Compliance Responses and Action Plans

  • Compliance Responses and Action Plans

    IFAC members and associates have provided self-assessment information about the regulatory and standard-setting framework in their countries (Part 1) and their organizations' activities in addressing IFAC's membership requirements (Part 2) as described in the Statements of Membership Obligations. Based on an analysis of this information, they are developing SMO Action Plans for continuous development and improvement.

    Some organizations have qualified to submit SMO Action Plans on a biennial basis by meeting eligibility criteria. These organizations are indicated with an asterisk (*).

    In the interest of transparency and providing information to the profession, regulators, and other stakeholders, all responses and SMO Action Plans are accessible below.

    FSR - danske revisorer

     

    Introduction

    The information below has been submitted as part of the IFAC Member Body Compliance program. The Program has two components:

    Part 1: Assessment of the Regulatory and Standard-Setting Framework (provides information about regulatory requirements and standard-setting processes in member body countries); and
    Part 2: Assessment of Compliance (provides information on compliance by member bodies with the Statements of Membership Obligations). Part 2 of the Compliance Program will begin later this year, and the results will also be posted to the website.

    The responses to Part 1 are provided below. IFAC staff has reviewed the responses and, where necessary, validated them with external knowledgeable parties. A list of key terms is available to assist readers in understanding the responses.

    The purpose of this Part 1 Assessment is to collect information on the roles of IFAC member bodies and other organizations (including government, regulatory or other appointed authorities) with respect to:

    1. Setting auditing, accounting, ethics, public sector and education standards; and
    2. Regulating the accountancy profession.

    Sections 1 and 2 of Part 1 contain an introduction and instructions for member body respondents. For this reason, they are not included here, and the responses begin with Section 3.

    Questions or comments may be sent to complianceassessment@ifac.org.


    Section 3 -- Member Body General Information

    1. Country:

      Denmark


    2. Name of member body:
      FSR - danske revisorer

      Or please specify name:



    3. Individual responsible for preparation:
      Uffee Conrad


    4. Date member body became a member of IFAC:
      Note: Please enter a numeric date (e.g., 12/2001, Month/Year)

      11 / 1977



    Questions 5 - 22 are for internal use only


    Section 3G -- Affiliations


    23. Please list those regional organizations to which your organization belongs (e.g., FEE, CAPA, ECSAFA, IAA, etc.):
      FEE

      Nordic Federation of Public Accountants, NRF (subregion) together with Sweden, Norway, Finland and Iceland



    Section 4 -- Statutory Framework


    Responses to this section will provide a description of the legal framework governing the commercial aspects of auditing and financial reporting in your country.

    Section 4A -- The Companies Act or Commercial Code


    The following questions concern the Companies Act (the Act) or Commercial Code (the Code) or similar Legal authority in your country. If no Legal authority exists, or the Legal authority does not address particular questions, please indicate "N/A" for Not Applicable.

    24. What is the full name of:
      a). the Act or the Code: The Danish Public Companies Act – consolidation act (Aktieselskabsloven – bekendtgørelse om lov om aktieselskaber) and Act on Private Companies ("Lov om anpartsselskaber")
      b). the Enacting body: Danish Commerce and Companies Agency (Erhvervs- og Selskabsstyrelsen)
      c). date the Act or Code came into force: 01 / 2002


    25. How can IFAC obtain a copy of the Act or Code?
      www.eogs.dk


    26. Is the Act or Code available in English?
      Yes   No


    27. What are the types of entities covered by the Act or the Code?
      Please check all that apply.
      Listed entities   Other (please specify):
      Private companies   Other (please specify):
      Governmental   Other (please specify):
      Not-for-profit   Other (please specify):


    28. Is there a requirement for the following entities to prepare annual statutory financial statements? If YES, please describe the financial reporting requirements including the accounting standards to be followed.
      Please check all that apply.
        No Yes (If YES, please describe)
      Listed entities The Annual Accounts Act (Ã…rsregnskabsloven) for all limited liability companies. Listed companies have to follow the information requirements issued by the Copenhagen Stock Exchange.Furthermore it is mandatory for listed companies to follow Danish Accounting Standards and from 2005 listed companies should prepare financial statements in accordance with IAS/IFRS.
      Private companies Private companies must every year present an audited annual report in accordance with the rules in the Presentation of Accounts Act. The requirements of the act concerning the annual reports of large companies are more extensive than in case of small companies. By "private companies" we understand private limited companies ("anpartsselskaber") and public limited companies ("aktieselskaber"). Danish Accounting Standards can be used on a voluntary basis by non-listed companies.
      Governmental
      Not-for-profit
      Other (please describe)
      Other (please describe)


