Auditor Termination
The Companies Act 1963 mandated annual independent audits for all companies. In 1999, exemptions were introduced for smaller-scale companies meeting specific criteria.
The 2014 Act revised thresholds and conditions for exemptions, including certification by directors and termination of auditors’ appointments. Audit exemptions are subject to certain conditions, including timely filing of annual returns and financial statements.
The exemption extends to small group companies but not to financial service entities or securitisation companies. Dormant companies may also qualify for exemptions if they meet specific criteria.
The effect of the exemption is the avoidance of certain audit-related provisions. Directors must provide a statement confirming compliance with exemption conditions. Failure to comply results in penalties. Certain financial service sector companies and holding companies with specific characteristics are ineligible for audit exemptions.
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