Auditing, financial reporting, accounting, and consultancy services for companies located in Denmark

Regulatory obligations

Denmark is a member of the European Union (EU), which means that they have to follow the accounting, audit, and financial reporting rules set by the EU. They have made sure that their laws and regulations match those of the EU when it comes to accounting and audit. The Danish Companies Act is responsible for regulating accounting and financial reporting requirements in Denmark. All companies in Denmark are required to submit annual financial statements to the Danish Commerce and Companies Agency (DCCA). This information is available to the public. Different types of companies such as private and public limited companies, limited liability companies, branches, partnerships, representative offices, and European companies also have to submit financial statements.

If a company in Denmark is listed on a stock exchange, they have to follow the accounting rules that are approved by the EU and are called International Financial Reporting Standards (IFRS). This applies to their overall financial statements and individual statements for companies that are listed but don't belong to a group. Other companies have to follow the Danish Financial Statements Act. They can either use the IFRS or the Danish accounting standards (known as Danish GAAP), which were developed by the Danish Accounting Standards Committee (DASC) FSR - Danske Revisorer.

The period of time given to create and provide financial statements

The financial year is just like the calendar year and it runs from January 1st to December 31st. Companies have to submit their yearly report to the Danish Business Authority by May 31st. This report must be received by the Authority no later than 5 months after the end of the financial year. However, for national joint stock companies and listed companies, the deadline is 4 months after the end of the financial year.

For tax purposes, the year is the same as the calendar year or any other 12-month period that the taxpayer has informed the Tax Agency of.

Responsibility for submitting documents after the deadline has passed

If a company fails to submit its annual financial report by the deadline, each board member can be individually fined up to DKK 3,000. If they continue to fail to submit financial statements, the company may be forced to close down by state authorities.

Examination of financial records

Companies established in Denmark have to submit audited financial statements to the Registrar of Companies every year. However, small companies can be exempt from an audit if they meet certain criteria for two consecutive years. These criteria are: a balance sheet total of 4,000,000 DKK, a net turnover of 8,000,000 DKK, and an average of 12 employees during the financial year. The exemption remains valid until the company decides otherwise at their annual shareholders' meeting.

A company can only be exempt from an audit for their future financial statements. They can't avoid an audit for any previous reporting periods. Commercial foundations and investment companies with employees can't be exempt from an audit, even if they meet the criteria. If the company, a person connected to the company, or the company's owner is fined or convicted for breaking company, accounting, or tax laws, the audit exemption is lost. In that case, the financial statements for the following year will need to be audited.

Understanding the responsibility of company directors and the role of subsidiaries in financial reporting

The people in charge of a company (the directors) are responsible for making sure that the company's financial statements are accurate and honest, following international standards for financial reporting and any additional requirements set out by Danish law. If the company has other smaller companies (called subsidiaries) under it, the directors must also prepare and submit a report that combines all their financial information. This helps give a clear overall picture of the entire company's financial situation.

A subsidiary is a company that's owned by another company, usually by more than half (50%). However, there are situations where a company that's owned less than 50% can still be considered a subsidiary if the owning company has control over it. A company has control over a subsidiary if it can make decisions about the subsidiary's money and how it operates, can hire or fire most of the people in charge of the subsidiary, and has the most votes when decisions are made by the subsidiary's leaders.