    29. Is there a statutory requirement for the following entities to be audited? If YES, describe the requirement including the auditing standards to be followed:
      Please check all that apply.
        No Yes (If YES, please describe)
      Listed entities The companies' annual reports are to be audited in accordance with the legal standard "generally accepted auditing practice". The Danish auditing standards, which are prepared by FSR (The Institute of State Authorised Public Accountants), have so far contributed to determining what is meant by "generally accepted auditing practice". FSR and FRR are presently implementing the international auditing standards (ISA), and these now contribute to determining what is meant by "generally accepted auding practice"
      Private companies Same answer as in case of listed entities
      Governmental
      Not-for-profit
      Other (please describe)
      Other (please describe)


    30. Are the auditors ("statutory auditors") that are appointed for audits required by the Act or Code ("statutory audits") appointed for a specific period?
      Yes   No
      If YES, please indicate the term of appointment: Year(s)


    31. Who appoints the statutory auditors?
      Please check all that apply.
      Shareholders   Management
      Board of directors   Other (please specify):
      Audit committee   Other (please specify):
      Government agency   Other (please specify):


    32. Does the Act or Code require joint auditors for the statutory audit?
      Yes   No
      If yes, please describe the requirement:
      See Question 41.


    33. Does the Act or Code require the rotation of the auditors or audit firms performing statutory audits?
      Yes   No
      If yes, please describe the requirement:
      According to the State Authorized and Registered Public Accountants Act (Lov om statsautoriserede og registrerede revisorer) public interest companies are obliged to change every 7 years the auditor who signs the audit report (partner rotation).



    Section 4B -- Securities Market Regulations


    Responses to this section will provide a description of the financial reporting and auditing requirements for listed entities in your country.

    34. What are (a) the major items of Legal authority for such requirements, (b) the Enacting body(ies) and (c) the latest amendment date? Please identify the specific articles or sections that pertain to auditing and financial reporting:
    1. the major items of Legal authority for such requirements

      1. The Annual Accounts Act (Årsregnskabsloven)-June 2001

      2. The Act on State Authorized and Registered Public Accountants (Lov om statsautoriserede og registrerede revisorer)-April 2003

      3. Danish Security Trading Act (Bekendtgørelse af lov om værdipapirhandel mv)-December 2003

      4. Executive Order on Admitting Securities to Quotation (Bekendtgørelse om betingelser for optagelse til notering af værdipapirer på en fondsbørs)-April 1996

    2. the Enacting body(ies)

      Securities Council

      The Copenhagen Stock Exchange

      The Commerce and Companies Agency

    3. the latest amendment date?

      1. June 2001
      2. April 2003
      3. December 2003
      4. April 1996


    35. How can IFAC obtain a copy of the Legal authority?
      www.eogs.dk
      www.xcse.dk


    36. Is the Legal authority available in English?
      Yes   No


    37. Are there any additional or alternative financial statement reporting requirements for listed entities that are not described in your answer to Question 28?
      Yes   No
      If YES, please describe the requirement:


    38. Are there any additional auditing requirements that apply to listed entities other than those described in your answer to Question 29 (e.g., additional GAAS requirements, additional independence requirements, requirements to report to those charged with governance, etc.)?
      Yes   No
      If YES, please describe the requirement:


    39. Who appoints the statutory auditors of listed entities?
      Please check all that apply.
      Shareholders   Management
      Board of directors   Other (please specify):
      Audit committee   Other (please specify):
      Government agency   Other (please specify):


    40. Are auditors who perform audits of listed entities appointed for a specified period?
      Yes   No
      If YES, please indicate the term of appointment: Year(s)


    41. Are joint auditors required for audits of listed entities?
      Yes   No
      If YES, please describe the requirement:
      Listed companies and financial institutions must appoint two statutory auditors to perform audit of the financial statements of the company/institution. At least one of the joint auditors has to be state authorized public accountant. The requirement to appoint two different auditors expires in 2005. Hereafter the company/institution has to appoint at least one state authorized public accountant.


    42. Is rotation of the auditor or audit firm for audits of listed entities required?
      Yes   No
      If YES, please describe the requirement:
      See Question 33.



    Section 5 -- Auditing Standards


    Responses to this section will provide a description of the legal and professional framework governing audit and other assurance standards in your country. The section focuses on the establishment of such standards. Please indicate the role your organization plays within this framework.

