FELIPE VI

KING OF SPAIN

To all who present it and understand it.

Sabed: That the General Courts have approved and I come to sanction the following law.

INDEX

Preliminary title. Scope, object, legal regime and definitions.

Article 1. Scope and object scope.

Article 2. Regulatory rules for auditing of accounts.

Article 3. Definitions.

Title I. Audit of accounts.

Chapter I. Of account auditing modes.

Article 4. Audit of annual accounts and other financial statements or accounting documents.

Article 5. Annual Accounts Audit Report.

Article 6. Duty of request and provision of information.

Article 7. Audit of consolidated accounts.

Chapter II. Requirements for the exercise of auditing of accounts.

Article 8. Official Register of Auditors of Accounts.

Article 9. Authorisation and registration in the Official Register of Auditors.

Article 10. Auditors authorised in other Member States of the European Union and in third countries.

Article 11. Audit firms.

Article 12. Low in the Official Register of Auditors.

Chapter III. Exercise the audit of accounts activity.

Section 1. Professional Skepticism and judgment.

Article 13. Professional skepticism and judgment.

Section 2. Independence.

Article 14. General principle of independence.

Article 15. Identification of threats and adoption of safeguard measures.

Article 16. Causes of incompatibility.

Article 17. Subjective extensions to linked entities or to a control relationship with the audited entity.

Article 18. Incompatibilities arising from situations involving the family of the main auditors responsible.

Article 19. Incompatibilities arising from situations involving persons or entities directly related to the auditor or audit firm.

Article 20. Incompatibilities arising from situations that are present in other persons or entities belonging to the auditor's network or the audit firm.

Article 21. Period of validity of incompatibilities.

Article 22. Recruitment scheme.

Article 23. Bans after the completion of the audit job.

Article 24. Fees and transparency in the remuneration of auditors and audit firms.

Article 25. Causes of abstention from perceived fees.

Section 3. Responsibility and financial collateral.

Article 26. Civil liability.

Article 27. Financial collateral.

Section 4. Internal Organization and the work of auditors and audit firms.

Article 28. Internal organization.

Article 29. Organization of the job.

Section 5-Custody and Secret Duties.

Article 30. Duty of conservation and custody.

Article 31. Duty of secrecy.

Article 32. Access to the documentation.

Chapter IV. Audit accounts of entities of public interest.

Section 1. Common Provisions.

Article 33. Scope of application.

Article 34. Legal regime.

Section 2. Of the reports.

Article 35. Annual Accounts Audit Report.

Article 36. Additional reporting for the Audit Commission on public interest entities.

Article 37. Annual transparency report.

Article 38. Report to the national supervisory authorities of public interest entities.

Section 3. Independence.

Article 39. Incompatibilities and prohibited services.

Article 40. Recruitment, rotation and appointment of auditors or audit firms.

Article 41. Fees and transparency.

Section 4. Internal Organization and work related to audits of public interest entities.

Article 42. Internal organization.

Article 43. Organization of the job.

Article 44. Transfer file.

Article 45. Organizational structure.

Title II. Public oversight.

Chapter I. Supervisor function.

Article 46. Public monitoring scope.

Article 47. Resources.

Article 48. Subjects on which the supervisory function is exercised.

Article 49. Supervisory powers.

Article 50. Place of the verification, investigation and inspection actions.

Article 51. Administrative collaboration.

Article 52. Audit of account audit activity: investigations and inspections.

Article 53. Research.

Article 54. Inspections.

Article 55. Assistance from professional and expert services.

Chapter II. Accounting and Audit Institute of Accounts.

Article 56. The Accounting and Audit Institute of Accounts.

Article 57. The President.

Article 58. The Audit of Accounts Committee.

Article 59. The Accounting Board.

Article 60. Confidentiality and duty of secrecy.

Article 61. Transparency and publicity.

Chapter III. Supervisory arrangements applicable to auditors, as well as to companies and other audit entities authorised in Member States of the European Union and in third countries.

Article 62. Auditors, companies and other audit entities authorised in Member States of the European Union and in third countries.

Chapter IV. International cooperation.

Article 63. Duty to cooperate with the Member States of the European Union and with the European supervisory authorities.

Article 64. Commission of European Bodies of Audit Supervision.

Article 65. Transmission of information to the European Central Bank, European System of Central Banks and to the European Systemic Risk Board.

Article 66. Colleges of supervisory authorities competent for auditing of accounts.

Article 67. Coordination with competent authorities of third countries.

Title III. Regime of infringements and penalties.

Article 68. Sanctioning administrative power.

Article 69. Specialties in the field of procedure.

Article 70. Administrative responsibility.

Article 71. Violations.

Article 72. Very serious infringements.

Article 73. Serious infringements.

Article 74. Minor infractions.

Article 75. Penalties for infringements committed by auditors of individual accounts.

Article 76. Penalties for offences committed by audit firms.

Article 77. Penalties for infringements committed by auditors and audit firms in relation to entities of public interest.

Article 78. Other additional sanctions.

Article 79. Penalties for offences committed by non-auditors.

Article 80. Determination of the penalty.

Article 81. Enforcement of resolutions.

Article 82. Advertisement of the sanctions.

Article 83. Administrative responsibility for extinguished audit firms.

Article 84. Obligation to preserve the documentation.

Article 85. Limitation of the infringements.

Article 86. Prescription of penalties.

Title IV. Rates of the Accounting and Audit Institute of Accounts.

Article 87. Rate of the Accounting and Audit Institute of Accounts for the control and supervision of the audit of accounts activity.

Article 88. Fee of the Accounting and Audit Institute of Accounts for the issue of certificates or documents at the request of a party and for entries and entries in the Official Register of Auditors.

Title V. Personal data protection.

Article 89. Protection of personal data.

Additional disposition first. Mandatory audit.

Additional provision second. Audits in public sector entities.

Additional provision third. Commission of Audit of Public Interest Entities.

Additional provision fourth. Collaboration of the National Commission on Markets and Competition in the implementation of competences in relation to the Audit of Accounts market.

Additional provision fifth. Report on market developments.

Additional provision sixth. Audit firms.

Additional provision seventh. Coordination mechanisms with public bodies or institutions with control or inspection powers.

Additional disposition octave. Electronic communications.

Additional provision ninth. Collaboration with the General Directorate of the Registers and the Notary.

Additional provision 10th. Information on payments made to public administrations.

First transient disposition. Graduates, engineers, commercial teachers, architects or university graduates.

Second transient disposition. Incompatibility situations.

Transitional provision third. Economic year of application of the forecasts contained in the additional provision tenth.

Single repeal provision.

Final disposition first. Amendment of the Code of Commerce approved by Royal Decree of 22 August 1885.

Final disposition second. Amendment of the Law 24/1988, of July 28, of the Stock Market.

Final disposition third. Amendment of Law 29/1998 of July 13, regulating the Administrative-Administrative Jurisdiction.

Final disposition fourth. Modification of the Recast Text of the Law of Capital Societies approved by the Royal Legislative Decree 1/2010, of July 2.

Final disposition fifth. Amendment of Law 27/2014 of 27 November of the Company Tax.

Final disposition sixth. Competence title.

Final disposition seventh. Incorporation of European Union law.

Final disposition octave. Regulatory enablement.

Final disposition ninth. Enablement for the modification of the Statutes of the Accounting and Audit Institute of Accounts.

Final disposition tenth. Authorization of the Accounting and Audit Institute of Accounts.

Final disposition eleventh. Tasks entrusted to the members of the Institute of Jurors of Accounts of Spain, prior to the entry into force of Law 19/1988, of July 12, of Audit of Accounts.

Final disposition twelfth. No increase in expenditure.

Final disposition thirteenth. Legal status of the reserve by goodwill in the financial years started on or after 1 January 2016.

Final disposition fourteenth. Entry into force.

PREAMBLE

I

The main purpose of this Law is to adapt Spanish domestic legislation to the changes incorporated by Directive 2014 /56/EU of the European Parliament and of the Council of 16 April 2014 amending the Directive 2006 /43/EC of the European Parliament and of the Council of 17 May 2006 on the statutory audit of annual accounts and consolidated accounts, in which it is not in accordance with that Directive. Together with that Directive, Regulation (EU) No 537/2014 of the European Parliament and of the Council of 16 April 2014 on specific requirements for the statutory audit of public interest entities and repealing the Directive has been adopted. Commission Decision 2005 /909/EC.

This Directive repealed the then Eighth Directive 84 /253/EEC of the Council of 10 April 1984, based on Article 54 (3) (g) of the EEC Treaty, on the authorisation of persons responsible for the legal control of accounting documents, incorporated in our order by Law 19/1988, of July 12, of Audit of Accounts, thus regulating for the first time in Spain the activity of audit of accounts. This activity, for its contribution to the transparency and reliability of the financial economic information of the companies and entities audited, is an essential element of the market economy system set out in Article 38 of the Treaty. Constitution. It is thus set up as the one which, through the use of certain revision techniques, aims at the issue of a report on the reliability of audited financial economic information, without being limited to the mere verification that the balances shown in their accounting records are consistent with those offered in the accounts that are audited, since the techniques of review and verification applied allow, with a high degree of certainty, to give a technical and independent opinion on accounting as a whole and, in addition, on other circumstances that, affecting life of the company, they were not collected in that process.

Account auditing activity is characterized by the public relevance it plays in providing a service to the revised entity and affecting and interested not only the entity, but also third parties that maintain or can maintain relationships with the same, taking into account that all of them, audited entity and third parties, may know the quality of the audited financial economic information on which the audit opinion is issued. In order to regulate and establish sufficient guarantees for the annual accounts or any other financial economic information that has been verified by an independent third party to be accepted with full confidence by third parties The audit activity was defined in Law 19/1988 of 12 July 1988 of the Audit of Accounts and established, among other provisions, the conditions to be fulfilled for access to the Official Register of Auditors and be able to exercise such activity, the rules governing its exercise, the minimum content of the report audit of annual accounts, the system of incompatibilities and liability of auditors, the regime of infringements and penalties and the allocation to the Accounting and Audit Institute of Accounts for the control of activity and of the disciplinary authority of the auditors.

Over time, various rules were followed to complete this regime. Thus, first of all, Law 4/1990, of 29 June, of the General Budget of the State for 1990, incorporated a specific route of registration in the Official Register of Auditors of Accounts for persons who, not having a university degree, However, they have obtained a sufficient degree of qualification to gain access to the university and have acquired a practical training of 8 years, greater than the general requirement. At the same time, certain special rules were laid down for the purpose of establishing practical training acquired prior to the entry into force of Law 19/1988 of 12 July of Audit of Accounts, a requirement for obtain the approval of the Accounting and Audit Institute for the purposes of the registration in the Official Register of Auditors.

Subsequently, Law 31/1991 of 30 December of the General Budget of the State for the year 1992 modified the composition of the Advisory Committee of the Accounting and Audit Institute of Accounts and Law 13/1992, of 1 of June, on own resources and supervision on a consolidated basis of the Financial Institutions, modified the regime of violations and sanctions. In addition, the obligation for auditors of accounts of entities subject to the supervisory regime provided for in Law 13/1992 of 1 June of 1 June to issue the audit report of the annual accounts in question was also established. when they know and verify the existence of alleged irregularities or situations which could seriously affect the stability, solvency or continuity of the audited entity.

With Law 3/1994 of 14 April, adapting the Spanish legislation on credit institutions to the Second Banking Coordination Directive and introducing other amendments relating to the financial system, incorporated the obligation to audit the accounting information that foreign credit institutions must make public annually for branches that have in Spain, when they do not have to present annual accounts of their activity in Spain.

Law 2/1995, of March 23, of Limited Liability Societies, included the possibility of extending the audit contract annually after the end of the initial contract period.

Subsequently, Law 37/1998 of 16 November of the reform of Law 24/1988 of 28 July of the Stock Market gave a new wording to the obligation for auditors of accounts of entities subject to the the supervision of the Banco de España, the National Securities and Exchange Commission and the Directorate-General for Insurance, to promptly communicate to these supervisory institutions any act or decision on the audited entity of those who have knowledge in the performance of their duties and which may affect the exercise of their duties in a relevant manner activity, its continuity, stability or solvency, or in cases where the opinion in its report is denied or unfavourable or where the issuance of the audit report is prevented.

In addition, by Law 41/1999 of 12 November on payment systems and securities settlement, the deadline of one year was set as a specific period for resolving and notifying the resolution in the sanctioning procedures. derivatives of the commission of the infringements provided for in Law 19/1988 of 12 July of Audit of Accounts.

In addition to these important changes, two substantial reforms need to be highlighted. The first of these was carried out by Law 44/2002 of 22 November 2002 on Measures to Reform the Financial System, in Articles 48 to 53, which introduced substantial changes affecting various aspects: the unified examination of the system of access to the Official Register of Auditors of Auditors, the obligation to continue training courses for auditors, the incorporation of specific access routes to the Official Register of Auditors of Accounts for officials belonging to certain bodies of the administration whose training and functions are In the case of the audit of public sector accounts, the duty of independence and the causes of incompatibilities, the duty of rotation of the auditor in relation to certain audited entities, the civil liability of the auditors, the duty of custody of the documentation of the audit work and the access to such documentation, the regime of infringements and penalties, the powers of the Accounting Institute and the Audit of Accounts in relation to the control of the audit of accounts and the creation of the rate of the Institute of Accounting and Audit of accounts by issue of audit accounts.

Subsequently, Law 62/2003 of December 30, of fiscal, administrative and social order measures, modified the composition and functions of the governing bodies of the Accounting and Audit Institute of Accounts.

Law 16/2007 of 4 July of reform and adaptation of commercial law on accounting matters for international harmonization based on European Union legislation, in its fifth additional provision, as amended By the fourth final provision of Law 34/2007, of 15 November, of air quality and protection of the atmosphere, it amended Law 19/1988, of 12 July, of Audit of Accounts, in relation to the deadlines for the recruitment of the auditors of the accounts, to enable the renewal of the audit contract for successive periods of up to three years years after the start of the initial period of recruitment.

The second of the substantial reforms of the Law took place with the entry into force of Law 12/2010, of June 30, amending Law 19/1988, of July 12, of Audit of Accounts, Law 24/1988, of July 28, of the Stock Market and the Recast Text of the Law of Companies, approved by the Royal Decree of Law 1564/1989, of 22 December, for its adaptation to the Community legislation.

Directive 2006 /43/EC of the European Parliament and of the Council of 17 May 2006 on the statutory audit of the annual accounts and consolidated accounts was transposed into our internal legal order. amending Council Directives 78 /660/EEC and 83 /349/EEC and repealing Council Directive 84 /253/EEC. The time since the entry into force of Directive 84 /253/EEC, the changes in the economic and financial environment with higher quotas for globalisation and internationalisation, and the lack of a harmonised approach to the Audit in the field of the European Union, mainly in the field of public oversight, made it essential to undertake a reform process in this area, which culminated in the aforementioned Directive 2006 /43/EC.

This Directive was an important step towards achieving greater harmonisation of the requirements for the exercise of audit activity in the field of the European Union, as well as of the principles that need to be met. the system of public oversight in this field, assuming at the time of its adoption a turning point in the regulation of the audit activity. The new regulation was established on the basis of understanding that the audit activity plays a role of public interest, understood by the existence of a wide range of people and institutions that rely on the performance of the the auditor, as the correct and proper execution constitute factors that contribute to the correct functioning of the markets by increasing the integrity and the effectiveness of the financial statements as vehicles of transmission of information. In the face of the repealed Directive containing basic rules for the authorisation, independence and publicity of auditors, Directive 2006 /43/EC extended its scope at the same time as it intended to harmonise a greater number of aspects. related to: the authorisation and registration of auditors and audit firms, including those of other States of the European Union and of third countries, the rules of professional ethics, independence and objectivity, the conduct of audits in accordance with the international auditing standards adopted by the European Union, the full responsibility of the auditor to carry out the audit of consolidated financial statements, the quality control of auditors and audit firms, the effective systems of investigation and sanctions, specific provisions relating to the entities of public interest and cooperation and mutual recognition between the competent authorities of the Member States of the European Union, as well as the relations of third countries.

In addition to transposing Directive 2006 /43/EC into national law, Law 12/2010 of 30 June amended certain aspects contained in Law 19/1988 of 12 July, which were necessary due to the changes that had taken place. taken place in commercial law and to incorporate technical improvements resulting from the practice.

Thus, changes are highlighted that affect the minimum content of the audit report in order to favor comparability in the international economic environment; the assumption of the full responsibility that the auditor of accounts responsible for the audit of the annual accounts or consolidated financial statements; the system of legal sources to which the audit of accounts, consisting of three sets of rules, should be subject to the rules of audit, ethics rules and internal quality control standards of the auditors and audit firms, incorporating as audit standards the International Standards of Audit which are adopted by the European Union; the authorisation and registration in the Official Register of Auditors of whom it is authorised in another State Member of the European Union, or in a public register of third countries in accordance with the requirements of reciprocity and equivalence, the obligation to register for those issuing audit reports on the annual or consolidated accounts of companies domiciled outside the European Union and whose securities are admitted to trading in Spain, and the possibility that other audit firms authorised in a Member State of the European Union, which was previously not permitted, may be partners of audit firms; the responsibility of the auditors solely for the audit firms the extent of the duty of secrecy to all persons involved in the conduct of the audit of accounts, the extent and purpose of the audit, the extent and purpose of the audit, the extent and the purpose of the audit, audit control activity of accounts, differentiating between external quality control, a regular and procedural nature, which can be generally derived from the formulation of recommendations or requirements; and technical control, the purpose of which is to detect and correct the inappropriate execution of a particular audit work or aspect of the auditor's activity; and certain changes in relation to the regime of infringements and penalties, related in almost all to the new obligations incorporated.

