How to Appoint an Auditor for Your Danish ApS

Starting and operating a Danish private limited liability company (Anpartsselskab or ApS) comes with a wide range of responsibilities, one of which is the appointment of an auditor. Appointing an auditor can often feel daunting due to various legal requirements and the importance of selecting the right professional who aligns with your company's needs.

This article will provide a meticulous and detailed roadmap on how to appoint an auditor for your Danish ApS, ensuring you understand not only the steps involved but also the implications of this essential decision.

The Role of an Auditor in an ApS

An auditor serves as an independent third-party professional responsible for examining and verifying a company's financial records to ensure accuracy and compliance with applicable laws and standards. The key responsibilities of an auditor include:

- Reviewing financial statements: Ensuring that the financial statements provide a true and fair view of the company's financial performance.

- Ensuring compliance: Verifying compliance with Danish Accounting Standards and other relevant legislation.

- Offering recommendations: Providing suggestions for improving financial processes and controls within the business.

For an ApS, having a qualified auditor is crucial as it builds credibility with stakeholders such as investors, banks, and tax authorities.

Legal Obligations for Auditors in Denmark

In Denmark, the appointment of an auditor is governed by the Danish Companies Act (Selskabsloven). The legal provisions relevant to auditors in a Danish ApS include:

- Mandatory Audits: Not all Danish ApS companies are required to have an audit performed. Companies meeting at least two of the following criteria are required to appoint an auditor:

1. Total assets exceeding DKK 4 million.

2. Net turnover exceeding DKK 8 million.

3. Average number of employees exceeding 12.

If your company does not meet at least two of the above criteria, you may not be obligated to appoint an auditor but still may choose to do so for various reasons, such as improving credibility or securing financing.

- Selection in the Articles of Association: Your company's articles of association should encompass stipulations regarding auditor appointment, including criteria for selection and duration of the auditor's term.

- The Auditor's Qualifications: Only individuals or firms registered with the Danish Business Authority can serve as auditors. Auditors must possess the requisite qualifications and be certified public accountants.

Steps to Appoint an Auditor

Appointing an auditor involves several steps, each critical to ensuring you select the most suitable professional for your ApS.

Step 1: Examine Your Needs

Before you begin the process of appointing an auditor, it's essential to assess your company's unique requirements. This involves:

- Understanding your business size and complexity: A larger or more complex business may require an auditor with specific industry expertise or a larger firm that can accommodate diverse needs.

- Defining the audit scope: Clarify what you expect from the audit. This will directly influence the type of auditor you should consider.

- Evaluating your budget: Understand how much you are willing to invest in audit services. Audit fees can vary significantly between firms and depending on the complexity of your financials.

Step 2: Research Potential Auditors

Researching potential auditors can feel overwhelming, but a systematic approach can ease the process:

- Seek recommendations: Consider asking other business owners for referrals. Personal recommendations can guide you toward reputable and reliable auditors.

- Utilize professional networks: Leverage platforms such as LinkedIn or local business networks to find professionals with the right qualifications and experience.

- Check credentials: Ensure the auditors are certified and have experience working with ApS companies in Denmark.

Step 3: Schedule Interviews

Once you've compiled a list of potential auditors, it's time to schedule interviews or meetings.

- Prepare a list of questions: Frame questions around their experience, specific industry knowledge, approach to audits, and handling of complex financial issues.

- Assess compatibility: It's essential that you feel comfortable with the auditor, as they will be privy to sensitive financial information.

- Inquire about fees: Discuss their fee structure and any potential additional costs that may arise during the audit process.

Step 4: Request Proposals

After interviews, you may wish to request formal proposals from qualified candidates.

- Proposal contents: A well-outlined proposal should include the auditor's approach to the audit, services provided, estimated timelines, and fee structures.

- Review and compare: Evaluate proposals against your established criteria to assess which auditor best aligns with your requirements.

Step 5: Make a Selection

With all the information you've gathered, now you can choose the most suitable auditor for your Danish ApS. Consider the following before making your decision:

- Reputation and reliability: Choose an auditor with a track record of reliability and professionalism.

- Specialized experience: If your business operates within a niche market, finding an auditor familiar with that industry can be advantageous.

- Compatibility: Consider how well you can communicate with the auditor and their ability to translate complex accounting terminology into understandable language.

Step 6: Formal Appointment

Once you've selected your auditor, you will need to make a formal appointment.

- Update Articles of Association: If necessary, amend your articles of association to reflect the auditor's details.

- Document the appointment: Draft an official resolution confirming the appointment, including any terms agreed upon.

- Notify relevant authorities: Inform the Danish Business Authority about the appointment, as required by law.

Ongoing Relationship Management with Your Auditor

Once an auditor is appointed, it's vital to manage the ongoing relationship effectively. Here are some pointers:

Establish Clear Communication Channels

Maintain transparency by having regular communications with your auditor. Schedule pre-audit meetings to clarify expectations and ensure that both parties are on the same page.

Provide Necessary Information

Ensure that you deliver requested documents and information promptly. Delays in providing financial data can derail the audit process and increase costs.

Seek Advice

Take advantage of your auditor's expertise. If you're contemplating any significant changes in your business structure or financial practices, consult with them to avoid potential pitfalls.

Potential Challenges in Appointing an Auditor

While the steps to appoint an auditor are straightforward, various challenges may arise during the process:

Limited Availability of Qualified Auditors

Finding auditors with the necessary qualifications-and within your budget-can sometimes be a challenge, especially if you operate in a niche market.

Mismatch of Expectations

It's crucial to ensure that both parties are aligned regarding expectations for the audit process. Miscommunication can lead to frustration and unmet needs.

Changing Regulations

Stay updated with any changes in the Danish Companies Act or related legislation affecting auditor appointments, qualifications, and duties to ensure compliance.

Key Differences Between an Auditor and an External Accountant in Denmark

An auditor and an external accountant both work with your ApS’s numbers, but their roles, responsibilities and legal status in Denmark are very different. Understanding these differences helps you decide whether you need a statutory auditor, whether you can opt out, and what kind of support you should expect from each professional.

Legal status and authorisation

In Denmark, an auditor is a regulated profession. Auditors must be authorised (state-authorised or registered) and are supervised by the Danish Business Authority (Erhvervsstyrelsen) and the Danish Auditors Supervisory Authority. They are subject to strict rules on independence, quality control and continuing education.

An external accountant (bookkeeper or accounting consultant) is not a protected title and is not licensed in the same way. Many accountants are highly qualified, but they are not subject to the same statutory oversight and do not have the legal mandate to perform statutory audits or issue audit opinions on financial statements.

Scope of work and responsibility

An auditor’s core task is to provide assurance on your financial statements. Depending on the engagement (full audit, extended review, review, or compilation), the auditor will examine your accounting records, internal controls and documentation to assess whether the annual report gives a true and fair view in accordance with the Danish Financial Statements Act and relevant accounting standards.

An external accountant typically focuses on day-to-day accounting and compliance, such as:

• Bookkeeping and reconciliation of bank accounts
• Preparation of VAT (moms) returns and payroll
• Drafting management accounts and budgets
• Preparing the draft annual report and corporate tax calculations

The accountant prepares figures; the auditor independently checks and challenges them. The auditor’s work is designed for shareholders, creditors and authorities, while the accountant’s work is primarily for management’s internal use and basic compliance.

Independence and conflict of interest rules

Danish auditors must comply with strict independence rules. If an auditor is appointed as the statutory auditor of your ApS, they:

• Cannot take over key management responsibilities, such as making decisions on accounting policies or authorising transactions
• Must avoid situations where their own work would be audited by themselves (self-review threat)
• Must disclose and manage any potential conflicts of interest

This means your auditor can advise and guide you, but cannot “run” your finance function if they are also signing the audit report.

An external accountant is not bound by the same statutory independence requirements. They can fully handle your bookkeeping, invoicing, payments and reporting. However, because they are involved in preparing the numbers, they cannot provide an independent audit opinion on those same numbers.

Who signs what: audit report vs. accounting assistance

When your ApS has a statutory auditor, the auditor issues and signs an audit report (or extended review report, depending on the engagement) that is attached to the annual report filed with Erhvervsstyrelsen. This report expresses a formal opinion on whether the financial statements are free from material misstatement.

An external accountant may sign an accounting assistance statement or similar note indicating that they have assisted in preparing the financial statements. This is not an audit opinion and does not provide assurance to shareholders, banks or authorities in the same way. It simply documents that a professional helped prepare the accounts.

When an auditor is legally required and when an accountant is enough

In Denmark, many smaller ApS can opt out of statutory audit if they remain below certain thresholds for two consecutive financial years. If your company consistently stays under the limits for balance sheet total, net revenue and average number of employees, you can choose to have no auditor and rely solely on an external accountant or internal resources.

However, even when the law allows you to opt out, other stakeholders may still require an auditor. Banks, investors or public grant providers often demand audited or at least reviewed financial statements as a condition for financing or support. In those cases, an external accountant alone will not meet their requirements; you need an authorised auditor to sign the report.

Liability and protection for owners and creditors

Auditors in Denmark carry professional liability and must have appropriate insurance. If an auditor is grossly negligent or intentionally issues a misleading audit opinion, they can be held liable for losses suffered by the company, shareholders or creditors, and may face disciplinary sanctions.

External accountants are also liable for their work under general contract and tort law, but there is no specific public disciplinary regime equivalent to that for auditors. The level of assurance and protection that their work provides to third parties is therefore more limited.

Typical collaboration in a Danish ApS

In practice, many Danish ApS work with both an external accountant and an auditor:

• The external accountant handles daily bookkeeping, VAT, payroll and prepares the draft annual report and tax calculations.
• The auditor reviews and tests the prepared material, performs audit or review procedures, and issues the formal report attached to the annual financial statements.

This division of roles can be efficient and cost-effective: the accountant focuses on routine processes, while the auditor concentrates on risk areas and assurance.

How to decide what your ApS needs

When choosing between an auditor and an external accountant (or deciding how they should work together), consider:

• Whether your ApS is legally required to have an auditor or can opt out
• What your bank, investors or other stakeholders expect in terms of audited accounts
• The complexity of your business model, group structure and transactions
• Your internal accounting resources and systems
• Your need for independent assurance versus primarily operational support

If your ApS is small, uncomplicated and below the audit thresholds, an experienced external accountant may be sufficient for compliance and management needs. If you are growing, seeking financing, or operating in a more complex or regulated sector, appointing an auditor can provide additional security, credibility and strategic insight.

When Is an Auditor Legally Required for an ApS and When Can You Opt Out?

Under Danish law, a private limited company (ApS) is not always required to have a statutory auditor. Whether you must appoint an auditor depends mainly on the size of your company and whether you choose to opt out of audit in your articles of association and at the general meeting. Understanding these rules helps you avoid unnecessary costs and stay compliant with the Danish Companies Act and the Danish Financial Statements Act.

