Danish Audit Act §24: Independence in Practice
Section 24 of the Danish Audit Act (Revisorloven) is the cornerstone of the Danish audit system. An auditor must be independent both in fact and in appearance. It is not enough to be independent — you must also appear independent to any reasonable observer. Violations can result in fines, revocation of approval, and criminal liability.
The five categories of threats to independence
Self-interest threat — financial or personal interest in the client (e.g., share ownership, disproportionate revenue share above 15-20%). Self-review threat — reviewing your own work (e.g., preparing and auditing the same accounts). Advocacy threat — becoming an advocate for the client's position. Familiarity threat — close personal relationships or long engagement duration. Intimidation threat — client pressure to compromise independence.
Safeguards
Internal policies describing procedures for assessing and handling threats. Quality control through Engagement Quality Control Review (EQCR). Mandatory partner rotation after 7 years for PIE audits. Service separation with firewalls between advisory and audit teams. Full documentation of all independence assessments.
Practical independence assessment: 6-step model
Step 1: Identify all relevant threats in the five categories. Step 2: Assess severity — insignificant, moderate, or serious. Step 3: Implement safeguards for moderate threats. Step 4: Consult the firm's independence partner for complex cases. Step 5: Document the entire process. Step 6: Ongoing monitoring — review at least annually.
Sitenyx's role in independence enforcement
AccountantGate tracks engagement details — type, duration, revenue share, and involved staff. Automatic alerts when clients approach revenue thresholds, engagements reach rotation thresholds, or staff are involved in both advisory and audit. Role-based access control separates audit and advisory team access to client data.
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Conclusion
Independence is not an abstract rule — it is the trust on which the entire audit system rests. Without independence, the auditor's report loses its value. With a systematic approach, clear internal policies, and the right digital tools, your practice can always meet the Act's requirements.
Ofte stillede sporgsmol
Does §24 apply to all accountants?
Section 24 applies to all godkendte revisorer (approved auditors) — both statsautoriserede and registrerede revisorer. It applies whenever you issue an erklæring (auditor's report) of any type. Advisory-only engagements without an erklæring have less stringent independence requirements.
Can the same firm do advisory and audit for a client?
Yes, but with safeguards. The key is to separate the teams — different staff members handle advisory and audit, with restricted information sharing. For PIE clients, additional restrictions apply under EU regulation.
What is the revenue concentration threshold?
FSR's guidance sets the threshold at 15% for PIE clients and 20% for other clients. If a single client represents more than this percentage of your firm's total revenue, the self-interest threat is considered significant and requires robust safeguards or declining the engagement.
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Complete guide to auditor independence under Revisorloven §24. Five threat categories, safeguards, and practical 6-step model.
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