Audit Exemption for Small Companies in Ireland: The Conditions Explained

Many Irish private companies do not need an audit, but the audit exemption is conditional and can be lost. This guide explains the audit exemption for a small company in Ireland using the Companies Registration Office (CRO) pages and the Department of Enterprise announcement on the amended regime. It is written for directors, finance managers and company secretaries, including those in Dublin, who sign off annual financial statements. Filing the annual return on time is one of the conditions for the exemption, so it helps to read this alongside our guide to CRO annual return and Form B1 filing.

This article is general information, not legal or audit advice. The conditions come from the Companies Act 2014 and the CRO pages cited below; check the current CRO page before you rely on any threshold.

What the exemption actually covers

The CRO's information leaflet on annual return and financial statement requirements (Information Leaflet No. 23, dated April 2019) states that "the only exemption granted is from having the Financial Statements audited." Companies must still prepare accounts, lay them before the annual general meeting and file them. The exemption sits in Chapter 15 of Part 6 of the Companies Act 2014 for small and micro companies, and Chapter 16 covers dormant companies.

That leaflet is several years old and predates the July 2025 change to the late-filing rule, so we use it here only for the structure of the regime and rely on the newer CRO pages for figures and for the late-filing rule.

Condition 1: the company must be small or micro

The CRO's "Audit Exemption" page (last updated 24 July 2025) says the company must qualify as a small company, and must satisfy two or more of three tests in the current and the preceding financial year, unless it is in its first year. The CRO's "Small Company" page (last updated 20 August 2025) shows the following limits:

The micro figures come from the CRO's "Micro Company" page (last modified 5 January 2026). The small company page defines the balance sheet total as the aggregate of the amounts shown as assets in the company's balance sheet. These figures are as shown on the pages at the time of writing and may change.

A company that is above the small thresholds, such as a medium-sized company, is not eligible. The 2019 leaflet states this directly.

Condition 2: the company must not be an excluded type

The CRO's audit exemption page says the company must not fall within the classes listed in the Fifth Schedule to the Companies Act 2014, and that public limited companies, public unlimited companies and investment companies are not entitled to either exemption. It also excludes a credit institution or insurance undertaking. The page includes a table of exemption availability by company type, covering private companies limited by shares (LTDs), designated activity companies (DACs), companies limited by guarantee (CLGs) and some unlimited companies, so check the table for your own company form.

The audit exemption page does not list the Fifth Schedule classes (the CRO Micro Company page refers to 18 classes and names some of them), so confirm in the Act whether any apply. If your company is part of a group, there are separate group tests: the CRO page says the group must qualify as a small group, with the entire group and its subsidiaries meeting two of three conditions taken as a whole.

Condition 3: the annual return must be filed on time

This is the condition that catches companies out. The CRO's audit exemption page says the annual return, with financial statements attached, must be filed on time, and that "a company will lose its audit exemption if it files its annual return late more than once within a five-year period."

The Department of Enterprise announcement of 16 July 2025 explains the change. Section 22 of the Companies (Corporate Governance, Enforcement and Regulatory Provisions) Act 2024 has commenced and replaces section 363 of the Companies Act 2014. Under the old rule a company lost the exemption on its first missed annual return. The page says that under the new rule a small company that fails to deliver its annual return loses audit exemption for the following two years only if it has also failed to file in any of the previous five financial years. On that wording, a first late filing in that period would not on its own remove the exemption, and a company's first annual return, or any earlier failure before commencement, does not count as a previous failure. The page also says late filing fees still apply in all cases.

The CRO's page on requirements for audit exemption describes the rule in the same way: if the return is filed late in the year the exemption is claimed, and was also filed late on another occasion in the preceding five years, the company loses the exemption for the following two years. It adds that the Registrar has no power to grant relief. The first Form B1 is due six months after incorporation and, because it carries no financial statements, audit exemption cannot be claimed on it.

Condition 4: members must not require an audit

The CRO page says members holding not less than 10% of the voting rights (one member, for a guarantee company) can object. Notice must be served in the preceding year, or during the year but not later than one month before the year-end. If such notice is served, the company must have an audit. The page adds that this right does not apply to a dormant company. In the exemption statement, directors confirm that shareholders have not served a notice under section 334.

Directors' exemption statement

The CRO page on requirements for audit exemption says there must be an exemption statement at the bottom of the balance sheet, using the specified wording and signed on behalf of the board. The statement includes that the company is availing itself of the exemption provided for by Chapter 15 of Part 6 of the Companies Act 2014, that it is doing so on the grounds that the section 358 conditions are satisfied, that shareholders have not served a notice under section 334, and that the directors acknowledge the company's obligations to keep adequate accounting records and to prepare financial statements giving a true and fair view. A small company may also claim the separate abridgement exemption, which has its own additional clause. Use the CRO's exact wording rather than paraphrasing it.

If the company stops qualifying

The CRO's audit exemption page says that if a company ceases to meet the conditions during a year, the directors must appoint an auditor as soon as possible after it ceases to comply. It also says that if a micro company does not meet all the conditions, its financial statements must be audited (Micro Company page).

A practical checklist

These are our suggestions, not legal requirements.

• Test size every year. Compare balance sheet total, turnover and average employees for the current and preceding year against the CRO figures, and keep the workings.
• Diarise the annual return date. The late-filing rule makes the filing date part of the audit decision, so give it an owner.
• Keep a five-year filing history. Record each return's filing date so you can show whether any earlier return was late.
• Check for member notices. Confirm with the company secretary whether any notice has been received before signing the statement.
• Brief the board. Directors remain responsible for accounting records and true and fair financial statements; our summary of directors' duties in Ireland gives the wider context.
• Consider other audit demands. The 2019 leaflet notes that third parties such as bankers may still require an audit even where the law does not.

Learnsignal's offices are off Baggot Street in Dublin, and we offer in-person training from there. For current details, see our CPD pages.

Frequently asked questions

Does audit exemption mean I do not need to prepare accounts?

No. The CRO leaflet says the only exemption granted is from having the financial statements audited. Accounts must still be prepared, laid before the AGM and filed.

Can a company lose the exemption for one late return?

Not on a first late filing in a five-year period, according to the Department of Enterprise's July 2025 announcement and the CRO pages. It is lost where a late filing follows another failure in the previous five years, and the loss lasts for the following two years.

What are the size limits for a small company?

The CRO's Small Company page shows a balance sheet total not exceeding €7.5 million, turnover not exceeding €15 million and no more than 50 employees, with two of the three needed. Check the page for current figures.

Can shareholders insist on an audit?

Yes, according to the CRO. Members holding at least 10% of voting rights can serve notice within the stated time limits, and the company then must have an audit.

Is a public limited company eligible?

No. The CRO states that public limited companies, public unlimited companies and investment companies are not entitled to the exemptions.

Audit exemption is a yearly decision, so retest the conditions each time you approve accounts and keep your filing history in good order.