General rule: Small ApS can opt out of audit

An ApS can normally opt out of a statutory audit if it qualifies as a “small company” and the shareholders decide to waive the audit requirement. To be considered small, your ApS must not exceed two out of the following three thresholds for two consecutive financial years:

• Balance sheet total: DKK 7 million
• Net revenue: DKK 14 million
• Average number of full-time employees: 10

If your ApS stays within these limits for two years in a row, you may choose to opt out of a full statutory audit. The decision must be approved by the general meeting and recorded in the articles of association and in the company’s filing with the Danish Business Authority (Erhvervsstyrelsen).

When an auditor is legally required for an ApS

You are legally required to appoint a state-authorised or registered auditor if your ApS does not qualify as a small company or if specific rules apply to your industry or ownership structure. In practice, an auditor is mandatory when:

• Your ApS exceeds two out of the three size thresholds (balance sheet, revenue, employees) for two consecutive financial years
• Your company is part of a larger group that is required to prepare consolidated financial statements with audit
• Sector-specific legislation requires an audit (for example, certain financial, insurance or investment-related activities)
• Public funding, grants or loan agreements impose an audit obligation
• The articles of association or a shareholders’ agreement explicitly require an audit

Once your ApS crosses the size thresholds for two consecutive years, the company must appoint an auditor, and the financial statements must be audited from the following financial year. The appointment is made by the general meeting and registered with the Danish Business Authority.

Situations where you cannot opt out of audit

Even if your ApS is small based on the thresholds, you cannot opt out of audit in the following typical situations:

• The company is classified as a financial undertaking or is otherwise regulated and subject to mandatory audit
• The company’s financing agreements (for example with banks or investors) require audited financial statements
• Minority shareholders holding at least the threshold specified in the Companies Act request an audit and obtain the necessary majority at the general meeting
• The company has previously committed serious breaches of accounting or filing obligations and the Danish Business Authority has imposed an audit requirement

In these cases, the audit obligation overrides the general possibility for small ApS to opt out.

How to validly opt out of audit

If your ApS meets the criteria to avoid a statutory audit and no special rules apply, you can opt out by following a formal process:

1. The management assesses whether the company meets the size thresholds for two consecutive years and documents this in the board or management minutes.
2. The shareholders pass a resolution at the general meeting to waive the audit requirement for future financial years.
3. The articles of association are amended to state that the company does not have an auditor and that the financial statements are not audited.
4. The change is filed with the Danish Business Authority within the standard deadline for registering changes to the articles.

The opt-out normally applies from the next financial year. If you want to reintroduce an audit later, you must again amend the articles and appoint an auditor at the general meeting.

Audit, extended review or no assurance: choosing the right level

Even when an audit is not legally required, many ApS owners choose some level of external assurance to strengthen credibility with banks, investors and business partners. The main options are:

• Full statutory audit – highest level of assurance, required once your ApS exceeds the size thresholds or falls under special regulation
• Extended review (udvidet gennemgang) – a lighter alternative to full audit that still provides external assurance on your financial statements
• Compilation (assistance with financial statements) – no assurance, but professional help to prepare compliant financial statements

If your ApS is small and not legally required to have an auditor, you can combine an audit opt-out with an extended review or compilation agreement with an external accountant to balance cost and reliability.

Practical considerations before opting out

Before deciding to opt out of a statutory audit, consider:

• Whether your bank, investors or key customers expect audited or at least reviewed financial statements
• How complex your business model, tax situation and internal controls are
• Whether you plan rapid growth that may soon push you above the size thresholds
• The value an auditor can add in terms of tax optimisation, compliance and risk management

For many small Danish ApS companies, opting out of audit can reduce costs, but it is important to balance the savings against the potential loss of trust and the reduced external control of your financial reporting.

Types of Audits Available for Danish ApS (Full Audit, Extended Review, Compilation)

When you run a Danish ApS, you can usually choose between three main levels of assurance from an auditor: a full statutory audit, an extended review (udvidet gennemgang) and a compilation (assistance with financial statements without assurance). Understanding the differences helps you balance compliance, risk management and cost.

Full audit (lovpligtig revision)

A full audit provides the highest level of assurance and is required for ApS companies that exceed at least two of the following thresholds for two consecutive financial years:

• Balance sheet total above DKK 44 million
• Net revenue above DKK 89 million
• Average number of full-time employees above 50

In a full audit, a state-authorised or registered public accountant performs extensive procedures to obtain reasonable assurance that the financial statements are free from material misstatement. This typically includes:

• Detailed testing of transactions and balances
• Assessment of internal controls and accounting systems
• Analytical procedures and risk assessments
• Confirmation with banks, major customers and suppliers where relevant

The auditor issues an audit opinion stating whether the financial statements give a true and fair view in accordance with the Danish Financial Statements Act and any applicable accounting standards. A full audit is often preferred if your ApS has external investors, significant bank financing or operates in a regulated or high‑risk industry.

Extended review (udvidet gennemgang)

An extended review is a lighter alternative to a full audit, available to ApS companies that are allowed to opt out of statutory audit under Danish rules but still want a certain level of assurance. It combines a standard review with a limited number of additional procedures.

Compared with a full audit, the work is less extensive and focuses more on analytical procedures and inquiries with management rather than detailed testing of all key areas. However, the “extended” element means the auditor also performs some extra checks, for example:

• Selected tests of material items in the financial statements
• Limited review of documentation for significant balances
• Basic assessment of going concern and key risks

The conclusion in an extended review report is a “limited assurance” conclusion. The auditor states whether anything has come to their attention that causes them to believe the financial statements are not prepared in accordance with the applicable framework. This option is often attractive for small and medium‑sized ApS that want to strengthen credibility with banks, suppliers or potential investors without bearing the full cost of a statutory audit.

Compilation / assistance with financial statements (bistand med regnskabsopstilling)

A compilation is the most basic level of auditor involvement. The auditor helps management prepare the annual report in accordance with the Danish Financial Statements Act, but does not provide assurance on the figures.

In a compilation engagement, the auditor typically:

• Assists with classifying and presenting the figures from your bookkeeping system
• Ensures the annual report formally complies with Danish disclosure requirements for your reporting class
• Prepares notes and management statement based on information provided by the company

The report clearly states that no audit or review has been performed and that the auditor does not express any opinion or conclusion on the financial statements. Responsibility for the content remains fully with management. This solution is mainly relevant for small ApS that have opted out of audit and do not need external assurance, but still want professional support to prepare a compliant annual report.

How to choose the right level for your ApS

Your choice between full audit, extended review and compilation depends on several factors:

• Legal requirements: If your ApS exceeds the statutory thresholds, a full audit is mandatory.
• Stakeholder expectations: Banks, investors or group companies may require at least an extended review or a full audit, even if the law allows you to opt out.
• Risk and complexity: Companies with complex transactions, rapid growth or higher fraud risk often benefit from the deeper insight of a full audit.
• Cost versus benefit: A compilation is usually the cheapest, an extended review is mid‑range, and a full audit is the most expensive, but may reduce financing costs and operational risks.

Before appointing an auditor, it is worth discussing your size, risk profile and future plans to determine which type of engagement best supports your ApS and complies with Danish regulations.

Criteria for Choosing the Right Auditor for Your ApS (Industry, Size, Risk Profile)

Choosing the right auditor for your Danish ApS is not only a legal and compliance decision, but also a strategic one. The “best” auditor is not necessarily the cheapest or the biggest, but the one whose experience, capacity and working style match your company’s industry, size and risk profile.

Match the auditor’s experience with your industry

Your auditor should understand how your business actually works. In Denmark, many audit firms specialise in specific sectors, and this can significantly improve the quality and efficiency of the audit. When assessing candidates, look for auditors who already serve clients in:

• Trading and e‑commerce – experience with inventory valuation, cross‑border VAT, OSS/IOSS schemes and platform reporting obligations
• Consulting, IT and SaaS – understanding of revenue recognition for subscriptions, work‑in‑progress and intangible assets such as software development costs
• Construction and real estate – knowledge of long‑term contracts, percentage‑of‑completion methods and property valuation
• Holding and investment companies – experience with intra‑group transactions, dividend flows, interest deductions and thin‑capitalisation rules
• Regulated sectors – such as financial services, where there are additional reporting and compliance requirements

Ask potential auditors for concrete examples of similar Danish ApS clients, including their size and complexity. An auditor who already knows your industry will usually require less time to understand your processes and can provide more relevant recommendations.

Consider the size and complexity of your ApS

The size of your company and the complexity of its transactions should guide your choice of auditor. In Denmark, an ApS is generally required to have an audit if it exceeds at least two of the following thresholds for two consecutive financial years:

• Balance sheet total: DKK 4 million
• Net revenue: DKK 8 million
• Average number of full‑time employees: 12

Even if you are below these thresholds and have opted out of a statutory audit, you may still choose a voluntary audit, extended review or compilation. When selecting an auditor, consider:

• Transaction volume – high volumes of sales, purchases or payroll require an auditor with robust systems and sufficient staff
• Group structure – if you are part of a Danish or international group, choose an auditor familiar with group reporting, consolidation and intra‑group pricing
• Foreign activities – cross‑border trade, foreign subsidiaries or permanent establishments require knowledge of double tax treaties, foreign VAT and currency issues
• Growth plans – if you expect rapid growth, acquisitions or external investors, select an auditor who can scale with you and handle more advanced reporting needs

For very small ApS with simple operations, a smaller local firm may be sufficient and more cost‑effective. For larger or fast‑growing companies, a mid‑size or larger firm with specialised departments may be more appropriate.

Assess your company’s risk profile

Risk profile refers to how likely it is that your financial statements could contain errors or be affected by fraud, and how serious the consequences would be. An auditor should be able to identify and respond to your specific risks. Key factors include:

• Cash handling and inventory – retail, hospitality and trading businesses with significant cash or stock require strong internal controls and an auditor experienced in testing them
• Complex contracts – long‑term projects, variable pricing or performance‑based contracts increase the risk of incorrect revenue recognition
• Related‑party transactions – loans to owners, management fees, group charges and transfer pricing require particular attention and documentation
• IT systems – if your accounting relies heavily on integrated IT systems, you need an auditor who understands system controls, data security and digital workflows
• Tax and VAT exposure – frequent cross‑border transactions, mixed VAT‑exempt and VAT‑liable activities, or complex employee benefits increase the risk of errors in Danish tax and VAT reporting

Discuss your business model openly with potential auditors and ask how they would approach the main risk areas in your ApS. A good auditor will be able to explain their planned procedures in clear, practical terms.

Check qualifications, authorisation and capacity

In Denmark, statutory audits must be performed by a state‑authorised public accountant (statsautoriseret revisor) or a registered public accountant (registreret revisor), or by an audit firm where the responsible partner holds one of these titles. When choosing an auditor, verify that:

• The auditor or firm is registered with the Danish Business Authority (Erhvervsstyrelsen)
• They have recent experience with Danish GAAP (årsregnskabsloven) and, if relevant, IFRS
• They have enough staff and resources to meet your reporting deadlines, especially around year‑end

Capacity is crucial. An auditor who is technically strong but overloaded with clients may struggle to respond quickly to your questions or complete the audit on time.

