International trade has increased worldwide because of globalization and trade agreements. The rise of inte rnational trade has led to new challenges for national and supranational authorities, especially tax authorities. These challenges that the national authorities are dealing with are the companies aggressive tax planning and shifting earned profit in the EU to other countries with lower tax or no tax.
The media has covered the past few tax scandals, including the latest Panama scandal, and the coverage has led to pressure on the national and EU authorities from citizens and other organizations who are concerned with preventing the companies from transferring profits in order to avoid paying taxes.
The Danish accounting companies in Class B, which are under a certain size, have an opportunity with their annual financial statement. This not will be mean that they can avoid making an annual financial statement, but they can easily choose to make that statement themselves, instead of having an accountant do it.
The amendments to the Financial Statements Act, made in 2006, 2010 and 2013 have resulted in less stringent requirements in the form of auditing, which has enabled in companies in Class B to take advantage of the opportunity to audit their financial statements.
Consequently, the annual financial statement no longer has the same guarantee of being is true and fair, which is what the signature of the accountant provides. These are problems that accountants offer solutions to, in addition to services other than auditing, like reviews and accounting service. The amendments to Danish Financial Statements Act will bring positive effects for the companies that are included in the changes, as it will clearly be beneficial for the individual company to acquire the choice of audit obligation. The changes will mean that each company will be able to save a lot of resources, time and money, compared to having to produce an annual report.
Conversely, changes in the annual accounts act may also have negative effects such as omissions in the annual report as an enterprise may not have the necessary knowledge of the performance of the annual report compared with what an auditor would have. In the event of omissions in the annual report, this also has an impact on the company’s external affairs, as the annual report provides significant information to the company as well as its operation. However, the easing of the mandatory audit requirements has caused a debate and a sense of fear of the consequences that the eases will cause, including the risk of an increase in economic crime.
|Educations||MSc in Auditing, (Graduate Programme) Final Thesis|
|Number of pages||132|