1 January 2013 an amendment to the Danish Financial Statements Act § 135 became effective. According to the amendment holding companies in reporting class B (limited liability companies and net turnover below DKK 72m) can opt out audit of the financial statements if a number of conditions are met.
The conditions for opting out the audit stipulate that the concern for two consecutive years does not transcend two of the following three conditions at the balance sheet date:
- A balance sheet of DKK 4 million.
- Net turnover of DKK 8 million.
- An average number of fulltime employees during the financial year of 12.
In practice the change means that the holding company does not need to audit the financial statement. If the company chooses to have the financial statement audited a declaration standard set by the Danish Business Administration can be applied. The decision to opt out audit can only be made prospectively.
If a company is required to have the financial report audited according to special legislation, it cannot take the advantage of opting out the audit. Opting out does not cover corporate funds.
Lene Holst Hansen