Contact us

Mandatory Audits for More than 10 Full-Time Employees

Mandatory Audits for More than 10 Full-Time Employees

Annual financial statements and profit distribution can be declared invalid if a company wrongly opts out of an audit. This can happen when a company initially waived an audit but later no longer meets the criteria – for instance, by exceeding the critical size of more than ten full-time employees. Business growth or the acquisition of a stake can also eliminate the conditions for opting out. In such cases, an audit becomes legally mandatory, and decisions on financial statements and profit distribution are invalid without an audit report.

To avoid legal consequences, boards of directors should regularly check the audit requirements and seek legal advice in case of uncertainty.