Evaluate communication style and service level

Beyond technical competence, the working relationship matters. You will be sharing sensitive financial information and relying on the auditor’s judgement. Consider:

• How clearly they explain Danish accounting and tax rules in plain language
• Whether you will have a consistent contact person or partner
• How quickly they typically respond to emails and calls
• Whether they offer meetings in person, online or both

For owner‑managed ApS, it is often valuable to have an auditor who is willing to discuss planned transactions in advance (for example, dividends, loans to owners or restructuring) so that you can avoid compliance issues later.

Balance price with value

Audit fees for Danish ApS are usually based on time spent and the complexity of the engagement. When comparing offers:

• Request a written estimate that specifies what is included (audit, extended review, compilation, tax returns, VAT assistance, advisory)
• Ask how hourly rates differ between partners, managers and assistants
• Clarify how additional work (for example, extra documentation requested by Erhvervsstyrelsen or SKAT) will be billed

The lowest fee is not always the best choice if it means less attention to your business or a higher risk of issues with authorities. Look for a reasonable balance between cost, quality and responsiveness.

Check independence and potential conflicts of interest

Under Danish rules, auditors must be independent of the companies they audit. Before appointing an auditor, confirm that:

• They do not hold shares in your ApS or have financial interests that could affect their objectivity
• They are not closely related to owners or management
• Any non‑audit services (for example, bookkeeping or extensive tax planning) are compatible with independence requirements

If your ApS is part of a group, ensure that the auditor’s other engagements in the group do not create conflicts. Independence issues can lead to problems with Erhvervsstyrelsen and may force you to change auditors unexpectedly.

Use references and reputation

Finally, ask for references from other Danish ApS clients, ideally in similar industries and of comparable size. Check:

• Whether the auditor has a history of missed deadlines or qualified opinions without clear explanations
• How they handled communication with management and owners in difficult situations
• Whether they are proactive in informing clients about relevant changes in Danish accounting, tax and company law

A well‑chosen auditor can become a long‑term partner who not only fulfils statutory requirements, but also helps your ApS navigate Danish regulations and supports your growth plans.

Understanding Danish Auditor Qualifications and Authorisations (State-Authorised vs Registered)

In Denmark, not every accountant can act as a statutory auditor for an ApS. Only professionals who meet strict education, exam and licensing requirements may use the protected titles state-authorised public accountant (statsautoriseret revisor) or registered public accountant (registreret revisor). Understanding the difference between these two categories helps you choose an auditor whose qualifications match the needs and risk profile of your company.

Who regulates auditors in Denmark?

All approved auditors are regulated by the Danish Business Authority (Erhvervsstyrelsen) and must be registered in the public database Revisornævnet. To perform statutory audits of Danish companies, an individual must:

• Hold an approved Danish auditor qualification (state-authorised or registered)
• Be listed in the official register of auditors
• Be affiliated with an approved audit firm (revisionsvirksomhed) that is also registered
• Comply with Danish auditing standards, the Danish Auditors Act and EU audit regulation

Both state-authorised and registered auditors are subject to quality control inspections, independence rules and continuing professional education requirements.

State-authorised vs registered auditor – what is the difference?

The two titles reflect different education paths and exam levels, but in practice both categories can audit most Danish ApS companies. The main differences are:

• Education and exams: State-authorised auditors typically have a longer academic background (often a master’s degree in auditing or accounting) and must pass a more extensive final exam that qualifies them to audit all types of entities, including listed companies and financial institutions. Registered auditors follow a slightly different route with a strong focus on SME and owner-managed businesses.
• Scope of permitted engagements: For a standard private limited company (ApS), both state-authorised and registered auditors are generally allowed to perform statutory audits, extended reviews and other assurance engagements, as long as they are properly registered. Certain high‑risk or public‑interest entities must, however, use a state-authorised auditor.
• Market positioning: State-authorised auditors are more common in larger audit firms and groups serving bigger or more complex companies, while registered auditors are often found in smaller practices with a strong focus on small and medium-sized enterprises.

What qualifications should your ApS look for?

When choosing an auditor for your ApS, focus less on the title alone and more on whether the auditor is properly authorised and experienced in your type of business. At a minimum, you should ensure that:

• The individual auditor is listed as either state-authorised or registered in the official Danish register
• The audit firm itself is also registered with the Danish Business Authority
• The auditor has relevant experience with Danish ApS companies of similar size and industry
• The firm follows Danish and international auditing standards and has a robust internal quality control system

For small and medium-sized ApS companies that are not public‑interest entities, both state-authorised and registered auditors can usually provide all required statutory services. If your company is growing rapidly, planning a listing, or operating in a highly regulated sector such as finance, energy or insurance, it is often advisable to work with a state-authorised auditor from the outset.

How to verify an auditor’s authorisation

Before appointing an auditor, you should always verify their status. You can:

• Search the public register of auditors maintained by the Danish Business Authority
• Check that both the individual auditor and the audit firm appear as active and approved
• Confirm that there are no public sanctions or prohibitions affecting their right to perform audits

Documenting this verification process is good governance and can be useful if your company is later subject to inspection or due diligence.

What this means in practice for your ApS

For most Danish ApS companies, the key is not whether your auditor is state-authorised or registered, but whether they are:

• Properly licensed and independent
• Experienced with Danish company law, tax rules and reporting requirements
• Able to provide the specific level of assurance you need (full audit, extended review or compilation)

Choosing an auditor with the right Danish qualifications and authorisations ensures that your annual report is accepted by the Danish Business Authority, reduces the risk of errors and penalties, and gives owners and lenders confidence in your financial information.

How to Evaluate Auditor Independence and Avoid Conflicts of Interest

Auditor independence is a core requirement under Danish law and a key factor in getting reliable financial statements for your ApS. An auditor who is not independent risks issuing an opinion that stakeholders, banks and the Danish Business Authority (Erhvervsstyrelsen) cannot trust. As a company owner or director, you are responsible for assessing independence before appointment and on an ongoing basis.

What “independence” means in Denmark

In Denmark, auditors are subject to the Danish Auditors Act (Revisorloven), the Executive Order on Auditor Independence and the EU Audit Regulation. In practice, independence has two dimensions:

• Independence in fact – the auditor must be able to perform the audit objectively, without being influenced by personal or financial interests.
• Independence in appearance – there must be no circumstances that could reasonably make third parties doubt the auditor’s objectivity.

For statutory audits and extended reviews of an ApS, the auditor must be a state-authorised public accountant (statsautoriseret revisor) or registered public accountant (registreret revisor) and must comply with these independence rules at all times.

Typical threats to auditor independence

When evaluating a potential auditor, consider the most common threats identified in Danish and international standards:

• Self-interest threat – the auditor has a financial interest in your ApS, for example as a shareholder, lender or major supplier.
• Self-review threat – the auditor is asked to audit work that their own firm has prepared, such as complex valuations or extensive bookkeeping, without sufficient safeguards.
• Advocacy threat – the auditor promotes your company’s position in disputes, tax cases or financing negotiations in a way that compromises objectivity.
• Familiarity threat – long-standing relationships or close personal ties with owners or management make it difficult to challenge information critically.
• Intimidation threat – management pressures the auditor, for example by threatening to terminate the engagement if the auditor does not accept certain accounting treatments.

Relationships and services that are not allowed

Certain situations are incompatible with independence and will normally disqualify an auditor from acting for your ApS:

• The auditor, their spouse/partner or close family holds shares or other ownership interests in your ApS or a controlling group company.
• The auditor or their firm has provided loans or guarantees to your ApS, or your ApS has provided loans or guarantees to the auditor.
• The auditor is a member of the management of your ApS (director, board member) or has been in such a role within the last financial year.
• The auditor’s fee is directly dependent on the outcome of the audit or on specific tax savings (pure success fees for statutory audit work are not allowed).

For public-interest entities there are additional prohibitions on certain non-audit services. Even though most ApS are not public-interest entities, it is still good practice to avoid having the same firm both design critical internal controls and then audit them, unless robust safeguards are in place.

Permitted non-audit services – and when they become a problem

Many Danish audit firms provide both audit and accounting services to small and medium-sized ApS. This is allowed, but you must ensure that the auditor does not take over management’s responsibilities. As a rule of thumb, the auditor may:

• Assist with bookkeeping, VAT returns and payroll processing, provided management reviews and approves the work.
• Prepare draft annual financial statements based on your records and decisions.
• Provide tax advice, including corporate tax calculations and guidance on Danish tax rules.

The auditor may not make key decisions for the company, such as choosing accounting policies, approving transactions or signing contracts. If the auditor’s staff effectively run your finance function without clear oversight from management, independence can be compromised because the auditor would be reviewing their own decisions.

Questions to ask when assessing independence

Before appointing an auditor, and at each reappointment, you can use the following questions to evaluate independence:

• Does the auditor or their close family have any direct or indirect ownership interest in our ApS or group?
• Does the auditor provide us with any services that could later be subject to audit (for example, valuations, complex calculations, or system design)? If so, what safeguards are in place?
• Has the auditor or firm recently held any management or board positions in our company?
• Are any of our key managers or finance staff former employees of the audit firm, and if yes, when did they leave?
• Is any part of the auditor’s fee contingent on specific outcomes, such as obtaining financing or achieving tax savings?
• How does the firm monitor independence internally (annual confirmations, rotation policies, internal reviews)?

Fee structure and independence

For Danish ApS, audit fees are usually based on hourly rates or fixed annual fees agreed in advance. To protect independence:

• Avoid fee arrangements that depend on the result of the audit or on the level of profit, equity or tax savings.
• Be cautious if non-audit services (bookkeeping, advisory) from the same firm are significantly larger than the audit fee, as this may create economic dependence.
• Ensure payment terms are reasonable; large overdue balances can create pressure on the auditor and should be avoided.

Rotation and long-term relationships

Danish law requires mandatory rotation of the key audit partner for certain larger entities, but not typically for small ApS. However, even when not legally required, you should consider:

• Requesting a change of the responsible engagement partner within the same firm after a number of years, for example after 7–10 years, to reduce familiarity threats.
• Ensuring that the auditor’s team changes periodically so that new staff can bring a fresh perspective to the audit.

Internal measures to avoid conflicts of interest

Your ApS can actively support auditor independence by:

• Documenting in board minutes that independence has been assessed before appointing or reappointing the auditor.
• Establishing a simple internal policy on when and how the auditor may provide non-audit services.
• Ensuring that management, not the auditor, makes all key accounting and business decisions.
• Providing complete and accurate information to the auditor, reducing the risk of pressure or disputes late in the process.

