Audit obligation
When do you have an audit obligation?
Audits and annual reports are two different things that are often confused. If there is an audit on a business, a registered or state-authorized public accountant must provide assurance and sign the financial statements.
Sole proprietorships (accounting class A) are not subject to audit. Limited liability companies and public limited companies (accounting classes B and C) are subject to audit unless you can opt out of the audit.
Your company can opt out of auditing if you do not exceed two of the three requirements below:
- A balance sheet total of over 4 million DKK
- Net revenue over 8 million DKK
- Average 12 full-time employees during the financial year
I Accountview we annually set up 500 annual reports without the need for an audit.
Risk industries with extended audit requirements
- Road freight transportation
- Moving stores
- Restaurants & Bars
- Pizzerias, grill bars, ice cream parlors
- Event catering
- Other restaurant services
- Data processing, web hosting and similar services
- Web portals
- Wholesale of cars, vans and minibuses
- Retail sale of cars, vans and minibuses
The annual report in the above industries with an annual turnover of more than DKK 5 million must therefore be provided with either:
- A statement of assistance with the preparation of the financial statements
- A review statement
- A statement on extended review
- A statement of assurance
It’s important to be aware of audit and annual report requirements, especially if your business operates in a high-risk industry. If you need guidance on whether your company is subject to mandatory auditing or if you need assistance with your annual report, we’re here to help.
Risk industries with extended audit requirements
According to the new Digital Bookkeeping Act, the audit obligation is extended to certain industries, so companies with a turnover of more than DKK 5 million annually must also have a declaration. The risk industries are :
- Road freight transportation
- Moving stores
- Restaurants & Bars
- Pizzerias, grill bars, ice cream parlors, etc.
- Event catering
- Other restaurant services
- Cafes, pubs, discos, etc.
- Data processing, web hosting and similar services
- Web portals
- Wholesale of cars, vans and minibuses
- Retail sale of cars, vans and minibuses
The annual report in the above industries with an annual turnover exceeding DKK 5 million must therefore be provided with either
- A statement of assistance with the preparation of the financial statements
- A review statement
- A statement on extended review
- A statement of assurance
It’s important to be aware of audit and annual report requirements, especially if your business operates in a high-risk industry. If you need guidance on whether your company is subject to mandatory auditing or if you need assistance with your annual report, we’re here to help.
