Appointing an auditor for companies and associations: how and when?
August 2024 - Did you know that, under certain conditions, Belgian companies are legally obliged to appoint an auditor for a three-year term? In this article, we set out the main rules of the game.
Even if there is no legal obligation to do so, this appointment can be useful for monitoring the interests of all stakeholders. This ensures transparency, integrity and accountability within companies. What legal provisions need to be taken into account?
Criteria for the compulsory appointment of an auditor
Since the revised Companies and Associations Code came into force on 1 May 2019, companies and associations have largely been equated with each other. To determine whether the appointment of a statutory auditor is compulsory, we must first distinguish between companies with liability - such as the NV or BV - and companies without liability, such as the vof or CommV... Because of their unlimited liability, the latter are not subject to statutory audit.
Another criterion is the size of the company. Here the legislator sets three criteria: turnover, balance sheet total and average annual number of employees. Does a company exceed more than one of these criteria for two consecutive financial years? Then the ‘large’ label applies. Large companies and associations can appoint an auditor...
New thresholds
In addition, for financial years starting after 31 December 2023, new thresholds apply. The turnover criterion has been raised from €9,000,000 to €11,250,000. The balance sheet total has been adjusted from €4,500,000 to €6,000,000. The annual average of 50 employees has remained unchanged. Important to know: these higher thresholds do not apply to associations!
What about companies within a group?
If a company is part of a group, the company law distinction between a parent company and a subsidiary applies. Should a parent company be considered ‘large’? It depends on criteria on a consolidated basis. However, the subsidiary is valued on an individual basis (unless that company exercises control). It should be noted that a company must always be assessed on an individual basis in order to verify the auditor's obligation...
Specific rules for consolidated accounts
The criteria also apply to a group of companies and associations that must prepare and publish consolidated financial statements under the Companies and Associations Code... The thresholds here are much higher than in the case of separate financial statements. In this case too, the change in thresholds must be taken into account, in particular the increase from €34,000,000 to €42,500,000 in terms of turnover and a balance sheet total of €21,250,000. The number of employees remains unchanged.
It is important to note that for consolidated accounts, the appointment of a statutory auditor is compulsory in each of the companies or associations under Belgian law included in the consolidation.
