When Does a Cyprus Company Need an Audit?

Under the Cyprus Companies Law, Cap. 113, every company registered in Cyprus must prepare annual financial statements. Under the Cyprus Auditors Law, those financial statements must be audited by a statutory auditor licensed by the Institute of Certified Public Accountants of Cyprus (ICPAC). Cyprus does not currently exempt small companies from statutory audit — this is stricter than the EU minimum.

The statutory audit applies to private and public companies, subsidiaries of foreign groups, holding companies, investment vehicles, and dormant companies alike. A dormant company still needs a statutory audit of its financial statements, though the audit is generally much smaller in scope.

There is one narrow simplification: 'small' companies (as defined by size thresholds in the Companies Law) may prepare abridged financial statements — but they still need a statutory audit. The audit exemption available in some other EU member states does not currently exist in Cyprus.

Groups with a Cyprus parent must prepare and audit consolidated financial statements unless a size-based exemption applies. Consolidated audits are performed under ISA 600 (Revised), with the Cyprus group auditor coordinating component auditors in every subsidiary jurisdiction.

Public Interest Entities (PIEs) — listed companies, banks and insurers — need a PIE audit under the EU Audit Regulation, with mandatory rotation, restricted non-audit services and enhanced Audit Committee reporting. PIE audit acceptance is subject to additional independence checks.

In short: if you incorporate a company in Cyprus, plan for a statutory audit every year. Engage an ICPAC-licensed audit firm early, keep clean accounting records under IFRS, and treat the audit as an annual health check rather than a compliance chore.