A substantially modified aspect was the duty of auditors ' independence, which is based, on the one hand, on the enunciation of a general principle of independence, which requires all auditors to refrain from acting when its objectivity in relation to financial economic information to be audited and, on the other hand, in the enumeration of a set of specific circumstances, situations or relationships in which it is considered that, in the case of the auditors do not enjoy independence in respect of a given entity, the single solution or safeguard the non-performance of the audit job.

In relation to the duty of independence, the obligation to document and establish the safeguard systems to detect and respond to the threats to the independence of the auditors was incorporated. If these threats are of such importance that they compromise independence, auditors should refrain from conducting the audit. In any event, any situation that might involve a possible participation in the audited entity or relationship with the entity should be avoided. In addition, certain situations or services that generate incompatibility to perform the audit were modified and the time period of the three-to two-year incompatibility situations was reduced.

In addition, the concept of a network to which the auditor or audit firm belongs was incorporated, for the purpose of observing the duty of independence, delimiting on the basis of the existence of the decision-making unit and the existence of control and significant influence relations, so that the persons or entities forming part of this network who incur any of the alleged incompatibility cases legally referred to, shall also render incompatible the auditor of accounts or audit firm in relation to the respective entity, with certain particularities. Also, the scope of subjective extensions was modified to include certain relatives.

On the other hand, when the concept of entities of public interest was incorporated at that time, obligations were introduced such as the publication of an annual transparency report and the rotation of the signatory of the report, in addition to the an obligation for certain entities to have an Audit Commission.

Finally, taking into account the numerous modifications produced, the Royal Legislative Decree 1/2011, of July 1, approved the Recast Text of the Law of Audit of Accounts, a comprehensive text of the regulations applicable to the Account audit activity, systematic, harmonised and unified.

II

The evolution experienced in the economic and financial context since the entry into force of Directive 2006 /43/EC of the European Parliament and of the Council of 17 May 2006, and in particular the financial crisis in the In recent years, it led to the question of the adequacy and adequacy of this Community regulatory framework, a process of debate on how audit activity could contribute to financial stability, culminating in the adoption and publication of Directive 2014 /56/EU of the European Parliament and of the Council of 16 April 2014, and of Regulation (EU) No 537/2014 of the European Parliament and of the Council of 16 April 2014, both with the ultimate aim of strengthening the trust of users in economic and financial information by improving the quality of the audits of accounts at the level of the European Union.

Unlike the previous framework, the development of a separate regulatory instrument for public interest entities is considered necessary in order to ensure that the audits of these entities are of high quality, contributing to a more effective functioning of the internal market, while ensuring a high level of consumer and investor protection at the level of the European Union.

To this end, the new rules of the European Union, first of all, aim to increase transparency in the performance of auditors by clarifying the role of the audit and the scope and limitations it has, to reduce the so-called expectation gap between what a user expects from an audit and what it really is. To this end, the aim is to further harmonise the rules of the European Union, as well as a minimum level of convergence with regard to auditing standards, which are designed to be used in carrying out audits of the annual accounts. of entities of all kinds, dimensions and nature. To this end, it is important to highlight the new content requirements of the audit report, which will be higher in the case of those issued in relation to public interest entities, improving the information to be provided to the institution. audited, to investors and other stakeholders. Thus, those who audit these entities are required, on the one hand, to submit an additional report to the Audit Committee of these entities that reflects the audit results, reinforcing the added value of the audit and contributing to the audit. the improvement of the quality of financial economic information that is being audited; and the auditors should also incorporate the annual transparency report for certain financial information that is set out in the Directive. It is also intended to strengthen the channels of communication between auditors and supervisors of public interest entities.

Secondly, the legislation of the European Union is intended to strengthen the independence and objectivity of the auditors in the exercise of their activity, a basic and fundamental pillar in which the trust placed in the European Union is based. audit report. To this end, more restrictive requirements are incorporated than those of Directive 2006 /43/EC of 17 May 2006, enhancing the attitude of professional scepticism and the special attention to be paid to avoid conflicts of interest or the presence of certain commercial or other interests, also taking into account the cases in which it operates in a network environment.

In order to reinforce the attitude of professional skepticism and objectivity, to prevent conflicts of interest arising from the provision of non-audit services, and to reduce the risk of possible conflicts of interest caused by the current system in which 'the auditor selects and pays the auditor' and the threat of familiarity arising from long-term relationships, the said Regulation (EU) No 537/2014 of 16 April 2014 incorporates for the auditors of entities of public interest, a list of non-audit services prohibited, which cannot be to be provided to those entities, their parent and their controlled entities; certain rules limiting the fees they may receive for services other than those of audit permitted or in relation to a particular interest entity public; as well as the obligation of external rotation or maximum procurement period.

Likewise, and in order to contribute to strengthening the independence of these auditors and the quality of the audits carried out in relation to these entities, the functions attributed to their Audit Commissions are strengthened, in The Commission has been able to make a statement on the subject of this task, while strengthening its independence and technical capacity.

Third, given the problems identified in relation to the structure of the market and the difficulties of expansion, certain measures are arbitrated that allow to dynamize and open the market for auditing, incorporating the 'European passport' in order to contribute to the integration of the audit market, but with the compensatory measures which may be taken by the host Member State in which the activity is intended to be carried out, and declaring the contractual clauses limiting or restricting the ability to choose auditor.

The above measures are accompanied by those incorporated in Regulation (EU) No 537/2014 of 16 April 2014 related to the incentives for the conduct of joint audits, the participation of smaller entities in the the mandatory, public and periodic tender processes, which are regulated by simplifying the choice of the auditor, and the obligation of external rotation.

In order to improve the business environment and initiatives, European Union legislation incorporates three groups of measures aimed at reducing the transaction costs involved in carrying out activities in the field of the European Union for small and medium-sized entities: the application of the complexity and the size of the activity of the auditor or the audited entity, the ability of Member States to simplify certain requirements for small audit entities and specific provisions for small and medium-sized entities auditers.

In the fourth place, in order to avoid fragmentation in the audit market at European Union level, the new legislation seeks a higher degree of harmonisation, not only in the rules governing the activity, but in the The European Union, which is a member of the European Union, is a member of the European Union. In this respect, the powers of the public supervisory authority are strengthened in order to strengthen compliance with those rules, while at the same time introducing the risk criterion as a rector in quality control reviews that It must carry out that authority and they are attributed to this authority to impose minimum disciplinary rules. That authority, as provided for in Directive 2014 /56/EU of 16 April 2014, shall be independent as a premise to ensure the integrity, autonomy and adequacy of the public oversight system.

In relation to auditors of public interest entities, mechanisms are incorporated, on the one hand, to monitor developments in the market, in particular with regard to risks arising from a high level of public interest. concentration of the market, in particular in specific sectors, and the functioning of the Audit Committees; and on the other hand, in relation to the surveillance of risks that may occur in the rated financial institutions systemic, establishing a sectoral and anonymous dialogue between those who audit these entities and the European Systemic Risk Board.

Therefore, in Directive 2014 /56/EU of 16 April 2014, which is transposed into this Law, aspects relating to the access of auditors and audit firms authorised in Member States to the objectivity of the law are dealt with. and independence, the organisation of auditors, the rules and the audit report, the reports to the Audit Committee and the recruitment and termination of the audit. On the other hand, in Regulation (EU) No 537/2014 of 16 April 2014, rules on fees and independence, the audit report, the communication, conservation and custody obligation, as well as temporary restrictions on the protection of the environment, are laid down in Regulation (EU) No 537/2014. external procurement or rotation and certain obligations of the Audit Committee, such as those relating to the selection process of the auditor. In both texts, mechanisms are incorporated to strengthen the public oversight system in order to ensure the full effectiveness of the new regulatory framework.

In short, the new European Union legislation introduces substantial changes in the existing rules, resulting from the need, in the European Union, to restore the confidence of users in the EU. financial economic information that is audited, in particular that of public interest entities and to strengthen the quality of audits, strengthening their independence.

III

The structure of the new law should be explained on the basis of, on the one hand, and on the public interest auditors, their integration with Regulation (EU) No 537/2014 of 16 April 2014, and on the other hand, the need to transpose Directive 2014 /56/EU. Both the Directive and the Regulation of the European Union mentioned above constitute the fundamental legal regime which should govern the audit of accounts at the level of the European Union.

The Law regulates the general aspects of the access regime to the exercise of the audit activity, the requirements to be followed in its exercise, ranging from objectivity and independence to the issuance of the report, the rules governing the organisation of auditors and the conduct of their work, as well as the control and sanctioning arrangements in order to ensure the full effectiveness of the rules. Regulation (EU) No 537/2014 of the European Parliament and of the Council of 16 April 2014 lays down the requirements to be followed by auditors of public interest entities, without prejudice to the application of those requirements to those who are (a) it provides a general rule for auditors and for the law to deal with those matters in respect of which the abovementioned Regulation gives Member States various options. In the light of this duality of schemes, this Law devotes a title to the audit of accounts in general, and another to the auditors of accounts of public interest entities.

Thus, this Law is structured in a preliminary title and five titles, in which eighty-nine articles are contained, ten additional provisions, three transitional provisions, a derogation provision and fourteen final provisions.

The preliminary title includes the general provisions of the legal regime for which the audit of accounts activity is to be governed, collecting its scope and the system of legal sources that integrates its rules This will also apply to those who audit entities of public interest. These auditors are also subject to the arrangements laid down in Regulation (EU) No 537/2014 of 16 April 2014. This legal regime underlies the role of public interest to which the exercise of the audit of accounts is conducted.

As far as the auditing standards are concerned, the international auditing standards that are adopted by the European Union Commission are still maintained. In this respect, it is established that existing and new emission audit standards may be able to impose additional requirements on those covered by international audit standards adopted by the Union. European, according to Directive 2014 /56/EU of the European Parliament and of the Council of 16 April 2014.

Also, and following the provisions of the Directive that is transposed, definitions are given for the effects of this Law, among which are those of small and medium-sized entities, in so far as, as has been highlighted, incorporate specific mentions by reason of size and following the parameters contained in Directive 2013 /34/EC of the European Parliament and of the Council of 26 June 2013 on annual financial statements, financial statements consolidated and other related reports of certain types of companies. It should be noted that these parameters do not match, for the purposes of this Law, with those defined as those that determine that an audit is mandatory.

Title I, dedicated to auditing accounts, regulates the essential aspects of the audit activity of accounts in accordance with the Directive that is transposed, although it should be noted that the audit that is regulated does not imply a guarantee of the future viability of the audited entity or of the efficiency or effectiveness with which the audited entity has led or is to conduct its business. This title is divided into three chapters. Chapter I sets out the audit arrangements for accounts and the new content of the audit report, which incorporates certain additional content in accordance with the powers granted to the Member States. At the same time, its scope is extended in respect of the management report which is issued. Similarly, the scheme to be applied in the case of audit of consolidated accounts is regulated, which is amended to incorporate certain details in relation to the assessment and review work of the group auditor.

Chapter II regulates the system of access to the exercise of audit activity, as well as the Official Register of Auditors, the public content of which is amended to incorporate the European mandate for the publication of the audit. sanctions. In accordance with this rule, it is also possible for an audit firm authorised in another Member State to be able to carry out its activity in Spain, provided that the person who signs the report is authorised in Spain.

On the other hand, and without prejudice to the provisions of the European Union legislation, certain aspects of the system of compulsory registration, in the Official Register, of those auditors and auditors are amended. audit firms issuing audit reports in relation to the annual or consolidated accounts of certain companies domiciled outside the European Union whose securities are admitted to trading in Spain, following compliance with the requirements equivalent to those required by the auditors of national accounts.

In any case, as far as the authorisation regime is concerned, given that the public relevance requires the former to comply with a set of requirements and conditions, the mere presentation of Previous responsible or communications statements do not by itself allow the start of this activity. For the same reason, the request that is made in order to exercise the audit activity of accounts cannot be understood by silence.

Chapter III, which regulates the various aspects that should govern the exercise of the auditing activity, contains five sections, divided into twenty articles. In Section 1, the European Union's mandate, the obligation of professional scepticism and the application of the professional judgment, which must preside over the implementation of any audit work since its planning, are incorporated into it. until the report is issued.

In Section 2, the independence regime is established that all auditors and audit firms are subject to, including auditors from those who audit public interest entities, according to the referrals contained in Chapter IV and the matters dealt with in Regulation (EU) No 537/2014 of 16 April 2014. The regime contained in the rule which is now repealed and which was set up as a mixed system is maintained, on the one hand, on the basis of a general principle of independence, which requires all auditors to refrain from acting when they are its objectivity in relation to financial economic information to be audited and, on the other hand, in the enumeration of a set of specific circumstances, situations or relationships in which it is considered that, in the case of the auditors do not enjoy independence in respect of a given entity, the only one being solution or safeguard the non-performance of the audit job.

This regime is part of the regulation contained in Directive 2014 /56/EU, which continues to collect, as with the previous Directive, as general principles to be ensured by the Member States, that of being independent, that of to participate in the decision-making process and to evaluate threats to independence and, where appropriate, apply safeguards to mitigate those threats (self-review, advocacy, self-interest, familiarity, or trust or intimidation) that may be to commit independence and, if necessary, to refrain from carrying out the audit. It also continues to oblige each Member State to ensure that an auditor does not carry out an audit in relation to an audited entity where there are financial, commercial, labour or other relationships of such importance as compromise the independence of the auditor. The new Community wording continues to force the auditor to consider the network environment in which it operates for the purpose of observing its independence.

However, the new Directive to transpose incorporates more restrictive requirements, not previously mentioned, such as the obligation for Member States to ensure that any person, not only the auditor, who is may influence the outcome of the audit to refrain from participating in the institution's decision-making process; the auditor or audit firm shall take steps to avoid conflicts of interest or commercial or other relationship class, direct or indirect, actual or potential, which may compromise the independence; whereas the auditors or audit firms, their staff or those who provide services in the exercise of the audit activity, and certain relatives, have no direct significant interest or carry out certain operations with instruments financial instruments of the audited entity; that those persons are not involved in the audit if they have financial instruments of the audited entity or have any commercial or financial interest or relationship with the audited entity. Finally, it takes into account certain requirements in relation to gifts, oversold situations affecting the audited entity and subsequent prohibitions, and with the minimum period during which the obligation of independence is to be observed. For all this, and consequently with the stated aim of strengthening independence, the regime contained in the new Directive goes beyond a principled approach.

To the extent that the regime incorporated in the Recast Text of the Audit of Accounts Act, which is repealed, was in the previous wording of the Directive, it is more than justified to maintain the same mixed system, given the The fact that independence is a fundamental pillar in which the trust placed in the audit report resides, and that the new Directive is more restrictive than the previous one.

Therefore, on the basis of such a mixed regime, the new requirements with the minimum character of Directive 2014 /56/EU of 16 April are incorporated, strengthening the system of incompatibilities or prohibitions. In 2014, certain issues are amended to prevent the regime applicable to auditors of general accounts from being more restrictive than those required by Regulation (EU) No 537/2014 of 16 April 2014, so as to be introduced certain adjustments in the period of calculation to which certain incompatibilities extend. This does not mean that the auditor's independence cannot be compromised by threats arising from commercial, labor, family or other interests or relationships, existing prior to the established period of computation.

Thus, the obligation to establish the safeguard systems to deal with threats that could arise from conflicts of interest or some commercial, labor, family or other relationship is legally incorporated. In any event, any situation or relationship which could lead to a possible participation in the audited entity, relationship to the audited entity, or its management, should be avoided, defining what is meant by the entity, so that it can be concluded that the independence is compromised, as laid down in the Directive. As the Recommendation of the European Union of 16 May 2002 on the independence of auditors in the European Union points out: fundamental principles, there are two substantial elements of the independence requirement, real and appearance, so that the auditors must be and appear to be independent. This being an unobservable mental attitude the international norms and practice delimit the situations or services that are configured as presumptions iuris et de iure, generators of incompatibility with the realization of the audit.

Also, certain situations or services that generate incompatibility to perform the audit are modified, incorporating those related to operations carried out with the financial instruments, the holding of interest significant and the acceptance of gifts of significant value. Similarly, the period of temporary calculation of certain situations of incompatibility to the previous year to which the audited financial statements relate, reducing it to one year for the vast majority, which coincide with the services which are prohibited for auditors of public interest entities. At the same time, the actions to be performed by the auditors in oversold situations where a financial interest is acquired or the audited entity is affected by a combination of business. Adjustments are also made to incompatibilities resulting from circumstances or situations in which family members are involved.

The Directive that is transposed provides that the existence of relationships, situations or services may affect the duty of independence not only between the audited entity and the auditor or audit firm, but also between the network to which the auditor or audit firm belongs. The extension rules distinguish between the audit network and the non-audit network, which is due to the need for more exceptions when the causes of incompatibility in the non-audit network are present, given their theoretical distance. The meaning of the rules of extension is that if the persons or entities within that scope incur any of the alleged incompatibility contemplated in this Law and other legal provisions, they will also do incompatible with the auditor or audit firm in relation to the respective entity, while taking into account the particularities set out in the Law. In this area of subjective extension, it is also included, among others, to those who are linked by certain kinship relationships, such as parents, children and siblings and their spouses, since in these cases there are or may be the same threats to independence as may be the case for the auditor's spouse, excluding the extent of such an extension and reducing the circle of relatives for certain assumptions.

