Five years after the Government instructed companies to report on corporate social responsibility (“CSR”), including gender quota, we have made an analysis of how many companies that actually comply with the statutory requirements in sections 99 a and 99 b of the Danish Financial Statements Act and of how the auditors approach any inadequate reporting. All questions are answered in the thesis “Corporate Social Responsibility – Compliance with the minimum requirements of the Danish Financial Statements Act”.
Based on an analysis of the annual reports of 170 randomly selected reporting class C (large) and D companies, we have looked at how many companies and auditors that observe the requirements of sections 99 a and 99 b of the Danish Financial Statements Act stipulating the companies’ mention of CSR and gender quotas. The analysis shows that many companies do still not comply with the minimum requirements. Especially the reporting class C (large) companies have some difficulty in complying with the requirements owing to lack of resources and interest.
At the same time, it is shocking that many auditors do no observe their duties to check the consistency of the management commentary and therefore do not modify the auditor’s report despite the companies’ non-compliance with the requirements. By interviewing auditors and persons in charge of CSR at Deloitte and PwC - some of the biggest consultancy firms in Denmark - we have tried to make an analysis of the initiatives that may be taken to increase the companies’ level of reporting and to intensify their interest, e.g. by preparing a more focused and comprehensive guide containing examples of good wording and by changing the distribution of responsibility thus both management and the auditors are penalised in case of non-compliance. It is also debated whether the requirement of CSR reporting should be abandoned regarding reporting class C (large) and D companies and instead leave it to the market forces. However, the disadvantage by doing this is that it must be expected that the reporting class C (large) companies which do not have the necessary resources and lack the interest today will fail altogether to disclose their CSR activities.
|Educations||MSc in Auditing, (Graduate Programme) Final Thesis|
|Number of pages||176|