000 in annual audit fees.
IBEC has called for an increase in the current threshold of €1.5m because it is significantly lower than the EU limit of €7.3m and the figure of Stg£5.6m which applies in Northern Ireland.
Daly believes the chances of getting the threshold raised “were pretty good” although she acknowledges there was a fear it could allow “a lot of cowboys to take advantage”.
But if the enforcement was good, allied to strong investigatory capabilities, there was less likelihood of cowboy operators trying to take advantage of the relaxation in auditing requirements.
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