Moreover, and also in accordance with the Directive, the period governing the prohibitions imposed after the completion of the audit work and to which the auditor is subject is reduced to one year for the purpose of to prevent, in the objective performance of the audit work, situations likely to pose a risk or threat to the independence by the existence, during such performance, of future commitments or expectations, may compromise the objectivity of the auditor in carrying out the audit. Only the two-year prohibition period for the case of auditors of public interest entities is maintained.

Changes incorporated in such situations or services do not in any way mean that, where the modified or deleted situations or other situations or services provided during previous periods are present, no they constitute or cannot constitute threats to independence, and the auditor must therefore establish in this respect the appropriate system of safeguards for their assessment and, where appropriate, elimination. Similarly, it does not mean that the auditor can perform the audit work in the event that these circumstances persist and are of such importance or entity that they compromise their independence in relation to the audited entity. As hitherto, the same must be understood in the case of situations other than those defined as grounds for incompatibility which, by their nature and moment of performance, may pose a threat to them, despite the Established safeguards, the independence of the auditor.

Section 3 regulates the civil liability of auditors in the exercise of the audit activity and the security to be provided, without any amendment being incorporated.

Section 4. incorporates, on the one hand, the principles and policies to which the internal organisation of the auditor and the audit firm must be adjusted, which must be geared towards preventing any threat to independence and must ensure the quality, integrity and critical and rigorous nature of the audits. On the other hand, the minimum standards to be adjusted for the organisation of the auditor's work are regulated.

In section 5, the maintenance and custody duties are provided, and the documentation of each audit and other documentation generated and required in accordance with this Law is kept secret. exceptions in favour of certain international authorities in the terms provided for therein.

Chapter IV, divided into four sections, contains the most stringent requirements for auditors of public interest entities, in addition to that set out in Title I which is not contradictory or excepted by as set out in Section 1 of this Chapter, and in accordance with the general reference to the Directive as set out in Article 1.2 of Regulation (EU) No 537/2014 of 16 April 2014. For reasons of legal certainty and normative uniformity, the references corresponding to the articles of the said Regulation are contained, and certain aspects not dealt with in the same or the options provided for in this case are necessary. of the Member States. Section 2. regulates the reports to be issued by these auditors in order to increase the confidence of users of the audited financial economic information and their responsibility for the audit carried out. In the first place, an audit report should be issued, the content of which is much wider than that provided for in general, and information on independence and its ability to detect is required in the European Union Regulation. irregularities, including those due to fraud. Secondly, these auditors should publish the annual transparency report, in respect of which the European Union Regulation incorporates certain financial information on its revenue and breakdown, the criterion of which is determined by the Law, and those of the audit network. In addition, it is required that it be published separately from the network to which it may belong in order to achieve greater transparency and avoid any confusion, without prejudice to the content which may be further developed by means of a resolution. of the Accounting and Audit Institute of Accounts.

Section 3, concerning the independence regime, includes in the first place, in addition to the corresponding references to the articles of Regulation (EU) No 537/2014 of 16 April 2014, the reference to the provisions of the Section 1 and 2. of Chapter III of Title I, given that Article 6 of that Regulation lays down the obligation to comply with the provisions of Article 22b of the Directive, which is required to be incorporated in those sections; and which oblige, inter alia, to comply with the provisions laid down in relation to the independence regime, as well as the obligation to assess the existence of threats that jeopardise its independence and to apply the safeguard measures to be applied. In accordance with the options granted to the Member States, and in accordance with Article 22 of the Directive, the period of calculation to which the prohibitions should be extended is extended and detailed services are also prohibited. when they are carried out by the next family members. Secondly, it takes account of the exercise of the options conferred on the Member States in relation to the maximum duration of the auditors ' recruitment and the rules for the limitation of fees for a concentration in respect of an institution of interest public, incorporated in Regulation (EU) No 537/2014 of 16 April 2014. For the duration, the maximum duration is not chosen, given that it is understood that excessive prolonged relationships generate a threat of familiarity with such an entity that independence is understood to be compromised. In relation to the rules for the limitation of fees for financial dependence, it is appropriate to impose the most restrictive requirement to prohibit the carrying out of audit in the following year, as a percentage of This is a threat of self-interest and even intimidation that cannot be mitigated. With regard to the various options exercised in respect of the rules of fees, prohibited services and external rotation, it is chosen to exercise certain more restrictive options, which are consistent with the establishment of a greater legal certainty, certain situations that prevent auditing of accounts. In relation to the limitations of fees, it is required that the auditor further considers the network in which it operates in order to prevent its compliance from being circumvented. In this way, it is intended to ensure a consistent and uniform application of the rules of independence, a fundamental pillar in which the trust placed in the audit report rests.

Finally, section 4. incorporates the specificities that apply to these auditors in relation to the rules of internal organization, the organization of work and the transfer of files and Article 45 authorizes determine the requirements to be met by those who audit entities of public interest, which is justified by the need to ensure the adequate provision of means and capacities to audit entities whose information has a complex dimension and undoubted economic impact on the markets.

Title II regulates the public oversight system and comprises four chapters. Chapter I determines the scope of public oversight, the full responsibility of which is the Accounting and Audit Institute of Accounts, the responsible authority on auditing of accounts, defining this area by the functions that are attributed and the subjects to which it reaches. Those required by the new legislation are currently being incorporated into the new rules, which refer to the monitoring of the evolution of the audit market. This is achieved by achieving the objectives of the European Union legislation, which is required by a competent authority specialised in financial economic information, as well as in the regulatory framework governing audit activity and in its monitoring, the same time as the absence of any conflict of interest is ensured, so that supervision is solely aimed at improving the quality of the audits and ensures that there is no fractionation in the regulatory and supervisory market of the audit. This follows the practice of almost all the Member States in practice. However, the allocation to the National Securities Market Commission of the supervisory authority in relation to the functions attributed to the Audit Committees for the accounts of the public interest entities is without prejudice to the powers conferred on the Institute of Accounts and Audit of Accounts, as the only competent and ultimate responsible authority for the public oversight system, according to the new Article 32.4 a of the Directive.

As is the result of European Union legislation, and in order to perform its functions properly, effectively, efficiently and with integrity, the Accounting and Audit Institute must comply with the following: premises: to be independent, so that they do not participate in their decision-making bodies or in decision-making who exercise the audit of accounts; be transparent in terms of work programmes and activity reports; have the appropriate and sufficient capacity, technical knowledge and resources and have a adequate and secure funding, free from undue influence by auditors and audit firms. In particular, the new rules of the European Union require that the competent authority be given the powers necessary to carry out its tasks, including the ability to take measures to ensure compliance with the requirements. new provisions, the ability to access data, obtain information and carry out inspections or other checks which it deems appropriate, for which it may contract professional services or be assisted by experts, Article 55 the existing power to agree with third parties, under certain conditions conditions, tasks related to the inspections of auditors that are not in the public interest, including the representative accounts of auditors. Also, the authorization to the Accounting and Audit Institute of Accounts is maintained in order to develop the criteria to be followed in relation to the execution of the quality control. Chapter II is dedicated to the Accounting and Audit Institute of Accounts, the national supervisory authority to which the audit of accounts powers are attributed, in accordance with the rules of the European Union cited.

It is important to highlight two aspects. On the one hand, the special prevalence and interest required by the audit work of the public interest entities, which justifies greater specialization, attention and dedication by the supervisor, and requires the appropriate efficient and efficient management and use of the available means for their due compliance. On the other hand, the special obligation, which the Institute of Accounting and Audit of Accounts already had, to ensure the duty of independence, which confers on it, as the case-law has recognized, the specific and qualified function to rule on the observance of that duty in the concrete development of the activity of audit for its condition of third objective, neutral and informed, to the par that technical, that it must prevail against any criterion that could come of the audited entity itself or of other entities. The functions attributed to the Audit Committee are set up as a kind of preventive safeguard which does not exempt the auditor from the accounts of the duty of independence, nor does it condition or exclude the powers of the Audit Committee. This is the case for the Accounting and Audit Institute of Accounts.

In addition, the scope and purpose of the audit activity of the audit of accounts and its two modalities, which continue to be maintained but which are referred to as follows, are more detailed. terminology of the law of the European Union and which rules in international practice, on the one hand, inspections-ex-control of external quality-of a regular or periodic nature and of which the formulation of recommendations can be derived requirements, for which the risk analysis is incorporated as a guiding criterion; and investigations-in which the current technical control is given-in order to detect and correct the improper execution of a particular audit or activity of the auditor. These control actions continue to be involved in the nature of previous information actions, as referred to in Article 69.2 of Law 30/1992 of 26 November of the Legal Regime of Public Administrations and of the Procedure. Common Administrative.

The proper control of audit activity also requires the establishment of appropriate mechanisms for the exchange of information with other public bodies or institutions, in particular the Bank of Spain, the Commission National Securities Market and the General Directorate of Insurance and Pension Funds.

Finally, Chapters III and IV regulate the international aspects resulting from the new European Union legislation. The public oversight system should understand the appropriate mechanisms for effective cooperation at European level between the supervisory activities of the Member States, as a factor contributing to ensuring high quality and homogeneous audit in the European Union. Such cooperation is based on the principle of regulation and supervision in the Member State of origin in which the auditor or audit firm is authorised and where the audited entity has its registered office. In the case of cross-border services within the European Union, the inspections shall be carried out by the authority of the home Member State, in which the auditor or company is authorised, and the investigations to the authority of the State a member in which the audited entity has its registered office, as specified in Chapter II. It extends the duty of collaboration with the Member States of the European Union to the European supervisory authorities.

In accordance with Regulation (EU) No 537/2014 of 16 April 2014, cooperation between the competent authorities of the Member States is to be organised within the framework of the Commission of European Audit Bodies, in which the Accounting and Audit Institute of Accounts is integrated as the authority responsible for public oversight in the audit of accounts, and for which its active participation is envisaged, at the same time as the exchange of a certain amount of information.

European cooperation mechanisms are envisaged by the possibility of transmitting information to the European Central Bank, the European System of Central Banks and the European Systemic Risk Board, and to the creation of supervisors in which information may be exchanged, in particular in relation to the activities of auditors operating within the framework of a network.

The need for effective cooperation with the authorities of third countries is also maintained, given the complexity of cross-border group audits and the increasingly internationalized economic environment. time to incorporate certain details to which the transmission to the third party of the information referred to or sent as a result of this cooperation should be subject to.

In order to strengthen compliance with the obligations incorporated in this Law as a result of the transposition of Directive 2014 /56/EU and the implementation of Regulation (EU) No 537/2014 of 16 April 2014, introduce certain amendments to the system of infringements and penalties, contained in Title III. These changes mainly affect the inclusion of new types of offenders as a result of the new obligations imposed, as well as the European mandate that the sanctions be effective and dissuasive. In addition, some amendments have been made to the classification of the offending, minor, but necessary types to bring them into line with the above principles. The rules for the advertising of penalties and complaints are also amended to comply with the mandates contained in the Directive. With regard to the complaint, without binding effect in order for the opening of a sanctioning procedure, its treatment is subject, through the efficient and efficient management and use of the available means, to the due respect of the powers of audit of the audit activity, which are legally attributed to the Institute of Accounts and Audit of Accounts, in order to achieve the ultimate objective of the overall improvement and as a whole in the quality of the audit work, (i) projecting these actions on all those who are legally entitled to exercise the audit activity and, in particular, those who audit entities of public interest due to the increased relevance to third parties.

Title IV is dedicated to the rates of the Accounting and Audit Institute of Accounts for the control and supervision of the audit of accounts, for the issuance of certificates or documents at the request of a party and for the entries and entries in the Official Register of Auditors. The taxable fact of the fee for the control and supervision of the audit of accounts is the provision by the ICAC of a service which affects the auditors or audit firms and which is evidenced, among other actions, through the conduct of the Official Audit Office of Accounts, normative tasks, inspections and investigations or the disciplinary regime of auditors or audit firms. The cost of control and supervision activity is higher in audits of public interest entities, given the higher requirements that the law now approved requires the auditors or audit firms to carry out them. Finally, Title V contains the regulation corresponding to the protection of personal data.

In short, with the regulation that is incorporated, the exercise of the control actions entrusted to the Accounting and Audit Institute of Accounts has to be able to achieve the overall improvement and overall in the quality of the the audit work, so that a high level of confidence in the users of the economic information is achieved and conflicts of interest in the conduct of the audits are avoided. This is intended to strengthen sufficient guarantees that the annual accounts or any other accounting document that has been verified by a third party will be accepted with full confidence by the person trying to obtain information through of them, precisely because they have been issued by whom, having adequate capacity and training, is independent.

IV

Finally, the Law is accompanied by ten additional provisions, some of which are maintained with the same content as in the legal text that is repealed, such as those referred to the mandatory audit and the auditors of the public sector. Other provisions are the subject of modification, as is the case and as has been stated, in relation to the cooperation mechanisms, or are incorporated ex novo, as is the case with those relating to the monitoring and evolution of the market, the audit firms, electronic communications and the maximum duration of contracts.

Highlights the novelty incorporated by the third additional provision, in which the requirement of an Audit Commission for public interest entities is regulated, in accordance with the requirements, exceptions, waivers, compositions and functions contained in Directive 2014 /56/EU of 16 April 2014 and incorporating its content into the Articulated Text of the Capital Companies Act, approved by Royal Decree-Law 1/2010 of 2 July 2010.

The three transitional provisions incorporate those already contained in Law 12/2010 of June 30, as well as those concerning duties or requirements that are considered new with this Law to establish a period of time. a transitional period to facilitate the application of new duties or requirements. This is the case for those referred to audit firms and for situations of incompatibility.

The final provisions regulate certain regulatory changes, mainly in order to comply with European Union legislation, with reference to the audit committees, and certain amendments are included. Ratings, highlighting the modification that leaves the definition of entities of public interest without vigor for reason of size contained in the Regulation that develops the Recast Text of the Law of Audit of Accounts, approved by the Royal Decree 1517/2011 of 31 October.

PRELIMINARY TITLE

Application scope, object, legal regime, and definitions

Article 1. Scope and object scope.

1. The purpose of this Law is to regulate the auditing of accounts, both compulsory and voluntary, by establishing the conditions and requirements for the necessary observance for the financial year, as well as the regulation of the public oversight system and mechanisms for international cooperation in relation to such activity.

2. Audit of accounts shall mean the activity consisting in the revision and verification of the annual accounts, as well as other financial statements or accounting documents, drawn up in accordance with the regulatory framework for financial information it is applicable, provided that such activity has the purpose of issuing a report on the reliability of such documents which may have effects vis-à-vis third parties.

3. The audit of accounts shall necessarily have to be carried out by an auditor or an audit firm, by issuing the relevant report and subject to the requirements and formalities set out in this Act.

4. The provisions of this Law do not apply to audits of accounts carried out by the State, regional or local public sector bodies in the exercise of their powers, which shall be governed by their specific legislation in accordance with the provisions in the second provision second.

Article 2. Regulatory rules for auditing of accounts.

1. The audit of accounts shall be carried out subject to this Law, to its Implementing Regulation, as well as to the rules of audit, ethics and independence and internal quality control of the auditors and companies of the audit.

Audit of accounts of public interest entities shall apply to them as set out in Regulation (EU) No 537/2014 of the European Parliament and of the Council of 16 April 2014 on the specific requirements for the statutory audit of entities of public interest, and as set out in Chapter IV of Title I of this Law.

2. The audit standards are the principles and requirements to be observed by auditors in the conduct of the audit work of accounts and on which the necessary actions to express a technical opinion should be based responsible and independent. Auditing standards are considered to be contained in this Law, in its Implementing Regulation, in the international audit standards adopted by the European Union and in the technical auditing standards.

For these purposes, international auditing standards, international standards of quality control, and other international standards issued by the International Federation of International Standards of Auditing, shall be understood by international auditing standards. Accountants through the International Standards Board on Audit and Assurance, provided they are relevant to the audit activity of regulated accounts in this Act.

The technical rules for auditing shall aim at the regulation of aspects not covered by the international audit standards adopted by the European Union.

3. Standards of ethics include at least the principles of professional competence, due diligence, integrity and objectivity, without prejudice to the provisions of Sections 1 and 2 of Chapter III

Title I.

4. The technical standards for auditing, standards of ethics and internal quality control standards of auditors and audit firms shall be drawn up, adapted or reviewed in accordance with the general principles and practice commonly used. accepted in the Member States of the European Union as well as with the international auditing standards adopted by the European Union, by public law corporations representing those who carry out the audit of accounts, prior to public information within two months and shall be valid from its date of publication, by means of a resolution of the Accounting and Audit Institute, in its "Official Gazette".

In the event that the representative public law corporations referred to in the preceding paragraph, upon request of the Accounting and Audit Institute of Accounts, did not elaborate, adapt or revise any of the technical standards for auditing, standards of ethics and standards of internal quality control, in the form set out above, this Institute shall carry out its elaboration, adaptation or review, informing the aforementioned corporations of representative public law and also complying with the public information requirement within two months.

5. Only additional requirements or procedures may be imposed on those laid down in international audit standards adopted by the European Union where such additional requirements or procedures are derived from requirements required by law. national reference to the scope of auditing of accounts or are necessary to increase the credibility and quality of audited financial statements.

These additional requirements will be communicated by the Accounting and Audit Institute to the European Commission, at least three months before its entry into force or, in the case of requirements already in place at the time the adoption of an international standard of audit, within a period not exceeding three months from the date of adoption of the international standard of audit.

Such additional requirements shall be established by means of a resolution of the Accounting and Audit Institute in which the relevant paragraphs of the pre-existing audit rules are declared in force. the adoption by the European Union of international auditing standards on the same subject, or by the publication of new audit standards limited to those additional requirements. The Resolution must be published in its "Official Gazette", after the public information is processed within two months.

