Changes to the Companies Law and the Assessment and Collection of Taxes Law were approved by the Cyprus House of Representatives on June 9, 2022.

The purpose of the amendment was to make the auditing procedure for the financial statements of small and medium-sized Cyprus companies simpler.

Prior to this vote, all Cyprus companies were required to carry out audits regardless of their size, risks, turnover, or number of transactions.  As a result, small businesses had to incur additional costs for audits that in some circumstances did not require as much documentation or time-consuming audit methods.  As a result of these changes, if a small business meets specific requirements, it can now be excluded from the burden of complying with the International Standards on Auditing.

A Cyprus-based company may submit financial statements with a limited assurance assessment rather than a complete audit if it meets the criteria specified below:

  • The net turnover is no more than €200,000. Without exception, “turnover” refers to all sources of revenue;
  • The total value of the assets of the company should not exceed €500,000.

The aforementioned requirements must be satisfied for at least a period of two consecutive years.

There are a few exceptions for companies, which even if they do satisfy the aforementioned criteria, a complete audit will still need to be performed.

  • Companies regulated and supervised by the Central Bank of Cyprus, the Cyprus Securities and Exchange Commission, and the Commissioner of Insurance or companies that hold a qualifying participation in such companies.
  • Parent companies that are required to prepare consolidated Financial Statements.

It is significant to highlight, that the assurance review must be prepared by a statutory auditor or an audit firm as per Auditors Law 2017.