By systematically evaluating these aspects before you appoint an auditor for your Danish ApS, you reduce the risk of conflicts of interest, strengthen trust in your financial reporting and ensure compliance with Danish independence rules.

Typical Costs of Audit Services for an ApS and How Fees Are Structured

Understanding the typical cost of audit services for a Danish ApS (private limited company) helps you budget correctly and avoid unpleasant surprises. Audit fees in Denmark are not regulated by law and are usually based on time spent, the complexity of your business and the level of assurance required. Below you will find realistic price ranges and an explanation of how auditors normally structure their fees.

Typical price ranges for ApS audit services in Denmark

For a standard Danish ApS that is required to have an audit, the annual fee for statutory audit services (including the audit of the financial statements and the auditor’s report) typically falls within these ranges:

• Very small / simple ApS (few transactions, low risk, simple structure, 1–2 employees): approx. DKK 15,000–30,000 per year
• Small ApS (turnover up to around DKK 10–25 million, more transactions, some employees): approx. DKK 25,000–60,000 per year
• Medium-sized ApS (higher turnover, several employees, more complex activities or group structure): approx. DKK 60,000–150,000+ per year

These ranges are indicative. Fees can be lower or higher depending on your auditor’s hourly rates, your internal organisation and how well-prepared your accounting records are.

How the level of assurance affects the price

Danish law allows different levels of assurance for ApS companies, depending on size and whether the company has opted out of audit where permitted. The main options are:

• Full statutory audit (revision) – highest level of assurance and typically the most expensive. The auditor performs extensive testing of transactions, internal controls and estimates and issues an audit opinion. This is often required for larger ApS or where the company has not opted out.
• Extended review (udvidet gennemgang) – a limited assurance engagement that is less extensive than a full audit but more detailed than a simple review. It usually costs less than a full audit, often in the range of DKK 15,000–40,000 for smaller ApS, depending on complexity.
• Compilation / assistance with financial statements (assistance engagement) – no audit or assurance, the auditor (or accountant) helps prepare the annual report based on the company’s records. Fees are typically lower, often starting from around DKK 8,000–20,000 for a small, uncomplicated ApS.

Choosing a lower level of assurance is only possible if your ApS meets the legal criteria for opting out of audit. Even when an audit is not legally required, some banks, investors or other stakeholders may still demand an audit or extended review, which will influence your cost level.

Key factors that influence audit fees for a Danish ApS

When you request quotes from different audit firms, they will usually ask for information about your company to estimate the fee. The most important cost drivers are:

• Size of the company – turnover, balance sheet total and number of employees. Larger companies generally require more audit work.
• Number and complexity of transactions – many small transactions, multiple bank accounts, foreign currency, or complex contracts increase the time needed.
• Industry and risk profile – regulated sectors (e.g. financial services), construction, international trade or cash-intensive businesses often require more detailed testing.
• Group structure – if your ApS is part of a group, has subsidiaries or intercompany transactions, the audit becomes more complex and therefore more expensive.
• Quality of bookkeeping – clean, up-to-date accounts and well-organised documentation reduce audit time. Poor bookkeeping, missing documentation or frequent corrections increase fees.
• Internal controls and systems – if you have clear procedures, segregation of duties and reliable IT systems, the auditor can rely more on controls and perform fewer detailed tests.
• Deadlines and timing – urgent work, late delivery of documents or work outside normal busy seasons can lead to higher fees or surcharges.
• Additional services – tax advisory, assistance with VAT, payroll, or special reports for banks and authorities are usually billed separately.

How Danish auditors typically structure their fees

Audit firms in Denmark usually base their pricing on hourly rates combined with an estimate of the hours needed. The most common fee structures are:

• Hourly billing – each person working on your audit has an hourly rate, which can range approximately from DKK 800–1,500 for junior staff to DKK 1,500–3,000+ for partners and specialists. The final fee reflects the actual time spent.
• Fixed annual fee – many firms offer a fixed price for the statutory audit and preparation of the annual report, based on an agreed scope and assumptions about your bookkeeping and documentation. If the work turns out to be significantly more extensive, an additional fee may be agreed.
• Package solutions – for smaller ApS, some firms offer combined packages including bookkeeping assistance, VAT returns, annual report and audit or extended review at a set annual price.

Regardless of the model, you should always receive an engagement letter that clearly describes the scope of work, the fee basis and how additional work will be handled.

What is typically included in the audit fee – and what is extra

For a standard statutory audit of a Danish ApS, the agreed fee will usually cover:

• Planning and risk assessment of the audit
• Testing of selected transactions and balances
• Review of key accounting estimates and policies
• Audit of the annual report prepared under the Danish Financial Statements Act
• Issuing the auditor’s report
• Basic communication with management and the board, including an audit conclusion and any management letter

Services that are often not included in the basic audit fee and may be billed separately include:

• Preparation of the annual report if your own accountant or internal team does not prepare it
• Preparation of the corporate tax return and other tax filings
• Ongoing tax and VAT advisory
• Assistance with budgets, cash flow forecasts or business plans
• Special reports for banks, investors or public authorities
• Support in case of tax audits or disputes with the Danish Tax Agency (Skattestyrelsen)

How to obtain and compare audit fee offers

To get a realistic picture of the cost for your ApS, it is advisable to request offers from at least two or three audit firms. When doing so, provide:

• Latest annual report and trial balance
• Information about your bookkeeping system and who maintains it
• Number of employees and main business activities
• Any special requirements from banks, investors or authorities

When comparing offers, look not only at the price but also at:

• Experience with your industry and company size
• Availability and response times
• Clarity of the engagement letter and fee structure
• Whether the auditor can also support you with tax, VAT and advisory if needed

Keeping your audit costs under control

You can actively influence the cost of your audit by improving your internal processes. For a Danish ApS, the most effective measures are:

• Ensuring that bookkeeping is up to date and reconciled before the audit starts
• Preparing all requested documentation in advance (bank statements, contracts, invoices, payroll records)
• Agreeing a clear timetable with your auditor and respecting deadlines
• Informing your auditor early about significant changes, such as new activities, acquisitions or financing arrangements

A transparent dialogue with your auditor about scope, expectations and potential additional work will help you avoid unexpected extra fees and ensure that the cost of audit services for your ApS remains predictable and aligned with the value you receive.

Internal Preparations Before Appointing an Auditor (Documentation, Systems, Processes)

Before you formally appoint an auditor for your Danish ApS, it pays to get your internal documentation, systems and processes in order. Good preparation will reduce the time your auditor needs, lower the risk of adjustments to your annual report and often reduce your audit fee. It also helps you decide whether you actually need a full statutory audit, an extended review or can opt out of audit entirely if your ApS meets the Danish thresholds.

1. Clarify your company’s audit obligation and expectations

Start by clarifying whether your ApS is legally required to have an auditor. Under Danish rules, an ApS can opt out of statutory audit if it does not exceed two of the following three thresholds for two consecutive financial years:

• Net turnover: DKK 8 million
• Balance sheet total: DKK 4 million
• Average number of employees: 12 full-time equivalents

If you exceed these limits, or if your articles of association or lenders require an audit, you must appoint an auditor. Even if you are below the thresholds, you may still choose a voluntary audit, extended review or compilation. Clarifying this in advance helps you discuss the appropriate level of assurance with potential auditors and prepare the right scope of documentation.

2. Organise your legal and corporate documentation

An auditor will review not only your numbers, but also the legal framework of your ApS. Make sure the following documents are complete, consistent and easily accessible:

• Updated articles of association and any amendments filed with the Danish Business Authority (Erhvervsstyrelsen)
• Incorporation documents, including the original memorandum of association and proof of paid-in share capital (minimum DKK 40,000 for an ApS)
• Register of shareholders and any changes in ownership
• Minutes and resolutions from general meetings and board meetings, especially those approving annual reports, dividends and major transactions
• Shareholder agreements and loan agreements with owners or related parties

Inconsistencies between your legal documents and what is registered with Erhvervsstyrelsen will be flagged by the auditor, so it is better to correct them before the first audit.

3. Ensure a clean and consistent bookkeeping system

Reliable bookkeeping is the foundation of an efficient audit. Before appointing an auditor, review whether your accounting system and chart of accounts are suitable for your business and compliant with Danish rules:

• Use recognised accounting software that supports Danish VAT (moms), SAF-T export and integration with e-invoicing if relevant
• Align your chart of accounts with the structure of the Danish Financial Statements Act (Årsregnskabsloven) for your reporting class (typically Class B for most ApS)
• Post all transactions regularly and avoid large backlogs at year-end
• Ensure that bank accounts, loans and credit cards are reconciled monthly
• Separate private and company expenses strictly, especially in owner-managed ApS

If you are migrating from spreadsheets or a foreign accounting system, complete the transition and reconciliations before the auditor starts. This will reduce the need for manual corrections and explanations.

4. Prepare key reconciliations and supporting schedules

Auditors will test whether the balances in your trial balance are supported by underlying documentation. Having reconciliations ready will significantly speed up the process. At a minimum, prepare:

• Bank reconciliations for all bank accounts as of the balance sheet date
• Detailed accounts receivable and accounts payable listings, reconciled to the general ledger
• Inventory listings with quantities, valuation method and any write-downs
• Fixed asset register with purchase dates, cost, depreciation and disposals
• Loan and lease schedules, including interest rates, maturities and collateral
• Reconciliation of VAT, payroll taxes (A-skat, AM-bidrag) and social contributions to filed returns and payments

For related-party balances, prepare clear schedules showing the nature of the relationship, terms and any interest or guarantees. Danish auditors pay particular attention to related-party transactions and loans to owners and management.

5. Organise tax, VAT and payroll documentation

Tax and VAT compliance is a key focus area in Danish audits. Before appointing an auditor, ensure that your tax-related documentation is complete and consistent:

• Copies of filed corporate income tax returns and preliminary tax assessments (for the last few years)
• Documentation of tax losses carried forward and any group contributions
• Filed VAT returns (momsangivelser) and payment confirmations for each period
• Payroll records, including employment contracts, salary specifications, holiday pay (feriepenge) calculations and filed eIncome (eIndkomst) reports
• Documentation for benefits in kind, company cars and shareholder loans, if applicable

If you operate cross-border, gather transfer pricing documentation, intercompany agreements and evidence of arm’s length pricing where required. This will help the auditor assess tax risks and disclosures.

6. Map and document your internal processes and controls

Even in small ApS companies, auditors will want to understand how you manage key financial processes. Prepare short descriptions of how you handle:

• Sales and invoicing, including who approves prices and credit limits
• Purchasing and supplier payments, including approval workflows and segregation of duties
• Cash management and access to bank accounts
• Expense reimbursements and company credit cards
• Inventory management and stock counts, if relevant

You do not need complex manuals, but clear, written procedures show the auditor that you take internal control seriously. This can reduce the extent of detailed testing they need to perform.

