The audit found that the military intelligence service "hid essential and crucial information" and "provided false information to the authorities" when quizzed about its surveillance operations between 2014 and 2020.
It also said information on Danish citizens had been collected in a "unauthorised" way.
The head of the service since 2015, Lars Findsen, was suspended along with two senior military intelligence officials.
Findsen told local news agency Ritzau that his colleagues "do not deserve to be suspected of infractions."
Defence Minister Trine Bramsen said in a statement that she would ensure an independent investigation.
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