Worth Knowing - Audit Exemption
Companies subject to reporting class B of the Danish Financial Statements Act can avail of audit exemption.
However, the companies continue to have to prepare and submit financial statements to the Danish Business Authority according to the rules of the Danish Financial Statements Act. Audit exemption is possible only for coming financial statements. Consequently, past reporting periods cannot be exempt from the statutory audit.
Companies subject to reporting class B of the Danish Financial Statements Act can avail
of the audit exemption if the company for two successive reporting years at its balance
sheet date does not exceed two of the following three thresholds:
- A balance sheet total of DKK 4 million
- Net revenue of DKK 8 million
- An average of 12 full-time employees during the reporting year.
The audit exemption does not apply to commercial foundations and employee investment companies, notwithstanding they meet the criteria.
Net revenue must be combined with financial income and income from investing activities if they are of minimum the same size as the net revenue.
The availability of audit exemption is lost if the company, an affiliate or the sole proprietor of the company accepts a fixed-penalty notice or as a party to a criminal case is found guilty of breach of company law, accounting legislation or tax and duties legislation. In such cases the company’s financial statements for the subsequent reporting year must be audited. The Danish Business Authority may extend the period of audit of the company’s financial statements by up to three reporting years.
Similarly, the Danish Business Authority may decide that a company will not be exempt from audit if a control shows material misstatement of the company’s financial statements.
Do you want to read more?
Downloade the publication