    Section 5A -- Statutory Framework


    43. Please provide the name of the Legal authority and/or self-regulatory rules that establish audit and other assurance standards in your country, the date of the last amendment of such authority or rules and the name of body responsible for setting audit and other assurance standards. If the standards are different for different entities (e.g., listed entities, private companies, governmental bodies, not-for-profit organizations, etc.), please specify the details that apply to each:
      Type of entity Name of
      applicable
      legal
      authority
      Date of last
      amendment
      (e.g. MM/YYYY 06/2001)
      Name of body responsible
      for setting audit and
      other assurance standards
      Listed entity The Act on State Authorized Public Accountants and Registered Accountants. 04/2003 FSR
      Other (please describe)
      Other (please describe)
      Other (please describe)

      a. How can IFAC obtain copies of these documents?

      By request to FSR.

      b. Are the documents available in English?
      Yes   No


    Section 5B -- Standard-Setting (FSR)


    44. For FSR, please indicate the nature of the body (i.e., whether it is part of a government ministry or department, an agency appointed by government, a private organization established by the profession, or other [please describe]) and the name of the standards.
      a. Nature of body

      Private organization established by the profession

      b. Name of standards

      Revisionsstandarder (Audit Standards)


    45. How many voting members does the standard-setting body have?
      7


    46. Are the members of the standard-setting body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe:


    47. What are the criteria considered in selecting members of the standard-setting body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?
      The best person for the job (Technical Experts).


    48. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      FSRs Board of Directors.


    49. What is the term of appointment for members?
      9 Year(s)


    50. For how many years has the standard-setting body been in existence?
      30 Year(s)


    51. Please indicate the budget in US$ of the standard-setting body for the last fiscal year:
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      48,250

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)

      6.2174



    52. To what entity is the standard-setting body accountable?
      FSRs Board of Directors.


    53. Describe the due process followed by the standard-setting body. Please include explanations of the following:
    1. public exposure of standards

      The standards are sent to the Danish Commerce and Companies Agency in order to receive comments and to every member of FSR within a 3 month time limit.

    2. accessibility of meetings (i.e., public or private)

      The meetings are private.

    3. approval process for final standards (i.e., majority required to approve final standards)

      2/3 of the committee vote for the standard.

    4. other relevant due process activities



    54. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      15 Day(s)



    Section 6 -- Ethics


    Responses to questions in this section will provide a description of the legal and professional framework governing ethics standards for accountants in your country. This section focuses on the establishment of such standards. Please indicate the role your organization plays within this framework.

    Section 6A -- Statutory Framework


    55. For each of the following types of professionals, please indicate the name of the Legal authority and/or self-regulatory rules establishing ethics standards for accountants and auditors in your country, the date of the last amendment of such authority or rules and the name of body responsible for setting the ethics standards.
      Type of professional covered Name of
      applicable
      legal
      authority
      Date of last
      amendment
      (e.g. MM/YYYY 06/2001)
      Name of body responsible
      for setting ethics standards
      Professional Accountants in Public Practice Act on State Authorized Public Accountants and Registered Accountants 04/2003 FSR
      Professional Accountants in Business
      Professional Accountants in the Public Sector
      Other (please describe)

      a. How can IFAC obtain copies of these documents?

      On request to FSR.

      b. Are the documents available in English?
      Yes   No


    Section 6B -- Standard-Setting (FSR)


    56. For FSR, please indicate the nature of the body (i.e., whether it is part of a government ministry or department, an agency appointed by government, a private organization established by the profession, or other [please describe]) and the name of the standards.
      a. Nature of body

      Private organization established by the profession

      b. Name of standards

      FSRs rules on ethics (draft) - due to be finalized in Spring 2005. Code to be based on IFAC Code of Ethics.


    57. How many voting members does the standard-setting body have?
      9


    58. Are the members of the standard-setting body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe:


    59. What are the criteria considered in selecting members of the standard-setting body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?
      No formal criteria exists in practice, the members of the Council of FSR are selected to ensure representation from different state authorized public accounting firms. Best person for the job.


    60. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      The members of FSR during the Annual General Meeting of the Institute.


    61. What is the term of appointment for members?
      2 Year(s)


    62. For how many years has the standard-setting body been in existence?
      20 Year(s)


    63. Please indicate the budget in US$ of the standard-setting body for the last fiscal year:
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      N/A

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)

      N/A



    64. To what entity is the standard-setting body accountable?
      FSR’s Annual General Meeting and Board of Directors.


    65. Describe the due process followed by the standard-setting body. Please include explanations of the following:
    1. public exposure of standards

      Exposure drafts are submitted to all members of FSR with a 3 month time limit to comment.

