New Audit Threshold in Hungary 2025

Audit 2025 – A Detailed Professional Analysis of the New Audit Threshold and Its Impact on Hungarian Businesses

In 2025, the Hungarian accounting and audit regulatory framework undergoes a significant transformation. The changes are driven by a European Union directive aimed at modernizing corporate size categories, while the Hungarian legislator has expanded and adapted these rules into a comprehensive reform package that will directly affect the daily operations of thousands of businesses. The most impactful element of the new regulation is the doubling of the audit revenue threshold, but its context and related modifications reveal deeper structural and strategic consequences for the business sector.

This expert summary from FirmaX Hungary explains the logic behind the reforms, their expected effects, and the practical implications for companies seeking to navigate the new regulatory environment correctly.

Why the Audit Threshold Needed to Be Reconsidered

For many years, the audit threshold has imposed disproportionate administrative and financial burdens on companies whose size and operations did not justify mandatory audit. As revenues, wages and inflation increased across the economy, the typical size of Hungarian companies grew considerably, yet the regulatory thresholds remained unchanged.

This discrepancy resulted in many businesses falling under the mandatory audit regime despite having low complexity and limited audit risk.

The EU recognized this issue in 2023 and introduced a uniform 25 percent increase in size thresholds. Hungary has gone beyond this, implementing an even more substantial adjustment to reflect the nominal values and structural characteristics of the domestic economy.

The key goals behind the reform include ensuring:

• improved competitiveness for SMEs
• reduced administrative burden
• more rational and risk-based audit obligations
• compliance with EU directives
• stronger financial transparency where it is genuinely needed

Doubling the Audit Revenue Threshold – A Professional Interpretation

The previous framework

Under the former rules, a business was exempt from mandatory audit if the average of the previous two financial years showed:

• net revenue below 300 million HUF and
• an average workforce below 50 employees.

Both conditions were required simultaneously. In practice, however, many companies exceeded the 300 million HUF revenue threshold due to one-off contracts or temporary growth, resulting in an audit obligation that was disproportionate to their actual size and risk level.

The new threshold from 2025

From 2025, the revenue limit increases from 300 million HUF to 600 million HUF, while the 50-employee threshold remains unchanged.

The two-year averaging rule continues to apply, ensuring stability and reducing the influence of temporary fluctuations.

This modification is more than a technical adjustment. It represents a structural shift that may affect nearly one third of the Hungarian SME sector. Estimates suggest that more than ten thousand businesses may fall out of the mandatory audit requirement.

Important timing rule

• The new threshold applies first to financial years that begin in 2025.
• The financial year of 2024 is still evaluated under the old system.
• Early adoption is not permitted.

Limits to the Exemption, Who Must Still Undergo Mandatory Audit

Despite the increase in the threshold, several categories of companies must still be audited regardless of size. These include:

• public interest entities
• financial institutions and regulated service providers
• insurers and investment firms
• Hungarian branches of foreign companies
• entities included in consolidated financial statements
• businesses that deviate from the Accounting Act to ensure a true and fair view
• certain civil and nonprofit organizations above specific income levels

In practice, the exemption primarily affects classic SMEs, while sectors involving heightened regulatory or systemic risk remain under mandatory scrutiny.

Related Threshold Increases in Financial Reporting

The audit threshold adjustment is part of a broader modernization effort. Several reporting thresholds will also increase from 2025 and will reshape the entire financial reporting environment.

Key changes include:

• higher thresholds for preparing simplified annual financial statements
• increased limits for consolidation requirements
• updated size categories for micro, small, medium and large enterprises
• increased revenue and balance sheet thresholds across various reporting types

These changes reduce the overall reporting burden. More businesses will be able to prepare simplified reports and fewer will be obligated to consolidate, resulting in notable cost and resource savings.

Less Legal Obligation, More Strategic Expectation

While the legislator reduces the number of companies required to undergo mandatory audit, market expectations continue to move in the opposite direction. Especially in financing, investment and international business development, external stakeholders increasingly demand transparency and reliability.

Banks, investors and multinational partners still view audited financial statements as one of the strongest indicators of financial stability a trend also reflected in the growing demand for professional audit support such as the Audit Services.

As a result, the following trend is expected:

• mandatory audits will decrease
• voluntary audits will increase
• audit will evolve into a value-enhancing tool rather than a compliance burden

An audited financial statement provides higher creditworthiness, stronger investor confidence and easier access to international partnerships.

What Companies Should Assess

Given the regulatory changes, every business should conduct an internal “audit readiness” review. Key steps include:

Reviewing two-year revenue averages

This determines whether the company will be exempt or remain subject to mandatory audit.

Evaluating the need for voluntary audit

Depending on strategic goals, maintaining an audit may strengthen financial credibility.

Maintaining high-quality accounting documentation

Even without mandatory audit, consistent and reliable financial data remain critical for business decisions.

Consulting a professional

With shifting thresholds, many companies fall close to boundary levels.
A misclassification can have long-term administrative consequences particularly in tax planning, where structured advice such as Tax Advisory becomes indispensable.

Long-Term Implications of the New Audit Framework

The increased audit threshold moves Hungarian regulation toward a more realistic connection between a company’s size and its compliance obligations. The reform reduces mandatory burdens and increases financial autonomy for SMEs.

At the same time, the change is part of a deeper evolution. The role of audit is shifting from an externally imposed requirement to an internally valued governance tool. The emphasis is moving from obligation to strategic credibility and financial discipline.

For forward-thinking companies, audit will increasingly become a strategic asset that supports growth, investment and long-term stability.