7. Establish a clear document storage and access structure

Audits are much smoother when documents are easy to find. Before engaging an auditor, set up a logical folder structure (digital or hybrid) for:

• Annual reports and management reports
• Contracts with customers, suppliers and key partners
• Financing agreements, bank correspondence and guarantees
• Board and shareholder meeting minutes
• Accounting records, invoices and vouchers (sorted by period and type)

Ensure that at least one person in the company can quickly locate any document the auditor might request. If you use cloud storage or accounting software with document attachments, verify that access rights are set correctly and that your auditor can be granted secure, time-limited access.

8. Assign internal responsibilities and timelines

Decide who in your ApS will be responsible for communication with the auditor and for providing requested information. Ideally, this is a person who:

• Understands your accounting and business model
• Has authority to coordinate with management and other departments
• Can commit time during the audit period

Agree internally on deadlines for closing the books after year-end, preparing reconciliations and delivering documents. Align these with your statutory filing deadline for the annual report with Erhvervsstyrelsen and with the auditor’s proposed timetable.

9. Review accounting policies and estimates

Danish auditors will assess whether your accounting policies comply with the Danish Financial Statements Act and are applied consistently. Before you appoint an auditor, review:

• Revenue recognition principles, especially for long-term projects or subscription models
• Depreciation periods for tangible and intangible assets
• Impairment testing for goodwill and other non-current assets
• Provisions and accruals (e.g. warranties, legal disputes, bonuses)
• Currency translation for foreign currency transactions and balances

Document the reasoning behind key estimates and judgments. This will help the auditor understand your approach and reduce the need for extensive follow-up questions.

10. Prepare for the initial meeting with your auditor

Once your internal preparations are in place, you will be ready for a productive first meeting with your chosen auditor. Use this meeting to:

• Present your business model, risk areas and growth plans
• Discuss whether you need a full audit, extended review or other assurance service
• Agree on a realistic timetable for interim work and year-end procedures
• Clarify what documentation the auditor expects to receive and in what format

Well-prepared documentation, robust systems and clear processes will not only make it easier to appoint an auditor for your Danish ApS, but will also strengthen your financial management and credibility with banks, investors and other stakeholders.

How to Formally Appoint or Change an Auditor in the Articles and at the General Meeting

Formally appointing or changing an auditor in a Danish ApS is done through your articles of association and resolutions passed at the general meeting. The process is regulated mainly by the Danish Companies Act and must be followed carefully to ensure that your annual report and filings with the Danish Business Authority (Erhvervsstyrelsen) remain valid.

1. Check your current articles of association

Start by reviewing your company’s articles of association (vedtægter). They typically state whether the company must have an auditor, whether the auditor must be state-authorised or registered, and how the auditor is elected (usually by the annual general meeting). If the articles explicitly require an auditor and you wish to opt out, or if they specify a particular auditor by name, you will need to amend the articles before you can change your setup.

If your ApS meets the criteria to opt out of audit (for two consecutive financial years, you do not exceed two of the following: balance sheet total of DKK 7 million, net revenue of DKK 14 million, and an average of 10 full-time employees), you can decide at the general meeting to remove the audit requirement from the articles. If you exceed these thresholds or are otherwise legally required to have an auditor, the articles must reflect that an auditor is elected.

2. Decide whether you are appointing, changing, or opting out

Before drafting any resolutions, clarify what you want to achieve:

• Appointing an auditor for the first time (for a newly formed ApS or one that previously opted out)
• Changing from one auditor to another (e.g. due to price, service level, or independence concerns)
• Opting out of audit (if legally allowed) and removing the auditor from the articles

This decision determines whether you only need a standard election of auditor or also an amendment of the articles of association.

3. Prepare the resolution for the general meeting

The auditor is normally elected by the shareholders at the annual general meeting (AGM). However, you can also appoint or change an auditor at an extraordinary general meeting (EGM) if needed. The board of directors or the management must prepare a written proposal that will be presented to the shareholders.

The resolution should clearly state:

• Whether you are electing a new auditor, re-electing the existing auditor, or dismissing the current auditor
• The full legal name and registration of the audit firm or individual auditor
• Whether the auditor is state-authorised (statsautoriseret revisor) or registered (registreret revisor)
• The financial year for which the auditor is elected
• Any amendments to the articles of association, if you are changing the audit requirement

If you are amending the articles (for example, to introduce or remove the audit requirement), the resolution must include the exact new wording of the relevant article. Amendments to the articles usually require a qualified majority, often at least two-thirds of both the votes cast and the share capital represented, unless your articles specify stricter rules.

4. Hold the general meeting and pass the resolution

At the AGM or EGM, the shareholders vote on the proposal. The meeting must be convened in accordance with your articles and the Companies Act, including proper notice and an agenda that clearly mentions the election or dismissal of the auditor and any proposed amendments to the articles.

During the meeting:

• The management presents the proposal and the reasons for appointing, changing, or removing the auditor
• Shareholders have the opportunity to ask questions about the auditor’s independence, experience, and fees
• A vote is taken, and the result is recorded in the minutes

If the required majority is achieved, the resolution is adopted. The minutes of the general meeting must be prepared and signed by the chair of the meeting and kept with the company’s records as documentation of the decision.

5. Update the articles of association if required

If the resolution involves changing the audit requirement or specifying a new auditor in the articles, you must update the text of the articles of association to reflect the decision. The updated articles should include:

• Whether the company is subject to statutory audit or has opted out
• Any specific requirements for the auditor (for example, that the auditor must be state-authorised)

The updated articles must be signed by the management or the person authorised to sign on behalf of the company. These updated articles will later be filed with the Danish Business Authority together with the notification of the change of auditor or audit status.

6. Obtain acceptance from the new auditor

Before you can formally register a new auditor, the auditor must accept the appointment. In practice, this is often done by the auditor signing the relevant forms or providing a written engagement letter. The auditor must also assess whether there are any independence issues or conflicts of interest that would prevent them from accepting the engagement.

For listed or larger companies, the auditor may also carry out internal acceptance procedures in accordance with professional standards. Even for smaller ApS, the auditor will typically perform basic client acceptance checks, including ownership structure, business activities, and any indications of non-compliance or money laundering risks.

7. Notify the Danish Business Authority (Erhvervsstyrelsen)

Once the resolution has been passed and the auditor has accepted, you must notify Erhvervsstyrelsen. This is done electronically via the online system (Virk). The notification typically includes:

• Whether you are appointing a new auditor, changing auditor, or opting out of audit
• The name and registration number (CVR) of the audit firm or individual auditor
• The date of the general meeting resolution
• Updated articles of association, if these were amended

The notification must be filed within the statutory deadlines after the general meeting. Timely registration is important, as the Danish Business Authority will use this information when you file your annual report. If the company is required to have an auditor, the annual report must be signed by the appointed auditor registered with Erhvervsstyrelsen.

8. Changing an auditor during the financial year

If you change auditor during an ongoing financial year, you must still follow the same formal steps: convene a general meeting, pass a resolution, obtain the new auditor’s acceptance, and notify Erhvervsstyrelsen. The outgoing auditor may be required to provide a statement explaining whether the resignation or dismissal is due to disagreements or other issues that shareholders should be aware of.

The new auditor will need access to prior working papers and information from the former auditor to ensure a proper handover. In practice, this means you should plan the timing of the change carefully, especially if it is close to the year-end or during the audit of the annual report.

9. Documenting the process for compliance and future audits

For both legal compliance and practical reasons, keep clear documentation of every step in the appointment or change of auditor:

• Notice and agenda for the general meeting
• Minutes of the meeting, including the voting result
• Updated articles of association, if amended
• Written acceptance from the new auditor
• Confirmation of filings with Erhvervsstyrelsen

This documentation will support your company in case of future disputes, inspections, or questions from the authorities or shareholders. It also helps your new auditor understand the background of their appointment and the company’s governance structure.

By following these steps, your Danish ApS can formally appoint or change an auditor in a way that complies with the Companies Act, keeps your records with the Danish Business Authority up to date, and provides a solid foundation for a transparent and efficient audit relationship.

Required Filings with the Danish Business Authority (Erhvervsstyrelsen) When Appointing an Auditor

When you appoint, change or remove an auditor for a Danish ApS, you must update the company’s information with the Danish Business Authority (Erhvervsstyrelsen). This is not just a formality: the auditor’s details and the audit obligation are part of your public company record in the Central Business Register (CVR). Failing to file correctly can lead to rejected annual reports, reminders, and in serious cases compulsory dissolution proceedings.

When you must file with Erhvervsstyrelsen

You are required to submit a filing to Erhvervsstyrelsen in the following situations:

• Appointment of the first auditor for a newly formed ApS
• Replacement of an existing auditor with a new one
• Removal of an auditor without appointing a new auditor (for example, when you validly opt out of audit)
• Change in the type of engagement (for example, from full audit to extended review or compilation) if this is reflected in the articles of association
• Correction of incorrect or outdated auditor information in CVR

All changes must be registered without undue delay after the general meeting or decision of the shareholders, and in practice you should file immediately after the resolution is passed.

Information that must be registered

When appointing an auditor, Erhvervsstyrelsen requires that you provide at least the following information:

• Full legal name of the audit firm or individual auditor
• Auditor’s CVR number (for an audit firm) or civil registration reference as registered with Erhvervsstyrelsen
• Type of authorisation (state-authorised public accountant or registered public accountant)
• Whether the appointment covers a full statutory audit, extended review or another engagement type, if this is specified in the articles
• Effective date of appointment (usually the date of the general meeting that elected the auditor)

If you remove an auditor or change to another auditor, you must also indicate the date on which the previous auditor’s appointment ends.

How to file the appointment in the online system

Filings are made electronically via Erhvervsstyrelsen’s online self-service on Virk.dk using NemID/MitID. The typical process is:

1. Log in to Virk.dk and select your ApS under “My companies”.
2. Choose the function for “Change company information” and then the section relating to auditor information.
3. Enter or update the auditor’s details exactly as registered with Erhvervsstyrelsen for the auditor.
4. Upload supporting documentation if requested (for example, minutes of the general meeting showing the appointment or removal of the auditor, especially in case of dismissal during the financial year).
5. Review and confirm the filing, then submit it electronically.

The filing is normally processed automatically and the updated auditor information becomes visible in CVR shortly after submission.

Link between auditor filings and the annual report

The auditor registered in CVR must match the auditor stated in your annual report. When you submit your annual report electronically, the system checks that:

• The company is correctly registered as being subject to audit, extended review, or exempt from audit
• The auditor’s CVR and name in the report correspond to the auditor registered with Erhvervsstyrelsen

If there is a mismatch, Erhvervsstyrelsen can reject the annual report and require you to correct the registration or resubmit the report. This can delay approval of the accounts and, if not resolved, may lead to daily fines and eventually compulsory dissolution proceedings.

