Every company registered in Cyprus is required to submit its audited annual accounts to the Registrar of Companies. The Financial Statements must be prepared in accordance with the provisions of the Companies Law and the International Financial Reporting Standards (IFRS EU).
Unlike other countries, all companies registered in Cyprus are legally required to have their yearly accounts audited by a locally licensed audit firm - in other words, an independent/external auditor(s) who has no ties to the company.
Having said that, even though an audit is compulsory in Cyprus, there are various added benefits of having an external business conduct an audit to establish your company's financial position and reputational strength.
These are:
Ensures Tax Compliance
When you request external audit and assurance services, you are exposing your company to a critical and unbiased evaluation of whether it is compliant with all applicable Internal Revenue Department rules and regulations.
The external audit firm is not linked with your company and may analyse your business without fear of being influenced if there’s a conflict in the findings.
For example, an internal accountant or auditor who has been with your firm for years may be reluctant to deliver bad news regarding tax non-compliance and may decide to postpone solving the problem, which could make the situation even more difficult to deal with.
Provides Independent Credibility
Another advantage of having an external auditor for your financial accounts is that they will be more credible as they have no personal interest in your company.
Having as much independence as possible gives more credibility, which is one of the keys to the success of your small business, especially if you are in the process of developing a solid reputation within your sector.
External auditors are not employees of your company, they will not be influenced by anything as they have nothing to gain from a favorable audit.
As a result, the audit of your financial statements by an external auditor will be more credible than than any check performed by your staff.
Allows Critique of Your Internal Processes
The value for independence in auditing is also reflected in the fact that internal staff and internal auditors cannot adequately scrutinize your company's internal procedures because they are a part of it.
External auditors, on the other hand, if hired to do so can examine your procedures in more detail and attention, and detect where your company is lacking.
In addition, external auditors frequently criticize accounting methods and general operations and they come up with an action plan for you to minimize waste and implement more efficient strategies.
Quality Control of Internal Audit
Another argument confirming how important it is to hire an independent auditor is that internal auditors are frequently too close to your business due to their employment in your company.
The external auditor can confirm that the internal audit was thorough, accurate and represents your company's financial situation and tax compliance. External auditors often have knowledge in a wide range of financial aspects that far exceeds that of your internal auditors.
ELSAVCO’s unwavering commitment to quality, independence, transparency and sophisticated methodology assures compliance with professional standards while also optimising value for your company and its stakeholders.
Our auditors have a diverse set of skills and experiences, including delivering audit and assurance services to high-profile companies in Cyprus and overseas.
Our services include:
Financial Statement Audits
Special Purpose Audits
Assurance Services
Impact Analysis of new standards and
Audit of offshore jurisdiction companies
We have solid working relationships and cooperation with our clients which means that we can get assistance when needed in resolving key challenges and performing high quality services.
Get in touch with ELSAVCO for any information you need in regards to audit and assurance services in Cyprus.
Visit our website, email us at info@elsavco.com, or contact us directly on 22 811900.