Explanatory note

These Regulations amend the provisions of Part VIII of the Companies (Northern Ireland) Order 1986 (accounts and audit) by inserting new Articles 257A to 257E into that Part (regulation 2).

The new provisions exempt small companies which satisfy specified conditions from the obligation to have their annual accounts audited (Article 257A). Slightly different criteria apply to small companies which are charities (Article 257A(5)). Article 257B sets out the cases where the exemptions are not available.

In certain circumstances the audit report is to be replaced by a report to be made by a suitably qualified person (defined as a “reporting accountant”) (Articles 257C and 257D).

Article 257E sets out the effect of the exemption from the audit requirement on other provisions of the 1986 Order.

Regulation 3 substitutes a new Article 396A which provides that a company exempt from the audit requirements is also exempt from the obligation to appoint auditors, and gives power to the directors to appoint auditors if that exemption ceases.

Regulation 4 and Schedule 1 make consequential amendments to the 1986 Order. Regulation 5 and Schedule 2 make consequential amendments to the Companies (Revision of Defective Accounts and Report) Regulations (Northern Ireland) 1991.

Regulation 6 determines the application of the regulations and contains transitional provisions.