    2. accessibility of meetings (i.e., public or private)

      Private meeting.

    3. approval process for final standards (i.e., majority required to approve final standards)

      The rules on ethics have to be approved by at least 6 of the 9 members of FSRs Board of Directors. Furthermore, the rules on ethics have to be approved by 2/3 of the votes on the Annual General Meeting. If less than 2/3 of the members of FSR are represented, the rules on ethics have to be approved by 2/3 of the votes given on a new General Meeting.

    4. other relevant due process activities

      N/A


    66. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      15 Day(s)



    Section 7 -- Education


    Responses to questions in this section will provide a description of how education requirements for the profession are established. Please indicate the role your organization plays within this process.

    Section 7A -- Education Requirements


    67. Please describe in general terms the education system in your country including the different stages of education from early childhood education through to tertiary level study. Please indicate which aspects / levels are compulsory as part of the national education system:
      1-9 grade in primary and lower secondary school (compulsory)

      3 years in upper secondary school (high school or business school)

      3 years bachelor in commerce and business and 2 years Master in accounting, auditing, commercial law and taxation at university level.


    68. Is there a legal authority or regulation that specifies the requirements for an individual to operate as an accountant or auditor in your country?
      Yes   No

      If YES, please provide the name and describe the requirements, including any relating to education, experience or qualifications.

      To become a state authorized public accountant a Master degree in accounting, auditing etc. and at least 3 years practical training is needed after which the candidate can register for the final exam. The rules are specified in executory order No. 186 of 22 March 2004 on the final exam for state authorized public accountants (Bekendtgørelse nr. 186 af 22. juni om eksamen for statsautoriserede revisorer) (based on the 8th Company Law Directive of the EU).


    69. Please select from below all the relevant key levels of requirements to obtain certification from your member body (i.e. to qualify as a certified or chartered accountant) and provide a general description of the requirement.
      Academic requirements
      Master degree in accounting, auditing, commercial law and taxation.
      Professional examinations
      A 3 year training program provided by FSR (not compulsory) which enables the candidate to register for the final exam for state authorized public accountants. During the program several tests are provided to the candidates.
      Practical experience
      Three years of practical training with a state authorized public accountant.
      Final qualifying examination
      A written examination over 2 days with 8 hours examination each day. After passing the written exam an oral exam must be passed. Both exams are held by the Audit Board (Revisorkommissionen).
      Other (please describe)


    70. Which of the following arrangements best describes who establishes the education requirements for the accounting profession in your country? Please select one option.
      A government ministry, department or agency establishes education requirements for the accounting profession with no additional requirements set by the member body(ies).
      A government ministry, department or agency establishes minimum education requirements for the accounting profession, and member body(ies) supplement these requirements.
      Member body(ies) establishes the education requirements for the accounting profession.
      Other (please describe)


    71. Please provide the name(s) of the relevant body in the government ministry, department, agency and / or member body who establishes the education requirements.
      Danish Commerce and Companies Agency

    1. A general description of the role of the relevant body(ies) including how it operates and its due process in establishing the education requirements.

      DCCA specifies education requirements in the State Authorized and Registered Public Accountants Act and in the “Executive Order for the Audit Board” (Bekendtgørelse om forretningsorden for Revisorkommissionen)

    2. How many voting members does the relevant body(ies) have

      N/A

    3. Are the members of the relevant body(ies) involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe:

    4. For how many years has the body been in existence?

      40 Year(s)


    72. How would you describe the authority that the education requirements have?
      Requirements are legally-based
      Requirements are set in the constitution, by-laws or other rules of the relevant body(ies).
      Requirements are set in member body(ies) policy document(s).
      Other (please describe)

    72 a. How can IFAC obtain copies of these documents?
      “Executive order on the final exam for state authorized public accountants” is a public document (on the web-site www.eogs.dk).

    72 b. Are these documents available in English?
      Yes   No


    73. Are the education requirements for accountants and auditors the same throughout your country, or do they differ among regions, provinces or states?
      Same   Different
      If different, please briefly describe the main differences:


    74. Please indicate the scenario that best describes who delivers the education and examination process for members of the profession. Please only select one option.
      The education program and final examination are delivered by the member body.
      The education program and final examination are delivered by the member body and other education institutions (e.g., universities, colleges, and others).
      The education program and final examination are delivered by education institutions (e.g., universities, colleges, and others).
      Other (please explain)


    75. Once qualified as a member of your professional body, can members offer their services directly to the public?
      Yes   No



    Section 7B -- Licensing


    76. Are there licensing requirements for auditors in your country?
      Yes (continue with Question 77)   No (proceed to Section 8)


    77. Who sets the requirements to obtain a license?
      The Danish Commerce and Companies Agency ("Erhvervs- og Selskabsstyrelsen")


    78. What are the requirements to obtain a license (please select all relevant requirements.)?
      Academic study specific for obtaining a license
      Practical experience
      Licensing examination
      Final qualifying examination
      Other (please describe)
      Taking out a professional indemnity insurance.


