Who is required to undergo an audit in Croatia?

A financial audit is an important tool for ensuring business transparency and enhancing the confidence of investors, creditors, regulators, and other stakeholders. While many companies associate an audit solely with a statutory requirement, it also plays a significant role in risk management and improving the quality of financial reporting.

A question frequently asked by businesses is: who is subject to a statutory audit in Croatia?

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Under the Croatian Accounting Act, an audit is mandatory for:

• Large and medium-sized companies
• Parent companies of large and medium-sized groups that prepare consolidated financial statements
• Public-interest entities
• Annual financial statements and annual consolidated financial statements of joint-stock companies (d.d.), limited partnerships (k.d.) and limited liability companies (d.o.o.) whose individual or consolidated figures, in the year preceding the statutory audit, exceed the thresholds for at least two of the following three criteria:
  • Total assets exceeding EUR 2.5 million
  • Net revenue exceeding EUR 5 million
  • An average of at least 25 employees
• Other entities where an audit is required by specific laws or regulatory rules

Whether a company is required to undergo an audit depends on legal criteria, the size of the business, and other regulatory requirements. Companies subject to a statutory audit must have their financial statements reviewed by an independent auditor, who provides an opinion on whether those statements comply with the applicable accounting standards.

How is company size determined?

Companies are classified based on:

• Total assets
• Net revenue
• Average number of employees during the financial year

The Croatian Accounting Act classifies companies as micro, small, medium-sized, or large based on these criteria.

In addition to mandatory audits, many organizations choose to undergo a voluntary audit. This is particularly common among companies preparing for investment, financing discussions with banks, acquisitions, or other significant business transactions. A voluntary audit can help identify potential risks early and increase confidence in the company's financial information.

Assessing audit requirements on time is important for avoiding regulatory risks, ensuring compliance with legal obligations, and strengthening trust among business partners.

Need support with a mandatory or voluntary financial statement audit? Learn more about our audit services and get in touch with our experts.

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