Special filings when dismissing or resigning an auditor

If an auditor is dismissed by the shareholders before the end of the term, or if the auditor resigns, additional transparency requirements apply. In such cases:

• The company must file the change of auditor with Erhvervsstyrelsen, including the date of dismissal or resignation.
• The outgoing auditor may be required to submit a statement to Erhvervsstyrelsen explaining whether the dismissal or resignation is related to disagreements about accounting, auditing or management issues.

These filings help Erhvervsstyrelsen and stakeholders assess whether there are any concerns about the company’s financial reporting or governance.

Filing when opting out of audit

If your ApS meets the statutory thresholds to opt out of audit (for example, for two consecutive financial years you do not exceed two of the following: balance sheet total of DKK 4 million, net revenue of DKK 8 million, and an average of 12 full-time employees), and the shareholders decide to remove the audit requirement, you must:

• Amend the articles of association at the general meeting to reflect that the company is not required to elect an auditor, and
• File the amendment and the removal of the auditor with Erhvervsstyrelsen via Virk.dk.

Only after Erhvervsstyrelsen has registered the change will your company be treated as exempt from audit for future financial years, provided you continue to meet the thresholds.

Practical tips to avoid filing errors

To ensure a smooth process with Erhvervsstyrelsen when appointing an auditor:

• Coordinate with your auditor in advance to confirm their exact registered name, CVR and authorisation type.
• Prepare clear minutes of the general meeting that appointed, replaced or removed the auditor.
• File the change immediately after the decision, not when the annual report is due.
• Check CVR after submission to confirm that the auditor information is correctly updated.

Accurate and timely filings with Erhvervsstyrelsen reduce the risk of rejected annual reports, penalties and administrative complications, and provide your stakeholders with reliable public information about your ApS and its appointed auditor.

What to Expect During the First Year of Cooperation with a New Auditor

The first year with a new auditor is usually the most intensive, because both sides need to understand each other’s expectations, systems and risk profile. For a Danish ApS, this period sets the tone for the long-term cooperation and has a direct impact on how smoothly your annual reporting and tax compliance will run.

Initial onboarding and information gathering

Cooperation typically starts with an onboarding phase. Your auditor will request access to your key documents and systems, for example:

• Incorporation documents and articles of association
• Latest annual report and any previous audit or review reports
• General meeting minutes and owner agreements
• Accounting policies and internal procedures
• Chart of accounts and access to your accounting system
• Bank agreements, loan contracts and major customer/supplier contracts

At this stage, the auditor will also ask about your business model, revenue streams, key risks, IT systems and internal controls. For many small and medium ApS, this is the first time these topics are discussed in a structured way, which can help you identify weaknesses in processes and documentation.

Planning the audit or review

Once the auditor understands your company, they will prepare an audit plan based on the chosen level of assurance (full statutory audit, extended review or compilation). For a full audit, you can expect a more detailed risk assessment and testing of internal controls; for an extended review, the focus is more on analytical procedures and limited testing.

The auditor will usually agree with you on:

• The timetable for interim work and year-end work
• Deadlines for delivering documentation from your side
• Key contact persons in your finance or administration team
• The expected date for signing the audit report and filing the annual report with Erhvervsstyrelsen

For most ApS, the annual report must be filed no later than 5 months after the end of the financial year. The auditor will plan backwards from this deadline to ensure there is enough time for corrections and board approval.

Interim work and system walkthroughs

In the first year, many auditors perform more interim work than in later years. This can include:

• Walkthroughs of your bookkeeping process, from invoice to payment
• Review of how you handle VAT (moms), payroll taxes (A-skat, AM-bidrag) and holiday pay (feriepenge)
• Testing of selected transactions during the year, especially in higher-risk areas such as revenue recognition, related party transactions or cash handling

For a new ApS or a company that has grown quickly, the auditor may recommend adjustments to your chart of accounts, documentation routines or approval workflows to reduce errors and make the year-end process more efficient.

Year-end procedures and documentation requests

As the financial year ends, you will receive a detailed list of information and documentation required for the audit or review. Typical items include:

• Trial balance and general ledger for the full year
• Bank statements and bank reconciliations for all accounts
• Debtor and creditor listings with reconciliations
• Inventory counts and valuation documentation, if relevant
• Fixed asset register and depreciation calculations
• Loan and lease agreements, including interest and repayment schedules
• Tax calculations, including corporate income tax and deferred tax

In the first year, expect more questions and clarifications than in later years, because the auditor is building their understanding of your figures and routines. Over time, as your processes become more standardised, the number of queries usually decreases.

Communication with management and owners

Throughout the first year, the auditor will communicate primarily with management, but for smaller ApS where the owner is also the director, this often means direct contact with you as the shareholder-manager. You can expect:

• Clarification questions by email or phone regarding specific transactions
• Discussions about accounting policies, for example revenue recognition, provisions or impairment
• Updates on identified issues that may affect the annual report or tax position

Before the annual report is finalised, the auditor will typically present their findings to management and, if relevant, to the board of directors or supervisory board. This includes any significant audit adjustments and recommendations for improving internal controls or documentation.

Audit report and annual report filing

When the work is completed, the auditor issues an audit report or review conclusion that is attached to your annual report. For a full audit, this report provides reasonable assurance that the financial statements give a true and fair view in accordance with Danish law and applicable accounting standards.

The auditor will also check that the management’s statement and any supplementary reports (for example on corporate governance, if applicable) are consistent with the financial statements. Once the board and general meeting have approved the annual report, it must be filed electronically with Erhvervsstyrelsen within the statutory deadline.

Advice on tax and compliance matters

Although the auditor’s primary role is assurance, the first year is also when many ApS receive important guidance on tax and compliance. This can include:

• Correct treatment of VAT, including exemptions and reverse charge rules for cross-border services
• Handling of shareholder loans and related party transactions in line with Danish company law
• Assessment of whether you meet or exceed thresholds that may trigger additional reporting or audit requirements in future years
• Optimisation of your accounting setup to support accurate and timely tax filings

For small and medium ApS, this advice often helps avoid penalties, interest and corrections from Skattestyrelsen and Erhvervsstyrelsen.

Setting expectations for future years

At the end of the first cycle, many auditors hold a short wrap-up meeting with management. This is an opportunity to:

• Review what worked well and what caused delays
• Agree on improvements in documentation and internal processes
• Align expectations for next year’s timetable and scope

Once the auditor has completed the first year, future audits or reviews are usually more efficient and predictable. Your ApS benefits from a better-structured accounting process, clearer responsibilities and a more stable compliance framework, which in turn supports growth, financing possibilities and trust from stakeholders.

How an Auditor Can Support Your ApS Beyond the Statutory Audit (Tax, Compliance, Advisory)

An appointed auditor is not only a statutory requirement for many Danish ApS companies – the right auditor can also be a long-term advisor who helps you optimise tax, strengthen compliance and support strategic decisions. Understanding how an auditor can assist you beyond the annual audit makes it easier to get full value from the cooperation.

Tax optimisation and ongoing tax compliance

In Denmark, corporate income tax for companies, including ApS, is currently 22%. While the rate itself is fixed, the effective tax burden depends heavily on how your business is structured and how you plan income, costs and investments. An auditor can help you:

• Choose the most tax-efficient way to remunerate owners and key employees (salary vs. dividends vs. benefits)
• Apply correct tax treatment of depreciation and amortisation of assets, including intangible assets and development costs
• Use available tax deductions and allowances, for example for R&D, business travel, home office and company cars
• Handle tax implications of group structures, intra-group transactions and transfer pricing documentation where relevant
• Plan timing of income and expenses to avoid unnecessary tax prepayments and interest on underpaid tax

Your auditor can also assist with preparing and reviewing the annual corporate tax return, preliminary tax assessments and communication with the Danish Tax Agency (Skattestyrelsen). This reduces the risk of penalties, surcharges and interest due to incorrect or late filings.

VAT, payroll and indirect tax support

Most Danish ApS companies must register for VAT when annual taxable turnover exceeds 50,000 DKK. The standard VAT rate is 25%, but there are exemptions and special rules for certain industries and cross-border transactions. An auditor can support you by:

• Assessing whether and when your ApS must register for VAT and other indirect taxes
• Setting up correct VAT treatment for domestic, EU and non-EU sales and purchases
• Reviewing your VAT returns to ensure that input VAT is correctly deducted and that exemptions are applied properly
• Advising on VAT implications of digital services, subscription models and e-commerce

For companies with employees, the auditor can also help you set up and review payroll processes, including A-tax, labour market contributions (AM-bidrag), holiday pay and reporting to eIndkomst. This is particularly important if you hire cross-border workers or pay benefits in kind, where the rules are more complex.

Strengthening compliance and internal controls

Even if your ApS is small, you are subject to Danish rules on bookkeeping, annual reports and company law. An auditor can help you design practical procedures that keep you compliant without overloading your organisation. Typical areas include:

• Implementing bookkeeping processes that comply with the Danish Bookkeeping Act, including digital storage and documentation requirements
• Setting up internal controls for payments, approvals and segregation of duties to reduce the risk of fraud and errors
• Ensuring that your annual report meets the requirements of the Danish Financial Statements Act for your reporting class
• Advising on shareholder loans, capital contributions, distributions and other transactions regulated by the Danish Companies Act

For companies that are growing or preparing for financing, the auditor can also help you prepare for potential inspections from the Danish Business Authority (Erhvervsstyrelsen) and other authorities, so that your documentation and processes are in order.

Business advisory and strategic support

Because auditors work with many companies across industries, they can provide valuable benchmarks and practical advice that go beyond pure compliance. For a Danish ApS, this can include:

• Cash flow and liquidity planning, including budgeting and rolling forecasts
• Analysis of profitability by product, customer or market segment
• Support in choosing the right financing structure (equity, loans, shareholder loans, leasing)
• Preparation of financial information for banks, investors or potential buyers
• Assessment of the financial impact of strategic decisions such as expansion, new product lines or internationalisation

Many auditors also assist with setting up management reporting, KPIs and dashboards so that owners and management receive timely and relevant financial information, not just once a year when the accounts are closed.

Support for growth, restructuring and transactions

When your ApS grows, restructures or enters into transactions, the financial and tax consequences can be significant. An auditor can help you plan and execute such changes correctly from the outset. Typical situations include:

• Establishing holding structures and group companies to optimise risk and taxation of dividends and capital gains
• Buying or selling a business or shares in another company, including financial due diligence
• Converting from a sole proprietorship to an ApS or merging several companies
• Implementing employee share schemes or incentive programmes and assessing their tax treatment

In these cases, the auditor often works together with lawyers and other advisors, but can act as your primary financial sparring partner who ensures that the numbers and assumptions are realistic and well-documented.

Digitalisation and accounting systems

The Danish Bookkeeping Act increasingly emphasises digital bookkeeping and secure storage of accounting records. An auditor can guide you in choosing and implementing accounting software and related systems that match the size and complexity of your ApS. This may include:

• Selecting cloud-based accounting systems that support Danish VAT, payroll and reporting requirements
• Integrating invoicing, banking and expense management to reduce manual work and errors
• Setting up access rights and approval workflows that support good internal control
• Preparing for future digital reporting requirements to authorities

Well-chosen systems not only make the annual audit smoother and cheaper; they also provide better real-time insight into your company’s financial position.

