What Does a Registered Auditor Actually Do — and Does Your Company Need One?

The word “auditor” appears frequently in the context of Irish company law, tax compliance, and the professional accountancy sector — but what an auditor actually does, and why it matters whether your accountant is one, is less well understood than you might expect.

This is worth clarifying, because the distinction between a registered auditor and an accountant who is not so qualified has real consequences for Irish companies.

The Distinction: Accountant vs Registered Auditor

An accountant can prepare financial statements, file tax returns, manage payroll, give business advice, and carry out a wide range of financial services. However, unless they are a registered auditor — holding a practising certificate from a recognised supervisory body — they cannot carry out a statutory audit.

A statutory audit is an independent examination of a company’s financial statements and underlying records, carried out in accordance with International Standards on Auditing (ISAs) and Irish company law. The auditor expresses an opinion on whether the financial statements — including the profit and loss statement and balance sheet — give a true and fair view of the company’s financial position and performance.

In Ireland, auditors must be registered with a recognised supervisory body — the Institute of Chartered Accountants in Ireland (CAI), the Association of Chartered Certified Accountants (ACCA), CPA Ireland, or one of the other bodies approved under the Companies Act 2014. These bodies regulate their members’ audit work, require ongoing training and quality assurance reviews, and can impose sanctions for non-compliance.

Malone & Co. is a licensed registered audit practice — meaning we are authorised to carry out statutory audits in addition to our full range of accountancy and tax services.

Who Is Required to Have a Statutory Audit?

In Ireland, not every company must have its accounts audited. Small private companies that meet certain size criteria are entitled to claim audit exemption — meaning they can file unaudited accounts with the CRO.

Under the Companies Act 2014, a company qualifies for audit exemption if it meets two of the following three criteria:

Turnover of not more than €12 million. Balance sheet total of not more than €6 million. Not more than 50 employees.

If a company meets two out of three of these tests for two consecutive years, it can apply for audit exemption — provided it has also met all its other compliance obligations (annual return filed on time, no disqualified or restricted directors, etc.).

A company loses its audit exemption if:

It exceeds two of the three size thresholds. It files its annual return late — even once, even by one day (as I have covered in detail in my article on annual return deadlines and the cost of missing them). A shareholder holding 10% or more of the shares requests an audit. It is a subsidiary of a larger company that does not meet the exemption criteria at group level.

Medium and large companies — those exceeding the small company thresholds above — must have their accounts audited regardless of whether they want one.

What Actually Happens in a Statutory Audit?

The audit process involves the auditor carrying out a range of procedures to gather evidence that supports their opinion on the financial statements. These procedures include:

Review of the accounting records. The auditor examines the company’s bookkeeping, invoices, bank statements, payroll records, and other financial records. They are looking for completeness, accuracy, and consistency.

Assessment of internal controls. For larger companies, the auditor evaluates the systems and processes the company uses to prevent errors and fraud. For smaller companies, the focus is more on substantive testing of the records themselves.

Confirmation procedures. The auditor may directly confirm balances with third parties — for example, requesting a confirmation of the year-end bank balance directly from the company’s bank, or writing to debtors to confirm outstanding amounts.

Review of estimates and judgments. Financial statements contain a number of figures based on management estimates — the recoverability of debtors, the useful life of assets, the adequacy of provisions. The auditor reviews the basis for these estimates.

Assessment of going concern. The auditor considers whether the company is a going concern — whether it will continue to operate for the foreseeable future. If there is material doubt about going concern, the audit report must address this.

At the end of the process, the auditor issues an audit report — a formal document expressing their opinion on the financial statements. An unqualified (or “clean”) audit opinion confirms that the financial statements give a true and fair view. A modified opinion — qualified, adverse, or a disclaimer of opinion — signals that the auditor has concerns about specific aspects of the accounts or could not obtain sufficient evidence.

What Value Does an Audit Provide?

For larger companies, the audit serves a corporate governance function. It provides shareholders, lenders, and other stakeholders with independent assurance that the financial statements are reliable. Where ownership and management are separated — as they are in larger companies — the audit is a check that management is accounting accurately for their stewardship of the business.

For smaller owner-managed companies, the value of an audit is less straightforward. The owner is typically also the manager and the primary shareholder — so the independence function is less obviously relevant. However, even for small companies, an audit adds value in several ways:

It brings discipline to the accounting process. The knowledge that accounts will be scrutinised to audit standard tends to improve the quality and completeness of record-keeping throughout the year.

It catches errors before they become problems. In the course of a properly conducted audit, accounting errors, classification issues, and occasionally more significant irregularities are identified and corrected.

It provides credibility with banks and lenders. Audited accounts carry more weight with banks considering lending decisions than unaudited ones.

It satisfies compliance requirements. Where a company must have audited accounts — because of its size, because it has lost the audit exemption, or because a lender or investor requires it — there is no alternative.

The Cost of an Audit

For a small Irish private company that has lost its audit exemption (typically due to a late annual return), the cost of a statutory audit typically ranges from approximately €1,500 to €4,000 per year, depending on the size of the business, the volume of transactions, and the quality of the bookkeeping.

This cost is incurred for three years following the late filing event. As I have noted in my article on annual return deadlines, this is the most financially significant consequence of a missed filing deadline — more than the filing fee itself.

For medium-sized companies with revenues above €5 million or significant balance sheet complexity, audit costs are proportionally higher — typically starting from €5,000 and rising depending on complexity.

Choosing a Registered Auditor

If your company requires an audit — whether because it falls outside the exemption criteria or because it has lost its exemption — the audit must be carried out by a firm or individual who holds a current practising certificate as a registered auditor. You can verify whether an individual or firm is registered by checking with the relevant supervisory body.

At Malone & Co., we carry out statutory audits for companies across County Louth and the North-East. Our audit work is conducted under the regulatory framework of the Institute of Chartered Accountants in Ireland. For more on keeping your company compliant, explore our full library of accounting and compliance guides.