Audit Exemption in Ireland: How to Qualify and How to Keep It
Small and micro companies can skip a statutory audit — but only if they qualify and file on time. The current size thresholds, the two-strike rule, and how exemption is lost.
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- Abbey Blue Formations
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- 7 min read
A statutory audit is one of the larger recurring costs a small Irish company can face — and most small companies do not have to bear it.
Two things changed recently and both work in your favour. The size thresholds rose by around 25% in 2024, pulling thousands of companies into the small and micro categories. And in July 2025 the rule that stripped audit exemption after a single late annual return was replaced with a more forgiving one.
Here is where audit exemption Ireland stands now, and the mistakes that still cost companies their exemption.
What Audit Exemption Actually Is
Audit exemption means exemption from filing an auditor's report with your financial statements. You still prepare and file financial statements, and you still file your annual return — you simply do not need a registered auditor to examine and report on them.
To claim it, the balance sheet must contain a declaration by the directors to that effect, and the annual return itself must declare that the exemption is being claimed.
The Audit Exemption Thresholds Ireland Applies
Company size is determined by meeting two out of three criteria. The European Union (Adjustments of Size Criteria for Certain Companies and Groups) Regulations 2024 raised the financial thresholds by roughly 25% to account for inflation, effective from 1 July 2024 and applying to financial years beginning on or after 1 January 2024.
Small company
- Turnover not exceeding €15 million
- Balance sheet total not exceeding €7.5 million
- Average number of employees not exceeding 50
Micro company
- Turnover not exceeding €900,000
- Balance sheet total not exceeding €450,000
- Average number of employees not exceeding 10
Micro companies get audit exemption plus significantly reduced reporting requirements.
If your accountant is still working from the old €12 million and €6 million figures, they are out of date — and your company may now qualify when it previously did not.
Who cannot claim it at all
Certain company types are excluded regardless of size, including public limited companies, public unlimited companies and investment companies, along with the classes of company listed in the Fifth Schedule to the Companies Act 2014.
How Companies Lose Audit Exemption
1. Outgrowing the thresholds
Exemption is lost by exceeding the limits, but not on the strength of one good year — the test applies across the current and preceding financial year. A single exceptional year will not usually push you into a mandatory audit.
2. Losing audit exemption through a late annual return — the two-strike rule
This is where the July 2025 change matters.
Under the old regime, one late annual return cost you audit exemption for two financial years. For a small company that had never needed an audit, that could mean thousands of euro in unplanned cost from a single missed date.
The Companies (Corporate Governance, Enforcement and Regulatory Provisions) Act 2024 replaced that. Small, micro and dormant companies now only lose audit exemption on a second or subsequent late filing within a rolling five-year period.
Three things to understand about it:
- The new rule started on 16 July 2025, and late filings before that date do not count towards the new test. Everyone started with a clean slate.
- It is a rolling five-year window, not a fixed one. A late return in 2026 followed by another in 2030 is still two strikes.
- Late filing penalties still apply. The reform changed the audit consequence, not the fee. Filing late is still expensive.
The change is best understood as one free pass for an administrative slip — not permission to treat the deadline loosely.
3. A shareholder requiring an audit
Members holding at least 10% of the voting rights can require a statutory audit for a financial year regardless of exemption status, by serving notice in the required timeframe. Rare in owner-managed companies, but a real protection for minority investors.
The District Court Route Still Exists
Where a return will be late, a company can apply to the District Court under section 343 of the Companies Act 2014 for an extension of time. If granted and the return is filed within the period the court specifies, the return is treated as filed on time — no late filing penalties and no strike against audit exemption.
Despite the 2025 reform, these applications continue in significant numbers, because a company that has already used its one strike has as much at stake as ever.
Keeping Your Exemption
The practical protections are unglamorous:
- Diary your annual return date and treat it as immovable.
- Have financial statements ready before the deadline, not during the week of it. Most late returns are late because the accounts were not finished.
- Watch the thresholds as you grow, and plan for audit a year ahead rather than discovering it retrospectively.
- Get the declarations right. Filing accounts without a required audit is a defective filing the CRO can reject.
Our company secretarial service tracks annual return dates, and our bookkeeping packages keep the underlying figures current so the accounts are ready when the date arrives.
Frequently Asked Questions
Does my small Irish company need a statutory audit?
Probably not. If your company meets two of the three small company criteria — turnover of €15 million or less, balance sheet total of €7.5 million or less, and 50 or fewer employees — and is not in one of the excluded categories, it can claim audit exemption. The vast majority of Irish companies qualify. What most often removes the exemption is not size but late filing of the annual return, or being part of a group that files consolidated accounts.
What are the current audit exemption thresholds in Ireland?
For financial years beginning on or after 1 January 2024, a small company is one meeting two of: turnover not exceeding €15 million, balance sheet total not exceeding €7.5 million, and no more than 50 employees on average. A micro company meets two of: turnover not exceeding €900,000, balance sheet total not exceeding €450,000, and no more than 10 employees. These figures replaced the previous €12 million and €6 million limits under regulations effective from 1 July 2024, so anything quoting the older numbers is out of date.
If I file my annual return late, do I lose audit exemption straight away?
Not any more. Since 16 July 2025, small, micro and dormant companies only lose audit exemption on a second or subsequent late filing within five consecutive years. A single late return is now one strike rather than an automatic loss. Two important caveats: late filing penalties still apply in full, and the five-year window rolls, so the strikes do not reset on a calendar schedule. Late filings before 16 July 2025 do not count towards the new test.
How much does a statutory audit cost in Ireland?
It varies with the size and complexity of the company and with your auditor's rates, so any figure in an article is a guess at your situation. What is worth understanding is the shape of the cost: an audit is a professional engagement priced in the thousands rather than the hundreds, which is why losing exemption over a missed filing date is disproportionately expensive relative to the late filing fee that triggered it. Get quotes from registered auditors for your own circumstances.
My company grew past the turnover threshold this year — do I need an audit now?
Not necessarily. The size test looks at the current and preceding financial year, so exceeding the limits in a single year does not automatically remove the exemption. That said, treat the first year over the line as your preparation year rather than a reprieve. Audit readiness is much easier to build in advance than retrospectively, and an auditor coming to a company with poorly maintained records will take longer and charge more.
Can I still apply to the District Court if my annual return is going to be late?
Yes, and companies still do so in significant numbers. A section 343 application seeks an extension of time to file. If the court grants the order and the return is filed within the period specified, it is treated as filed on time, meaning no late filing penalties and no strike counted against your audit exemption. This matters most for a company that has already had one late filing within the five-year window and cannot afford a second.
Does a dormant company need an audit or an annual return?
A dormant company still has to file an annual return — dormancy does not suspend CRO obligations, and companies are struck off for exactly this oversight. Dormant companies can avail of audit exemption, and the two-strike rule applies to them as it does to small and micro companies. If you have a dormant entity sitting on the register, either keep filing for it or close it properly through voluntary strike-off.
Can a shareholder force my company to have an audit even if we qualify for exemption?
Yes. Members holding at least 10% of the voting rights can serve notice requiring a statutory audit for a financial year, and the exemption does not override that right. It is rarely used in companies where the directors and shareholders are the same people, but it is a meaningful protection where there are outside or minority investors, and it is worth being aware of before a funding round brings new shareholders onto the register.