Do my annual accounts need to be audited? Get to grips with the rules and requirements

Do my annual accounts need to be audited?

One of the most common questions among business owners is: do my annual accounts need to be audited? The short answer is that it depends on the size and legal form of your business. In this article, we look at when an audit is required, why it matters and how you can get professional help.

What does an audit of the annual accounts mean?

An audit of the annual accounts means that an independent, approved auditor reviews your company's accounts to ensure they are correct and meet the legal requirements. The auditor checks whether the financial information in the accounts gives a true and fair view and is free of material misstatement.

When must annual accounts be audited?

Whether your annual accounts must be audited depends primarily on the size and legal form of your business. Here are the general rules:

• Private limited companies (ApS) and public limited companies (A/S): Must as a rule have their accounts audited, unless they can make use of the audit exemption for smaller businesses.
• Smaller businesses (reporting class B): If your business does not exceed two of the following three thresholds in two consecutive financial years, you can be exempt from audit:
  • A balance sheet total of DKK 4 million.
  • A net turnover of DKK 8 million.
  • An average of 12 full-time employees.
• Personally owned businesses, including sole proprietorships, generally have no audit obligation, but can opt for one voluntarily to strengthen the credibility of their accounts.

Still unsure? Contact us today.

Why does an audit matter?

An audit ensures that your company's accounts give a true and fair view and comply with the law. It offers several benefits:

• Greater credibility: Audited accounts can strengthen your company's credibility with investors, banks and partners.
• Regulatory compliance: An audit helps ensure that the accounts meet current rules.
• Error prevention: An auditor can identify errors and omissions in the accounts so they can be corrected.

Different types of assurance

There are several types of assurance, depending on your company's needs:

• Extended review: A more limited check, often used by smaller businesses.
• Audit: The most comprehensive form of assurance, in which the auditor examines all material parts of the accounts.
• Review: A lighter examination focusing on high-level checks.

The benefits of professional help with your audit

At Summ, we offer professional help with annual accounts and audits. Our accounting consultants have extensive experience with all types of businesses and can help you:

• Ensure your company meets all legal requirements
• Minimise the risk of errors in the accounts
• Build credibility with authorities and investors

Contact Summ for professional advice

Unsure whether your annual accounts need to be audited? Contact Summ today for a free, no-obligation conversation. We help you get your company's accounts in order, professionally and efficiently.