Article 3. Definitions.

For the purposes of this Act, the following definitions apply:

1. Financial reporting framework: the set of rules, principles and criteria set out in:

(a) European Union legislation on consolidated accounts, in the cases provided for in their application.

b) The Trade Code and the remaining commercial law.

c) The General Accounting Plan and its sectoral adaptations.

d) The binding rules that the Accounting and Audit Institute of the General Accounting Plan and its complementary rules approve.

e) The rest of the Spanish accounting regulations that are applicable.

2. Mandatory audit: audit of the annual accounts or consolidated accounts, which is required by European Union law or national law.

3. Auditor of accounts: a natural person authorised to carry out audits of accounts by the Institute of Accounts and Audit of Accounts, as provided for in Article 8.1, or by the competent authorities of a Member State of the Union European or a third country.

4. Audit firm: legal person, irrespective of the corporate corporate form adopted, authorised to carry out audits of accounts by the Accounting and Audit Institute, in accordance with the provisions of Article 8.1; or by the competent authorities of a Member State of the European Union or of a third country.

5. They will have the consideration of public interest entities:

(a) Securities issuing entities admitted to trading on official secondary securities markets, credit institutions and insurance institutions subject to the supervisory and control regime attributed to the Bank of Spain, the National Securities Market Commission and the Directorate-General for Insurance and Pension Funds, and the autonomic bodies with responsibility for the management and supervision of insurance institutions, respectively, as well as the securities issuing institutions admitted to trading on the stock market belonging to the expanding enterprise segment.

(b) Entities that are determined to be regulated in the light of their significant public importance by the nature of their activity, by their size or by their number of employees.

(c) groups of companies in which the dominant company is an entity referred to in points (a) and (b) above.

6. Responsible Auditor Principal:

a) Account Auditor to sign the audit report for individual accounts or on behalf of an audit firm.

(b) In the case of audit firms, the auditor or auditors appointed in their case by the audit firm as the principal responsible for carrying out the audit of accounts on behalf of that company.

(c) In the case of audits of consolidated accounts or other financial statements or consolidated accounting documents, the auditor or auditors of accounts appointed as the auditor or chief auditors responsible for perform auditing on entities that are significant in the consolidable set.

7. Member State of origin: the Member State of the European Union which has authorised the auditor or audit firm to carry out the audit of accounts in that State in accordance with the provisions of its national rules in the context of Article 3 (1) of Directive 2006 /43/EC of the European Parliament and of the Council of 17 May 2006 on the statutory audit of the annual accounts and consolidated accounts, as amended by the Directive 2014 /56/EU of the European Parliament and of the Council of 16 April 2014.

8. Host Member State: the Member State of the European Union, other than the Member State of origin, in which an auditor or an audit firm authorised by its home Member State to carry out the audit of accounts, obtain the relevant authorisation to carry out the activity in that State, in accordance with its national rules as a result of the transposition of Articles 3a and 14 respectively of Directive 2006 /43/EC.

9. Small entities: entities that during two consecutive years meet, at the closing date of each of them, at least two of the following circumstances:

(a) that the total of the assets of the asset does not exceed EUR 4 million.

b) That the total amount of its annual turnover does not exceed EUR 8 million.

c) That the average number of employees employed during the financial year is not more than fifty.

Entities will lose this consideration if they fail to gather, for two consecutive exercises, two of the circumstances referred to in this paragraph.

In the first social exercise since its constitution, transformation or merger, institutions shall have such consideration if they meet, at the close of such financial year, at least two of the three circumstances expressed in this paragraph.

10. Medium-sized entities: institutions which, without the consideration of small entities, for two consecutive financial years meet, at the closing date of each of them, at least two of the following circumstances:

(a) that the total of the assets of the asset does not exceed EUR 20 million.

b) That the total amount of its annual turnover does not exceed 40 million euros.

(c) The average number of employees employed during the financial year is not more than two hundred and fifty.

Entities will lose this consideration if they fail to gather, for two consecutive exercises, two of the circumstances referred to in this paragraph.

In the first social exercise since its constitution, transformation or merger, institutions shall have such consideration if they meet, at the close of such financial year, at least two of the three circumstances expressed in this paragraph.

11. Commission team: staff of the auditor or audit firm involved in carrying out an audit work of specific accounts, including those who, whether or not they are members, are employees or any person whose services are available or under the control of the auditor or audit firm.

12. Family of the chief auditor responsible: the spouses of the auditors or persons with whom they maintain similar affectivity relationships, and those with whom the auditor has links of consanguinity in the first direct or second degree collateral grade, as well as the spouses of those with whom they have the cited consanguinity links.

13. Family members with close ties of the person affected by the cause of incompatibility: the spouses or those who maintain a similar relationship of affectivity, who have links of consanguinity in the first descending grade and who, with independence of the degree, have links of consanguinity and live in your home for a minimum period of one year.

14. Network: the structure to which an auditor or an audit firm belongs, having as its object the cooperation, as well as, clearly aiming at sharing benefits or costs, or sharing common ownership, control or management, policies and common quality control procedures, a common business strategy, the use of a common commercial name, or a significant portion of their professional resources.

In any event, entities linked to the auditor or audit firm shall be understood to be part of the same network in the terms referred to in the following paragraph.

15. Entities linked to the audited entity: entities that are directly or indirectly linked by the existence of a control relationship in the terms referred to in the following paragraph, by the existence of the same unit the audited entity and the other entities are controlled by any means by one or more natural or legal persons acting jointly or under the sole direction of statutory agreements or clauses, or by means of the significant influence on the terms provided for in Article 47 of the Code of Trade.

16. Entities with a control relationship with the audited entity: entities directly or indirectly linked to the audited entity by the existence of a control relationship as referred to in Article 42 of the Trade Code.

TITLE I

From Audit of Accounts

CHAPTER I

Of account auditing modes

Article 4. Audit of annual accounts and other financial statements or accounting documents.

The two audit modes of accounts that are included in the scope of this Act are:

1. The audit of the annual accounts, which shall consist of verifying those accounts for the purposes of ruling if they express the true image of the assets, the financial situation and the results of the audited entity, in accordance with the regulatory framework of financial information that is applicable.

It shall also include the verification of the management report which, where appropriate, accompanies the annual accounts, in order to give an opinion on their agreement with those annual accounts and whether their content is in accordance with the provisions of the application rules.

2. The audit of other financial statements or accounting documents, which shall consist of verifying and ruling whether those financial statements or accounting documents express the true image or have been prepared in accordance with the regulatory framework of financial information expressly established for its preparation.

What is established in this Law on the work and audit reports of the annual accounts will be applicable, with the corresponding adaptation, to the work and audit reports of other financial statements or documents accounting.

Article 5. Annual Accounts Audit Report.

1. The audit report of the annual accounts is a business document which shall include at least the following content:

(a) Identification of the audited entity, of the annual accounts that are the subject of the audit, of the regulatory framework for financial information that was applied in its preparation, of the natural or legal persons who commissioned the audit work and, where appropriate, the persons to whom it is intended; and the reference to which the annual accounts have been drawn up by the administrative body of the audited entity.

(b) A general description of the extent of the audit carried out, with reference to the audit standards in accordance with which the audit has been carried out and, where appropriate, the procedures provided for in them which have not been possible apply as a result of any limitation on the conduct of the audit. It shall also be reported on the responsibility of the auditor or audit firm to express an opinion on those accounts as a whole.

c) Explanation that the audit has been scheduled and executed in order to obtain reasonable assurance that the annual accounts are free of material improprieties, including those arising from fraud.

The risks considered most significant to the existence of material malcorrections, including those due to fraud, shall also be described, a summary of the auditor's responses to those risks and, where appropriate, the risks. essential observations derived from those risks.

(d) a statement that no services other than the audit of the annual accounts have been provided or that there are situations or circumstances that have affected the necessary independence of the auditor or audit firm; (a) the rules of procedure laid down in Sections 1 and 2 of Chapter III

Title I.

e) A technical opinion in which it will be clearly and precisely stated whether the annual accounts offer the true image of the assets, the financial situation and the results of the audited entity, according to the framework (a) a regulatory framework for financial information that is applicable and, in particular, with the accounting principles and criteria contained therein.

The opinion may take four modalities: favorable, with caveats, unfavorable or denied.

When there are no caveats, the opinion will be favorable.

In the event that such caveats exist, all of them must be reflected in the report and the technical opinion will be with caveats, unfavorable or denied.

Also, any significant uncertainties or material related to facts or conditions that may raise significant doubts about the ability of the audited entity to continue as such will be indicated. business.

There will also be reference to the issues that, not constituting a caveat, the auditor of accounts should or should consider necessary to emphasize in order to emphasize them.

(f) An opinion on the agreement or not of the management report with the accounts for the same financial year, in the event that the management report accompanies the annual accounts. An opinion shall also be included as to whether the content and presentation of such a management report is in accordance with the rules applicable to it and shall, where appropriate, indicate the material incorrections which have been made. detected in this respect.

g) Date and signature of who or who would have done it. The date of the audit report shall be the date on which the auditor and the audit firm have completed the audit procedures necessary to form an opinion on the annual accounts.

2. The audit report shall be issued by the auditor or the audit firm in such a way as to enable it to fulfil the purpose for which the audit of accounts was contracted. The failure to issue the audit report or the waiver to continue the audit contract can only be caused by the existence of a fair cause. In any case, it is considered that there is a fair cause in those cases where one of the following circumstances is present:

(a) Existence of threats that compromise the independence or objectivity of the auditor or audit firm, in accordance with the provisions of Sections 1 and 2 of Chapter III of Title I and, where applicable, in the Section 3 of Chapter IV of Title I.

(b) Absolute impossibility of carrying out the work entrusted to the auditor or audit firm for circumstances not attributable to them.

In the above cases, in the case of compulsory audits, the registered office of the audited company, as well as the Accounting Institute, must be informed in a reasoned manner. Audit of Accounts, of the circumstances determining the lack of issuance of the report or the waiver to continue with the audit contract, in the form and time limits to be determined regulatively.

3. The annual accounts audit report will be issued under the responsibility of who or who would have done so, and must be signed by them.

4. The annual accounts audit report shall be accompanied by all the documents that make up the audit accounts and, where appropriate, the management report. The publication of these documents, together with the audit report, shall be governed by the provisions of the applicable regulatory framework for financial information.

5. In no case shall the annual accounts audit report be published in part or in part or separately from the audited annual accounts.

When the report is public, it may be mentioned in its existence, in which case it must be referred to the type of opinion issued.

6. The audit report shall be drawn up in clear and unambiguous language. In no case shall the name of any public body or institution with inspection or control powers be used in such a way as to indicate or suggest that such authority supports or approves the audit report.

Article 6. Duty of request and provision of information.

Audited entities will be required to provide information that is necessary to carry out the audit work of accounts; also, who or those who perform such work will be required to require You need information for the issue of the Audit of Accounts report.

Article 7. Audit of consolidated accounts.

1. This Act shall apply to the audit of consolidated annual accounts, or other consolidated financial statements or accounting documents.

2. The auditor who carries out the audit of the consolidated annual accounts, or other financial statements or consolidated accounting documents, assumes full responsibility for the audit report issued, even if the audit of the accounts the annual accounts of the participating companies has been carried out by other auditors.

3. Those who issue the opinion on the consolidated annual accounts, or on other consolidated financial statements or accounting documents, shall be required to obtain the necessary information, if any, to those who have carried out the audit of accounts. of entities that are part of the consolidable set, which shall be required to supply as much information as requested.

4. The auditor who carries out the audit of the consolidated annual accounts, or other financial statements or consolidated accounting documents, shall carry out an evaluation and review of the audit work carried out by other auditors or audit firms, including those of the European Union and third countries, in relation to audits of entities that are part of the consolidated set.

The assessment shall be documented in the work papers of the auditor of the consolidated accounts, including the nature, timing and scope of the work performed by the other auditors or audit firms, as well as, in their case, the review carried out by the auditor of the consolidated accounts of relevant parts of the audit documentation of the said auditors for the purposes of the audit of the consolidated annual accounts.

Also, the auditor who carries out the audit of the consolidated annual accounts, or other financial statements or consolidated accounting documents, will review the audit work done by the other auditors to effects of the audit of consolidated annual accounts, and should document such review.

For these purposes, and in order for the auditor of the consolidated accounts to be able to rely on the work carried out by the other auditors or audit firms, it will be necessary to enter into a prior agreement with them in order to transmit the entire documentation necessary for the performance of the audit of the consolidated accounts.

The documentation for the audit work of the consolidated accounts, which shall be kept by the auditor or audit firm of those accounts, shall allow for the review and control of the work carried out by part of the Accounting and Audit Institute of Accounts in an appropriate manner.

5. Where the auditor of the consolidated accounts cannot review the audit work carried out by other auditors or audit firms, including those of the European Union and third countries, in relation to the accounts of institutions it shall take appropriate measures and inform the Accounting and Audit Institute of such circumstances and their causes within the time limits and form to be determined in accordance with the rules. The measures to be taken shall include the carrying out of the audit procedures necessary for the audit of the consolidated accounts, either directly or in collaboration with other auditors, as appropriate, on the accounts of those auditors. entities.

6. Where the consolidated accounts auditor is the subject of an inspection or investigation in connection with an audit work of consolidated accounts by the Accounting and Audit Institute of Accounts, if required to do so, it shall make available to the person who carries out such control or investigation all information in his possession relating to the audit work carried out by other auditors or audit firms, including those of the European Union and of third countries, in relation to the accounts of institutions included in the consolidated accounts, for purposes the audit of the consolidated accounts, including the work papers corresponding to the work carried out by the other auditors.

7. Where an entity that is part of the consolidated set is audited by auditors or audit firms of third countries with which there is no exchange of information agreement on the basis of reciprocity, the auditor who carries out the audit of the consolidated annual accounts, or other financial statements or consolidated accounting documents, shall be responsible for applying the procedures which are determined to facilitate the Accounting and Audit Institute of Accounts can have access to the documentation of the work the audit carried out by the auditors or audit firms of the third country, including the work papers relevant to the audit of the group, and may in this effect retain a copy of that documentation or agree to written with these auditors or audit firms an adequate and unlimited access for the group auditor to refer to the Accounting and Audit Institute of Accounts, when required. If there are legal or other impediments preventing the transmission of the audit work papers from a third country to the auditor of the group, the documentation retained by this auditor shall include proof that he has applied the appropriate procedures for obtaining access to the documentation relating to the audit and, in the case of impediments other than legal ones arising from national law, the evidence demonstrating the existence of such impediments.

8. The provisions of this Article shall also apply to the audit firm carrying out the audit of consolidated annual accounts, or other consolidated financial statements or accounting documents, as well as to the auditors of the accounts which the perform on behalf of that company.

9. The provisions of this Article shall not apply to audits carried out by the public authorities for the control of the financial and financial management of the public sector on the annual accounts or other consolidated financial statements in which the dominant company is a business public entity or another entity governed by public law and the dominated companies may be a commercial company. This type of audit shall be governed by public sector specific legislation.

CHAPTER II

Requirements for the exercise of auditing accounts

Article 8. Official Register of Auditors of Accounts.

1. The audit of accounts may be carried out by natural or legal persons who, together with the conditions referred to in Articles 9 to 11, are entered in the Official Register of Auditors of the Accounting Institute and Audit of Accounts, and provide the financial guarantee referred to in Article 27.

2. The Official Register of Auditors shall be public and its information shall be accessible by electronic means.

3. In the case of auditors, it shall contain the following information:

a) Name, address, record number, and situation in which they are enrolled.

(b) In the case of being registered as an exercise, the professional address, website address, and registration number of the company or audit firms with which it is related shall be indicated.

(c) All other entries as auditor of accounts with the competent authorities of other Member States and as auditor in third countries, with indication, of the competent authorities for the registration, and where appropriate, the registration numbers.

(d) The penalties imposed as a result of the exercise of the audit of accounts, in accordance with the provisions of Article 82.

4. In the case of audit firms, it shall contain the following information:

(a) Name, registered office, legal form, address of each office in which you perform your activity, registration number and address of website.

(b) The name, address and registration number of each of the partners, with the indication of who or who perform the administrative or management functions.

(c) Name, address and registration number of the auditors at the service of the audit firm, with the identification of those who are expressly designated to carry out audits and to sign reports audit on behalf of the company and the period of validity of that designation.

(d) If the company is linked to the entities referred to in Articles 19 or 20, it shall provide information on the names and addresses of such entities, or indication of where such entities may be publicly obtained. information.

(e) All other entries as an audit firm with the competent authorities of other Member States and third countries, indicating the competent authority for the registration and, where appropriate, the number of record.

(f) Where appropriate, if the audit firm is registered under Article 11.4, an indication of the Member State of origin in which it was authorised.

(g) The penalties imposed as a result of the exercise of the audit of accounts, in accordance with the provisions of Article 82.

5. In the case of auditors, as well as companies and other audit entities of third countries, they must be included separately, and in any event they must be identified as those referred to in Article 10.3 and Article 11 (5), with the indication that they are not authorised for the exercise of the audit of accounts in Spain.

6. The registration in the Official Register of Auditors shall not entitle to the exercise of other activities other than those provided for in Article 1, which shall require the conditions of qualification and tuition required by the applicable legislation. in each case.

7. The auditors of accounts entered in the Official Register of Auditors, with the exception of those referred to in Article 10.3, shall follow courses and carry out continuing training activities, which may be given in the form and conditions to be laid down in regulation, by the representative corporations of the auditors, the authorised teaching entities or other entities.

Article 9. Authorisation and registration in the Official Register of Auditors.

1. To be registered in the Official Register of Auditors of Accounts it will be required:

a) Being older.

