Increased Thresholds for Statutory Audit

Audit

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EU Regulation Update: Increased Thresholds for Statutory Audit

The European Commission has implemented significant changes to the threshold values for statutory audits. These changes, which have substantial implications for Dutch legal entities, build on the information from our previous blog post “Statutory Audit of Financial Statements in the Netherlands: Everything You Need to Know.” In this update, we explore these new developments and their impact on your business operations.

  1. Context and Background
    Recap of Previous Thresholds: The old thresholds for a statutory audit included, among others, a turnover of more than 12 million euros. A medium-sized manufacturing company with an annual turnover of 13 million euros, therefore, was subject to a statutory audit. European Standards: These limits, in place since 2013, were seen as restrictive, particularly due to economic growth and inflation.

  2. The new changes
    Increased Threshold Values: The new turnover limit of 15 million euros means, for example, that an ICT consultancy company with an annual turnover of 14 million euros now falls outside the scope of mandatory audits, reducing administrative burdens.

    Asset threshold adjustment: The value of assets according to the balance sheet, which previously exceeded EUR 6,000,000, has now been increased to EUR 7,500,000. This adjustment means that companies with asset values just over the old threshold might now be exempt from mandatory audits.

  3. Impact on Sustainability

    Reporting and CSRD Reduction in the Number of Companies Subject to Audit: A wholesale company that previously just met the threshold might now fall outside the requirements for extensive sustainability reporting, thus saving time and resources.

  4. Special Case: IFRS as a Standard: Regardless of size, the use of IFRS as a reporting standard requires a statutory audit. This means that a small software company operating internationally and using IFRS remains subject to this audit.

Conclusion: These changes in EU regulations have significant consequences for Dutch businesses. It is crucial to stay informed about these developments to ensure your company can respond adequately and meet the requirements.

Do you have questions about the new audit threshold values and how they might affect your business? Contact us for expert advice and support.