Audit exemption
Accountancy Europe has published research and analysis into the implementation across Europe of the recent EU directive raising audit exemption thresholds.
In Ireland, the audit exemption limit is a total balance sheet of €7.5m and gross turnover of €15m for a single company, and €9m and €18m respectively (along with a net balance sheet of €7.5m and net turnover of €15m) for a group; headcount in both cases is limited to 50. The EU threshold is a €7.5m total balance sheet, a €15m net turnover and 50 employees.
The threshold spectrum ranges from Finland (three or fewer employees, €200k turnover and €100,000 balance sheet) to Denmark and the Netherlands, both of which, like Ireland, have adopted the EU maximum.
The research points out that some EU countries have lower limits but also offer the option of an audit or ‘extended review’, with an absolute requirement for audit above a certain threshold. The study notes the UK limits as £8.7m balance sheet total, £17.5m net turnover and 50 employees.
Sustainability
The European Securities and Markets Authority has published a thematic note on sustainability-related reporting by companies. The paper lists examples of good and poor reporting, and calls for four principles to be followed: that reports be accurate, accessible, substantiated and up to date.
VSME
The European Financial Reporting Advisory Group has launched three educational videos to help SMEs comply with the Voluntary Sustainability Reporting Standard for SMEs (VSME) disclosure requirements. VSME is designed to reduce the reporting burden for small companies.
Sustainability assurance
In the UK, the Department of Business and Trade has published the outcome of its consultation on proposals for an oversight regime for assurance of sustainability-related financial disclosures. The UK proposals suggest that all providers of sustainability assurance will have to be regulated and supervised. In Ireland only PIE sustainability assurers will be regulated and supervised, opening up the possibility of a new class of unqualified and unsupervised sustainability assurance service providers for non-PIE companies.
ACSPs
Companies House in the UK is working on proposals for the verification of the identity of all individuals before they can file accounts. This would include third parties filing on behalf of others, including accountants filing for their clients.
The move would require some seven million UK directors being individually identified. All third-party agents filing on behalf of UK companies would also have to register with Companies House as authorised corporate service providers (ACSPs). Registration would require identification of the ACSP’s principals.
Since last year, accountants and other professional service providers who are registered for anti-money laundering purposes with a supervisor in the UK, such as ACCA, have been able to register with Companies House to become ACSPs as long as the ACSP has a UK business address.
Following extensive feedback, Companies House has recently postponed the registration deadline, which is now ‘no earlier than November 2026’.
ISQM
International Standards on Quality Management (ISQM) require firms to identify the risks to audit quality in the practice, and to design controls and ways of working to mitigate those risks. These arrangements are reviewed by audit compliance officers in the same depth as an audit file, and the most recent article from the ACCA audit monitoring team flags key ISQM 1 issues. The Irish ISQM is identical to the ISQM (UK) referred to in the article.
CPD podcasts
David Hegarty, the Corporate Enforcement Authority’s director of legal and policy, has provided an overview of what the authority is and does in a podcast. Available on multiple platforms, the podcast is for anyone interested in learning more about the work of the statutory body enforcing company law. Search for ‘Enforceable’ to find it on your preferred podcast platform.
Another podcast, CSRD Wave 1 Observations, from the Irish Auditing and Accounting Supervisory Authority (IAASA), looks at the first year of Corporate Sustainability Reporting Directive reporting in Ireland. The podcast appears to be available only on YouTube but a transcript can be downloaded from IAASA.
AI in SMP
While some members have been embracing AI in their practices – and are reaping cost savings, greater income and more free time as a result – many are struggling to see how to integrate AI into their practice. A good place to start is ACCA’s free introduction courses, which also confer six hours of verifiable CPD. The courses cover how to use free and paid AI software, client confidentiality, and give illustrated examples of what AI can do.
Possible uses include:
- writing a letter to a client – ‘brain dump’ the letter’s contents into your AI and then ask it to write the letter using formal business language
- doing the sums to set up a lease – input into the AI the remaining payments on the lease and the inherent interest rate, and then get the lease numbers back in Excel
- transcribing a meeting and/or summarising or taking minutes for one
- summarising a subject in PowerPoint slides
- finding something on the internet – eg ‘where is the legislation governing the irrevocable guarantee exemption from filing in CRO?’
- finding something in computer records – eg ‘what client has the PPN number 123456?’ (be careful here to use an AI application that does not share data with users outside the firm).