(b) To have Spanish nationality or that of any of the Member States of the European Union, without prejudice to the provisions of the law on the right of establishment.

c) Causing criminal records for intentional crimes.

d) Having obtained the corresponding authorization from the Accounting and Audit Institute of Accounts.

2. The authorisation referred to in point (d) of paragraph 1 above shall be granted to those who meet the following conditions:

a) Haber obtained a university degree of official character and validity throughout the national territory.

This requirement will not be required for those who, in compliance with the rest of the requirements set out in this section, have completed the studies or obtained the qualifications they have for the university entrance and acquired the training. a practice referred to in point (b) of this paragraph, for a period of at least eight years, in work carried out in the financial and accounting field, in particular on the control of annual accounts, consolidated accounts and similar financial statements; of which at least five years have been carried out with an auditor or a company of audit, and in the exercise of this activity in any Member State of the European Union.

For the purposes of calculating the period of practical training acquired prior to the entry into force of Law 19/1988 of 12 July of the Audit of Accounts, the certification of such practical training will be for those who, in At that time, they were members of the Institute of Sworn Auditors of Accounts, of the Register of Auditors of Auditors belonging to the General Council of Colleges of Economists of Spain and of the General Register of Auditors belonging to the Higher Council of Official Colleges of Spain's Commercial Holders.

b) Haber followed programs of theoretical teaching and acquired a practical training.

The theoretical teaching programmes shall cover the subjects referred to in point (c) of this paragraph.

Practical training should be extended for a minimum period of three years in work carried out in the financial and accounting fields, and shall relate in particular to annual accounts, consolidated accounts or similar financial statements. At least two years of such practical training shall be carried out with an auditor or an audit firm, and in the exercise of this activity in any Member State of the European Union.

c) Having passed a professional fitness test organized and recognized by the State.

The examination of professional competence, which will be aimed at the rigorous testing of the training of the candidate for the audit of accounts, will have to deal with the following subjects: financial information; financial analysis; analytical cost accounting and management accounting; risk management and internal control; audit of accounts and access rules; rules applicable to auditing of accounts and to audit auditors and audit firms; international auditing standards; and standards of ethics and independence. The examination shall also cover, to the extent required for the exercise of the audit of accounts, the following matters: company law, other entities and governance; insolvency, fiscal, civil and legal rights The European Commission, the European Economic and Social Committee, the Committee of the European Economic and Social Committee, the Committee of the European Economic and Social Committee and the Committee of the European Economic and Social Committee companies.

Those who hold a university degree of official character and validity throughout the national territory, of those regulated in the Organic Law 6/2001, of 21 December, of Universities, will be dispensed in the examination of aptitude professional of those subjects which have been completed in the studies required to obtain these qualifications.

3. The aptitude test shall be carried out by means of the single convocation system, on a joint proposal from the representative body of auditors, and subsidiary by the Accounting and Audit Institute of Accounts, after approval. by the latter of the respective convocation, to be published by order of the Minister of Economy and Competitiveness.

Regulations shall be established for the approval of the content of the programmes, the periodicity, the composition of the court, in which at least one member of each of the corporations shall be recorded. representative of auditors and the period of practical training.

4. Public employees, whose training and performance functions are related to the audit of public sector accounts, or who examine or assess the financial situation and the financial situation, may be registered in the Official Register of Auditors. assets and the performance of financial institutions or insurers, and which have been selected as public employees by opposition or by other established evidence for the purpose of establishing theoretical training and aptitude necessary for the exercise of such functions, when they meet the requirements for registration in the Official Register of Auditors of Accounts set out in this Article.

The requirement for the follow up of theoretical teaching programmes and the requirement for overcoming the examination of professional competence, as laid down in points (b) and (c) of paragraph 2, shall be understood as overcoming the opposition or the selective testing of access to public employment referred to in the preceding paragraph.

The requirement of practical training laid down in point (b) of paragraph 2 shall also be deemed to be fulfilled, by the effective performance of work relating to the audit of annual accounts, consolidated accounts or similar financial statements of the Public Sector, financial institutions or insurers for a minimum period of three years, duly certified.

5. The submission of a responsible statement or prior notice shall not allow the exercise of the audit of accounts. The request for access to the Official Register of Auditors and, therefore, the authorisation for the exercise of the audit of accounts shall not be deemed to be an administrative silence.

Article 10. Auditors authorised in other Member States of the European Union and in third countries.

1. The auditors of accounts authorised to carry out the audit of accounts in other Member States of the European Union may be registered in the Official Register of Auditors of Accounts in the terms which they regulate determine.

To obtain the authorization of the Accounting and Audit Institute of Accounts, they must pass an aptitude test on the Spanish legislation applicable to the audit whose knowledge has not been accredited in the State member in which the auditor of accounts is authorized.

2. Auditors of accounts authorised to carry out the audit of accounts in third countries, subject to reciprocity, which meet requirements equivalent to those of the Member States, may be entered in the Official Register of Auditors. required in points (a), (b) and (c) of Article 9.2, as well as with the continuing training obligation referred to in Article 8.7.

In order to obtain the authorization of the Accounting and Audit Institute, they must at least prove that the requirements laid down in Article 9.1 (a) and (c) are met. equivalent to that referred to in the preceding paragraph, in terms which are regulated by law, and have permanent domicile or establishment in Spain or appoint a representative with registered office in Spain.

3. Without prejudice to the provisions of European Union legislation, the auditors of accounts authorised to carry out the audit of accounts in third countries shall be registered in the Official Register of Auditors of Accounts. issuing audit reports on annual accounts or consolidated annual accounts of an institution incorporated outside the European Union and whose securities are admitted to trading on an official secondary market in Spain, except where the institution audited issues exclusively bonds, bonds or other negotiable debt securities that comply with any of the following conditions:

(a) That they have been admitted to trading on an official secondary market in Spain before 31 December 2010 and whose nominal value per unit is at least EUR 50 000 at the date of issue.

(b) that have been admitted to trading on an official secondary market in Spain after 31 December 2010 and whose nominal value per unit is at least EUR 100,000 at the date of issue.

This exception shall not apply where the entity issues securities which are comparable to shares in companies or which, if they are converted or if the rights they confer are exercised, entitle them to acquire shares or securities comparable to actions.

The account auditors referred to in this paragraph must meet the following conditions:

1. Comply with the requirements equivalent to those required by Articles 9.1 (a) and (c) and 9.2 (a) and (b).

2. To designate a representative with registered office in Spain.

3. To carry out the audit reports referred to in this paragraph in accordance with the international audit standards adopted by the European Union and in accordance with Sections 1 and 2 of Chapter III of Title I or, where appropriate, in accordance with the rules and requirements declared equivalent by the European Union.

4. The annual transparency report referred to in Article 37, or a report that meets the equivalent reporting requirements, shall be published on its website.

The registration in the Official Register of Auditors of these auditors does not entitle them to the exercise of the audit activity of accounts in relation to entities domiciled in Spain.

Without prejudice to the provisions of the European Union legislation, audit reports issued by these auditors from third country accounts not registered in the Official Register of Auditors of Accounts shall not be effective. legal in Spain.

Article 11. Audit firms.

1. Commercial companies which comply with the following requirements may be entered in the Official Register of Auditors of Accounts as audit firms:

(a) That the natural persons who perform the work and sign the audit reports on behalf of an audit firm are authorised to carry out the audit of accounts in Spain.

(b) Most of the voting rights correspond to auditors or audit firms authorised to carry out the audit of accounts in any Member State of the European Union.

(c) a majority of the members of the administrative body are auditors or audit firms authorised to carry out the audit of accounts in any Member State of the Union; European.

In case the administrative organ has no more than two members, at least one member must meet the conditions set out in this paragraph.

2. The provisions of Article 9.5 shall apply to audit firms. Also, Law 2/2007, of March 15, of professional societies will be applicable to the audit companies of accounts as soon as it does not contravene this Law.

3. The management and signature of the audit work carried out by an audit firm shall, in any case, correspond to one or more auditors who may carry out the audit activity in Spain and who are appointed by the audit firm. audit firm as the main auditors responsible for carrying out the audit, as well as for signing the report on behalf of that company.

4. Audit firms authorised in another Member State of the European Union, which intend to carry out the audit in Spain, may be registered in the Official Register of Audit Auditors, provided that the main auditor responsible or the main auditors responsible for carrying out the audit are registered in the Official Register of Auditors. Authorisation in another Member State may be required by the accreditation of a certificate issued by the relevant competent authority within three months of the application.

The registration of these companies shall be communicated to the competent authorities of the Member States of origin. The withdrawal of authorisation from companies registered in the Official Register of Auditors, where they are also registered in another Member State, shall be communicated to the host Member State, with an indication of the cause of the withdrawal.

5. In any event, companies and other audit entities authorised to carry out the audit of third country accounts issuing audit reports shall be registered in the Official Register of Auditors of Accounts. the annual accounts referred to in Article 10.3. In such cases, those who sign the reports on behalf of the entity shall be required to comply with the requirements set out in that Article.

To be registered in the Official Register of Auditors, these companies and other audit entities shall comply with the following conditions:

(a) that the auditor who signs the audit report on behalf of the audit report and the majority of the members of his/her management body comply with the requirements equivalent to those required in points (a) and (c) of the Article 9.1 and in points (a) and (b) of Article 9.2.

(b) The audit reports referred to in this paragraph shall be carried out in accordance with the international audit standards adopted by the European Union and in accordance with Sections 1 and 2 of Chapter III of the Title I, or where appropriate, in accordance with the rules and requirements declared equivalent by the European Union.

c) To appoint a representative with registered office in Spain.

(d) The annual transparency report referred to in Article 37, or a report that meets the equivalent reporting requirements, is published on its website.

The audit reports issued by the companies and other audit entities referred to in this paragraph shall not have legal effect in Spain, without prejudice to the provisions of the Union legislation. European.

The registration in the Official Register of Auditors of Accounts of these companies and other audit entities does not entitle them to the exercise of the audit activity in relation to entities domiciled in Spain.

Companies and other audit entities referred to in this paragraph shall be discharged from the Official Register of Auditors when they fail to comply with any of the requirements set out in this paragraph, by voluntary waiver. or by sanction.

Article 12. Low in the Official Register of Auditors.

1. The auditors shall cause temporary or final discharge, as the case may be, in the Official Register of Auditors, in the following cases:

(a) For non-compliance with any of the requirements set out in Articles 9 and 10. Such non-compliance shall be communicated by the auditors to the Accounting and Audit Institute of Accounts.

b) By voluntary resignation.

c) By penalty.

2. In addition to the same assumptions as set out in the previous paragraph, audit firms shall, as the case may be, cause a temporary or permanent discharge in the Official Register of Auditors, where they do not comply with any of the requirements. in Article 11 (1), as well as for the failure to maintain the financial guarantee provided for in Article 27.

Audit companies shall report to the Accounting and Audit Institute the non-compliance with the requirements set out in Article 11 for registration in the Official Register of Auditors.

Such non-compliance shall result in the absence of such non-compliance when it is maintained for a period of more than three months. Exceptionally, at the request of the audit firm, the Accounting and Audit Institute may extend the previous period for a period of up to three months when sufficient circumstances are established that the justify.

However, before the three months of extension elapse, the Accounting and Audit Institute of Accounts may make requirements for the underhealing or fulfilment of the requirements required in this article in a determined time, which if not addressed, may result in the discharge in the Official Register of Auditors.

CHAPTER III

Exercise Account Audit Activity

Section 1. Professional Skepticism and Trial

Article 13. Professional skepticism and judgment.

1. In carrying out any audit work of accounts, the auditor shall act with scepticism and apply his professional judgment in the terms set out in this section and the rest of the regulatory rules for the business of auditing of accounts.

2. Professional scepticism means the attitude which always involves keeping an inquisitive and special mind alert to any circumstance which may indicate a possible correction in the audited annual accounts due to error or fraud; and review the audit findings in a critical manner.

This attitude means recognizing the possibility of material improprieties in the annual accounts subject to audit, including fraud or errors, whatever the previous experience of the auditor of accounts in relation to with the honesty and integrity of the managers and managers of the audited entity.

In particular, the auditor or audit firm shall maintain an attitude of professional scepticism:

(a) When they review the estimates of the entity's management relative to fair value, impairment of assets and provisions and future cash flows that determine the entity's ability to continue as business.

b) When they perform the critical assessment of the evidence of audit obtained, which implies questioning the evidence of contradictory audit, the adequacy and adequacy of the evidence obtained, and the reliability and integrity of documents, responses and other information from the audited entity.

3. Professional judgement means the competent, appropriate and consistent application of the circumstances of the audit, the practical training, the knowledge and the experience of the auditor in accordance with the auditing standards, ethics and the regulatory framework for financial information that are applicable to decision-making in the conduct of an audit work of accounts.

The application of professional judgment should be properly documented. The mere referral to the professional judgment shall not be admissible as a justification for decisions which otherwise are not supported by the facts or circumstances at work, by the evidence of audit obtained or which are not in conformity with the as set out in the rules referred to in the preceding paragraph.

Section 2. Independence

Article 14. General principle of independence.

1. Auditors and audit firms shall be independent, in the exercise of their function, of the audited entities and shall refrain from acting when their independence in relation to the review and verification of the accounts annual, financial statements or other accounting documents are compromised.

2. Auditors and audit firms, as well as any person in a position to directly or indirectly influence the outcome of the audit, shall refrain from participating in any way in the management or decision-making of the audit firm. the audited entity. Communications made during the conduct of the audit work which are necessary for the performance of the regulatory regulation of the activity of the audited entity shall not be considered to be involved in the management or decision-making of the audited entity. audit of accounts or the derivatives of actions required by other provisions of legal status.

3. In any event, auditors and audit firms shall refrain from carrying out the audit of an institution's accounts in those cases where they incur any cause of incompatibility as provided for in Articles 16 to 20 or of the situations referred to in Articles 23, 25, 39 and 41.

4. In particular, they may not participate or influence, in any way on the outcome of an entity's audit of accounts, those persons who have an employment, commercial or other relationship with the audited entity, which may generate a conflict of interest or being perceived, generally, as causing a conflict of interest.

5. The Accounting and Audit Institute of Accounts is the body responsible for ensuring proper compliance with the duty of independence, as well as for assessing in each specific work the possible lack of independence of an auditor or audit firm.

Article 15. Identification of threats and adoption of safeguard measures.

1. For the purposes of this section, auditors and audit firms shall establish the procedures necessary to identify and identify threats to their independence, to assess them and, where appropriate, to identify and identify threats to their independence. significant, to implement appropriate and sufficient safeguard measures to eliminate or reduce them to an acceptably low level that does not compromise their independence.

2. Threats to independence may come from factors such as self-review, self-interest, advocacy, familiarity or trust, or intimidation, arising from the existence of conflicts of interest or any commercial, financial, or other work, family or other, whether direct or indirect, actual or potential.

If the importance of these factors in relation to the safeguard measures applied is such that it compromises their independence, the auditor or the audit firm shall refrain from carrying out the audit.

3. The procedures for the detection and identification of threats and the safeguard measures shall be appropriate to the audit activity dimension of the auditor or audit firm and shall be subject to regular review and shall be applied. individually, where appropriate, for each audit work, and should be documented in the work papers of each audit of accounts.

4. The situations and threats referred to in the preceding paragraphs may also be generated when they are in the persons or entities referred to in Articles 18, 19 and 20.

Article 16. Causes of incompatibility.

1. In any event, the auditor or the audit firm shall be deemed not to have sufficient independence in the performance of his duties in respect of an undertaking or entity, in addition to the incompatibility assumptions provided for in other laws, where one of the following circumstances is present in the auditor, the audit firm or the main auditors responsible for the audit work:

a) Circumstances arising from personal situations:

1. Having the status as a member of the administrative, managerial or proxy body that has a general power of the audited entity in its favor or to fill employment positions in the audited entity. This shall also be the case for the person responsible for the financial economic area and for the person who performs supervisory or internal control functions in the audited entity, whatever the link they have with that entity.

2. º Having significant direct interest in the audited entity arising out of a contract or the ownership of a property or the ownership of a right. In any event, it shall be understood that there is such an interest in the assumption of financial instruments of the audited entity or of an entity linked to it where, in the latter case, they are significant to either party.

For the purposes of this number, interest that is indirectly held through diversified collective investment institutions is excepted.

3. Do any type of operation related to financial instruments issued, guaranteed or otherwise backed by the audited entity.

For the purposes of this number, financial instruments that are indirectly held through diversified collective investment institutions are excepted.

4. º Request or accept gifts or favors from the audited entity, unless its value is insignificant or inconsequential.

b) Circumstances arising from services provided:

1. The provision to the audited entity of accounting or preparation services of accounting records or financial statements.

2. º The benefit to the audited entity of valuation services, unless the following requirements are met:

i. They do not have a direct effect or have an effect of minor relative importance, separately or in aggregate, in the audited financial statements;

ii. That the estimate of the effect in the audited financial statements is thoroughly documented in the work papers for the audit work.

3. The provision of internal audit services to the audited entity, unless the management body of the audited entity is responsible for the overall internal control system, for the determination of the scope, risk and frequency of the internal audit procedures, the consideration and execution of the results and recommendations provided by the internal audit.

4. The provision of legal services at the same time for the audited entity, unless such services are provided by different legal persons and with different management boards, and without the possibility of referring to the (a) resolution of disputes on matters likely to have a significant impact, measured in terms of relative importance, in the financial statements for the audited period or period.

