Companies (1986 Order) (Audit Exemption) (Amendment) Regulations (Northern Ireland) 1997

Explanatory Note

(This note is not part of the Regulations.)

1.  These Regulations further amend provisions in Part VIII of the Companies (Northern Ireland) Order 1986 (“the 1986 Order”) concerning the exemption of certain small companies from the requirement to have their annual accounts audited. The amendments apply to annual accounts for financial years ending on or after 22nd February 1998.

2.  Regulation 2(3) increases the turnover limit in Article 257A(3)(b) of the 1986 Order which a small company other than a small charitable company must not exceed in respect of a financial year if it is to be exempt from audit from £90,000 to £350,000 (for small charitable companies the gross income limit will remain at £90,000 — see regulation 2(4)). As a consequence of this increase, the requirement that small companies falling within Article 257A(2) obtain a report from a reporting accountant is repealed except in the case of small charitable companies.

3.  Regulation 2(7) inserts a new paragraph (6A) into Article 257A of the 1986 Order to make clear that companies which are dormant and which fall within sub-paragraph (a) or (b) of Article 258(1) of the 1986 Order may claim exemption from audit under either Article 257A or Article 258.

4.  Regulation 3(2) and (3) amends Article 257B of the 1986 Order. The amendments enable a company which would otherwise be disqualified from claiming exemption from audit under Article 257A for a financial year because it was a parent company or subsidiary undertaking for any period in that year, to claim the exemption, provided that the group of which it was a member was a small group satisfying the conditions specified in new Article 257B(1C).

5.  Regulation 4 amends Article 257D(3)(d) of the 1986 Order as a consequence of the Chartered Association of Certified Accountants having changed its name to the Association of Chartered Certified Accountants.