In Cyprus, audit requirements for companies have recently been updated to ease the financial reporting burden on small and medium-sized enterprises (SMEs). As of June 9, 2022, amendments to the Cyprus Companies Law allow certain companies to opt for a review engagement instead of a full statutory audit, provided they meet specific criteria.

Criteria for Audit Exemption:

1. Net Turnover: The company's annual turnover must be less than €200,000.
2. Total Assets: The total assets of the company must not exceed €500,000.
3. Duration: These criteria must be met for at least two consecutive financial years.

Exceptions:

Even if these thresholds are met, certain companies are still required to conduct a full audit. These include:

• Companies regulated by the Central Bank of Cyprus, the Cyprus Securities and Exchange Commission, and the Commissioner of Insurance.
• Parent companies required to prepare consolidated financial statements.

Review Engagement:

A review engagement provides limited assurance compared to a full audit. It involves the auditor conducting analytical procedures and inquiries to ensure that the financial statements are free from material misstatements. This alternative is cost-effective and time-efficient, offering a practical solution for smaller companies without the extensive requirements of a full audit.

Implementation:

These changes apply to financial statements for reporting periods ending on or after December 31, 2022. The review engagement must be performed by a licensed statutory auditor or audit firm in accordance with the International Standard on Review Engagements (ISRE) 2400 (Revised)​

For more detailed information and specific advice tailored to your company’s circumstances, it is recommended to consult with a professional auditor or a legal advisor in Cyprus.