    79. Are there ongoing requirements to retain a license?
      Yes   No

      If YES, please select all relevant requirements.
      Continuing professional development
      Re-examination
      Other (please specify):


    80. What entity grants the license?
      The Audit Board conducts the examination and The Commerce and Companies Agency grants the license.


    81. Describe any additional licensing requirements for auditors of listed entities (e.g., additional education requirements, registration, etc.).
      None



    Section 8 -- Public Sector Accounting Standards


    Responses to this section will provide a description of the legal and professional framework governing public sector accounting standards in your country. The section focuses on the establishment of such standards. Please indicate, where appropriate, the role of your organization within this framework.

    Section 8A -- Statutory Framework


    82. Please provide the name of the Legal authority and/or self-regulatory rules establishing public sector accounting standards in your country, the date of last amendment and the name of the body responsible for setting public sector accounting standards. If the standards are different for different entities (e.g., whole of government, ministry/department, statutory authority/agency, profit entity owned by government, state governments, local governments, other [please specify]), please specify the details that apply to each.
      Type of entity Name of
      legal
      authority
      Date of last
      amendment
      (e.g. MM/YYYY 06/2001)
      Name of body responsible
      for setting public sector
      accounting standards
      Whole of government
      Ministry/department
      Statutory authority/agency
      Profit entity owned by government
      State governments
      Local governments
      Other (please describe)
      Other (please describe)

      a. How can IFAC obtain copies of these documents?



      b. Are the documents available in English?
      Yes   No



    Section 9 -- Private Sector Accounting Standards


    Responses to the questions in this section will provide a description of the legal, statutory and professional framework governing private-sector accounting standards in your country. The section focuses on the establishment of such standards. Please indicate what role your organization plays within this framework.

    Section 9A -- Statutory Framework


    94. Please provide the name of the Legal authority and/or self-regulatory rules that establish private-sector accounting standards in your country, the date of last amendment, and the name of the body responsible for setting private sector accounting standards. If the standards are different for different entities (for example, listed entities, private companies, governmental organization, not for profit organizations, etc.), please specify the requirements that apply to each.
      Type of entity Name of legal
      authority or
      applicable
      rules
      Date of last
      amendment
      (e.g. MM/YYYY 06/2001)
      Name of body responsible
      for setting private sector
      accounting standards
      Listed entity The Danish Financial Statements Act, Copenhagen Stock Exchange and Rules on Information Requirements 07/2003 FSR (for both)
      Other (please describe) All commercial enterprises The Danish Financial Statements Act 06/2001
      Other (please describe)
      Other (please describe)
      Other (please describe)

      a. How can IFAC obtain copies of these documents?

      On request to FSR.

      b. Are the documents available in English?
      Yes   No


    Section 9B -- Standard-Setting (FSR (for both))


    95. For FSR (for both), please indicate the nature of the body (i.e., whether it is part of a government ministry or department, an agency appointed by government, a private organization established by the profession, or other [please describe]) and the name of the standards.
      a. Nature of body

      Private organization established by the profession.

      b. Name of standards

      Danish Accounting Standards


    96. How many voting members does the standard-setting body have?
      9


    97. Are the members of the standard-setting body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe:


    98. What are the criteria considered in selecting members of the standard-setting body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?
      No formal criteria exists. In practice, the members of the Accounting Standards Committee are selected to ensure “best persons to the job”.


    99. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      FSRs Board of Directors


    100. What is the term of appointment for members?
      8 Year(s)


    101. For how many years has the standard-setting body been in existence?
      Year(s)


    102. Please indicate the budget in US$ of the standard-setting body for the last fiscal year:
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      64,335

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)

      6.2174



    103. To what entity is the standard-setting body accountable?
      FSRs Board of Directors.


    104. Describe the due process followed by the standard-setting body. Please include explanations of the following:
    1. public exposure of standards

      Exposure drafts are submitted to all members of FSR and to other interested parties with a time limit of at least three months to give their comments.
      The Danish Accounting Standards are prepared in a formal cooperation between FSR and organizations represented in the Accounting Advisory Panel, i.e. preparers and users of financial statements as well as academic.
      From 2005 all listed companies have to follow international accounting standards (IAS/IFRS). The Danish accounting standards are already very much on line with IAS/IFRS.