When to involve your auditor beyond the audit

To get maximum value from your auditor, involve them early when you plan significant changes, not only after the financial year-end. Contact your auditor when you:

• Consider major investments, financing or restructuring
• Enter new markets or start cross-border activities
• Plan to hire your first employees or expand your workforce significantly
• Experience rapid growth and need stronger financial management and reporting

By using your auditor as an ongoing advisor, your ApS can reduce risks, avoid costly mistakes and build a more robust financial foundation for long-term growth.

Common Mistakes Owners of Small ApS Make When Selecting an Auditor

Many owners of small ApS focus mainly on price when choosing an auditor and overlook factors that are crucial for compliance, tax efficiency and long-term growth. Below are the most common mistakes and how to avoid them when appointing an auditor for a Danish ApS.

1. Choosing Based Only on the Lowest Fee

Price matters, especially for a small ApS, but selecting the cheapest offer can be costly in the long run. Very low fees may mean limited partner involvement, little proactive advice and a “tick-the-box” approach to your annual report. This increases the risk of errors in your financial statements and tax returns, which can lead to corrections from the Danish Tax Agency (Skattestyrelsen), late filing penalties from the Danish Business Authority (Erhvervsstyrelsen) and higher advisory costs later.

Instead of comparing only hourly rates, look at what is included in the fee: assistance with the annual report under the Danish Financial Statements Act, corporate tax return (formularkode 201), VAT reconciliation, guidance on dividend distribution and help with digital filings to Erhvervsstyrelsen.

2. Not Checking Whether the Auditor Is Properly Authorised

Some owners assume that any “accountant” can act as an auditor. In Denmark, statutory audits and extended reviews for an ApS may only be performed by approved auditors who are either state-authorised (statsautoriseret revisor) or registered (registreret revisor) and listed in the public register maintained by Erhvervsstyrelsen.

Failing to verify this can result in your financial statements being rejected, forcing you to redo the work with a properly authorised auditor and potentially missing filing deadlines. Always check the auditor’s authorisation in the official register and ensure the engagement letter clearly states the type of engagement (full audit, extended review or compilation).

3. Ignoring Whether an Audit Is Actually Required

Many small ApS either appoint an auditor “because everyone does it” or, conversely, assume they can opt out without checking the legal thresholds. Under Danish rules, an ApS can generally opt out of statutory audit if, for two consecutive financial years, it does not exceed two of the following three limits:

• Balance sheet total: DKK 7 million
• Net revenue: DKK 14 million
• Average number of employees: 10 full-time equivalents

Ignoring these thresholds can lead to unnecessary audit costs or, in the opposite case, non-compliance if your company actually needs an audit. A good adviser will help you assess whether you can legally opt out, whether an extended review or compilation is sufficient, and when it is strategically wise to keep an audit (for example, to satisfy banks or investors).

4. Overlooking Industry Knowledge and Business Fit

Another frequent mistake is choosing an auditor who has no experience with your industry or business model. For example, an auditor mainly working with local retail shops may not be the best fit for a SaaS company with recurring revenue, deferred income and foreign customers, or for a holding company with multiple investments.

Lack of sector knowledge can lead to incorrect revenue recognition, weak advice on VAT rules (especially for cross-border services and e-commerce) and missed opportunities for tax optimisation. When selecting an auditor, ask about their experience with companies of similar size, industry and risk profile, and request concrete examples of typical issues they help clients solve.

5. Not Assessing Independence and Potential Conflicts of Interest

Owners of small ApS often rely on personal recommendations from friends, banks or lawyers and do not consider independence requirements. Under Danish and EU rules, auditors must be independent of their audit clients. If the auditor is too involved in bookkeeping, decision-making or management functions, their independence may be compromised.

Common risk situations include the auditor:

• Acting as both bookkeeper and statutory auditor without clear separation of duties
• Having close family or financial ties to the owners or management
• Providing extensive advisory services that may need to be evaluated in the audit

Failure to assess independence can result in qualified audit opinions, reputational damage and, in serious cases, intervention by Erhvervsstyrelsen. Always discuss how the auditor ensures independence and what services they can and cannot provide in combination with the statutory audit.

6. Underestimating Communication and Availability

Many small ApS choose an auditor without checking how communication will work in practice. If you only speak to the auditor once a year, you may miss important deadlines or planning opportunities, such as optimising salary versus dividends, handling shareholder loans correctly or planning investments before year-end.

Warning signs include long response times, unclear contact persons and no structured process for questions during the year. When selecting an auditor, clarify who your main contact will be, typical response times, and whether short phone calls or emails during the year are included in the fee or billed separately.

7. Failing to Clarify the Scope of Work in Writing

Some owners rely on verbal agreements and do not insist on a clear engagement letter. This often leads to misunderstandings about who is responsible for bookkeeping, VAT returns, payroll, corporate tax and the preparation of the annual report.

Without a written agreement, you may assume the auditor will handle tasks that they consider outside their scope, such as ongoing VAT control or checking that management complies with company law requirements. This can result in errors, late filings and unexpected extra invoices.

Make sure the engagement letter clearly specifies:

• The type of engagement (audit, extended review or compilation)
• Which reports and tax returns are included
• Deadlines and responsibilities for providing documentation
• How additional work and advisory services are billed

8. Not Considering Digital Tools and Workflow

Another common mistake is choosing an auditor who does not work efficiently with digital systems. If your ApS uses cloud accounting software, digital receipt management and online banking, an auditor who still relies heavily on manual processes can slow down the work and increase costs.

Ask which accounting systems the auditor supports, whether they can access your bookkeeping system directly, and how they handle secure document exchange and electronic signatures. A digital workflow reduces the risk of lost documents, speeds up the year-end process and helps you keep your records aligned with Danish bookkeeping requirements.

9. Ignoring Future Needs and Growth Plans

Owners of small ApS often choose an auditor only for their current situation and do not consider how the company may develop. If you plan to hire more employees, expand abroad, bring in investors or convert to an A/S, you will need an auditor who can support you through these changes.

Switching auditors later is possible but involves formal decisions at the general meeting and filings with Erhvervsstyrelsen, and may raise questions from banks or stakeholders. It is more efficient to choose an auditor who can handle both your current size and your expected growth, including advice on group structures, transfer pricing where relevant and shareholder agreements.

10. Not Comparing a Few Qualified Options

Finally, many small ApS appoint the first auditor they speak to, without comparing alternatives. This increases the risk of overpaying, choosing a poor fit or missing out on an auditor who better understands your business.

Before deciding, speak to at least two or three authorised audit firms. Prepare the same basic information for each (turnover, balance sheet total, number of employees, activities, any foreign operations) and ask them to explain their proposed approach, estimated fees and how they work with small ApS. This will give you a clearer picture of the market and help you make a more informed choice.

Avoiding these common mistakes will help you select an auditor who not only ensures compliance with Danish law, but also supports your ApS with practical advice, efficient processes and a long-term perspective on your business.

How to Terminate Cooperation with an Auditor and Appoint a New One Correctly

Changing your auditor in a Danish ApS is a formal process governed by the Danish Companies Act and supervised by the Danish Business Authority (Erhvervsstyrelsen). If it is handled incorrectly, your financial statements may be rejected, and you risk non-compliance penalties. Below is a practical guide to terminating cooperation with your current auditor and appointing a new one in a compliant and efficient way.

1. Understand when and why you can change your auditor

The owners of an ApS are free to replace the auditor at any ordinary or extraordinary general meeting, as long as the decision is made correctly and recorded in the minutes. Typical reasons include:

• Need for a different level of service (for example, moving from a full audit to an extended review or vice versa)
• Desire for an auditor with specific industry experience
• Concerns about audit quality, communication or responsiveness
• Fee level that no longer matches the size or complexity of the company
• Need to ensure independence where the current auditor has developed potential conflicts of interest

Simply wanting a lower fee is not a problem in itself, but you should always ensure that the new auditor is properly authorised and independent.

2. Check your articles of association and existing agreements

Before you start the process, review:

• The articles of association (vedtægter) to see whether they contain specific rules on the appointment and removal of the auditor
• The latest general meeting minutes where the current auditor was elected, including the term of appointment
• Any engagement letter or contract with the current audit firm, especially notice periods and termination clauses

In most ApS companies, the auditor is elected annually at the ordinary general meeting, and there is no contractual lock-in beyond the current financial year. However, larger audit firms may use engagement letters with notice provisions. Respecting these terms reduces the risk of disputes and additional fees.

3. Plan the timing of the change

From a practical perspective, the smoothest time to change auditor is:

• Immediately after the end of a financial year, before the audit work has started, or
• At the ordinary general meeting where the annual report is approved

If you change auditor in the middle of an audit, the outgoing auditor must consider whether there are reasons to resign and whether they need to inform the Danish Business Authority. The incoming auditor will also need time to perform client acceptance procedures and obtain information from the previous auditor, which can delay the audit.

4. Inform and cooperate with the current auditor

While Danish law does not require you to give a detailed justification to the outgoing auditor, it is good practice to:

• Inform them in writing that the company intends to propose a new auditor at the next general meeting
• Clarify whether they are expected to complete the current year’s audit or not
• Agree on closing procedures, including access to working papers for the incoming auditor where relevant

Auditors in Denmark are subject to professional rules that require them to cooperate with the successor auditor, within the limits of confidentiality and data protection. This cooperation helps ensure continuity and reduces the risk of misunderstandings in the first year with the new auditor.

5. Select and pre-approve the new auditor

Before you formally dismiss your current auditor, you should identify and obtain preliminary acceptance from the new one. Make sure that:

• The new auditor is properly authorised in Denmark as a state-authorised public accountant (statsautoriseret revisor) or registered public accountant (registreret revisor), depending on your needs
• The audit firm is registered with the Danish Business Authority and subject to quality control
• The auditor confirms in writing that they are independent under the Danish Auditors Act and relevant ethical standards
• You agree on the scope of work (full audit, extended review or compilation), the expected timetable and a clear fee structure

For many small and medium-sized ApS companies, the audit fee will typically be structured as a fixed annual fee based on turnover, number of transactions and complexity, with additional hourly rates for advisory services. Clarifying this upfront avoids disputes later.

6. Adopt a formal resolution at the general meeting

The decision to terminate the current auditor and appoint a new one must be made by the shareholders at a general meeting. The process usually includes:

1. Convene an ordinary or extraordinary general meeting in accordance with the notice rules in the articles of association and the Danish Companies Act
2. Include an item on the agenda covering removal of the current auditor and election of a new auditor
3. Present the proposal, including the name and registration details of the proposed new auditor or audit firm
4. Adopt the resolution by simple majority, unless your articles of association require a higher majority
5. Record the decision in the minutes of the general meeting, including:
   • The full legal name and CVR number of the outgoing audit firm
   • The full legal name and CVR number of the incoming audit firm
   • The effective date of the change

If the auditor is removed before the end of their term, the minutes should briefly state the reason. This is important because the Danish Business Authority may request an explanation, and the outgoing auditor may need to report if there are special circumstances.

