What is auditing?

An audit is an examination and verification of a company’s financial and accounting records and supporting documents by a professional, such as a Certified Public Accountant.

Who needs auditing in Italy?     

Auditing is compulsory for corporations or SPAs (Societa per Azioni, see legal section).

The annual directors’ report, as provided by Article 2428 Italian Civil Code, must provide information and a true and fair view concerning:

• The company’s position at the balance sheet date and its performance during the accounting period
• Events of special importance since the end of the accounting period
• Future events, such as intended investments
• Activities in the field of research and development

If a joint stock company is allowed to draw up an abridged financial statement, it can be exempted from preparing the director’s report if some compulsory information is given directly in the notes to the financial statements.

A joint stock company is required to file the financial statements (including reports from directors and auditors when required) with the commercial register. For the publication of the financial statements, it is filed in the Trade Register within 30 days after the Shareholders Meeting.

More information on the general situation of Italy’s accounting standards can be found in this publication (page 6).

What are the audit processes in this country?

There is no general provision for companies to be audited in Italy, except for those:

• with a share capital of more than Euro 120,000
• exceeding certain balance sheet limits
• listed on the Stock Exchange (as well as certain companies in the financial services sector)

Useful Links

• Investment Guide Italy – Doing Business