    2. accessibility of meetings (i.e., public or private)

      Meetings are private.

    3. approval process for final standards (i.e., majority required to approve final standards)

      At least 2/3 of the members of the Accounting Standards Committee have to approve the final standard.

    4. other relevant due process activities

      Occasionally, meetings among members of FSR and other interested parties have been arranged and articles have been written in professional magazines.


    105. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      15 Day(s)



    Section 10 -- Monitoring (Quality Assurance) and Enforcement


    Responses to the questions in this section will provide a description of the legal and professional framework governing regulation of the profession in your country. Please indicate what role your organization plays within this framework.

    Section 10A -- Securities Market Regulatory Authority


    106. Name the authority that regulates the securities market:
      The Financial Supervisory Authority, the Securities Council and the Copenhagen Stock Exchange


    107. What responsibilities does this organization have for monitoring and enforcing compliance with accounting, reporting or auditing requirements? Please identify the Legal authority that establishes that responsibility:
      Executive orders are issued by the Financial Supervisory Authority (Finanstilsynet) and the Securities Council (Fondsrådet). Detailed requirements for companies listed on the Copenhagen Stock Exchange are issued by the Board of Directors of the Copenhagen Stock Exchange.

      The legal authority is the Danish Securities Act (lov om værdipapirhandel).


    108. Briefly describe the role of the regulatory authority as it relates to the following:
    1. regulation of the audit profession

      These authorities have no general role related to regulation of the audit profession, since this is the duty of the Commerce and Companies Agency. However, some specific requirements related to audit and accounting in financial institutions are determined by the Financial Supervisory Authority.

    2. accounting and auditing standard-setting

      See answer to answer a. above.

    3. review of financial statements prepared by listed entities, and monitoring of their compliance with the accounting and disclosure requirements

      From 2005, the Securities Council (Fondsrådet) will have the duty to review financial statements from listed companies and hereby to monitor their compliance with the accounting and disclosure requirements.



    Section 10B -- Stock Exchange


    109. Name the four largest stock exchangers (by market capitalization) and whether it is organized as a profit or not-for-profit organization:
      Profit Not
      for
      profit
      Stock Exchange
      The Copenhagen Stock Exchange
      Dansk Autoriseret Markedsplads



    Section 10B -- Stock Exchange
    The Copenhagen Stock Exchange Details


    110. For The Copenhagen Stock Exchange, is there a mechanism at the stock exchange(s) for monitoring and enforcing financial reporting, accounting and auditing of listed entities?
      Yes   No

      If YES, please describe the following:

    1. How the monitoring and enforcement of financial reporting, accounting and auditing is conducted.

      Financial statements are reviewed on a sample basis by Copenhagen Stock Exchange.

    2. The consequences of non-compliance with the financial reporting, accounting or auditing requirements.

      The Copenhagen Stock Exchange may impose a public prosecution or impose a fine of at least 25.000 DKK and not more than 1 mio. DKK.

    3. How enforcement actions are administered.

      The Copenhagen Stock Exchange issues several prosecutions and advises every year which is described in annual report from the Stock Exchange.


    Section 10B -- Stock Exchange
    Dansk Autoriseret Markedsplads Details


    110. For Dansk Autoriseret Markedsplads, is there a mechanism at the stock exchange(s) for monitoring and enforcing financial reporting, accounting and auditing of listed entities?
      Yes   No

      If YES, please describe the following:

    1. How the monitoring and enforcement of financial reporting, accounting and auditing is conducted.

      “Dansk Autoriseret Markedsplads” does not perform reviews of the contents of the financial statements, but they ensure/monitor that financial statements, quarterly reports etc. are filed within the deadlines. From 2005 the Securities Council will have the duty to perform reviews of financial statements from all listed companies on a sample basis.

    2. The consequences of non-compliance with the financial reporting, accounting or auditing requirements.

      Dansk Autoriseret Markedsplads may impose a public prosecution.

    3. How enforcement actions are administered.

      Dansk Autoriseret Markedsplads is a very newly established market place and have not as yet any practical experience on enforcement.



    Section 10C -- Regulatory Oversight of the Accounting Profession


    111. Has an audit profession oversight body been established (e.g., to oversee the external quality assurance review process, etc.)?
      Yes   No

      If NO, proceed to the next section.

