The Role of Auditors in Denmark's Annual Reports
In Denmark, a company owner can choose to opt out of the audit requirement by providing the relevant information during the company's incorporation process. This process is called "fravælge revisionspligt".
In Denmark, for ApS and IVS limited liability companies, it is mandatory to have an audit, unless two of the following three recommendations are met:
- The balance sheet does not exceed DKK 4 million.
- The annual net revenue does not exceed DKK 8 million.
- The average number of full-time employees does not exceed 12.
To avoid an audit for holding companies in Denmark, they need to meet the same requirements as limited liability companies, which include having a balance sheet total of no more than DKK 4 million, a turnover of no more than DKK 8 million, and no more than 12 full-time employees. However, these values must be combined for all companies in which the holding company has a controlling amount of shares (usually 20% ownership).
The annual audit of a limited liability company can be deregistered at the shareholders' meeting if the company was established many years ago with an annual audit.
In order to do so, the company needs to establish at the annual shareholders' meeting that the audit will not be necessary from the following year:
- Record the necessary information in the minutes of the meeting.
- Agree on an amendment to the company's Articles of Association that removes any reference to the audit requirement.
- At the end of the year, when preparing the company's annual report, state that the conditions for not being audited have been met.
Since 2006, there has been no requirement for Danish sole proprietorships to have an audit.