Publication

9 February 2018

Rediscovering the value of SME audit

This information paper reports on the current developments in Sweden and Denmark, where national authorities are assessing the consequences of exempting small and medium-sized enterprises (SMEs) from mandatory audit.

SMEs are crucial for the functioning and growth of the EU economy, representing 99,8% of all non-financial companies. Audit ensures that a company’s financial information is reliable, which is indispensable to instil confidence and trust in this part of the economy. However, policy-makers seem to focus on audit of large or listed companies rather than SMEs. In some countries such as Sweden and Denmark, they have even introduced an audit exemption for SMEs.

Sweden has just evaluated the impact of abolishing the SME audit requirement, concluding that this reform was unsuccessful as its costs outweigh the benefits. This has prompted Denmark to start a similar investigation. These countries’ empirical facts-based approach is a good practice of sound policy-making. We encourage all policy-makers to follow such an approach and to consider the benefits of SME audit.

We have formed a group of experts to enhance the debate at European level on how best to respond to the challenges of SME audit. We will also keep analysing national developments in the area of SME audit policy.

Related content

PublicationSimplifying auditing standards for small or non-complex entities

12 April 2018

UpdateSME

20 June 2019

PublicationSME hub

11 June 2019

BlogGDPR one year on: its impact on auditors and accountants?

13 May 2019

Update SME

6 May 2019

NewsWhy should I care about accountants?

2 May 2019

Team memberJúlia Bodnárová

18 April 2019

In the mediaEvolution of SME audit in Europe from the perspective of the legislation and auditing standards

10 April 2019

PublicationOur SME work in 2018

10 April 2019

Update SME

8 April 2019

PublicationThe Business Insolvency Directive

28 March 2019

PublicationAudit exemption thresholds in Europe

21 February 2019

BlogLooking back, moving forward: our sustainable future starts today

16 January 2019

Publication10 Most popular publications of 2018

11 December 2018

PublicationGDPR: implications for auditors

6 December 2018

Stories from PracticeWorried about the GDPR? Call your accountant!

3 December 2018

BlogHelp SMEs grow (part 2)

14 November 2018

EventDigital hour webinar: the new role for accountants

17 October 2018

Consultation responseESMA’s draft guidance on prospectus risk factors

16 October 2018

BlogHelping SMEs grow – part 1

8 October 2018

PublicationReporting key audit matters in the EU banking sector

28 September 2018

Sign up for our newsletter