      If YES, please describe :

    1. What are the name and duties of the oversight body?

      The Danish Commerce and Companies Agency is the relevant authority responsible for the regulation of the audit profession. The Agency issues several executive orders based on the Act on State Authorized and Registered Public Accountants.

      The Auditor’s Public Oversight Body (“Revisortilsynet”) establishes detailed procedures for the statutory quality assurance review of state authorized and registered public accountants. The oversight body has authoirty to perform/monitor quality assurance reviews to ensure compliance with independence requirements, to establish whether sufficient quality control systems are developed and implemented and to decide on any possible sanctions. All state authorized and registered public accounting firms are subject to quality assurance review regardless whether they perform audit of financial institutions (banks) or other companies.


    2. The number of members on the oversight body

      9, including 2 from FSR and 2 from FRR

    3. Its powers

      The oversight body has the power to read all reports from the quality assurance reviews and to decide on any possible sanctions, e.g. to issue a warning or to file a disciplinary action or a criminal action against the auditors or the audit firm.

    4. How the oversight body conducts or oversees a program of inspections to assess the degree of compliance of each audit firm/auditor with applicable auditing standards and regulations

      The quality assurance program is monitored by the oversight body and any decisions are taken by the body. The program comprises the following elements:

      a. control at least every 4 years
      b. reviewers to be approved – ensure independence and competence
      c. issuance of guidelines
      d. option to review reviewer's work papers or participate in follow up visits


    5. The sanctions the oversight body may impose in the event of non-compliance

      Issuing a warning, requiring a new quality review or filing of a disciplinary action or a criminal action.

    6. How the oversight body is accountable to any public institution or body

      The oversight body has to prepare an annual report which is available for the general public.


    Section 10D -- Banks Regulatory Authority


    112. Name the authority that regulates the banks and similar financial institutions. Discuss how this authority differentiates between accounting requirements for regulatory reporting and general purpose external financial reporting:
      The Financial Supervisory Authority. The requirements regarding the assurance of the necessary solvency and the requirements regarding general purpose external financial reporting are in principle totally separated. However, in the supervisory work performed by the Financial Supervisory Authority these tasks are combined.


    113. Discuss briefly the legal requirements with respect to monitoring and enforcement by the regulatory authority of accounting and auditing standards that apply to the banks and similar financial institutions:
      According to the Act on Financial business, section 344, (lov om finansiel virksomhed) the Financial Supervisory Authority monitors the compliance with the act as well as with executive orders issued by the authorities according to the act.


    114. Briefly describe the role of the regulatory authority as it relates to the following:
    1. regulation of the audit profession

      None.

    2. accounting and auditing standard-setting

      According to the Act on financial business, the Financial Supervisory Authority has the authority to issue detailed rules on the annual financial statements for financial institutions. According to the same act, section 199, subpara. 11, the Financial Supervisory Authority also issues executive orders on the detailed performance of the audit in financial institutions. General purpose standard setting is a task undertaken by FSR.

    3. review of financial statements prepared by listed entities

      The Financial Supervisory Authority has the duty to review financial statements of financial institutions, e.g. listed financial institutions.

    4. enforcement of accounting, reporting and auditing requirements

      The Financial Supervisory Authority has enforcement power regarding accounting, reporting and auditing in financial institutions, e.g. listed financial institutions.



    Section 10E -- Non-Banking Financial Institutions Regulatory Authority


    115. Name the regulatory authority(ies) responsible for monitoring compliance with and enforcing accounting, reporting and auditing requirements imposed on non-banking institutions.
      The Financial Supervisory Authority.


    116. What is the source of Legal authority of the regulatory authority(ies)?
      The Act on Financial Business.


    117. Briefly describe the role of the regulatory authority(ies) as it relates to the following:
    1. regulation of the audit profession

      None

    2. accounting and auditing standard-setting

      See 114b.

    3. review of financial statements prepared by listed entities

      See 114c.

    4. enforcement of accounting, reporting and auditing requirements

      See 114d.



    Section 10F -- Insurance Companies Regulatory Authority


    118. Name the regulatory authority responsible for monitoring compliance with and enforcing accounting, reporting and auditing requirements imposed on insurance companies.
      The Financial Supervisory Authority.


    119. What is the source of Legal authority of the regulatory authority(ies)?
      The Act on Financial Business.


    120. Briefly describe the role of the regulatory authority(ies) as it relates to the following
    1. regulation of the audit profession

      None.

    2. accounting and auditing standard-setting

      See 114b.

