Abstract
The thesis analyzes the auditor's duty to critically review non-commercial fund affairs. It interprets the vague and elastic terms in section 25(1) of the Danish Foundation Act, to analyze how the auditor can ensure compliance with the requirements and inform the fund authority.
The terms »critical review« and »other matters« in section 25(1) of the Danish Foundation Act are legal standards from former and old legislation. It does not provide guidance for auditors and are not defined through case law. The legislative work indicate that the auditor should ensure all aspects to review non-commercial funds, but the law itself does not go beyond an undefined legal standard. This creates a discrepancy between the law's wording and its legislative history, making the terms broad, vague, and elastic. Interpreting »critical review« and »other matters« in the Danish Foundations Act can be challenging due to the lack of clarification, leading to uncertainty. There is a need for guidance and specific instructions to ensure a critical review and inform the fund authority of relevant observations and issues in the audit of non-commercial funds.
To ensure a sufficient audit and critical review of a non-commercial fund, the relevant matters include accounting materials, interest-/dividend-bearing investments, receivables and liabilities, administrative costs and fees, share-out distributions and more. Other aspects to consider are reviewing minutes, timely use of provisions, conflicts of interest, special banking engagement and
more. Chapter 6 and 8 of the Danish Foundation Act on management, extraordinary transactions, non-tied up capital level, consolidation, article of association violations and more is important to the audit. The auditor must assess share-out distributions and the risk of illegal share-outs to cohabitants, minor children, or board members' spouses, and report them to the foundation
authority.
The articles of association must describe the foundation's purpose, including distinction between different types and documentation requirements and use of tied-up capital.
The Danish Foundations Act includes the government order in investment (Anbringelsesbekendtgørelsen), where the auditor must report any investments that endanger the fund's capital. The most crucial aspects are liquid tied-up capital and risk-weighted assets. The auditor's report to the fund authority will also apply to unauthorized changes to the article of
association and decisions with disqualified board members.
| Educations | MSc in Auditing, (Graduate Programme) Final Thesis |
|---|---|
| Language | Danish |
| Publication date | 2023 |
| Number of pages | 80 |
| Supervisors | Mark Ørberg |