Statutory audit: is it required in your organisation?
Large organisations are required to have their financial statements audited. A number of criteria are defined for this in the law. But even when an audit is not mandatory, an independent and impartial view of your financial processes may be well worthwhile, as it constitutes an extra form of assurance, both internally and for your external stakeholders.
Mandatory or not? The legal criteria
The statutory audit – the annual check of your financial statements – is required by law if your company or non-profit organisation exceeds at least two of the following three measures:
- a net turnover of 9 million euros;
- a balance sheet total of 4.5 million euros;
- a workforce of 50 employees.
For listed companies, the statutory audit is automatically mandatory, just as it is for subsidiaries of groups or holding companies that publish consolidated figures. It makes no difference whether you as a separate entity meet two of the three criteria.
Is an audit required? Appointing a statutory auditor
If you are obliged to have a statutory audit, the general meeting must appoint a statutory auditor. This is a company auditor who reviews your financial and administrative organisation every year for a (renewable) term of three years and issues an opinion on the financial statements.
Statutory audit not required? It’s still worth considering!
Many SMEs and non-profit organisations do not have to appoint an auditor to review their accounts. Yet an external view of this kind is worth considering even for a small organisation. This is because it provides extra assurance and comfort, both internally and for your financial and commercial stakeholders, since you provide them with proof that your figures give a true and fair view of your business operations. Moreover, the analysis of your processes goes much further than checking your figures. The auditor is your sounding board and sparring partner for financial issues.