The turnover, number of employees and assets are factors which may determine whether companies shall be under the obligation to appoint an accounts auditor in order to verify their annual accounts or not. To this end, the auditor shall be appointed by the shareholders meeting and said appointment shall be registered with the corresponding Companies Registry.
Those companies without the legal obligation of auditing their annual accounts may also do so voluntarily, at any time.
AUDITOR APPOINTED WITH A VALID AND REGISTERED MANDATE
According to the doctrine of the General Directorate for Registries and Notaries, as outlined in its resolution of 15th March 2016, when an auditor holds a valid and registered mandate, even if the company at issue may not be under the obligation to audit the accounts, said company shall submit an auditor’s report together with the annual accounts.
This is an important issue to consider, particularly in cases where an auditor has been appointed for a different reason than that of approving the accounts.
Such doctrine has been enacted by law with the new drafting of Article 279 (in force since 1st January 2016) of the Spanish Company’s Act, according to which “[…] The administrators will also submit the management report, if required, and the auditor’s report, when the company is bound to audit according to a legal provision or in case such audit had been agreed upon the request of the minority or voluntarily, and the auditor’s appointment is registered with the Companies Registry.”
AUDITOR WITH AN UNREGISTERED APPOINTMENT
Companies registries are implementing a broad interpretation both on the aforementioned resolution and the new wording of Article 279 of the Spanish Company’s Act.
Such interpretation leads to the conclusion that, besides the obligations cited in the previous paragraph, when companies without the obligation to submit an auditor’s report along with the annual accounts, but who wish to submit the auditor’s report anyway (in the interest of accounting transparency), should previously register the appointment of the auditors with the Companies Registry. The absence of the registration of said position will imply the rejection of the registration of the annual accounts.
Vilá Abogados
For more information, please contact:
27th May 2016
