Audit Thresholds

German audit thresholds: the numbers that trigger a statutory audit

A German statutory audit is triggered by size, and the trigger is precise: you must be audited once you cross out of the small-company class into medium or large. This page gives the exact thresholds, explains the two-of-three and two-consecutive-years mechanics that decide the timing, and works through examples of when audit duty begins.

The threshold that turns on the audit

An audit becomes mandatory when a corporation leaves the small class. The small-company limits are €7.5m balance sheet total, €15m revenue and 50 employees on average (§ 267 Abs. 1, post-2024 figures). Stay under at least two of these three and you are small — no audit. Exceed at least two of them and you become medium, and § 316 HGB then requires an audit.

So the audit trigger and the small-to-medium boundary are the same line. There is no separate 'audit threshold' number in the statute — you test your size class, and audit duty follows automatically from being medium or large.

The three criteria you test

  • Balance sheet total (Bilanzsumme) above €7.5m — total assets after the § 267 Abs. 4a deficit adjustment.
  • Revenue (Umsatzerlöse) above €15m — net turnover for the year.
  • Average employees above 50 — the average of the four quarter-end headcounts (§ 267 Abs. 5).
  • Exceed two or more of these and you are no longer small; exceed only one and you remain small and unaudited.

Timing: the two-consecutive-years rule

Crossing the thresholds once is not enough. Under § 267 Abs. 4 HGB the change of class only takes effect after the limits have been exceeded on two consecutive balance sheet dates. A company that jumps above two thresholds in year 1 and stays there in year 2 becomes medium with the year-2 statements — and those year-2 statements are the first that must be audited.

The exception is a newly formed company: its first balance sheet date already fixes the class, so a start-up that opens above the small limits is medium — and audited — from its very first year. There is no grace year for new entities.

Worked examples

Stays small — no audit

€9m balance sheet total, €12m revenue, 40 employees. Only one threshold (balance sheet) is exceeded, so the company remains small under the two-of-three test. No statutory audit.

Becomes medium — audit starts

€10m balance sheet total and €18m revenue, 45 employees, for two years running. Two thresholds are exceeded on two consecutive dates, so the company is medium — and the second year's statements must be audited.

One-off spike — no reclassification yet

A company above two limits in year 1 but back under them in year 2 does not become medium: the two-consecutive-years rule is not met, so no audit is triggered by the single spike.

Listed — always audited

A capital-market-oriented company is large by § 267 Abs. 3 Satz 2 regardless of the numbers, so it is audited from the outset even with a small balance sheet.

Frequently asked questions

At what size does a German company have to be audited?

When it leaves the small class — that is, exceeds at least two of €7.5m balance sheet total, €15m revenue and 50 employees on two consecutive balance sheet dates. From that point it is medium (or large) and must be audited under § 316 HGB.

Is there a separate audit threshold in the HGB?

No. The statute has no standalone audit figure. You determine your size class from the § 267 thresholds, and the audit obligation follows automatically from being medium or large.

Does exceeding one threshold trigger an audit?

No. You must exceed at least two of the three small-company criteria to leave the small class. Breaching only one — a large balance sheet with modest revenue and headcount, say — keeps you small and unaudited.

When does the audit obligation actually start?

After the thresholds are exceeded on two consecutive balance sheet dates (§ 267 Abs. 4). The statements for that second year are the first that must be audited. A newly formed company above the limits is audited from its first year.

Does a one-off good year trigger an audit?

No. A single year above the thresholds does not reclassify you, because the two-consecutive-years rule is not met. Two years above two thresholds are needed before medium status — and audit duty — begin.

Do the 2024 thresholds change when audits are required?

Yes. The Wachstumschancengesetz raised the small-company limits to €7.5m / €15m / 50 for fiscal years beginning after 31 December 2023, so some companies that were medium (and audited) under the old figures may now be small and exempt.