5. The provision to the audited entity of design and implementation services of internal control procedures or risk management related to the development or control of financial information, or design or application of the financial information systems used to generate the data in the financial statements of the audited entity, unless the latter assumes responsibility for the overall internal control system or the service is provided in accordance with the specifications established by that entity, which it must assume also the responsibility for the design, execution, evaluation and operation of the system.

2. For the purposes of this Article, the statements to the financial statements shall be construed as being made to the other documents referred to in Article 1.2, where they are the subject of an audit.

Article 17. Subjective extensions to linked entities or to a control relationship with the audited entity.

1. The auditor or the audit firm shall be deemed not to have sufficient independence in the performance of his duties when the circumstances of incompatibility are present in the entities related to the audited entity. personal data referred to in Article 16.1.a).

2. The provision of the services provided for in Article 16.1.b) shall only determine the incompatibility of the auditor or the audit firm when they are provided to other entities with which the audited entity has a control relationship.

Article 18. Incompatibilities arising from situations involving the family of the main auditors responsible.

1. The auditor or the audit firm shall be deemed not to have sufficient independence in the performance of their duties in respect of an audited entity, when they are in the family of the auditor or the main auditors. responsible for the audit work referred to in points (a) and (b) of Article 3.6, the circumstances referred to in Article 16.

This forecast will also apply where the circumstances of incompatibility arising from personal or service situations are assessed respectively in relation to entities linked to or controlled by the audited entity referred to in the previous article.

2. For the purposes of the above paragraph, the circumstances of incompatibility shall be assessed taking into account the following particularities:

(a) With regard to those arising from the condition held or placed in accordance with Article 16.1.a) .1.:

1. º In any case, if the family member has the status as a member of the board of the audited entity, its dominant entity or an entity in respect of which the audited entity exercises control or influence significant.

2. If employment positions, these will have to affect the development of meaningful information, measured in terms of relative importance, containing the financial statements or other accounting documents of the institution. audited.

3. In other cases, there shall be incompatibility when they occur in the audited entity, in its dominant entity or in an entity in respect of which the audited entity exercises significant control or influence in terms of of relative importance, for the audited entity.

(b) In respect of those resulting from the possession of financial instruments as provided for in Article 16.1.a) .2.:

1. When family members with close links of the auditor or responsible auditors hold financial instruments of the audited entity. If the instruments are of a related entity, they shall be significant.

2. Where other family members have financial instruments that are significant to the audited entity, to its parent entity or to a related entity in respect of which the audited entity exercises control or influence significant, in terms of relative importance, for the audited entity.

In the event that the spouses of these family members hold financial instruments of an entity linked to those referred to in the preceding paragraph, there shall be incompatibility where, as provided for in regulation, they are very significant.

(c) With regard to the carrying out of transactions related to financial instruments provided for in Article 16.1.a) .3.:

1. When family members with close links of the auditor or responsible auditors conduct transactions with the financial instruments issued, guaranteed or otherwise backed by the institution audited, of its dominant entity or of a related entity in respect of which the audited entity exercises significant control or influence and is significant, in terms of relative importance, for the audited entity.

2. Where other family members perform transactions with financial instruments issued, guaranteed or otherwise backed by the audited entity, and the volume of transactions is significant or, if treat the spouses of these relatives, very significant.

d) In the light of the circumstances of incompatibility relating to the provision of services provided for in Article 16.1 (b), there shall be an expression of incompatibility in the event of occurrence in the audited entity, in its a dominant entity or an entity in respect of which the audited entity exercises control and is significant, in terms of relative importance, for the audited entity.

Article 19. Incompatibilities arising from situations involving persons or entities directly related to the auditor or audit firm.

1. The auditor or the audit firm shall be deemed not to have sufficient independence in the performance of his duties in respect of an audited entity, where the circumstances provided for in Article 16 or in other laws are met. on the following persons or entities:

(a) Persons, other than the main auditors responsible, are auditors or not, and are or are not members of the audit or audit firm's organisation, which participate or have the capacity to influence the outcome final audit of accounts, or responsibility for supervision or management in carrying out the audit work and can directly influence its assessment and final outcome.

(b) Persons, other than those referred to in the preceding subparagraph, who are part of the order team, are already employed or already provide services to the auditor or audit firm.

(c) the audit firm's partners, as well as auditors or audit firms with which they have any direct or indirect links, which are not included in the preceding letters. For the purposes of considering the existence of direct or indirect linkage with auditors or audit firms, the provisions set out in Article 3.15 shall apply in relation to entities linked to the audited entity, as well as the existence of common partners.

(d) Persons, other than those referred to in the preceding letters, who are employed or whose services are at the disposal or under the control of the auditor or audit firm and who are directly involved in the audit audit activities.

This forecast shall also apply when they are present in the persons or entities referred to in this paragraph the circumstances of incompatibility arising from personal situations or services provided respectively in relationship with entities linked to or controlled by the audited entity referred to in Article 17.

2. For the purposes of the above paragraph, the circumstances of incompatibility shall be assessed taking into account the following particularities:

(a) With regard to those arising from the condition held or placed in accordance with the provisions of Article 16.1.a) .1.:

1. When the persons referred to in paragraph 1 (d) are present, there shall be incompatibility if it concerns the audited entity, its dominant entity or a related entity in respect of which the audited entity exercises significant control or influence, in terms of relative importance, significant for the audited entity. In any event, there shall be an incompatibility situation where they have the status of members of the administrative body.

2. In the case of family members with close links to the persons referred to in paragraph 1, there shall be no incompatibility only if they are administrators or persons responsible for the economic and financial area of the audited entity. a dominant entity or a related entity in respect of which the audited entity exercises significant control or influence and is, in terms of relative importance, significant for the audited entity.

However, in the case of family members with close links to the persons referred to in points (c) and (d) of paragraph 1, there shall be no incompatibility only where, for the purposes of the structure and size of the company audit, there may be a relationship with possible effects or influence on the outcome of the audit work.

(b) In respect of those resulting from the possession of financial instruments as provided for in Article 16.1.a) .2.

1. Where the persons referred to in points (c) and (d) of paragraph 1 and their family members with close links have significant financial instruments of the audited entity, their parent institution or an institution related to which the audited entity exercises significant control or influence and that entity is significant, in terms of relative importance, for the audited entity.

2. When they are in the family with close links of the persons referred to in points (a) and (b) of paragraph 1.

(c) With regard to the carrying out of transactions related to financial instruments provided for in Article 16.1.a)

.

1. Where family members with close links to the persons referred to in points (a) and (b) of paragraph 1 perform transactions with financial instruments issued, guaranteed or backed in any other form by the audited entity, by its parent entity or by a related entity in respect of which the audited entity exercises significant control or influence and is significant, in terms of relative importance, for the audited entity.

2. Where family members with close links to the persons referred to in points (c) and (d) of paragraph 1 perform transactions with financial instruments issued, guaranteed or backed in any other form by the audited entity, and the volume of transactions is significant.

(d) Regarding those resulting from requesting or accepting gifts or favors from the audited entity as provided for in Article 16.1.a. 4. º, when they are present in the family with close links of the persons to whom refer to points (a) and (b) of paragraph 1

e) In relation to the circumstances of incompatibility relating to the provision of services provided for in Article 16.1.b):

1. Where the persons referred to in point (d) of paragraph 1 are present, there shall be incompatibility in the case of the occurrence of the audited entity, its dominant entity or an entity in respect of which the audited entity exercises control and is significant, in terms of relative importance, for the audited entity.

2. Where family members with close links of the persons referred to in paragraph 1 provide accounting or preparation services for the accounting records or financial statements to the audited entity or to an institution in respect of which the audited entity exercises control and is significant, in terms of relative importance, for the audited entity.

However, in the case of family members of the persons referred to in points (c) and (d) of paragraph 1, there shall be incompatibility only where, by reason of the structure and size of the audit firm, there may be relationship to possible effects or influence on the outcome of the audit work.

Article 20. Incompatibilities arising from situations that are present in other persons or entities belonging to the auditor's network or the audit firm.

1. The auditor or the audit firm shall be deemed not to have sufficient independence in the performance of his duties in respect of an audited entity, where the circumstances referred to in Article 16 or in other laws are in the case of persons or entities, excluding the persons or entities referred to in the previous Article, with which the responsible primary auditors referred to in points (a) and (b) of Article 3.6 or the company are formed by the same network; auditing on whose name the audit is performed.

For the purposes of this paragraph, persons in the network of the auditor or audit firm who may give rise to an incompatibility situation shall, in general, be limited to those who have the status of a partner, administrator, secretary of the administrative or proxy body with a general mandate in an entity belonging to that network.

This forecast will also apply when the circumstances of incompatibility arising from personal situations or services provided respectively in relation to entities linked to or controlled by the entity are present. audited as referred to in Article 17, provided that the audited entity exercises significant control or influence and those are, in terms of relative importance, significant for the audited entity.

2. For the purposes of the above paragraph, the circumstances of incompatibility shall be assessed taking into account the following particularities:

(a) With regard to those arising from the condition held or placed in accordance with Article 16.1.a) .1.:

1. º If the persons or entities referred to in paragraph 1 exercise direct or employment positions, they shall have an impact on the development of meaningful information, measured in terms of relative importance, contained in the financial statements or other accounting documents of the audited entity.

2. In the event that family members with close ties were administrators or responsible for the economic-financial area of the audited entity, when, for the purposes of the structure and size of the audit firm, it could exist relationship with possible effects or influence on the outcome of the audit work.

(b) In respect of those resulting from the possession of financial instruments as provided for in Article 16.1.a) .2, there shall be incompatibility where the persons or entities referred to in paragraph 1 have instruments significant financial assets of the audited entity, its dominant entity or an entity in respect of which the audited entity exercises significant control or influence, provided that, by reason of the structure and the joint dimension of the company of the audit and of the entities belonging to the network, there may be relationship with possible effects or influence on the outcome of the audit work.

(c) The cause of incompatibility relating to the application or acceptance of gifts provided for in Article 16.1.a) shall not

.

(d) In respect of the services provided for in Article 16.1.b), there shall be incompatibility if family members with close links to the persons referred to in paragraph 1 provide accounting or the preparation of the accounting records or financial statements to the audited entity, provided that, for the purposes of the structure and size of the audit firm, there may be a relationship with possible effects or influence on the outcome of the audit audit.

Article 21. Period of validity of incompatibilities.

1. There shall be a situation of incompatibility arising from the provision of services where such services are provided in the period from the beginning of the financial year to which the annual accounts, financial statements or other financial statements correspond. audited accounting documents, up to the date on which the auditor or audit firm completes the audit work.

In the case of incompatibilities arising from personal situations, they shall be understood to exist when they occur in the period from the beginning of the first year preceding the financial year to which the accounts correspond. annual, financial statements or other audited accounting documents, up to the date on which the auditor or audit firm completes the audit work.

Without prejudice to the foregoing, in the case of incompatibilities arising from Article 16.1.a) .2., the situation of incompatibility prior to the acceptance of the appointment as auditor shall be resolved. accounts.

2. Where the possession of financial instruments referred to in Article 16.1 (a) .2. occurs in a way that occurs after acceptance of the order, the auditor or audit firm shall proceed to the to liquidate, undo or eliminate such financial interest within one month of the fact that it became aware of such a circumstance. If the above mentioned interest cannot be resolved by circumstances not attributable to the auditor, it may be extended, but the interest must be resolved, in any event, before the audit report is issued. Failure to do so shall refrain from carrying out the audit work and shall carry out the communications referred to in Article 5.2.

When, once an order has been accepted, the audited entity is acquired, merged or acquired by another entity, the auditor or audit firm shall identify and assess the interests, relationships or situations with the entity, in order to determine whether its independence could be compromised. Within the shortest possible time and, in any event, before three months, the auditor shall take the necessary steps to eliminate the relations or interests that have compromised his independence or to reduce the threats to an acceptable level for the it is not compromised.

3. The period of calculation referred to in this Article shall apply in the cases referred to in Articles 17, 18, 19 and 20, with the particularities provided for in those Articles.

Article 22. Recruitment scheme.

1. Auditors and audit firms shall be engaged for a period of time determined initially, which shall not be less than three years and not more than nine years from the date on which the first financial year is initiated, may be contracted for successive maximum periods of up to three years after the end of the initial period.

If, after the end of the initial recruitment period or the extension of the initial recruitment period, the auditor or audit firm or the audited entity has not demonstrated its will to the contrary before the date of approval of the audited annual accounts for the last period contracted or extended, the contract shall be tacitly extended for a period of three years.

2. During the initial period, or the period of extension of the initial contract, the contract cannot be terminated without a fair cause. Differences of opinion on accounting treatments or audit procedures are not a fair cause. In any case, the auditors and the audited entity shall report the termination of the audit contract to the Accounting and Audit Institute.

Shareholders holding more than five percent of the share capital or voting rights of the audited entity or the management body of the audited entity may request the judge of the first instance of the registered office of the entity the revocation of the auditor appointed by the general meeting and the appointment of another, when it is fair cause.

3. Where the audits of accounts are not mandatory, the temporary procurement constraints laid down in paragraph 1 of this Article shall not apply.

4. Contractual or statutory agreements or clauses which may restrict or limit the selection, appointment and recruitment by the competent bodies of the entity of any auditor or auditor shall be void in full. the audit firm entered in the Official Register of Auditors.

Article 23. Bans after the completion of the audit job.

1. Without prejudice to other prohibition scenarios referred to in other laws, during the year following the completion of the relevant audit work of accounts, the main auditors responsible for the audit work and the companies the audit in whose name the audit is carried out may not be a part of the administrative or management bodies of the audited entity or of the entities with which it has a control relationship, no work place, or direct or indirect financial interest in such entities if, in either case, it is significant for either party.

2. The prohibition referred to in the preceding paragraph shall apply to the following

:

(a) Auditors, partners or not, other than the main auditors responsible for the audit work, of the audit firm having responsibility for oversight or management in carrying out the audit work; and can directly influence their assessment and final outcome.

b) Those who are part of the task team for the audit work when they have the status of auditors, only in relation to the audited entity.

c) the audit firm's partners and the auditors appointed to carry out audits on behalf of the audit firm that have not intervened or have the ability to influence the audit work, unless they cease to have any linking or interest with the audit firm before entering into the relevant bodies, taking up work in the audited entity or before having a financial interest and provided that the objectivity cannot be seen committed to the existence of possible reciprocal influences between those partners and the signatory or the audit firm.

3. Failure to comply with the prohibition shall lead to the incompatibility of the auditors and audit firms referred to in this Article for the conduct of the audit work of the audited entity or of the audit firms. companies that are part of the group under the terms of Article 42 of the Code of Commerce, from the moment that the prohibition is violated and in the following two years.

4. This Article shall not apply where the financial interest derives from oversold causes not attributable to the auditor, or is acquired under normal market conditions by the auditor, or by the partner of the auditor. the audit firm or auditor appointed to carry out audits on behalf of the audit firm, provided that, in such situations, it no longer has any link or interest in the audit firm.

Article 24. Fees and transparency in the remuneration of auditors and audit firms.

1. The fees for the audit services shall be fixed, in any case, before the performance of their duties begins and for the entire period in which they are to be performed. Such fees may not be influenced or determined by the provision of additional services to the audited entity. They may not have a contingent character or be based on any kind of condition other than changes in the circumstances which served as the basis for the fixing of the fees. For the exercise of that function, no other remuneration or benefit may be paid by the auditors or audit firms.

For these purposes, contingent fees shall be read in an audit order where the remuneration is calculated in accordance with a pre-established formula based on the results of a transaction or of the transaction itself. audit work. Fees shall not be considered to be a fee established by a judicial decision or by the authorities concerned.

2. Auditors and audit firms shall report to the Accounting and Audit Institute on an annual basis the hours and fees charged to each audited entity, distinguishing those corresponding to audit services from accounts and other services, as well as any other information specified by the Accounting and Audit Institute for the performance of its duties.

Article 25. Causes of abstention from perceived fees.

1. Where the accrued fees arising from the provision of audit services and other than the audit services to the audited entity by the auditor or audit firm, in the last three consecutive financial years, represent more than 30% of the total annual revenue of the auditor or audit firm, the auditor or audit firm shall refrain from carrying out the audit of accounts for the following financial year.

2. The obligation to refrain from carrying out the corresponding audit in the following financial year shall also be required where the accrued fees resulting from the provision of audit services and other than the audit services in the last three consecutive financial years to the audited entity and its related entities, by the auditor or audit firm and those forming part of the network, account for more than 30% of the total annual revenue of the auditor of the audit accounts or company and of the network.

3. The criteria to be taken into account in the case of auditors or audit firms initiating their activity, as well as auditors and small audit firms, shall be determined. In addition, the total revenue to be computed for the purposes of compliance with this limit shall be determined.

Section 3. Responsibility and financial collateral

Article 26. Civil liability.

1. Auditors and audit firms shall be liable for damages resulting from the failure to comply with their obligations under the general rules of the Civil Code, with the particularities set out in this Article.

2. The liability of auditors and audit firms shall be liable in a proportionate and direct manner to the economic damage which they may cause for their professional performance both to the audited entity and to a third.

For these purposes, any natural or legal person, public or private, shall be deemed to be third party, who accredit that he acted or ceased to act taking into account the audit report, being this essential and appropriate element for form your consent, motivate your action or make your decision.

Civil liability shall be enforceable in a personal and individual manner, except for damage or injury caused by the audited entity itself or by third parties.

3. Where the audit of accounts is carried out by an auditor on behalf of an audit firm, the auditor who has signed the audit report and the audit firm shall, within the limits set out in the preceding paragraph, respond jointly and severally. audit firm.

4. The action to require the contractual liability of the auditor and the audit firm shall be prescribed for the four years from the date of the audit report.

Article 27. Financial collateral.

