News item | 16-02-2024 | 2:55 PM
Fewer companies are required to have their annual reporting audited by an accountant and to draw up a management report. Fewer companies also need to prepare extensive annual accounts. The cabinet has decided to do this in implementation of a European Directive.
With the decision, the government reduces the burden on companies and the pressure on the audit capacity of accountants. The reduction in accountability obligations is due to the inclusion of inflation over the past ten years in the criteria used to classify companies into categories. These categories determine how much accountability a company must provide annually.
Fewer companies are required to have an audit and a management report because they fall into a smaller category of companies. These categories are established on the basis of balance sheet total and net turnover. There are four categories of companies: micro, small, medium and large. The smaller the category a company falls into, the fewer obligations that company has to justify itself. The limit amounts that determine the categories have been increased by 25%. The increase will take effect from the 2024 financial year, but in line with the wishes of the business community and accountancy organizations, the increased limit amounts may also be used for the 2023 financial year.
The Council of Ministers has approved the order in council regulating the increase in the limit amounts. With this decision, the government follows a directive from the European Commission published on October 19. The decision will appear in the Official Gazette shortly.