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    Country by Country Financial Reporting and Auditing Framework

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    Belgium – Crowe Horwath Callens, Pirenne, Theunissen & Co. (Prepared October 2015)

    Preparation of and Filing of Statutory Financial Statements

    Companies and Limited Liability Partnerships, the most important being the Public Limited Liability Company (Naamloze Vennootschap / Société Anonyme) and the Private Limited Liability Company (Besloten Vennootschap met Beperkte Aansprakelijkheid / Socité Privée à Responsabilité Limitée), are required to prepare annual financial statements and file these with the Belgian National Bank (www.nbb.be).

     

    The Statutory Financial Statements should be drafted in Euro, although exemptions are possible after authorization by the Ministry.

     

    The Financial Statements should be filed in the language of the Region (Dutch in the Flemish Region, French in the Walloon Region, German in the German speaking Region, both Dutch and French are possible in the Brussels Region).

     

    There is a prescribed legal format for the Financial Statements, which should be fully respected and which is based on the Minimum Chart of Accounts (Royal Decree of September 12, 1983). Small companies (see below for definition) can file their Financial Statements using a less detailed format with limited disclosures.

     

    In accordance with the Belgian Company Code, filing should be done within one month after the Financial Statements have been approved by the shareholders, but not later than 7 months after the balance sheet date.

     

    Large companies are also required to prepare and file a management report. The auditor's report needs to be filed, if a statutory auditor is to be appointed in accordance with the Company Code (See below).

     

    Large groups are required to prepare and file consolidated financial statements that also comprise a group management report. A group is considered a large group, when two of the following conditions are met:

    • The group has an annual turnover of more than 29,2 million euros;
    • The group has assets worth more than 14,6 million euros;
    • The group has more than 250 employees.

    Financial Reporting Framework

     

    Since 2005, Belgian listed companies are required to prepare their Financial Statements in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU. 

     

    All other companies and partnerships in Belgium prepare their Financial Statements in accordance with the Belgian Company Code and the Royal Decree of January 30, 2001 ("Belgian GAAP"). In Belgium, these Belgian GAAP Statutory Financial Statements are the basis for the taxable income and the yearly Tax Filing.

     

    In accordance with the Royal Decree of December 5, 2004, unlisted Banks and Credit Institutions in Belgium need to use IFRS for their consolidated Financial Statements, as from 2006. Also Real Estate Investment Trusts (SICAFI/Vastgoedbevak) need to prepare their individual and consolidated Financial Statements under IFRS (as from 2007) and also unlisted insurance companies must prepare their consolidated Financial Statements in accordance with IFRS (as from 2012).

     

    Furthermore, an unlisted company can also voluntarily decide to prepare its consolidated Financial Statements in accordance with IFRS, but such a decision is irrevocable.


     

    Audit Requirements for Corporations and LLPs Registered in Belgium

     

    In general, all medium and large-sized companies and partnerships must appoint a Statutory Auditor for the audit of their Statutory Financial Statements.

    A small company or partnership may qualify for an audit exemption if the company or partnership meets two of the following three criteria for two consecutive years:

    • Has an annual turnover of no more than 7,3 million euros;
    • Has assets worth no more than 3,65 million euros;
    • Has no more than 50 employees.

     

    This exemption does not apply to:

    • Listed companies, regardless of their size;
    • Companies with more than 100 employees (are always obliged to appoint a Statutory Auditor);
    • Unlisted subsidiaries belonging to a group under which the European Directive must prepare consolidated Financial Statements, whatever the size of the subsidiary;
    • Companies, whose articles of association require a Statutory Audit.

     

    In addition to the audit of the individual Statutory Financial Statements, also the consolidated Financial Statements are subject to an audit, if the preparation of consolidated Financial Statements is required by law.

     

    Audit Appointment, Rotation and Joint Audits

     

    Auditors are appointed by the shareholders upon proposition of the audit committee, if any. By law, such appointment is always for three consecutive years. Early dismissal is only possible under very specific circumstances (personal important reasons / obligation of the Company and the Statutory Auditor to report the early termination of the auditor's mandate to the "Hoge Raad voor de Economische Beroepen", which will open an investigation).

     

    A cooling-off period of two years needs to be respected to take specific functions or to render certain services.

     

    In listed companies, banks, credit institutions and insurance companies, the signing partner cannot certify the accounts for more than 6 consecutive years (obliged internal partner rotation).

     

    Whilst not prohibited and a legal possibility to avoid the one-to-one fee cap limitation (see below), joint audits are very rare in Belgium.

     

    Auditing Standards

     

    In Belgium Crowe Horwath Callens, Pirenne, Theunissen & C° is required to undertake their audit and express an opinion on the Financial Statements in accordance with International Standards on Auditing.

     

    In addition, in accordance with the Belgian standard, which is complementary to the International Standards on Auditing as applicable in Belgium, it is also the statutory auditor's responsibility to verify, in all material respects, the compliance with certain legal and regulatory requirements (information in the management report, respect of accounting legislation, compliance with Company Code, respect of the company's articles of association, conflict of interests, interim dividends).

     


    Ethical Framework

     

    Crowe Horwath Callens, Pirenne, Theunissen is bound by:

    • The law of July 22, 1953;
    • The Royal Decree of April 21, 2007 (implementation of the EU directive 2006/43/EG);
    • The Royal Decree of January 10, 1994 (deontological rules for registered auditors in Belgium and for their staff);

     

    The ethical Framework is largely based on the IFAC Code of Ethics (IESBA).

     

    One of the specific independence rules in Belgium is the "one-to-one" fee cap limitation, requiring that the fees for non-audit services can never exceed the audit fees, for both listed companies and companies belonging to a group which under the European Directive must prepare consolidated Financial Statements.

     

    Audit Regulation

     

    Crowe Horwath Callens, Pirenne, Theunissen & C° is subject to the following external and internal monitoring processes with regard to their audit practice.

     

    External monitoring

    The audit practice itself, as well as all signing partners, is subject to a periodic external peer review by the Belgian Institute of Registered Auditors. This peer review is to be completed every six years. Signing partners signing audit opinions of public listed companies, banks, credit institutions or insurance companies are required to have their peer reviews successfully completed every three years.

     

    Internal monitoring

    In accordance with ISQC1, Crowe Horwath Callens, Pirenne, Theunissen & C° has also put in place a system of internal quality monitoring, which mainly consists of:

    • Annual post-issuance monitoring procedures known as Quality Assurances Reviews, led by the Quality Assurance Leader; and
    • Pre-issuance Concurring Reviews (for opinions with regard to High Risk Audit Engagements) or Consulting Reviews (for modified opinions).

     

    Transparency Report

     

    Crowe Horwath Callens, Pirenne, Theunissen & C° prepares an annual transparency report, that is available on its website and that covers information about the respective audit firm's governance and ownership structure, its quality control and monitoring system, its independence policies and measures, its continuing professional education processes, its remuneration principles for senior personnel as well as the list of public interest entities audited by the firm.

     

     


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