Complusory obligation
There are different takes on what an audit of the annual accounts is compulsory:
- When in two consecutive financial years two of the following criteria are met:
- The total amount of assets is over EUR 2.850.000.
- The net turnover must not exceed EUR 5.700.000.
- The average member of employers during the last year is over 50.
To take an example, a company that during financial years 2012 and 2013 had a sales volume above Euros 6 million and assets of above 3 euro million in each financial year, has to be audited in 2013:
- However, notwithstanding the foregoing, there are other circumstances where auditing is mandatory:
- The request of shareholders representing at least 5% of the capital stock. The applications must be performed at the provincial mercantile register 3 months before the year-end. The audit will be carried out by the company.
- Mandatory preparations of consolidated financial statements. This companies must audit this consolidated statements , regardless of whether they audit or not the individual accounts.
- Company's shares on any official stock exchanges.
- Companies with publicly issued debt.
- Financial intermediation commitment.
- Dedication to any activity subject to the Law of "Ordenación y Supervisión de los Seguros Privados".
- Receiving government subsidies aid from public budget or European Union funds, for a cumulated amount over EUR 600.000. Mandatory audit the financial year receiving the subsidies and the years using them.
- Performing works, public utilities management, consulting and other services for the public administration, for a cumulated amount over EUR 600.000, that represents the 50% of the net turnover.
- Admission of its securities to trading on a regulated market in any EU member state.
- Judicial mandate sought by who may have a legitimate interest, even in voluntary jurisdiction. In this case, the court shall require the party applying to guarantee the payment of the audit costs and expenses which it will have to bear if the result does not involve irregularities.
- All Insurers.
- The mutual guarantee societies.
- Branches of foreign credit institutions not legally obliged to publish their annual account in Spain. Must submit to external audit the accounting information they have to publish and those, in closed, they have to send to the bank of Spain.
- The mutual provident societies.
- The collective investment institutions and their management companies.
- Funds of securization of mortgages.
- The High Sports Council, ex officio or upon request of the corresponding professional league may require the sports corporations to be audited by the auditors they designate.
- Companies undertaking electrical, natural gas and manufactured gas by pipeline operations.