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3. Accounting and Auditing
Spanish accounting principles are contained in the Spanish National Chart of Accounts, in force in accordance with Royal Decree 1514/2007. Subsequently, Royal Decree 1159/2010 modified partially the mentioned principles and approved Standards for the Preparation of Consolidated Accounts. The Spanish accounting principles are in general terms harmonized with IAS regulations.
Reporting requirements for companies are different depending on their size. Find below a table with the three established limits on features defining each business size. Two limits must be surpassed for two consecutive financial years to get a new status (size wise) and consequently different requirements.
At the end of each financial year, which may not necessarily coincide with the calendar year, all companies must deposit their annual financial statement, this is, the balance sheet, the profit and loss statement, the statement of changes in net equity and the annual report in a public registry. Except ‘Small companies’ the annual statements must also include the effective cash flow statement.
Except Small companies, in the above table, the rest of companies must conduct an audit of their annual accounts. Auditing firm or auditor must be enrolled in the Official Auditors Register.