New Criteria for an Obligatory Audit


In accordance with the amendment to the Accounting Act effective as of 1 January 2016, accounting entities in the Czech Republic are divided into 4 categories: micro, small, medium and large companies. The entities are divided into these categories based on their total assets, total turnover and average number of employees.

The criteria relevant for the initial classification of the companies are based on the financial statements for 2015. A company is classified into such a category for which it meets at least 2 out of 3 criteria as specified below. An entity changes its category if it meets criteria for another category for two consecutive periods.

The relevant criteria are shown in the following table:

Newly, the financial statements of large and medium companies are always subject to an obligatory audit, whereas the financial statements of micro companies are not. The criteria for an obligatory audit have remained generally unchanged only for small companies. However, it is also worth mentioning that the computation of criterial values as above has also been slightly altered by the amendment.

Should you have any questions regarding the issues above, please do not hesitate to contact Radek Stein, e-mail:


Download Newsletter October 2016