In 2006 the possibility of opting out of audit was first introduced in Denmark. Thus, Denmark became one of the late member states in EU to implement this and thereby giving the companies in Denmark somewhat the same conditions as the other member states. Since then there has been regulations to the law and today there is no requirement on almost all small companies in the SME-segment. Even though the law was passed around 13 years ago, the topic about audit requirements are still very vivid in the Danish debates. One of the reasons for this might be that the real development of companies opting out of audit have been especially rapid since 2012, where 86% still had audit – as of 2017 it is only 36%. Based on this the topic of audit requirement has also been more relevant during the later years. The main objective of this dissertation is to determine, based on the debate in Denmark, the main pros and cons on the possibility of opting out of audit. Subsequently this dissertation will look at experiences made in Sweden and Norway, and thereby compare these experiences with the Danish situation. We found that the trade organization of auditing in Denmark (FSR) argues that the lack of audit, results in a loss of information in the public, as it is provided that all else equal the percentage of remarks in the companies having an auditor’s reports would also be the same percentage in companies without audit. Therefore, in 2016 according to FSR at least 11,239 companies with at least one remark was not brought to public knowledge as a direct result of the lower requirements for audit. On the other hand, reports show that companies in Denmark have saved 1.6 billion DKK because of the legislation and 1.700 extra jobs have been created. As a topic which is heavily being debated in Denmark, the Danish Business Authority, in December 2018 released a report with one of the main conclusions being that the number of formal mistakes in the financial reports doesn’t vary regardless of which statement was being issued by the auditor. The real difference in formal mistakes was only when the companies filed their financial reports without the presence of an auditor. The conclusion was based on a desk review and therefore did not include substantial mistakes. In 2017 the Swedish National Audit Office recommended the Swedish Authorities to reestablish the requirement for audit for all companies as the legislation had been costly than it was meant – mainly because of lost taxes due to the government failing to follow up on the legislation. In Norway on the other hand we found an interesting counterpart to audit; certified accountants that, if chosen, mitigated or fully offset, the negative impact on compliance by opting out of audit. The certified accountants are not a known phenomenon in Denmark and this dissertation concludes that the idea of having certified accountants could mitigate many of the negative impacts of opting out of audit.
|Uddannelser||Cand.merc.aud Regnskab og Revision, (Kandidatuddannelse) Afsluttende afhandling|
|Vejledere||Thomas Riise Johansen|