7. Register the change with the Danish Business Authority

After the general meeting, the company must notify the Danish Business Authority electronically via Virk.dk. The registration should include:

• The decision to remove the existing auditor
• The appointment of the new auditor
• Updated information on whether the company is subject to a full audit, extended review or compilation

The change must be registered without undue delay after the decision. In practice, companies typically file the change within a few days. Failure to register can lead to reminders, possible fines and delays in the approval of your annual report.

8. Handle the outgoing auditor’s obligations

When an auditor is dismissed or resigns, they have specific obligations under Danish law and professional standards. Among other things, the outgoing auditor must:

• Assess whether there are reasons to inform the Danish Business Authority about the circumstances of the resignation or dismissal
• Respond to professional inquiries from the incoming auditor, within the limits of confidentiality
• Complete any work already performed to the extent agreed, or clearly state what has not been completed

If the outgoing auditor believes that there are serious issues, such as suspected fraud or management’s failure to fulfil legal obligations, they may be required to report this. This is one reason why it is important to maintain a professional and transparent dialogue throughout the change process.

9. Support the incoming auditor’s acceptance and planning

Once the new auditor has been formally appointed and registered, they will carry out client acceptance procedures and plan their work. To ensure a smooth start, you should:

• Provide the new auditor with your articles of association, latest annual report, management accounts and key contracts
• Give them access to your accounting system and documentation, including bank statements, invoices and payroll records
• Explain any significant changes in the business, such as new activities, financing arrangements or cross-border transactions
• Clarify expectations on deadlines for draft financial statements, audit completion and filing of the annual report

The new auditor will also need to understand whether your company meets the thresholds for mandatory audit or can opt for an extended review or compilation. This assessment is based on your revenue, balance sheet total and number of employees over two consecutive financial years.

10. Avoid common pitfalls when changing auditors

Owners of small and medium-sized ApS companies often make similar mistakes when replacing their auditor. To avoid problems:

• Do not delay the decision until just before the filing deadline for the annual report; this leaves too little time for the new auditor to perform their work properly
• Do not assume that the new auditor will automatically be registered with the Danish Business Authority; you must ensure the registration is completed
• Do not ignore the outgoing auditor’s final invoice or open issues; unresolved disputes can slow down the transfer of information
• Do not downgrade from a full audit to a lower level of assurance without considering the impact on banks, investors and other stakeholders

A well-planned change of auditor can improve the quality of your financial reporting, strengthen compliance and provide better advisory support for your ApS. By following the formal requirements and maintaining open communication with both the outgoing and incoming auditor, you reduce risk and ensure a smooth transition.

Record-Keeping and Documentation Requirements to Facilitate a Smooth Audit

Good record-keeping is one of the most effective ways to reduce audit risk, lower audit fees and ensure that your Danish ApS meets all statutory requirements. Danish auditors are required to assess whether your bookkeeping and documentation comply with the Danish Financial Statements Act (Årsregnskabsloven), the Danish Bookkeeping Act (Bogføringsloven) and relevant tax rules. If your documentation is incomplete or disorganised, the audit will take longer, cost more and may result in qualifications in the audit report.

Core bookkeeping requirements for a Danish ApS

Under the Danish Bookkeeping Act, your ApS must record all business transactions in a timely, accurate and traceable way. In practice this means:

• All transactions must be recorded on an ongoing basis, normally no later than when the financial statements are prepared, and for VAT-registered companies in time to prepare correct VAT returns
• Each entry must be supported by underlying documentation (for example an invoice, contract or bank statement)
• It must be possible to trace every transaction from the financial statements back to the original document and vice versa (audit trail)
• Your bookkeeping system must ensure that entries cannot be changed without leaving a clear log of who changed what and when

Most Danish auditors expect ApS companies to use a recognised accounting system (for example e-conomic, Dinero, Billy or a similar solution) rather than spreadsheets alone, especially once the company is VAT-registered or has employees.

Retention periods and storage format

Your ApS must keep accounting records and supporting documentation for at least 5 years after the end of the financial year to which they relate. This applies to both paper and electronic records. The retention period also covers:

• General ledger and journals
• Annual reports and management reports
• Bank statements and reconciliations
• Sales and purchase invoices
• Payroll records and holiday pay documentation
• Contracts, loan agreements and lease agreements
• Documentation for tax positions, including transfer pricing where relevant

Documentation may be stored electronically, including in cloud solutions, as long as it is secure, readable, and can be made available to the auditor and authorities in Denmark without undue delay. If data is stored outside Denmark, you must ensure that the Danish Tax Agency and other authorities can obtain access when required.

Key documents your auditor will expect to see

To carry out a smooth audit of your ApS, your auditor will typically request at least the following:

• Company formation documents, articles of association and any amendments
• Shareholder register and minutes from general meetings and board meetings
• Trial balance and general ledger for the financial year
• Bank statements for all accounts, including corporate cards and deposit accounts
• Bank reconciliations at year-end and for selected interim dates
• Customer and supplier ledgers, including ageing analyses of receivables and payables
• Documentation for major revenue contracts and significant purchase agreements
• Inventory lists and stock count documentation, where applicable
• Fixed asset register with purchase invoices, depreciation calculations and disposal documentation
• Loan agreements, intercompany balances and shareholder loans, including interest calculations
• Payroll reports, employment contracts, holiday pay calculations and pension agreements
• VAT, payroll tax (AM-bidrag), A-tax and other tax filings, including SKAT account statements
• Any correspondence with the Danish Tax Agency or the Danish Business Authority relevant to the year

Having these documents ready and clearly organised before the audit starts is one of the simplest ways to reduce the time your auditor spends on basic information gathering.

Sales, purchases and VAT documentation

For sales and purchases, Danish rules require that each transaction is supported by proper documentation. Your auditor will check that:

• Sales invoices contain mandatory information such as your company’s name, address, CVR number, invoice date, invoice number, description of goods or services, quantity, price, VAT rate and VAT amount
• Purchase invoices from suppliers meet similar requirements and support VAT deductions
• Cash and card sales (if relevant) are recorded daily and can be reconciled to bank deposits and POS reports
• VAT returns (momsangivelser) reconcile to your accounting records for the period

Missing or incomplete invoices can lead to VAT corrections, penalties and additional tax. A clear filing structure for sales and purchase documentation – for example by year, month and type of document – will make it easier for both you and your auditor to locate specific items.

Payroll, holiday pay and employee documentation

If your ApS has employees, payroll documentation is a key focus area in Danish audits. Your auditor will typically review:

• Employment contracts and any amendments
• Monthly payroll reports from your payroll system
• Documentation for calculation and payment of A-tax and labour market contributions (AM-bidrag)
• Holiday pay (feriepenge) calculations and balances, including any amounts administered via FerieKonto or private holiday pay schemes
• Pension agreements and payments to pension providers

Errors in payroll and holiday pay can quickly become costly, as they often affect several years and many employees. Keeping payroll documentation complete and reconciled to your accounts reduces the risk of adjustments and disputes.

Bank, cash and financing documentation

Bank and financing documentation is central to the auditor’s work because it provides independent evidence of your company’s financial position. To facilitate the audit, you should ensure that:

• All bank accounts, including foreign currency accounts, are recorded in the accounts
• Year-end balances are reconciled to bank statements
• Any cash on hand is counted at year-end and documented
• Loan agreements with banks, group companies and shareholders are available, including terms, interest rates and repayment schedules
• Interest calculations and payments are documented and reconciled

For shareholder loans, your auditor will also assess whether the loans comply with Danish company law restrictions and tax rules, so clear documentation of purpose, terms and repayments is essential.

Fixed assets, depreciation and leasing

For companies with significant equipment, IT, vehicles or other fixed assets, your auditor will expect a structured fixed asset register. This should include:

• Purchase date, supplier and invoice reference
• Acquisition cost and any subsequent improvements
• Depreciation method and useful life
• Accumulated depreciation and carrying amount
• Disposals, including sales price and documentation

If you have lease agreements, the auditor will review contracts to determine whether they should be treated as operating or finance leases under the Danish Financial Statements Act and your chosen reporting framework. Keeping all lease contracts and amendments in one place speeds up this assessment.

Tax positions and estimates

Your auditor must evaluate whether income tax, deferred tax and other tax-related items are correctly recognised. To support this, you should keep:

• Corporate income tax calculations for the year
• Documentation for any tax losses carried forward
• Transfer pricing documentation, if your ApS is part of a group with cross-border transactions and meets the Danish thresholds for documentation
• Correspondence with the Danish Tax Agency regarding rulings, audits or adjustments

For provisions and estimates (for example for bad debts, warranties or legal disputes), the auditor will expect written calculations and explanations of the assumptions used. Preparing short memos for significant estimates can significantly reduce follow-up questions during the audit.

Internal controls and IT systems

Even in small ApS companies, auditors look at how you control access to systems and reduce the risk of error or fraud. You can facilitate this part of the audit by documenting:

• Who has access to the accounting and payroll systems and with which rights
• How you approve invoices, payments and changes to master data (for example supplier bank details)
• How you back up accounting data and ensure continuity if systems fail

Written procedures do not need to be long or complex, but they should reflect how you actually work. Clear, simple process descriptions help the auditor understand your business and reduce the need for detailed questioning.

Practical tips to prepare for the audit

To make the first and subsequent audits as efficient as possible, it is helpful to:

• Agree an audit timetable with your auditor well before year-end
• Ask for a prepared-by-client (PBC) list of documents the auditor expects and prepare them in advance
• Use consistent file names and folder structures for digital documents, for example “2025-01 Supplier Invoices”
• Ensure that key staff are available during the audit period to answer questions
• Resolve obvious issues (for example unreconciled bank accounts or negative balances) before the auditor starts fieldwork

Systematic record-keeping and clear documentation are not only legal obligations in Denmark; they are also an investment in smoother audits, better financial insight and stronger credibility with banks, investors and authorities.

Conclusion and Next Steps

The appointment of an auditor for your Danish ApS is a fundamental aspect of your business's financial governance. By understanding the legal obligations, carefully choosing a professional who aligns with your needs, and proactively managing your relationship with them, you're positioning your business for sustainable success.

Consider taking the next steps in your journey by reviewing your current financial practices and determining if your appointed auditor meets all your business requirements. Remember, an effective auditor not only safeguards your company's interests but also contributes valuable insights that can pave pathways for future growth.

By following the steps outlined in this guide, you can navigate the auditor appointment process with confidence and ensure that your Danish ApS adheres to the highest standards of financial accountability and transparency.