Key takeaways
- Every Cyprus company still needs independent assurance; there is no small-company exemption. What changed is which companies can qualify for a lighter review engagement instead of a full statutory audit.
- The review-engagement turnover threshold rose from €200,000 to €300,000, alongside an unchanged €500,000 total-assets cap; both criteria must be met together, for two consecutive years.
- The change applies to financial years starting on or after 6 February 2026, via a separate bill from the main tax reform package.
- Raising the turnover cap while leaving the asset cap unchanged mainly widens eligibility for revenue-heavy, asset-light small companies, not asset-heavy ones already close to the cap.
- A review engagement (ISRE 2400) is still performed by a licensed auditor and is not the same as unaudited or compiled accounts; it gives limited, not full, assurance, so clean source records matter either way.
01No Cyprus company escapes assurance
Every Cyprus-registered company must have its financial statements independently examined; there is no small-company exemption from assurance. The only variable is the type of engagement: a full statutory audit, or, for companies that qualify, a review engagement under ISRE 2400 (Revised).
A review is lower-scope: limited assurance built mainly on analytical procedures and inquiry, rather than the reasonable-assurance testing a statutory audit performs. A company that does not meet the eligibility criteria stays on a full audit; what changed is the criteria.
02What changed, the numbers
The new eligibility criteria for a review engagement:
The two figures work together, not as alternatives: a company needs turnover under €300,000 and total assets under €500,000, in both of the two consecutive financial years assessed.
03Who the raised threshold actually reaches
Because both criteria must be met together, raising the turnover cap while leaving the €500,000 asset cap unchanged mainly widens eligibility for revenue-heavy, asset-light small companies: service businesses and trading intermediaries, rather than asset-heavy ones already near the cap.
Two mechanics to flag to clients: a newly incorporated company still needs the two-year track record, so the change does not shortcut year one. And a company that later exceeds either threshold for two consecutive years reverts to a full statutory audit, so eligibility for review is a status to monitor annually, not a one-time decision.
04What a review engagement changes, and what it doesn't
An ISRE 2400 review is still an assurance engagement performed by a licensed auditor.
It is not the same as unaudited or compiled accounts, and it is not a rubber stamp.
What changes is scope and the form of the conclusion: a review gives limited assurance, typically a negative-form conclusion ("nothing has come to our attention to indicate the financial statements are not fairly presented"), rather than the positive opinion a full audit expresses.
In practice that usually means less transaction-level testing and more analytical review, which can lower both the fee and the calendar time an engagement takes. It does not remove the auditor's ability to ask for underlying documentation, so the quality of a company's records still shapes how smoothly the engagement runs, audit or review.
05The record-keeping angle: clean source documents matter either way
Nothing about the assurance route changes what a small company should be keeping in order. The habits that make either engagement painless:
- Legible source documents matched to the ledger , every invoice and receipt traceable to the entry it supports.
- VAT treatment recorded per line, not assumed , so a reviewer or auditor can see the basis for the rate applied, not just the total.
- Bank reconciliations kept current , not reconstructed retroactively when the engagement letter arrives.
- Supporting schedules for accruals and provisions , with the workings kept, not just the final figure.
- A visible trail from source document to posted entry , so a clarifying question can be answered by pointing, not searching.
A reviewer asking a clarifying question needs the same underlying evidence an auditor would, just for fewer items.
This describes publicly announced thresholds and legislative changes, not professional advice on which engagement type applies to a specific company. Confirm eligibility and transition timing with your auditor, or with ICPAC, before any engagement-letter decision.
The habits that make a review engagement painless are the same ones the VAT working papers guide describes for a defensible VAT file: source document, treatment, and posted entry, kept together. If your practice is tracking this threshold, and the SDC, provisional-tax, and VIES dates around it, across several clients, the compliance calendar for accounting practices keeps them on one screen.