Audit

 

 

Mandatory audit as a consequence of legal provisions

 

  • When, during a couple of consecutive financial years, as of the closing date of each of such financial years, the limits of the accounts of assets, turnover and average number of workers is exceeded in accordance with the provisions of the laws.

  • As a consequence of the corporate activity carried out by the company. Such is the case of:

    • Entities receiving subsidies or financial aid from the budget of public administrations or governmental entities, or proceeds from the European Union, for the amount exceeding €600,000

    • Entities that carry out works or enter into work agreements, or that render services or supply goods for the public sector, for an amount exceeding €600,000, when such amount is more than 50 percent of the turnover of the relevant company.

    • Entities that issue securities that are traded in regulated securities markets, or object of an initial public offering.

    • Entities which, as a result of their activity, are supervised by the Spanish Securities and Exchanges Commission (Comisión Nacional del Mercado de Valores).

    • Credit cooperatives.

    • Chambers of Commerce, Industry and Navigation.

    • Companies for the reciprocal granting of guarantees.

    • Private equity entities and their managing companies.

    • Pension funds and their managing companies.

    • Collective investment schemes.

    • Nongovernmental organizations are obtain proceeds of more than €180,303.63 on an annual basis, or intend to access to proceeds from subsidized funds.

    • Asset securitization funds.

    • Insurance entities.

    • Cooperatives.

    • Foundations, in accordance with certain criteria.

    • Mutual funds.

    • Associations of public utility that draw up unabridged standard accounts.

    • Companies in bankruptcy that are intervened, when such companies were previously obliged to audit their accounts.

    • Companies that operate in electricity and gas industries.

       

       

       

       

       

       

       

       

       

 

 

Voluntary audit that is agreed in the general meeting of shareholders

 

  • With the purposes of preparing the way of the next mandatory audit works, in order to avoid the potential impact of eventual qualifications in the report of prospective years.

  • In those situations where the owners of the company are not the same as those in charge of the management of such company.

  • For the purposes of granting more validity and reliability on the information received from the company.

  • To transmit to third parties the image of quality.

  • When set forth by the bylaws of the company.

  • Where required by governmental bodies, in order to access or even justify subsidies or aid obtained.

     

     

     

     

     

     

     

     

     

 

Limited review of financial statements and certificate of particular facts

 

  • The entity decides what it wants, what it needs, the scope of the requested work and the procedures to be followed.

  • This is a useful process, when the entity requires or needs to know particular facts, from and independent and professional standpoint.

  • Always advisable in those situations in which there are discrepancies among the shareholders, or perhaps doubts or distrust in relation to procedures or transactions that have been carried out, as well as in connection with the behavior of certain members of the staff when carrying out the duties that have been entrusted them.

     

     

     

     

     

     

     

     

     

 

Other special reports that are required by the laws

 

  • As a result of judicial appointments, pursuant to Section 40 of the Spanish Commercial Code and Section 266 of the revised text of the Equity Companies Act.

  • As a consequence of the appointments carried put by the Registrar of the Companies House and, inter alia

     

     

     

     

     

     

     

     

     

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    • Companies that are obliged to audit their accounts, where the general meeting of shareholders has not appointed the auditors prior to the end of the financial year.

    • In the event of a company that is not obliged to audit its accounts, upon request of a shareholder that owns at least 5 percent of the share capital of the company, within the term comprised in the three months following the closing of the financial year.

    • As a matter of answer to the decision made by the administrators of the company consisting of certain corporate agreements, where required by laws: share capital increase by offsetting credit rights and/or receivables, share capital increase against reserves, share capital reduction to offset losses, merger projects, winding-up projects, and so on.

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Audit certificate in relation to the good dedication of subsidies

 

  • When a public administration or governmental entity grant any sort of subsidy, the grantor usually requires that the auditor and chartered accountant issues the relevant report justifying the compliance of the expenses with the purposes of the relevant subsidy.