Audit of statutory financial statements
The requirement for the audit of financial statements is provided in the Companies Code (NL / FR) and in the Royal Decree of 30 January 2001 (NL / FR) for large companies. The auditor is appointed for a term of three financial years by the general meeting of shareholders, upon proposal of the board of directors and after approval by the works council (where applicable). The auditor remuneration should be approved by the shareholders’ meeting.
The auditor may be reappointed without limitation. However, referring to the Belgian standard on independence, the statutory auditor or the audit partner representing the audit firm responsible for the audit of public interest entities (quoted companies, credit institutions and insurance companies) must rotate off after a period of 6 years, starting as of every renewal of the auditor's appointment as from June 29, 2008).
The obligation to appoint a statutory auditor applies to each large company incorporated under Belgian law, whether its object is social or not, established in the form of:
- a public limited liability company
- a partnership limited by shares
- a private limited liability company
- a cooperative limited liability company
- if not all of the members are natural persons:
- general partnerships
- ordinary limited partnerships
- if one of the members (located in Belgium or abroad) is liable to the audit of a statutory auditor:
- a Economic Interest Grouping (EIG)
- a European Economic Interest Grouping (EEIG) registered in Belgium
- a European company registered in Belgium
that meets the following criteria:
- the annual average of its workforce exceeds 100 persons or
- more than one of the following criteria is exceeded:
- annual average workforce: 50
- total assets: 3,650,000 EUR
- annual turnover (excluding VAT): 7,300,000 EUR
In applying the above criteria, each company is to be considered on a stand-alone basis, except for :
- companies which are part of a group which is obliged to prepare and publish consolidated financial statements (within or outside Belgium)
- companies which meet the definition of a "holding company" ("portefeuillemaatschappij / société de portefeuille") according to the Belgian Royal Decree no. 64 of 10 November 1967 (NL / FR).
- companies whose shares are quoted on an official Stock Exchange.
in which cases, the criteria are to be measured for the consolidated group to which the company belongs.
When an entity was considered “small” in prior periods and becomes “large” in the current period, it continues to be considered “small” in the period in which the change occurs. If this entity meets the “large” criteria for a second period, then it is considered as “large” and from that point onwards is required to appoint a statutory auditor. Similarly, when an entity met the definition of “large” in prior periods and becomes “small” in the current period, it remains “large” in the period in which the change occurs. If this entity meets the “small” criteria for a second period, then it is considered as “small” and from that point onwards is no longer required to appoint a statutory auditor.
Directors can be held personally responsible for any loss or damage that is claimed by a third party as a result of the entity not having appointed an auditor and they are also penally responsible.
The auditor’s report and the audit procedures are based on the auditing standards of the IBR/IRE (algemene controlenormen / normes générales de révision). Furthermore, Deloitte applies the International Auditing Standards (ISA), which have not yet been endorsed by IBR/IRE.
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