1. Without prejudice to the civil liability provided for in the previous Article, in order to respond to the damage and damage which they may cause in the course of their business, the auditors and audit firms shall be obliged to to provide financial collateral.

2. The financial guarantee may be provided by cash deposit, debt securities, financial institution endorsement or liability insurance or liability insurance, for the amount and in the form established by the Ministry of Economy and Competitiveness. The amount, in any case, shall be proportional to its turnover.

3. In addition to the amount of the financial guarantee for the first year of the activity, the essential elements which are necessary to ensure their sufficiency and validity shall be fixed in addition to the amount of the financial guarantee.

Section 4. Internal Organization and the work of auditors and audit firms

Article 28. Internal organization.

1. Auditors and audit firms shall have reliable administrative and accounting procedures, effective risk assessment procedures, operational mechanisms to ensure the control and protection of their assets, and the protection of their computer systems, as well as internal quality control mechanisms, which ensure compliance with the decisions and procedures within the functional structure of the auditor and at all levels of the company audit.

2. Auditors and audit firms shall establish an internal quality control system which ensures the quality of the audit of accounts in accordance with the rules of internal quality control to which it is established. refers to Article 2.

The ultimate controller of the internal quality control system shall be an auditor of accounts entered in the Official Register of Auditors, which may carry out the audit of accounts in accordance with the requirements of the Article 8.1.

The internal quality control system shall include, inter alia, the following:

(a) Effective organisational and administrative measures to prevent, detect, assess, communicate, reduce and, where appropriate, eliminate any threat to the independence of auditors and audit firms, in accordance with the provisions laid down in Section 2. of Chapter III of Title I.

Such measures shall include, inter alia, policies and procedures to ensure that owners or shareholders, as well as members of the administrative, management and internal supervisory bodies of the companies the audit, or the related companies referred to in Articles 19 and 20, cannot intervene in the conduct of an audit of accounts in any way that could compromise the independence and objectivity of the auditor signer of the audit report.

In the case of auditors, the policies and procedures referred to in the preceding paragraph shall relate to persons and entities related to the auditor of accounts in the terms set out in Articles 19 and 20.

b) Appropriate policies and procedures for the conduct of audit of accounts, relating to ethics and independence, acceptance and continuity of work, human resources, including training of the personnel and the execution of orders, including oversight and review of audit accounts, as well as monitoring.

Those policies and procedures will include, among others, the following:

1. º Policies and procedures for the staff of auditors and audit firms, as well as any other person directly involved in the audit of accounts, to hold the knowledge and experience required for the performance of the functions assigned to them.

2. Remuneration Policies, including as such participation in benefits, that offer sufficient performance incentives to ensure the quality of the audit of accounts. In particular, the revenue which the auditor or the audit firm receives from the provision to the audited entity of services other than the audit of accounts shall not form part of the performance or remuneration assessment. of any person involved in the conduct of the audit work of accounts or who can influence the audit work.

3. Policy and procedures in relation to the organisation of the audit file referred to in Article 29.

4. Policy and procedures to ensure that the outsourcing of audit functions or activities does not undermine the internal quality control of the auditor and audit firms, or the activities of the audit firm supervision referred to in Article 49. Such outsourcing shall not affect the liability of the auditor and audit firms against the audited entity.

5. Policy and procedures to check and analyze the suitability and effectiveness of your internal organization and internal control systems, as well as the measures to be taken to correct any possible deficiencies.

Such procedures shall include, inter alia, the means by which the staff of the auditor and the audit firms may report internally the facts which may be the constituent of infringements of the regulatory regulatory for the audit of accounts activity.

In any case, the auditor and audit firms shall carry out an annual assessment of the internal quality control system. The auditor and the audit firm shall keep records of the findings of that assessment and of the proposed measures, where appropriate, to amend the system under assessment.

3. Auditors and audit firms shall be equipped with appropriate systems, resources and procedures to ensure the continuity and regularity of their audit activities. To this end, they shall establish appropriate organisational and administrative measures to prevent, detect, resolve and record incidents that may have serious consequences for the integrity of their audit activity.

The simplified requirements referred to in the above paragraphs for those who perform exclusively small entity audits will be determined.

4. The auditor and audit firms shall document the systems, policies, procedures, mechanisms and measures referred to in the preceding paragraphs, and shall inform them of their staff, as well as of the persons and entities. referred to in Articles 19 and 20 which are involved or may be involved in the carrying out of the audit of accounts.

5. Auditors and audit firms shall be able to credit the public oversight system with the policies and procedures they have established to achieve effective compliance with the provisions set out in paragraphs 1 and 2. The above are appropriate, and should be proportionate to the magnitude and complexity of their activities, determined according to the size of the entities that are audited.

Article 29. Organization of the job.

1. Auditors and audit firms shall designate in accordance with criteria of quality, independence and competence, at least one responsible auditor, responsible for carrying out the audit of accounts. The responsible primary auditor or the responsible primary auditors shall actively participate in the conduct of the audit of accounts, giving sufficient time to the assigned audit work and shall have the resources available. sufficient, as well as the staff with the competence and capacity to perform their duties properly.

2. An audit file shall be drawn up by the auditors and audit firms for each audit work of accounts, which shall include at least the analysis and evaluation made prior to the acceptance or continuity of the work of the audit firm. audit, including aspects relating to the auditor's duty of independence required in Sections 1 and 2 of Chapter III of Title I, as well as other documentation relating to each work, including the work papers of the auditor who constitute the evidence and support of the conclusions obtained in the performance of each audit work, including those found in the report.

The audit file will be closed within 60 days from the date of the audit report.

3. Auditors and audit firms shall establish and document the following records relating to their audit activity of accounts:

(a) Register of serious or very serious infringements of the regulatory rules of the audit of accounts, as well as of any consequences and of the measures intended to remedy the infringements and to amend the internal quality control system. An annual report shall be drawn up containing a general summary of the measures taken, which shall be disclosed at the appropriate internal level.

b) Registration of queries, containing the requests made and advice received from experts.

c) Registration of audited entities, including the following data in relation to each audited entity:

1. Social Reason, Tax Identification Number, Address and Social Address.

2. ° Identification of the main auditor responsible or of the main responsible auditors and, where appropriate, of the quality control reviewer.

3. The corresponding accrual fees for each financial year in respect of auditing of accounts and for other services provided to the audited entity, broken down for each of these two types of services and per entity.

d) Registration of claims, containing those that have been written and related to the execution of the audit of accounts.

Section 5-Custody and Secret Duties

Article 30. Duty of conservation and custody.

Account auditors and audit firms shall retain and safeguard, within five years, from the date of the audit report, the documentation relating to each audit of accounts by they have been carried out, including the work papers of the auditor who constitute the evidence and the support of the findings contained in the report and other documentation, information, files and records referred to in Articles 28, 29, 42 and 43.

Article 31. Duty of secrecy.

The auditor of the audit report, the audit firm as well as the audit firm's partners, the auditors appointed to carry out audits on behalf of the audit firm and all persons who have been audited. have been involved in carrying out the audit shall be obliged to maintain the secrecy of the information they know in the exercise of their activity, and not be able to make use of it for purposes other than those of the audit itself accounts, without prejudice to the duty of denunciation referred to in Article 262 of the Law of Procedure Criminal.

The invocation of the duty of secrecy governed by this paragraph shall not prevent the application of the provisions of this Law and of Regulation (EU) No 537/2014 of 16 April 2014.

Article 32. Access to the documentation.

Without prejudice to the provisions of the previous article, they may, in any case, access the documentation concerning each audit of accounts, subject to the duty of secrecy:

(a) The Institute of Accounts and Audit of Accounts, both in the exercise of the supervisory function referred to in Chapter I of Title II, and for the purposes of international cooperation provided for in Chapter IV of the Title II.

b) Those who are appointed by judicial resolution.

(c) The Banco de España, the National Securities Market Commission and the Directorate-General for Insurance and Pension Funds, as well as the autonomous bodies responsible for supervision and control of insurance institutions, exclusively for the purposes of the exercise of powers relating to entities subject to their supervision and control, in particularly serious cases, in accordance with Article 38, and provided that they have not been able to obtain such entities the specific documentation they need to access.

Additionally, the National Securities Market Commission may request any information and documents from the auditors of the securities issuing entities admitted to trading on markets. official secondary securities which are accurate for the exercise of the powers conferred.

(d) the bodies which have been assigned by law powers of internal and external control of the economic and financial management of the public sector, in respect of audits carried out on public entities in their respective fields of competence. Such bodies and bodies may require the auditor or audit firm to provide information on a specific case, in relation to the audit of the accounts of the audited entity and with the clarification, where appropriate, of the content of the working papers.

e) The corporations representing the auditors to the exclusive effects of verifying the observance of the internal practices and procedures of their members in the exercise of their audit activity of accounts.

(f) The auditors and audit firms, in addition to the case provided for in Article 7, in the case of replacement of auditor or audit firm of the institution. In this case of substitution, the predecessor auditor or audit firm shall allow access by its successor to all information related to the audited entity and to the most recent audit documentation.

(g) The competent authorities of the Member States of the European Union and of third countries in the terms referred to in Chapter IV of Title II.

h) Those who are authorized by law.

CHAPTER IV

From auditing accounts to public-interest entities

Section 1. Common Provisions

Article 33. Scope of application.

This title applies to auditors and audit firms of accounts carrying out audit work on the annual accounts or financial statements or accounting documents relating to institutions of the European Union. public interest, in accordance with the provisions of Article 1.2, as well as public interest entities in relation to the designation and procurement of auditors.

Article 34. Legal regime.

To auditors and audit firms of accounts carrying out audit work of the annual accounts or financial statements or accounting documents relating to entities of public interest, shall be application of the provisions of Regulation (EU) No 537/2014 of 16 April 2014, as well as the provisions of this Act, in accordance with the particularities set out in this Title.

Section 2. Of Reports

Article 35. Annual Accounts Audit Report.

The audit report of the annual accounts of an entity of public interest shall be drawn up and presented in accordance with the provisions of this Law and Article 10 of Regulation (EU) No 537/2014 of 16 April 2014.

Article 36. Additional reporting for the Audit Commission on public interest entities.

1. Auditors or audit firms of public interest entities shall draw up and submit an additional report to the audit of the annual accounts in accordance with Article 11 of Regulation (EU) No 537/2014. of 16 April. In the case of an audit of consolidated annual accounts, the group auditor shall draw up this additional report to be delivered to the dominant company.

2. Where requested by the national supervisory authorities of public interest entities, the additional report for the Audit Board shall be provided to them without delay by the auditors or audit firms.

Article 37. Annual transparency report.

1. Auditors and audit firms carrying out the audit of accounts of public interest entities shall publish and report on an individual basis a transparency report in accordance with the minimum content set out in the Article 13 of Regulation (EU) No 537/2014 of 16 April 2014 and in accordance with the following criteria:

(a) The information relating to the total turnover of the statutory auditors exercising individually and the audit firms which are part of the audit firm's network, referred to in the Article 13 (2) (b) (iv) of Regulation (EU) No 537/2014 of 16 April 2014 shall comprise the audit services of annual and consolidated financial statements as well as the various audit services which they have provided to the audit services. entities of public interest and related entities referred to in Article 17.

(b) The information relating to the total turnover of the auditor or audit firm referred to in Article 13.2.k (i) and (iii) of Regulation (EU) No 537/2014 of 16 April 2014 shall be broken down separated by each of the audited public interest entities.

2. In accordance with Article 13.1 of Regulation (EU) No 537/2014 of 16 April 2014, auditors and audit firms shall report to the Accounting and Audit Institute of Accounts of the publication, in the the website, the transparency report or the update of the transparency report where appropriate, in the form and time limit to be determined.

3. In the exceptional case where, as provided for in the last paragraph of Article 13.2.k) of Regulation (EU) No 537/2014 of 16 April 2014, the auditor or the audit firm decides not to publish the information indicated in the Article 13 (2) (f) of that Regulation on public interest entities audited during the preceding financial year in order to prevent a significant and serious threat to the personal security of any individual, the auditor of accounts or the audit firm shall report to the Accounting and Audit Institute of the reasons justifying the existence of such a threat within the time limit and the manner in which it is regulated.

4. The content of the transparency report referred to in paragraph 1 may be developed by means of a resolution of the Accounting and Audit Institute. Such a decision shall be in accordance with the procedure laid down in Article 24.1 of Law 50/1997 of 27 November of the Government.

Article 38. Report to the national supervisory authorities of public interest entities.

Auditors of accounts and audit firms carrying out the audit of the annual accounts or other financial statements of public interest entities subject to the supervisory and control regime attributed to the Bank of Spain, the National Securities Market Commission and the Directorate-General for Insurance and Pension Funds, or the autonomic bodies with powers of management and supervision of insurance institutions, will have the obligation to communicate promptly in writing, to the aforementioned public bodies or institutions as appropriate, all information relating to the audited entity or institution of which they have been aware in the performance of their duties in the cases referred to in Article 12.1 of Regulation (EU) No 537/2014 of 16 April 2014.

Section 3. Independence

Article 39. Incompatibilities and prohibited services.

Auditors of accounts and audit firms of public interest entities shall apply to them:

1. The scheme laid down in Regulation (EU) No 537/2014 of 16 April 2014, and in particular Articles 5.1, 5.4 and 5.5 thereof. However, the services referred to in Article 5.3 of that Regulation may be provided, provided that the requirements laid down therein are met.

In addition, the prohibition on the provision of non-audit services as referred to in Article 5.1 of the Regulation shall extend to the families of the main auditors responsible for the particularities referred to in Article 5 (1) of the Regulation. Article 18 (2) (d) of this Law, as well as the persons referred to in Article 19 with the particularities referred to in that Article.

2. The scheme set out in Sections 1 and 2 of Chapter III of Title I of this Law, with the following particularities:

(a) The circumstances referred to in Article 16.1 shall apply only to the cases referred to in point (a), and the provisions of Article 21 shall also apply in relation to those circumstances and assumptions.

(b) The rules referred to in Articles 17 to 20 shall apply in relation to the circumstances and assumptions referred to in point (a) above.

(c) The prohibitions following the completion of the audit work set out in Article 23 shall apply for the two years following the completion of the audit work.

Article 40. Recruitment, rotation and appointment of auditors or audit firms.

1. In relation to the duration of the audit contract, the provisions laid down in Article 17 of Regulation (EU) No 537/2014 of 16 April 2014, in particular the provisions of paragraphs 3, 5, 6 and 8 shall apply. In addition, the minimum duration of the initial period for the recruitment of auditors in public interest entities may not be less than three years, not being able to exceed the total period of recruitment, including carryovers, of the maximum duration of 10 years as set out in Article 17 of that Regulation. However, after the end of the full ten-year maximum procurement period of an auditor or audit firm, that period may be extended further to a maximum of four years, provided that it has been contracted simultaneously. the same auditor or audit firm together with another auditor or audit firm to act jointly in this additional period.

During the initial period, or the period of extension of the initial contract, the contract cannot be terminated without a fair cause, and the differences of opinion on accounting treatments cannot be considered as such. or audit procedures. In any case, the auditors and the audited entity shall report the termination of the audit contract to the Accounting and Audit Institute.

2. In relation to the rotation of auditors and audit firms, the provisions of Article 17 (7) of Regulation (EU) No 537/2014 of 16 April 2014, in particular as set out in the third and fourth subparagraphs, shall apply. In addition, after five years from the initial contract, the rotation of the main auditors responsible for the audit work shall be compulsory, and in any case a period of three years shall be required for such persons. may return to participate in the audit of the audited entity in accordance with the first subparagraph of Article 17.7 of Regulation (EU) No 537/2014 of 16 April 2014.

3. The designation of auditors or audit firms in public interest entities shall be subject to the provisions of Article 16 (2), (3), (4), (5) and (6) of Regulation (EU) No 537/2014 of 16 April 2014.

4. Shareholders holding more than five per cent of the share capital or voting rights of the audited entity or the management body of that entity may ask the judge of first instance for the registered office of the institution to revocation of the auditor appointed by the general meeting and the appointment of another, when the right is due. The application may also be made by the Accounting and Audit Institute of Accounts.

In any event, in the event of termination or revocation of the auditor, the auditor and the audited entity shall communicate such a circumstance to the relevant national supervisory authority of the entity of interest. public, indicating the reasons why they are based.

Article 41. Fees and transparency.

1. In relation to the limitations of fees, the provisions of Regulation (EU) No 537/2014 of 16 April 2014, in particular Articles 4.1 and 4.2, shall apply.

2. Where the accrued fees arising from the provision of audit services and other than the audit services to the audited entity, by the auditor or audit firm, in each of the last three consecutive financial years, represent more than 15% of the total annual revenue of the auditor or audit firm, the auditor or audit firm shall refrain from carrying out the audit of accounts for the following financial year.

Also, the obligation to abstain provided for in the preceding paragraph shall also be required where the accrued fees arising from the provision of audit services and other than the audit services in each of the three In the case of the audited entity and its related entities on the part of the auditor or audit firm, and of those who are part of the network, they represent more than 15% of the total annual revenue of the audited entity. audit of accounts or audit firm and of the network. The total revenue to be computed for the purposes of compliance with this limit shall be determined.

However, in the terms in which it is regulated, where the audit firm is small or medium, the Audit Committee or equivalent body, on the basis of an examination of the threats to independence and the measures taken to mitigate it, may exceptionally allow the audit of accounts for the following year to be carried out only once. Such exceptionality shall be adequately justified and substantiated.

