Companies Act 2014 section 361

Audit exemption not available where notice under section 334 served

Section 361 deals with the circumstances in which a company or group loses its entitlement to the audit exemption because members have exercised their right under section 334 to require a statutory audit.

• Even if a company meets all the qualifying conditions for audit exemption, it loses that entitlement for any financial year in which the company's members serve a notice under section 334 requiring an audit.
• In a group situation, if such a notice is served on the holding company, the entire group — including the holding company and all other group members — loses the audit exemption for that year, regardless of whether notices were also served on individual subsidiaries.
• If no notice is served on the holding company but a notice is served on another group member, only that particular group member loses its audit exemption for the year in question; the holding company and the remaining group members may still avail of the exemption.
• Where only a subsidiary loses its exemption in this way, this does not reduce or affect the scope of the audit exemption as it applies to the holding company's group financial statements.