Revisorpligt: Et effektivt værn mod tilsigtede og utilsigtede fejl i skatte- og afgiftsangivelser

Johannes Sønderris Pedersen & Hung Nhat Huynh

Student thesis: Master thesis

Abstract

This thesis aims to investigate whether introducing auditor obligation (“revisorpligt”) for Danish companies can be preventive against the gap between the amount of tax and VAT justified and the actual amount of tax and VAT paid by Danish companies, referred to as the tax gap. The research derives from current legislation and a governmental proposal for the 2020/2021 parliamentary year in which auditor obligation is highlighted, yet, without any concrete political proposals. The current legislation is a result of the relaxation of auditing obligation in 2011, which has resulted in 23% of all Danish companies today publishing annual reports without any statement from an approved auditor. At the same time, statements from the Danish Tax Agency show that 10% of Danish companies allegedly commit fraud. Furthermore, a compliance survey from the Danish Tax Agency from 2014 finds that significantly more deliberate errors can be identified in companies' tax payments when there are no approved auditor statements on annual reports. To examine this issue, this thesis must define what auditor obligation may include, as the concept is currently not concretely defined in the current governmental proposal. Thus, the benchmark used for auditor obligation in this thesis has been a proposal from the industry association FSR recommending introducing an approved auditor’s statement of assistance (“assistanceerklæring”) on the annual report of all companies with a yearly turnover of DKK 5 million or more. The thesis concludes that an approved auditor’s statement of assistance is a useful tool to identify especially unintentional errors in tax and VAT reports, as approved auditors are subject to both external and internal quality requirements which entail performing work actions, directly and indirectly, targeting the identification of errors. Despite this, the thesis concludes that a statement of assistance is only to a limited extend effective when it comes to identifying intended errors, as the approved auditor is limited to perform work based on information provided by the company's management, and limited due to the timing of work actions. The thesis finds that introducing auditor obligation will increase the covered companies' financial burden while leaving the uncovered companies without increased control. However, an increased control effort from the Danish Tax Agency will, over time, constitute more effective prevention for all companies without division of company size, when authorities begin to implement intelligent solutions to identify intentional as well as unintentional errors more effectively across authority systems. Finally, we conclude that introducing auditor obligations will only be effective if the Danish Auditors Act is modified so that the Danish Business Authority's quality control also includes approved auditors’ statements of assistance. Furthermore, Section 18 of the Danish Auditors Act must also be modified to include statements of assistance. To counteract the identified weaknesses of auditor obligation, we propose introducing auditor obligation in combination with increased tax deduction on the expenses coming from the proposal. In addition, we propose introduction of random control of companies not covered by auditor obligation. In line with the amendments to the Danish Auditors Act mentioned above, this will result in adequate protection against unintended and intended errors, due to more presence from approved auditors and more control.

EducationsMSc in Auditing, (Graduate Programme) Final Thesis
LanguageDanish
Publication date2021
Number of pages110