The default rule in Cyprus is simple and often misunderstood: every company must prepare financial statements and have them either audited or reviewed by a licensed statutory auditor. There is no turnover below which a company escapes both. What changed in 2026 is not an exemption — it is that more small companies can now use the lighter, cheaper review engagement under ISRE 2400 (Revised) instead of a full statutory audit, because the turnover ceiling for that option rose from €200,000 to €300,000.
This guide sets out exactly when a review can replace an audit in 2026, the difference in what you get, a worked example of who qualifies, and the traps that catch companies out. It pairs with our guide to Cyprus company annual obligations and the 2026 tax calendar.
Does every Cyprus company need an audit?
Yes — or a review. Under the Companies Law (Cap. 113), every Cyprus company must prepare financial statements under IFRS and have them examined by a statutory auditor licensed and regulated by ICPAC. The only relief for small companies is the type of engagement: a qualifying company can have a review rather than a full audit. Both are signed by a licensed auditor, and both sets of financial statements are filed in the same way and to the same deadlines.
A common myth is that the smallest companies need no accounts. That is not true for companies. The "turnover below which no audited accounts are needed" rule applies to self-employed individuals, not to limited companies — see going self-employed in Cyprus. A dormant company can apply specific dormant-company treatment, but an active company always needs an audit or a review.
When can a review replace the audit in 2026?
A company may opt for a review instead of a full audit only if it satisfies both of the following for two consecutive financial years:
| Test | Limit (FY on/after 6 Feb 2026) | Previously |
|---|---|---|
| Net turnover | Below €300,000 | Below €200,000 |
| Total gross assets | Below €500,000 | Below €500,000 (unchanged) |
| Period for which both must hold | Two consecutive financial years | |
| Who performs it | ICPAC-licensed statutory auditor / audit firm | |
If either test is failed — turnover at or above €300,000, or assets at or above €500,000 — a full statutory audit is required. The two tests are cumulative, not alternatives: passing one is not enough.
The €300,000 turnover limit applies to financial years beginning on or after 6 February 2026. For earlier years the limit is €200,000. A December year-end company applying the new limit will typically do so from its FY2026 accounts onward — confirm your company's position for the specific year you are filing.
Audit vs review: what's actually different?
The two engagements differ in the level of assurance the auditor gives — and therefore in how much work is done and what the report is worth to a third party.
An audit provides reasonable assurance: the auditor performs detailed testing and expresses a positive opinion that the financial statements give a true and fair view. A review (ISRE 2400) provides limited assurance: the auditor performs mainly enquiry and analytical procedures and gives a negative-form conclusion that nothing has come to their attention to suggest the statements are materially misstated.
| Statutory audit | Review (ISRE 2400) | |
|---|---|---|
| Assurance level | Reasonable (true & fair view) | Limited (nothing came to attention) |
| Standard | International Standards on Auditing (ISAs) | ISRE 2400 (Revised) |
| Work involved | Risk assessment + substantive testing of balances | Enquiry + analytical procedures |
| Typical cost & time | Higher | Lower |
| Signed by | ICPAC-licensed statutory auditor | ICPAC-licensed statutory auditor |
| Filing obligation | Same deadlines | Same deadlines |
Worked example: who qualifies, who doesn't
The two-test, two-year mechanic is best seen on real numbers. Take three Cyprus companies with a December year-end, looking at their FY2026 accounts:
| Company | Turnover | Total assets | Outcome (FY2026) |
|---|---|---|---|
| A — small consultancy | €250,000 | €180,000 | Review — both tests passed (assuming FY2025 also passed) |
| B — growing trader | €310,000 | €120,000 | Audit — turnover ≥ €300,000 |
| C — asset-heavy holding | €90,000 | €640,000 | Audit — assets ≥ €500,000, even though turnover is tiny |
Company A turned over €248,000 in FY2025 and €250,000 in FY2026, with assets of €170,000 and €180,000. Because both turnover and assets stayed under the limits for two consecutive years, Company A can file FY2026 with an ISRE 2400 review rather than a full audit — a lower-cost engagement for the same filing outcome. Had its FY2025 turnover been €305,000, the two-consecutive-year test would fail and FY2026 would still need a full audit.
The traps that catch companies out
- Both tests, every year. Failing either turnover or assets — in either of the two years — means a full audit.
- Group subsidiaries rarely qualify. Intercompany loans and receivables usually push total gross assets over €500,000, so subsidiaries of international groups normally stay on a full audit regardless of turnover.
- Switching back and forth. A company hovering around €300,000 may flip between review and audit year to year. Many owners near the line simply stay on audit for continuity.
- Third parties may require an audit. Banks, investors, acquirers and public tenders often insist on audited accounts. A review will not satisfy them even if you qualify for one.
- Self-employed individuals are different. The rules above are for companies; the assurance obligation for a sole trader follows separate turnover rules — see going self-employed in Cyprus.
Which should you choose?
If your company is clearly above either threshold, the decision is made for you — a full audit is required. If you genuinely qualify for a review, weigh three things:
- Does anyone require audited accounts? If your bank, investors or a tender do, take the audit regardless.
- Are you about to grow past €300,000? Continuity often argues for staying on audit rather than switching.
- Is cost the priority and external assurance need low? Then the review is the lighter, cheaper route — and the saving is real.
Whichever applies, clean bookkeeping is what keeps either engagement fast and inexpensive. The messier the records, the more the auditor has to do — and the more either a review or an audit costs.
How we handle audits and reviews
We keep your books audit-ready year-round through our accounting and bookkeeping service, work out whether your company qualifies for a review, and coordinate the engagement through our network of ICPAC-licensed statutory auditors — Philippou Accounting prepares and manages; the statutory opinion is signed by the licensed auditor. If you are weighing a switch of provider, our guide to changing accountant in Cyprus shows what a clean handover looks like. Talk to us about which engagement your company needs in 2026.