Internal Audit in Nicosia
Internal audit provides independent, objective assurance to the board of directors and senior management on the effectiveness of a Cyprus company's risk management, internal controls, and governance processes. Unlike statutory audit, it is typically discretionary for private companies but mandatory for public-interest entities, CySEC-regulated firms, and larger organisations pursuing best practice governance.
What is internal audit?
Internal audit is an independent, objective assurance and consulting activity designed to add value to an organisation. It helps evaluate and improve the effectiveness of governance, risk management, and internal control processes. In Cyprus, internal audit engagements are typically performed against the International Standards for the Professional Practice of Internal Auditing (IPPF) issued by the Institute of Internal Auditors (IIA).
Engagements can be operational, financial, compliance-focused, or IT-focused. Reports are typically issued to the audit committee or board, not to external parties.
When is internal audit mandatory?
Under Cyprus corporate governance requirements, certain entities are required to have an internal audit function: banks and credit institutions supervised by the Central Bank of Cyprus, insurance companies under Insurance Companies Law, Cyprus Investment Firms (CIFs) supervised by CySEC, publicly listed companies on the Cyprus Stock Exchange, and Alternative Investment Fund Managers (AIFMs) exceeding certain size thresholds.
Beyond regulated entities, many mid-market Cyprus companies engage internal audit selectively for specific risk areas — cybersecurity, procurement, supplier relationships, or compliance programmes.
Cyprus regulatory framework
CySEC-regulated CIFs must maintain an internal audit function proportionate to the nature, scale, and complexity of their business, as detailed in CySEC Circular C136 and related directives. Banks must comply with the Central Bank's Governance and Management Arrangements Directive. Public interest entities follow the corporate governance code recommendations.
The internal audit function must be independent of operational management, with direct reporting to the audit committee or board. It cannot report to a function it audits.
In-house vs outsourced internal audit
Cyprus regulators generally permit outsourcing of the internal audit function to a qualified external firm, provided the arrangement preserves independence and the board retains ultimate responsibility. For smaller regulated entities and mid-market companies, outsourced internal audit is often more cost-effective than building an in-house team.
Typical annual fees for outsourced internal audit range from €10,000 for smaller CIFs to €50,000+ for larger regulated firms with multiple risk domains to cover annually.
Firms specialising in Internal Audit
10 firmsMulti-practitioner firms with documented practice in Internal Audit, ranked by claim status, listing completeness, and client rating.
A&C Christofi Ltd is a Cyprus-based firm of Certified Chartered Accountants and Registered Auditors, providing accounting, audit, tax, payroll, business advisory, and other professional services to SMEs and individuals. With over 17 years of experience, they emphasize human-centered advisory and technology-enabled efficiency.
Demetriou & Associates Business Advisers Ltd (dba) is a dynamic firm of professional accountants and business advisers based in Nicosia, Cyprus. Established in 2017 by a team with over 30 years of experience, the firm offers audit, assurance, taxation, accounting, advisory, and business setup services. They are a member of DFK International, a global association of independent accounting firms.
Reanda Cyprus is a professional services firm offering corporate, accounting, and international tax services. They help clients navigate the complexities of international business with services including audit, tax, corporate finance, immigration, and compliance. They are part of the Reanda International network, originally founded by a top-tier Chinese firm in 1993.
UHY Antonis Kassapis Ltd is the Cyprus member firm of UHY International, based in Nicosia. Established in 1991, it provides audit, tax, accounting, corporate and fiduciary, and management consultancy services to local and international clients.
CYAUSE Audit Services Ltd, established in 2011, is a Cyprus-based professional services firm offering audit, tax, accounting, company formation, licensing, and advisory services. With offices in Limassol, Nicosia, and Abu Dhabi, and membership in BKR International, the firm serves international and local clients across diverse industries, including high net worth individuals, investment firms, and trading companies.
Nexia Poyiadjis is a Cyprus-based professional services firm and the exclusive member of Nexia International in Cyprus. They provide audit, tax, advisory, and outsourcing services to a wide range of industries. With headquarters in Nicosia and an office in Limassol, they serve clients in banking, real estate, energy, funds, shipping, and more.
