What is the employee threshold for a company to be exempt from a mandatory audit under the Companies Act?

A company is exempt from a mandatory audit under the Companies Act if it qualifies as a small company. One of the key criteria for determining whether a company is classified as small involves meeting certain thresholds, including those related to the number of employees.

To qualify for audit exemption, a company must have no more than 50 employees on average in the financial year. This threshold aligns with the definition set out in the Companies Act, which specifies that small companies must not exceed 50 employees. Therefore, selecting the option indicating no more than 50 employees is accurate in reflecting the legislative requirements, allowing an understanding of the size and scope under the Companies Act that delineates when a company faces differing audit obligations.

The thresholds beyond 50 employees would not apply to small companies and would thus require a mandatory audit, reinforcing the importance of the 50-employee guideline in defining audit exemptions for smaller entities.