Audit Coordination in Malta

For each accounting period, the company’s directors shall prepare individual accounts comprising the balance sheet as at the last day of the accounting period to which they refer, the profit and loss account for that period, the notes to the accounts and any other statements which may be required. 

The Client Accounting team at CSB Group assists with co-ordinating companies’ statutory audits as required by the Companies Act (as well as other assurance engagements), and the drafting of audited financial statements for submission to the Malta Business Register.

Audit Coordination in Malta – Key Facts

• Audit requirement: Malta companies must prepare annual financial statements. Most require a statutory audit, but certain qualifying and/or newly incorporated companies may benefit from an audit exemption under applicable rules
• Regulatory framework: Annual accounts are filed with the Malta Business Registry (MBR), generally together with an auditor’s report unless a statutory exemption applies
• Audit standards: Where an audit is required, it must be conducted in accordance with International Standards on Auditing (ISAs)
• Qualified auditors: Statutory audits must be performed by warranted auditors authorised by the Maltese Accountancy Board
• Accounting frameworks: Companies may prepare financial statements under GAPSME or IFRS (as adopted by the EU):
  • IFRS: MGA-licensed companies, certain regulated entities and large companies exceeding the SME thresholds highlighted below may be required to use IFRS
  • GAPSME: Small and medium companies within the SME thresholds highlighted below classification thresholds may use GAPSME
• Financial statement components: Required components depend on the applicable accounting framework and entity size. Under the GAPSME framework, small entities have reduced disclosure requirements compared with medium entities or IFRS reporters
• Submission deadlines: Private companies must generally approve annual accounts within 10 months after year-end, with an additional 42 days granted for submission. Different timelines can apply to public companies and first accounting periods which are longer than 12 months

Audit of Financial Statements

Malta companies are required to prepare annual financial statements and file annual accounts with the Malta Business Registry (MBR). In most cases these accounts are accompanied by an auditor’s report, however, certain qualifying small private companies and certain newly incorporated companies may benefit from an exemption for a full statutory audit under the provisions of the Companies Act and the Audit Exemption Rules, 2025.

Where an audit is required, the audit of financial statements is to be carried out by a qualified person holding the relevant warrant issued by the Maltese Accountancy Board and performed in accordance with International Standards on Auditing.

GAPSME & IFRSs

Financial statements are generally prepared under General Accounting Principles for Small and Medium-Sized Entities (‘GAPSME’) where the company qualifies and no election or requirement to apply International Financial Reporting Standards (‘IFRSs’) as adopted by the EU applies. Large undertakings, public-interest entities and certain regulated entities may need to report under IFRS.

Companies may also need to comply with group accounting policies, meaning that if group companies are preparing financial statements according to IFRSs, it might be necessary to prepare IFRS financial statements for that company too.

How does one classify SMEs in terms of the rules?

In terms of the GAPSME Regulations, an entity is considered to be small or medium, as applicable, if on the basis of two consecutive years it meets two of the three criteria set out in the table below:

Please note that the above thresholds may differ from those of small companies in the Companies Act.

Large and Public Interest Entities (PIEs) fall outside the scope of GAPSME, and are therefore required to prepare a full set of financial statements in accordance with IFRS. Companies holding an MGA license and other regulated entities may also be obliged to prepare financial statements in accordance with IFRSs.

Companies should assess their classification and applicable reporting framework each year, particularly where size thresholds, group status, regulated status or audit-exemption eligibility may impact the company.

Disclosure Requirements for Financial Statements

Small companies that are not PIEs are exempted from the requirement to prepare and to deliver to the MBR a directors’ report. For Companies Act purposes, a company is generally considered to be a small company where, as at its balance sheet date, it does not exceed at least two out of the following three thresholds: a balance sheet total of €5 million, net turnover of €10 million, and an average of 50 employees during the accounting period.

Where the directors take advantage of the exemption from delivering the directors’ report to the MBR, together with the annual accounts, a declaration on the prescribed form in lieu of the directors’ report will need to be signed by the same directors to confirm that the company qualifies for the exemption.

If a company is incorporated between 1 January and 30 June, its first accounting period would generally run from the incorporation date to 31 December of that year, unless a different accounting reference date is selected and properly notified to the MBR. If a company is incorporated between 1 July and 31 December, the first accounting period would generally run from the incorporation date to 31 December of the following year.

A company can also have its year end other than 31 December, but if this is not specified and the respective form filed at the MBR, the default will be 31 December.

Submission to the Malta Business Registry 

For private companies, annual accounts must generally be approved within 10 months from the accounting year-end and submitted with the MBR within a further 42-day window. For public companies, a shorter approval timeline applies.

Tax return deadlines must also be adhered to. 

Coordination Process of Company Audits

The process begins by obtaining fee proposals from reputable independent audit firms in Malta for the client’s consideration. Throughout the entire audit process, we ensure that auditor independence, quality standards and statutory requirements are respected.

Following the appointment of the chosen audit firm, we will facilitate the process to ensure a smooth and efficient audit is carried out. The auditor will receive timely and accurate management accounts together with all the supplementary information that is required during the course of the audit.

We coordinate with the auditor and address audit queries within the scope of the accounting records and information available to us, reverting to the client where confirmations, explanations or documents are required. This helps the audit engagement progress on a timely basis and supports the finalisation and submission of the audited financial statements within the stipulated deadlines.