All you need to know about accounting and auditing in Hungary

Registering a company in Hungary as a foreigner is a great opportunity, but it is important to comply with the regulations. With the proper preparation and help, you’ll be all set to get your business up and running. To get you familiar with accounting and auditing main regulations in Hungary, we have prepared this article to ensure that everything goes smoothly and that your company is in accordance with Hungarian law.

Main accounting rules in Hungary

In Hungary, accounting and bookkeeping are regulated by the Accounting Act and local rules. Businesses must keep records and prepare financial reports that follow local accounting principles. Double-entry bookkeeping is mandatory, but international enterprise resource planning systems are allowed as long as they comply with local regulations.

Requirements regarding reports

Hungarian business associations need to make a yearly report in Hungarian that shows their assets, liabilities, financial status, and profits or losses. The report must use the currency stated in the company’s founding document and follow the company’s bookkeeping methods. The report format is determined by factors like net turnover, balance sheet total, and the number of employees.

Report publication

Companies in Hungary must submit their annual or simplified annual report, along with a decision on profit/loss utilization, and an independent auditor’s report (if required), via the Online Reporting and Form Completion System on the Service of Company Information and Electronic Company Registration website. 

This must be done by the last day of the fifth month after the balance sheet date. 

All companies must have an electronic contact provided by the state through company portal, called “Cégkapu” (here our guide on how to open your company portal in Hungary).

Main obligations and standards for auditing

The Chamber of Hungarian Auditors Act applies to audit and assurance services. Companies using double-entry bookkeeping must appoint an auditor according to the Accounting Act, but exemptions are possible if certain financial and employee criteria are met. 

Auditing in Hungary must follow national rules and stick to the Hungarian National Auditing Standards, which meet global auditing requirements. 

Members of the Chamber of Auditors can perform audits in Hungary, but licensed individuals or audit companies can also do it with an assigned responsible auditor. Certain qualifications and licenses are required to audit specific entities like credit institutions and insurance companies.

When is the performance of an audit necessary?

Certification of financial statements and performance of an audit are two mandatory activities in Hungary for those companies having at least one of the following characteristics:

1. Having reached the HUF 300 million turnover threshold in the last two years
2. Staff numbers exceeding an average of 50 employees for at least two consecutive working years

Some companies like savings banks and Hungarian branch offices of foreign enterprises must comply with auditing obligations. Companies that have deviated from Accounting Act provisions are also not exempt.

The presence of an auditor is also necessary during some extraordinary operations in the life of the company, such as national or cross-border mergers, divisions, etc.

Therefore, mandatory auditing is not required for companies if their average annual net sales revenue in the two fiscal years preceding the current fiscal year is less than net 300 million forints, and the average number of employees over the two fiscal years preceding the current fiscal year is less than 50 people.

If you want to know more about accounting and auditing services in Hungary, do not hesitate to reach out to our experienced professionals.