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X. Audit requirements
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1.Audit law
Under Additional Provision, One of Law 19/1988, the financial statements for periods beginning on or after July 16, 1988, of all enterprises and entities must be audited, regardless of their legal form, in the following cases:
– Entities whose shares are listed on a Spanish stock exchange.
– Enterprises that issue debentures for sale to the public.
– Enterprises engaging habitually in financial intermediation, including enterprises acting as commission agents and stockbrokers (even if operating as individuals), and all financial enterprises and entities that must be registered in the corresponding registers of the Ministry of Economy and Finance and the Bank of Spain.
– Enterprises whose corporate purpose includes any of the activities regulated by the Private Insurance Law, within the limits defined in regulations.
– Enterprises receiving subsidies or financial aid from, or performing work for, or providing services or supplying goods to, the State or public agencies, within the limits defined in regulations.
– Enterprises, including cooperatives and other entities, which exceed certain limits defined by the government.
At present, the limits referred to in the preceding paragraph are those established for preparing abridged balance sheets (see following section).
Royal Decree 1636/1990, approving the Audit Law Regulations, established the same limits for insurance companies and cooperatives as those stipulated in the Corporations Law; however, a life and third party liability insurance companies must have their financial statements audited in all cases.
2. Corporations Law
The Corporations Law, which was amended to include the changes introduced by Law 19/1989, stipulates that the financial statements of all corporations must be audited except for those of enterprises authorized to present abridged balance sheets.
The corporations, which can prepare abridged balance sheets, are those which have met at least two of the following three conditions in the two consecutive years prior to the balance sheet date:
– That total assets do not exceed €2,373,998.
– That annual sales do not exceed €4,747,996.
– That the average number of employees during the year does not exceed 50.
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