When is an accountant mandatory for the annual accounts?
Medium-sized and large entities in principle have a statutory audit requirement (art. 2:393 DCC). Micro and small entities are exempt.
Short answer
Medium-sized and large entities in principle have a statutory audit requirement (art. 2:393 DCC). Micro and small entities are exempt.
Basis: art. 2:393 DCC
When does the statutory audit requirement arise?
The audit requirement in principle follows from the size class. If at least two small upper limits are exceeded over the statutorily required consecutive balance sheet dates, the medium-sized class with an audit requirement may follow. Also test group data and special exceptions.
For financial years from 1 January 2024, use the current limits of art. 2:396 DCC: assets of no more than €7.5 million, net turnover of no more than €15 million and fewer than 50 employees for the small class. Look at two of three characteristics and at the required consecutive balance sheet dates. A BV with €8 million assets but €10 million turnover and 20 employees may still be small. In a group, the data of group companies are relevant; reading only the holding company's figures may produce the wrong class.
Which engagement does the accountant then perform?
An auditor's report may only be issued by a registeraccountant (RA) or AA with audit authorisation. Software can support the examination, but not replace the report.
The statutory audit is an examination in accordance with professional standards and results in an auditor's report. For this, an accountant needs access to supporting evidence, transactions and resolutions; a neat pdf alone is insufficient. The board remains responsible for the annual accounts and for timely publication. Therefore plan the audit before the final preparation date and agree who processes corrections in the bookkeeping. A medium-sized company can prepare the figures itself, but may not have the statutory auditor's report replaced by software. Also check that the accountant has the required authorisation for the engagement.
When does a third party voluntarily ask for an audit?
Apart from the law, articles of association, grant conditions or financing agreements may require an accountant's report or audit. Ask which type of engagement is prescribed exactly; a compilation and an audit are not equivalent.
Even without a statutory duty, a bank may ask for assurance. Then distinguish between a compilation engagement, a review engagement and an audit engagement: they do not provide the same level of assurance. A financier that only asks for prepared annual accounts does not necessarily mean an accountant's audit. Ask for the literal contract condition and discuss costs and planning. Grant decisions may also set requirements for the use of specific amounts, for example €250,000 in project costs. That audit may have a different scope from the statutory audit of the annual accounts.
How do you plan a possible audit on time?
Each year, before preparing, determine which class applies for the coming financial year. Collect the assets, net turnover and average number of employees of the relevant group. A company may exceed two small limits in 2024 and 2025; the consequences of the statutory class must then be taken into account for the applicable reporting period. Plan the accountant early, because an audit may require physical stocktakes, external confirmations and documentation on estimates. If the accountant is only involved after the balance sheet date, some audit procedures are harder to perform. The software user remains responsible for a complete file.
State in the engagement letter whether it concerns an audit of the statutory annual accounts, a compilation or an agreed audit of a grant item. Also note which entities and financial years are covered. An audit of the operating company is not automatically an audit of the holding company. Ask when the report can be issued and how corrections are discussed. Adoption and filing must then still take place within the statutory periods. Keep the signed report and the digital proof of submission together with the adopted annual accounts. That later shows that the board not only hired an accountant but also completed the whole publication chain.
Sources
Frequently asked questions
Is a compilation report enough when an audit is required?
No. A compilation does not replace the auditor's report required by art. 2:393 DCC.
May an AA carry out the statutory audit?
That depends on the audit authorisation and the applicable professional rules.
Does the audit requirement change after one year of growth?
The size class in principle follows a test over consecutive balance sheet dates, with specific rules for first financial years.
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Preparing Dutch annual accounts?
Your first set of annual accounts is free, for every size class. Create an account and prepare the annual accounts of your Dutch company under Title 9 of Book 2 of the Dutch Civil Code.
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