How company accounts are audited in Spain

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1. The law defines the audit of accounts as the review and verification of annual accounts and other accounting documents, which can only be carried out by a registered auditor or audit firm, ending with a report on their reliability.
2. The audit report must include, among other things, the scope of the work, a declaration of independence and a technical opinion that can be favorable, qualified, adverse or denied. It cannot be published separately from the audited accounts.
3. To work as an auditor you must pass a professional aptitude exam, prove at least three years of practical training and have no criminal record for intentional offenses. You cannot start the activity with a simple sworn statement.
4. Auditors must be independent from the audited entity: they cannot be directors or employees of the entity, hold significant interests in it, or provide it with certain services such as accounting or internal audit.
5. The audit contract initially lasts between three and nine years, renewable for periods of up to three years. It cannot be terminated without just cause, and disagreements over accounting criteria are not just cause.
6. Public interest entities (listed companies, banks, insurers and others) face stricter rules: additional reports to their audit committee, an annual transparency report, mandatory auditor rotation and tighter fee limits.
7. The Instituto de Contabilidad y Auditoría de Cuentas oversees the whole activity: it inspects auditors, investigates specific engagements, sanctions violations and publishes final sanctions.
8. Violations are classified as minor, serious and very serious, with penalties ranging from a private warning to revocation of authorization and fines of thousands of euros, harsher when auditing a public interest entity.

Who it affects

• Companies and entities required to audit their accounts: They must provide all the information the auditor requests and undergo an audit if they issue securities, engage in financial intermediation, receive public aid or exceed the limits set by the Government.
• Auditors and audit firms: They must register in the Official Register, comply with duties of independence, confidentiality and continuing education, and face inspections and sanctions.
• Investors and third parties who rely on audited accounts: They receive audit reports with more content and stronger guarantees of auditor independence.
• Public interest entities (listed companies, banks, insurers): They must have an audit committee, accept auditor rotation and comply with stricter fee limits.

Words worth knowing

Auditoría de cuentas (audit of accounts)

Independent review of a company's accounts by an authorized professional, who issues a report on whether they are reliable.

Entidad de interés público (public interest entity)

A company whose securities are listed on a stock exchange, a bank, an insurer or another entity considered relevant to the public because of its activity, size or number of employees.

Opinión con salvedades (qualified opinion)

An auditor's opinion that is generally favorable but points out specific issues that do not add up or could not be verified.

Registro Oficial de Auditores de Cuentas (Official Register of Auditors)

Public list kept by the Instituto de Contabilidad y Auditoría de Cuentas with the auditors and firms authorized to practice.

Comisión de Auditoría (audit committee)

An internal body of a company, made up of directors, that oversees financial information and is responsible for selecting and supervising the auditor.

It summarizes the law as published in the BOE. It is written by artificial intelligence and may contain mistakes: the official text is what counts. Read the official text · How we make summaries