If a dormant company is also a bank or insurance company, what is the audit requirement?

• A. It still requires an audit
• B. It is exempt from audit
• C. Audit required only if it has employees
• D. Audit required only if it files group accounts

Answer: (A)

Banks and insurers face mandatory statutory audits regardless of whether they are dormant. While a private company that is dormant can often avoid an audit if it has no significant accounting transactions, the regulatory framework for banks and insurance firms overrides that exemption. The aim is to ensure reliability of financial information for regulators and the market, so the financial statements of these regulated entities must be audited even if no trading has occurred. This requirement stands irrespective of whether the company has employees or files group accounts.