HLB Cyprus is a chartered accounting and advisory firm, originally established in 1997 and now among the largest in Cyprus. It provides audit, tax, advisory, corporate compliance, payroll, and cyber security services to a diverse, multinational clientele. The firm is a member of HLB International, a global network of independent accounting firms.
Morison Patsalides Limited is a Cyprus-based firm of chartered accountants founded in 1990. They offer audit, accounting, tax, international business, consulting, and corporate finance services. The firm is a member of the Morison Global international network and prides itself on a personal approach to client needs.
Kreston Proios Ltd is a leading independent accountancy firm in Cyprus, established in 1965. It offers audit, taxation, advisory, and management consulting services to local and international clients. The firm is a member of the Kreston global network and is an ACCA Approved Employer.
One of the leading professional firms in the service sector in Cyprus, G. Josephakis Audit Ltd offers audit and assurance, taxation, business advisory, accounting, company formation, and training services. Their mission is to provide high-standard professional services to help clients succeed.
Independent specialists
84Certified Public Accountant · Nicosia
Certified Public Accountant · Nicosia
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Certified Public Accountant · Nicosia
Certified Public Accountant · Nicosia
Certified Public Accountant · Nicosia
Certified Public Accountant · Nicosia
Certified Public Accountant · Nicosia
Certified Public Accountant · Nicosia
Certified Public Accountant · Nicosia
Certified Public Accountant · Nicosia
Certified Public Accountant · Nicosia
Certified Public Accountant · Nicosia
Certified Public Accountant · Nicosia
Certified Public Accountant · Nicosia
Certified Public Accountant · Nicosia
Certified Public Accountant · Nicosia
Certified Public Accountant · Nicosia
Certified Public Accountant · Nicosia
Certified Public Accountant · Nicosia
Certified Public Accountant · Nicosia
Certified Public Accountant · Nicosia
Certified Public Accountant · Nicosia
Certified Public Accountant · Nicosia
Certified Public Accountant · Nicosia
Certified Public Accountant · Nicosia
Certified Public Accountant · Nicosia
Certified Public Accountant · Nicosia
Certified Public Accountant · Nicosia
Certified Public Accountant · Nicosia
Certified Public Accountant · Nicosia
Certified Public Accountant · Nicosia
Certified Public Accountant · Nicosia
Certified Public Accountant · Nicosia
Certified Public Accountant · Nicosia
Certified Public Accountant · Nicosia
Certified Public Accountant · Nicosia
Certified Public Accountant · Nicosia
Certified Public Accountant · Nicosia
Certified Public Accountant · Nicosia
Certified Public Accountant · Nicosia
Certified Public Accountant · Nicosia
Certified Public Accountant · Nicosia
Certified Public Accountant · Nicosia
Certified Public Accountant · Nicosia
Certified Public Accountant · Nicosia
Certified Public Accountant · Nicosia
Certified Public Accountant · Nicosia
Certified Public Accountant · Nicosia
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Frequently asked questions
Do all Cyprus companies need internal audit?
No. Internal audit is mandatory for regulated entities such as CIFs, banks, and insurance firms, and for listed companies. Private unregulated companies have no legal obligation, though many mid-market firms voluntarily commission internal audit reviews for governance or risk management purposes.
Can internal audit and statutory audit be provided by the same firm?
For most Cyprus private companies, yes. However, for public interest entities and CySEC-regulated firms, EU Audit Regulation restricts non-audit services by the statutory auditor, including internal audit in some cases. Firms should check the current rules with their auditor before engaging.
What qualifications should an internal auditor have?
The Certified Internal Auditor (CIA) qualification from the IIA is the international benchmark. Many Cyprus practitioners also hold ACCA, ACA, or ICPAC qualifications with specialisation in internal audit or risk. For IT audits, CISA (Certified Information Systems Auditor) is standard.
How often should internal audits be performed?
The Internal Audit Plan is typically approved annually by the audit committee based on a risk assessment. Higher-risk areas may be audited annually or more frequently; lower-risk areas on a 2-3 year cycle. Regulated entities must follow a documented plan proportionate to their risk profile.
What does an internal audit report look like?
A typical report describes the scope and objectives, methodology, findings ranked by risk severity, recommendations for improvement, and management responses. Reports are issued to the audit committee or board, with executive summaries for senior management. Follow-up on remediation is part of the ongoing audit cycle.