Audit criteria from 1 January 2022
On July 9, 2020, the National Council of the Slovak Republic approved the Act No. 198/2020 Coll. which contained the changes in the obligation of the verification of the individual financial statements by an auditor. The subsequent amendment to Act no. 431/2020 Coll. on accounting brought the changes in the size criteria for the obligation of the verification of financial statements by an auditor.
From January 1, 2022, the following criteria are valid:
- the total amount of assets exceed 4,000,000 euros,
- net turnover exceed 8,000,000 euros,
- the average recalculated number of employees in one accounting period exceed 50.
The above-mentioned criteria are tested for the period of two years – the last fiscal year for which the financial statements are made and the previous fiscal year. All three criteria are tested, but to fulfill the obligation of the verification of the financial statements by the auditor, it is enough to fulfill 2 out of the 3 conditions for each year.
In the past few years, the criteria for the audit were increased several times as is listed in the table below.
Criteria for the audit obligation during the years 2019-2022
|
Criteria |
2019 |
2020 |
2021 |
2022 |
|
The total amount of assets in euros |
1,000,000 |
2,000,000 |
3,000,000 |
4,000,000 |
|
Net turnover in euros |
2,000,000 |
4,000,000 |
6,000,000 |
8,000,000 |
|
Number of employees |
30 |
30 |
40 |
50 |
An example of an audit obligation
The following table provides an example of the test of the criteria.
|
Criteria |
2021 |
2022 |
|
The total amount of assets in euros |
3,000,000 – exceeded |
4,000,000 – exceeded |
|
Net turnover in euros |
6,000,000 - not exceeded |
8,000,000 – exceeded |
|
Number of employees |
40 - did not exceed |
50 - did not exceed |
Based on the table, it can be concluded that for the period of 2021 only one criterion out of 3 was met which means that the company does not have the obligation of the compulsory audit for that particular year. For the period of 2022, two out of three criteria were met so the company has the obligation of the statutory audit for 2022 but since the conditions need to be met for two years, the company does not have to be audited in 2022.
