When do I have to audit my annual accounts?

Commercial law establishes various circumstances in which companies are required to submit their annual accounts for audit. The main obligation arises when the company exceeds certain economic thresholds or finds itself in special circumstances, such as bankruptcy or liquidation, in which case the verification of accounts is also mandatory.

Current thresholds for mandatory auditing

A company must be audited if, during two consecutive financial years, or in the first financial year after its incorporation, transformation or merger, it exceeds at least two of the following three limits:

• Assets exceeding €2,850,000
• Net turnover exceeding €5,700,000
• Average workforce exceeding 50 employees

These criteria objectively determine when it is mandatory to audit a company's annual accounts.

New thresholds pending transposition

These thresholds will be updated following a European directive pending transposition. Once incorporated into Spanish law, auditing will be mandatory if two of these new limits are exceeded:

• Assets exceeding €3,565,000
• Net turnover exceeding €7,125,000
• Average workforce exceeding 50 employees (this last limit remains unchanged)

When does the audit requirement cease to apply?

The law establishes that the obligation to audit only disappears when the company fails to exceed two of the thresholds for two consecutive financial years.

For example, if a company exceeds two of the criteria in 2023 and also in 2024, it must audit its 2024 accounts and will continue to be obliged to do so in 2025. It will only be exempt if in 2025 and 2026 it no longer exceeds the indicated thresholds.

Other cases of mandatory auditing

In addition to the economic and size requirements, there are other cases in which auditing is mandatory. Specifically, when the company receives subsidies or public aid exceeding 600,000 euros, or when it contracts with the public sector for an amount exceeding that amount and that volume represents more than 50% of its turnover. In these situations, the accounts for the financial year in which the aid is received must be audited, as well as those for the financial years in which the subsidised operations or investments are carried out.

Appointment of the auditor

It is important to remember that the auditor must be appointed. This is the responsibility of the General Meeting before the end of the financial year to be audited. The term of office must be between three and nine years. If the meeting does not meet the deadline, it loses the right to appoint an auditor, and the administrator or any partner may then request the appointment by applying to the Commercial Registry or the competent court.