Accountancy Obligations and Financial Statements in Spain
Are There Direct Consequences for Violating Accountancy Obligations?
The Commercial Code imposes a series of requirements that must be complied with, and certain formalities to guarantee the veracity of the accounts.
- No direct sanction exists for violating the rules.
- However, the legislator is so interested in the accuracy of accounting that a material breach of the duty of keeping such records (double counting or commingling, leading to a material misunderstanding of their equity or financial situation) has indirect consequences under Article 164.2 LC 1. If the work piece of qualifying is opened, it will be treated as guilty.
What Does “Evidentiary Value of Accounting Records” Mean?
Evidentiary value of accounting records (Article 31 Ccom): The value as evidence of the traders’ books and other accounting documents shall be appreciated by the Courts according to the general rules of law.
Point out the Differences Between the General and Limited Proceedings
This question requires additional context to be answered properly, as the original document does not specify the types of proceedings.
What Is the Annual Report? What Is Its Objective?
The annual report shall complete, extend, and comment on the information the other documents forming the annual accounts contain.
Which Are the Components of the Financial Statements? Describe the Main Idea of Their Respective Content.
- Balance sheet.
- The profit and loss account.
- Annual report, or notes to the financial statements.
- Statement reflecting the changes in net assets or equity.
- Cash flow statement.
What Are the General Principles of Accountancy? Describe the Main Idea of Their Respective Content.
- Prudence: If a situation arises where there are two acceptable alternatives for reporting an item, conservatism directs the accountant to choose the alternative that will result in less net income and/or less asset amount. Conservatism helps the accountant to “break a tie.” It does not direct accountants to be conservative. Accountants are expected to be unbiased and objective.
- No offset: Except when a standard expressly provides otherwise, the no offset principle shall be applied. The SNCA defines the conditions for being able to present a financial asset and a financial liability and tax assets and tax liabilities for their net amount.
- Materiality: Because of this basic accounting principle or guideline, an accountant might be allowed to violate another accounting principle if an amount is insignificant. Professional judgment is needed to decide whether an amount is insignificant or immaterial.
What Is an Audit Proceeding? Where Is It Regulated?
A law aimed at adapting Spanish law to Directive 2006/43/EC on statutory audits of annual accounts and consolidated accounts was approved: Law 12/2010, of June 30, amending Spanish. The Spanish Audit Law rules that companies, under a series of requirements linked to the impossibility of keeping an abridged balance sheet by corporate law, are obliged to have their financial statements audited. It is also mandatory to audit its financial statements at the request of the minority shareholders. The law makes it obligatory for the financial statements of all companies and entities, regardless of their legal form, that couldn’t keep an abridged balance sheet by corporate law.