In July 2025, an amendment to the Accounting Act was approved that fundamentally changes the rules for mandatory audits and the categorization of accounting entities.
The Chamber of Deputies and the Senate have approved an amendment to the Accounting Act which significantly narrows the scope of accounting entities subject to a mandatory audit. The amendment still needs to be signed by the President of the Czech Republic and published in the Collection of Laws before it can enter into force.
The main change is that audits will only be mandatory for accounting entities classified as medium-sized or large. Small accounting entities are now exempt from audit requirements, even though they were previously subject to them. The only exceptions are public-interest entities (e.g. banks, insurance companies, securities issuers), which will continue to be subject to mandatory auditing regardless of their category.
Unless an accounting entity exceeds at least two of the three limits set out below in two consecutive accounting periods, auditing will not be mandatory for its financial statements: – assets exceeding CZK 120 million (previously CZK 40 million) – turnover exceeding CZK 240 million (previously CZK 80 million) – more than 50 employees
The change in the audit rules is closely related to the amended limits for the categorization of accounting entities by size. There is a significant increase in the monetary limits for annual net turnover and asset value. (The limit for the average number of employees remains unchanged.)
Below are the new limits that will be used to determine the category. Each category of accounting entity has different requirements for the scope of financial statements and audit obligations. An accounting entity falls into the next higher category if it exceeds at least two values in two consecutive accounting periods:
Micro accounting entity – Assets ≤ CZK 11 million – Turnover ≤ CZK 22 million – Number of employees ≤ 10
Small accounting entity – Assets ≤ CZK 120 million – Turnover ≤ CZK 240 million – Number of employees ≤50
Medium accounting entity – Assets ≤600 million CZK – ,Turnover ≤1,200 million CZK – Number of employees ≤250
Large accounting entity – on the balance sheet date, at least two of the values specified for medium-sized accounting entities are being exceeded.
The new rules will apply from 1 January 2026. For accounting entities that keep accounts according to the calendar year, the data for 2024 and 2025 will be assessed.
Source: Act No. 563/1991 Coll., on Accounting Parliamentary Print 783 – Amendment to the Accounting Act
