Audit requirement: when is an audit mandatory?

The short answer

An audit by an accountant is a legal requirement for medium-sized and large legal entities. Micro and small legal entities are exempt. The obligation arises when a legal entity no longer meets the requirements for small on two consecutive balance sheet dates; the figures of group companies count. Without an auditor's report, the annual accounts of a legal entity subject to the audit requirement can in principle not be adopted.

Updated 30 October 2026

Key facts

What the law provides

The legal entity engages a registeraccountant, an Accountant-Administratieconsulent with an entry in the register of accountants, or a statutory auditor to examine the annual accounts (art. 2:393(1) DCC). The engagement may also be given to an organisation in which such accountants work together.

The accountant examines whether the annual accounts give the required true and fair view and comply with the statutory requirements, and whether the management report has been prepared in accordance with Title 9 and is consistent with the annual accounts (art. 2:393(3) DCC). The outcome is an opinion on fair presentation: unqualified, qualified, adverse or a disclaimer of opinion (art. 2:393(5) and (6) DCC). In addition, the accountant reports to the board and the supervisory board (art. 2:393(4) DCC).

The general meeting appoints the accountant. If it fails to do so, the supervisory board is competent, and failing that the board. The engagement can only be withdrawn for well-founded reasons; a difference of opinion about the reporting or about the audit procedures is not such a reason (art. 2:393(2) DCC).

When the obligation arises

The law formulates the audit requirement as the main rule and carves out micro and small. A legal entity is therefore subject to the audit requirement as soon as it is no longer small. That is the case if, on two consecutive balance sheet dates, it does not meet at least two of the three requirements of art. 2:396(1) DCC. The explanation of those requirements is under the size criteria; a quick test is possible with the audit requirement check.

• The group counts. The assets, turnover and number of employees of group companies that would fall within a consolidation are included (art. 2:396(2) DCC). A holding company with a small balance sheet of its own can therefore be subject to the audit requirement.
• First financial year. For the first and second financial year, the balance sheet date of the first financial year is decisive (art. 2:398(1) DCC).
• Listed companies, banks and insurers. These public-interest entities cannot rely on the exemptions, however small they are (art. 2:398(7) DCC).

Worked example: the year in which the audit begins

A manufacturing company in the form of a BV (private limited company) grows steadily. The company does not exist; the amounts serve as an example.

At the end of 2024 only turnover is above the limit; the BV meets two requirements and remains small. At the end of 2025 it meets none. That is the first balance sheet date on which it does not comply, so the exemption still applies for 2025. At the end of 2026 it again does not comply: the annual accounts for 2026 are the first that must be audited.

The board therefore already knows at the end of 2025 what is coming and can have the general meeting give the engagement in good time in 2026.

Exemption and alternatives

A subsidiary in a group can stay outside the audit requirement through the group exemption. The articles on the management report, other information, audit and publication then do not apply to it (art. 2:403(3) DCC). The conditions are strict: the shareholders consent in writing every year, the figures are included in consolidated annual accounts and the consolidating company accepts joint and several liability for the debts arising from legal acts of the subsidiary (art. 2:403(1) DCC). See 403 declaration.

A small legal entity may have an audit carried out voluntarily, for instance because a bank, a grant provider or a buyer asks for it. A lighter engagement is a review or a compilation. These go less far and do not replace the statutory audit; see compilation report and auditor's report.

Audit per size class

What happens without an audit

Failing to give the engagement is an economic offence (art. 1(4°) WED). In addition, the annual accounts cannot be adopted if the competent body has not been able to take note of the auditor's report, unless a legitimate ground for its absence is stated in the other information (art. 2:393(7) DCC). Without an auditor's report, adoption can therefore stall. The publication obligation remains: if the annual accounts have not been adopted within two months after the preparation deadline, the board makes the prepared annual accounts public without delay as not adopted, and the outer limit of twelve months after the financial year remains (art. 2:394(2) and (3) DCC). Any interested party can demand compliance with the audit requirement (art. 2:393(8) DCC).

Common mistakes

• Relying on a single growth year. The obligation follows from two balance sheet dates.
• Looking only at your own BV. The group figures decide.
• Treating the 403 declaration as a formality. If one condition is missing, the subsidiary is simply subject to audit.
• Mistaking a compilation report for an audit. Only the report of art. 2:393(5) DCC is an auditor's report.
• Adopting before the report is there. The law does not allow this, unless a legitimate ground for its absence is stated (art. 2:393(7) DCC).
• Thinking it concerns only BVs. The cooperative and the foundation or association that falls under Title 9 are also subject to audit if they are not small.

Audit requirement and Jaarrekening.io

Jaarrekening.io derives the size class from your figures and indicates whether the audit requirement of art. 2:393 DCC applies. For a medium-sized or large legal entity, you use the software to prepare the file that your accountant audits, and you record the auditor's report in the financial year. The software does not perform an audit itself and does not issue a report.

Sources

• Art. 2:393 DCC: engagement, examination, report and consequences for adoption (wetten.overheid.nl)
• Art. 2:396 DCC: exemption for the small legal entity and counting the group (wetten.overheid.nl)
• Art. 2:395a DCC: exemption for the micro legal entity (wetten.overheid.nl)
• Art. 2:398 DCC: first financial year and public-interest entities (wetten.overheid.nl)
• Art. 2:403 DCC: group exemption and the conditions (wetten.overheid.nl)
• Art. 2:394 DCC: publication of annual accounts that have not been adopted (wetten.overheid.nl)
• Economic Offences Act (Wet op de economische delicten), art. 1(4°), art. 2(4) and art. 6 (wetten.overheid.nl)
• KVK: What do the annual accounts consist of?
• KVK: To file annual accounts or not?

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