    3. review of financial statements prepared by listed listed entities

      See 114c.

    4. enforcement of accounting, reporting and auditing requirements

      See 114d.



    Section 10G -- Other Regulatory Authority


    121. Name any other regulatory authority(ies) responsible for monitoring compliance with and enforcing accounting, reporting and auditing requirements.
      1) The Danish Commerce and Companies Agency.
      2) The Security Council.
      3) The Copenhagen Stock Exchange.
      4) The Auditor’s Public Oversight Body.
      5) The Disciplinary Tribunal for Auditors.


    122. What is the source of Legal authority of each regulatory authority?
      1) The Annual Accounts Act, the Act on State Authorized Public Accountants and Registered Public Accountants (Årsregnskabsloven, Lov om statsautoriserede revisorer og registrerede revisorer).

      2) The Act on financial business (Lov om finansiel virksomhed).

      3) The Act on financial business, the disclosure requirements issued by the Copenhagen Stock Exchange (Lov om finansiel virksomhed).

      4) The Act on State Authorized and Registered Public Accountants (Lov om statsautoriserede og registrerede revisorer).


    123. Briefly describe the role of the regulatory authority(ies) as it relates to the following
    1. regulation of the audit profession

      The Danish Commerce and Companies Agency is the relevant authority responsible for the regulation of the audit profession. The Agency issues several executive orders based on the Act on State Authorized and Registered Public Accountants.
      The Auditor’s Public Oversight Body establishes detailed procedures for the statutory quality assurance of state authorized and registered public accountants.


    2. accounting and auditing standard-setting

      The Copenhagen Stock Exchange endorses Danish Accounting Standards which are to be applied by listed companies.
      The authorities have no formal role in relation to standard setting. However, normally they are invited to submit their comments to draft standards.


    3. review of financial statements prepared by listed listed entities

      The Danish Commerce and Companies Agency, the Securities Council and the Copenhagen Stock Exchange have the authority to review financial statements from listed companies.

    4. enforcement of accounting, reporting and auditing requirements

      The different authorities mentioned in 121 have different enforcement responsibilities



    Section 10H -- Quality Assurance


    124. Does any organization of professional accountants/auditors organize a program of quality assurance review to monitor compliance with accounting, reporting and auditing requirements?
      Yes   No

      If NO, proceed to next Section.

      If YES, briefly describe the monitoring and enforcement mechanism.

      Since 1994 all member firms of FSR have been subject to institute-based quality control which is mandatory for member firms of FSR. The institute-based quality control covers all professional services provided by the member firms of FSR.

      From this year (2004) statutory quality control will be undertaken by the newly established Auditor’s Public Oversight Body.



    125. Under what authority does the organization conduct the program of quality assurance review?
      According to the statutes of FSR and from 2004 according to the Act on State Authorized and Registered Public Accountants, section 14-17.


    126. Who performs the review (e.g., one firm reviewing another firm, staff from the national professional organization, contractors, or a combination of these)?
      One firm reviewing another firm.



    Section 10 I -- Investigation and Discipline


    127. Is there a process for investigating and disciplining the accounting profession in your country?

    128. Which of the following best describes the responsibility for the investigatory and disciplinary function in your country?
      Government or other agencies are solely responsible for this function.
      Government or other agencies have this responsibility, but the member body or bodies participate in the process.
      Government formally delegates this function to the member body or bodies, to exercise on its behalf.
      Member body or bodies have separate and independent processes that operate alongside processes of legal authorities.
      Other (please explain)


    129. Please indicate the name of the body or bodies responsible for investigation and discipline.
      The Disciplinary Tribunal for Auditors.


    Responses to the remaining questions in this Section are required if your organization has responsibility for investigation and disciplinary actions.

    130. How many voting members does the body have?
      13


    131. Are the members of the body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe: Voluntary: 12, Employed: 1 (FSR/FRR have minority representation


    132. What are the criteria considered in selecting members of the body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?
      Best person for the job
      1 chairman who has to be a judge plus an equal number of representatives for accountants and users of accounts



    133. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      The Danish Commerce and Companies Agency.


    134. What is the term of appointment for members?
      4 Year(s)


    135. For how many years has the body been in existence?
      40 Year(s)


    136. Please indicate the budget in US$ of the body for the last fiscal year.
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      154,000

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)

      6.500 (specify currency)



    137. To what entity is the body accountable?
      The Disciplinary Tribunal is independent, but is formally a part of the Commerce and Companies Agency.


    138. Approximately how many days per year does the body meet in full session (including teleconferences)?
      12 Day(s)



     

     

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