3. The annual report on fees to the Institute of Accounts and Audit of Accounts by auditors and audit firms, as referred to in Article 24.2 of this Law, shall be made with a separate indication of the entities audited having the consideration of public-interest entities, in this case distinguishing, in the fees for services provided other than the audit of accounts, whether those services are required by the law of the Union or not European or by a national provision of legal status.

Section 4. Internal Organization and work related to audits of public interest entities

Article 42. Internal organization.

Without prejudice to the policies and procedures to be included in the quality control system, as referred to in Article 28.2.b) of this Law, auditors and audit firms, in the audit work For the purposes of Article 8 of Regulation (EU) No 537/2014 of the European Parliament and of the Council of 16 April 2014, the Commission shall, in accordance with Article 8 of Regulation (EU) No 537/2014 of the European Parliament and of the Council, before the report is issued.

Article 43. Organization of the job.

1. Without prejudice to the audit file that auditors and audit firms have to draw up for each audit work, in accordance with Article 29.2 of this Law, the audit file shall be based on the audit file. document the aspects further collected, where appropriate, in Articles 6 to 8 of Regulation (EU) No 537/2014 of 16 April 2014, as well as the working papers of the auditor and the audit firm constituting the evidence and the support of the findings in the reports referred to in Articles 10, 11 and 12 of the said Regulation Regulation.

2. With regard to the obligation to draw up a register of audited entities, as referred to in Article 29.3.c) of this Law, between the data to be included in that register, the revenue referred to in Article 14 of the Regulation shall be included. (EU) No 537/2014 of 16 April 2014, as well as the details referred to in Article 37.1 of this Law.

Article 44. Transfer file.

In the case of replacement of auditor or audit firm in public interest entities, without prejudice to the provisions of Article 32 of this Law, the provisions of Article 18 of the Treaty shall apply. Regulation (EU) No 537/2014 of 16 April 2014.

Article 45. Organizational structure.

The requirements relating to the organisational structure and the dimension to be met by the auditors or audit firms carrying out audits of the institutions of the institution may be determined. public interest. Such requirements shall include those relating to the number of auditors, the number of employees, the existence of technical and specialised resources in the processing and analysis of complex questions and the contrasting quality of the internal control systems. In any case, the requirements shall be proportionate and modulated in the light of the complexity of the audit work and the magnitude of the audited entity.

TITLE II

Public monitoring

CHAPTER I

Supervisor Function

Article 46. Public monitoring scope.

1. All auditors and audit firms, in the course of the activity referred to in Article 1, and other persons, entities or entities, are subject to the system of public oversight, objective and independent, established in this Law. bodies whose performance is within the scope of Regulation (EU) No 537/2014 of 16 April 2014.

2. The Accounting and Audit Institute of Accounts is the authority responsible for the public oversight system, and in particular:

(a) The authorisation and registration in the Official Register of Auditors of Accounts Auditors and audit firms.

b) The adoption of standards on ethics, rules of internal quality control in audit activity and technical auditing standards in the terms provided for in this Law, as well as the supervision of its proper compliance.

c) The continuing training of auditors.

d) The system of inspections and research.

e) Regular monitoring of the evolution of the market for audit accounts in the case of entities of public interest.

f) The disciplinary regime.

3. It corresponds to the Accounting and Audit Institute of Accounts, in addition to the functions that legally have attributed, the responsibility and participation in the mechanisms of international cooperation in the field of the audit activity accounts, referred to in this Act, as well as in Regulation (EU) No 537/2014 of 16 April 2014.

4. The Official Register of Auditors will depend on the Accounting and Audit Institute of Accounts.

Article 47. Resources.

Against the resolutions handed down by the Accounting and Audit Institute of Accounts in the exercise of the powers conferred on it by this Law, the Minister of Economy and Competitiveness will be able to appeal to the Minister for Economic Affairs. resolution will end the administrative path.

As an exception, the normative resolutions issued by the Accounting and Audit Institute of Accounts will be directly applicable to the judicial-administrative jurisdiction.

Article 48. Subjects on which the supervisory function is exercised.

1. The Accounting and Audit Audit Institute may collect as much information as it deems necessary for the proper performance of the supervisory powers entrusted to it by the following persons and entities:

(a) of auditors and audit firms, and of the entities referred to in Articles 19 and 20.

(b) Third parties to whom such auditors or audit firms have outsourced certain functions or activities.

(c) For persons who participate or have participated in the activities of auditors and audit firms, or have a connection or relationship with them.

(d) of the audited entities, and their related entities, as referred to in Article 17.

2. The natural and legal persons referred to in the preceding paragraph are required to make available to the Institute of Accounts and Audit of Accounts how many books, records and documents require, whatever their original support, and in the support that the Accounting and Audit Institute of Accounts requests, including computer programs and magnetic, optical or any other class.

Additionally, auditors and audit firms shall be required to appear before the Accounting and Audit Institute of Accounts, at the latter's request.

3. The Institute of Accounts and Audit of Accounts, in the exercise of its powers, may communicate and require auditors and audit firms by electronic means the information and actions carried out in the compliance with the provisions of this Law.

Article 49. Supervisory powers.

1. In the exercise of its supervisory function, the Accounting and Audit Institute may carry out the necessary checks, inspections, investigations and discipline in relation to the persons and entities to which it is refers to the previous article. In particular, it may:

(a) Access any data, record or information related to the audit of accounts held by auditors and audit firms and receive or obtain copies thereof, related to the audit account audit activity.

b) Carry out investigations and inspections, as well as any checks you deem necessary.

c) Access to any data, record or information held by the subjects mentioned in the previous article, and other than those referred to in point (a) of this paragraph, provided that it is necessary for the appropriate compliance with the functions attributed to this Institute.

d) Require an end to any practice that is contrary to the regulatory regulation of the audit activity of accounts.

This decision may be taken as a precautionary measure in the course of a sanctioning file or as a measure outside the exercise of sanctioning power, provided that it is necessary for the effective protection of third parties or the proper functioning of the markets, and will be maintained as long as the cause that has motivated them remains.

e) Impose the sanctions and administrative measures that, if any, correspond in accordance with the provisions of this Title.

2. The powers referred to in the preceding paragraph may be exercised directly, in collaboration with other authorities or by application to the competent judicial authorities.

3. The Accounting and Audit Audit Institute may refer to the courts or tribunals facts or circumstances that may be evidence of a crime.

Article 50. Place of the verification, investigation and inspection actions.

1. Verification, research and inspection activities may be carried out at the choice of the Accounting and Audit Institute:

(a) In any office, office or unit of the auditor or audit firm, and of the entities referred to in Articles 19 and 20 and other persons or entities referred to in Article 48.1.

b) In the accounts of the Accounts Institute and Audit Office.

2. Where the actions are carried out in the places referred to in point (a) of paragraph 1 above, the working day of the proceedings shall be observed, without prejudice to the fact that agreement may be reached in other hours and days.

Article 51. Administrative collaboration.

1. In the terms provided for in Article 4 of Law No 30/1992 of 26 November 1992, of the Legal Regime of the General Administration and of the Common Administrative Procedure, the organs and bodies of any public administration, without prejudice to the of the duty of secrecy to protect them in accordance with the current legislation, are subject to the duty of collaborating with the Accounting and Audit Institute of Accounts and are obliged to provide, at this request, the data and information that have and may be necessary for the exercise by the latter of the function monitor.

2. They shall also communicate to the Accounting and Audit Institute the facts of which they would have been aware that they could constitute an infringement of the regulatory regulation of the audit of accounts.

3. In particular, the Institute of Accounts and Audit of Accounts may request from the national supervisory authorities of public interest entities the information it deems relevant for the performance of its tasks and in relation to the powers referred to in Article 46.

Also, the Accounting and Audit Institute of Accounts may request the collaboration of the State Tax Administration Agency, in relation to the data and information of the auditors and companies of the audit that is necessary for the exercise of their powers.

Article 52. Audit of account audit activity: investigations and inspections.

The audit of the audit of accounts, which will be carried out on its own initiative and in accordance with the human and material availabilities of the Accounting and Audit Institute of Accounts, will be carried out by the following Actions:

(a) Investigations of the actions of auditors and audit firms

(b) Inspections of auditors and audit firms.

Article 53. Research.

1. Investigations into certain audit work of accounts or aspects of the audit of accounts shall be designed to determine facts or circumstances which may lead to the existence of evidence of possible non-compliances the regulatory rules for the audit of accounts.

2. The investigation shall consist of the examination of the audit work files or other documentation held by the auditor and the audit firms and of the persons and entities referred to in Articles 19. and 20, as well as in carrying out inquiries and in obtaining and evaluating any other relevant information or documentation.

Article 54. Inspections.

1. The inspections shall consist of the periodic review of auditors and audit firms, with the objective of evaluating their internal quality control systems, by means of verification of the procedures applied and the review of the audit firm. the files of the audit work of selected accounts, including the assessment of compliance with the regulatory regulatory activity of the audit of accounts and with the purpose of verifying and concluding on the effectiveness of those audit accounts systems.

In relation to auditors and audit firms carrying out audits of public interest entities, it shall be as set out in Articles 26.6 and 26.7 of Regulation (EU) No 537/2014 of 16 April 2014.

2. The inspections shall be carried out on the basis of a risk analysis. In the case of auditors and audit firms carrying out audits required by European Union law, the minimum frequency of inspections shall be six years, without prejudice to the provisions of Article 26.2 of the Treaty. Regulation (EU) No 537/2014 of 16 April 2014 on auditors and audit firms carrying out audits of public interest entities.

3. The inspections shall be appropriate and proportionate to the extent and complexity of the activities of the auditors and audit firms subject to the inspections. For this purpose, the verification of the archives of the audits of small and medium-sized entities shall take into account the specific considerations set out in the audit rules for small and medium-sized entities. dimension.

The actions and criteria to be followed in the inspections of audit firms that have a substantial identity when they have indicated that they apply the same procedures and policies will be determined. internal control. For these purposes, it is understood that there is a substantial identity between audit firms when members are shared or auditors of accounts constituting the majority of the social capital or the administrative body.

4. The results of the inspections shall be documented in a report containing the main conclusions of the quality control with the improvement requirements formulated, which should be applied by the auditor of accounts and the companies of the audit within the time limit set for that purpose.

In the inspections carried out on auditors and audit firms carrying out audits of public interest entities, it shall be as laid down in Articles 26.8 and 26.9 of Regulation (EU) No 537/2014 of the European Parliament and of the Council [16]. April.

5. The report referred to in the previous paragraph shall be published on the website of the Accounting and Audit Institute of Accounts, in the case of auditors and audit firms of interest entities. public.

Such publication shall not contain identifying data of the entities audited by the audited auditors or audit firms and shall be maintained on the website until the Accounting and Audit Institute of Accounts issue a new report containing the results of a new inspection.

The publication referred to in this paragraph shall be without prejudice to the follow-up of the requirements in its case formulated, the investigative actions that may be carried out or the actions taken. disciplinary measures that could be initiated in cases where there were evidence of infringement.

Article 55. Assistance from professional and expert services.

1. The inspection, investigation or verification functions that correspond to the Accounting and Audit Institute of Accounts shall be carried out by the official personnel at their service.

However, when the service needs so require, and the media insufficiency is properly credited, in the cases referred to in the following paragraphs, it will be possible to apply for third-party recruitment. for the sole purpose of carrying out only instrumental tasks within those tasks.

The procurement will be carried out through a service contract in the terms of the public sector contract legislation.

2. In carrying out inspections relating to auditors or audit firms which do not audit entities of public interest, and exclusively for the performance of mere instrumental tasks, it may be contracted either with the Corporations representative of the auditors, or with third parties.

In any case, those who perform such tasks on behalf of the Corporations or the third parties shall always comply with the following requirements:

(a) That they are auditors of non-performing accounts and do not belong to audit firms.

(b) That they are independent of the auditors who are subject to inspection and are free of any potential influence or conflict of interest on the part of the auditors.

For these purposes, persons who are engaged in these terms must declare that they have no conflict of interest with the audit firm or audit firm.

In any case, those persons who, at least, in the three years prior to the commencement of the inspection, have been members or employees, have provided professional services or have been employed, may not participate in this tender. associated with the auditor or audit firm subject to inspection.

(c) Have appropriate professional training and appropriate experience in auditing of accounts and financial information, as well as specific training on quality controls.

(d) In carrying out inspections, the Accounting and Audit Institute may also engage with experts with specific expertise in any of the fields or specialised sectors related to any of the field of interest for the exercise of the inspection powers. These experts shall comply with the requirements set out in points (b) and (c) of this paragraph 2.

(e) The provisions of this paragraph 2 shall be without prejudice to the provisions of Article 26.5 of Regulation (EU) No 537/2014 of 16 April 2014 for auditors and audit firms carrying out audits of entities of public interest.

3. In addition, in order to carry out investigations and other checks other than those referred to in the previous paragraph by the staff of the Accounting and Audit Institute of Accounts, experts may be provided with knowledge or experience in certain areas or specialised sectors related to any field of interest in the exercise of the powers of that Institute. Those experts shall comply with requirements similar to those referred to in points (b) and (c) of paragraph 2.

Such assistance shall be subject to procurement in the terms set out in the preceding paragraphs.

4. Those who participate in the purely instrumental tasks in inspection enforcement procedures or in the development of specific functions in the inspections, investigations or other checks may access the documentation that is necessary for auditors or audit firms, provided that they are expressly determined by the officials of the Audit and Audit Institute responsible for the performance of the accounts or audit firms, subject to the duty of secrecy laid down in Article 60 and shall act under instructions from public officials to provide their services at the Accounting and Audit Institute of Accounts.

5. When required for the performance of specific verifications or functions, the Accounting and Audit Institute of Accounts may obtain the assistance of professional services and experts, who will be hired on the terms as set out in the previous paragraphs. Such verifications or specific functions, in any case, may not involve any other activity than mere instrumental work.

6. In all cases of inspection, investigation, verification or other action referred to in this Article, the supervision and management of such persons shall be the responsibility of the officials inspectors of the Accounting and Audit Institute of Accounts who will establish the tasks of a purely instrumental nature that must be carried out in each case by the third parties hired to assist in the performance of the third parties.

7. The service contracts referred to in this Article shall have the length of time strictly necessary for the provision of the service provided for them.

CHAPTER II

Accounting and Audit Institute of Accounts

Article 56. The Accounting and Audit Institute of Accounts.

1. The Accounting and Audit Institute of Accounts, a self-governing body assigned to the Ministry of Economy and Competitiveness, shall govern its actions by the laws and general provisions applicable to it, and, in particular, Law 6/1997, of 14 April of the Organization and the Functioning of the General Administration of the State and by this Law.

2. The governing bodies of the Accounting and Audit Institute are: the President, the Audit Board of Accounts and the Accounting Board.

Article 57. The President.

The President, with the category of director general, will be appointed by the government, on the proposal of the Minister of Economy and Competitiveness, and will hold the legal representation of the Accounting and Audit Institute, exercising the powers assigned to it by this Law and those that are regulated by law.

You cannot be President who during the preceding three years:

a) You have audited account audits.

b) You have been the holder of voting rights in an audit firm.

(c) You have been a member of the administrative, management or supervisory body of an audit firm.

(d) You have been a partner or maintained a contractual or other employment relationship with an audit firm.

Without prejudice to other prohibition cases referred to in other laws, during the two years following the end of the exercise of their duties, the President may not incur any of the circumstances to which he or she is refer to points (a) to (d) above.

Article 58. The Audit of Accounts Committee.

1. The Audit of Accounts Committee is the body to which matters relating to the following matters shall be subject to consideration by the President:

(a) Determination of the rules to be followed by the professional aptitude tests required for access to the Official Register of Auditors, as well as the calls for them approved and published by Order ministerial;

(b) Publication of internal quality audit, ethics and control standards to be developed, adapted or reviewed by public law corporations representative of those performing the audit of accounts or, where appropriate, by the Accounting and Audit Institute of Accounts;

(c) Proposals for legislative or regulatory amendments to the Minister for Economic Affairs and Competitiveness in relation to regulatory regulation of the audit of accounts;

(d) Determination of the standards of continuous training referred to in Article 8.7.

(e) Resolution of queries submitted to the Accounting and Audit Institute by auditors as a consequence of the exercise of such activity whenever they are deemed to be of general interest;

(f) Any other items deemed appropriate by the Presidency of this Institute, excluding those related to the exercise of sanctioning power.

2. The Audit Committee shall be chaired by the President of the Accounting and Audit Institute of Accounts, and shall be composed of a maximum of thirteen members appointed by the Minister of Economy and Competitiveness, with the following distribution:

a) A representative of the Ministry of Economy and Competitiveness, through the General Directorate of Insurance and Pension Funds;

b) a representative of the Ministry of Finance and Public Administrations, through the General Intervention of the State Administration;

(c) a representative of the Court of Auditors;

(d) four representatives of representative corporate auditors;

e) a representative of the Banco de España;

f) a representative of the National Securities Market Commission;

g) a state attorney;

h) a member of the judicial or tax career or merchant registrar;

i) a university professor;

j) and an expert of recognized accounting and auditing of accounts.

They may not be members of the Audit of Accounts Committee for people who during the preceding three years:

1. Hayan conducted audit of accounts.

2. Ms Hayan have been voting rights holders in an audit firm.

3. Ms Hayan was a member of the management, management or supervisory body of an audit firm.

4. Ms Hayan been a partner or maintained a contractual or other employment relationship with an audit firm.

Without prejudice to other prohibition cases referred to in other laws, during the two years following the completion of the Audit Committee member's office, they may not incur any of the Circumstances 1. to 4. to which the preceding paragraph refers.

3. The composition, organisation and functions of the Audit Audit Committee shall be developed in a regulatory manner.

4. Assistance to the Audit Audit Committee shall be entitled to the appropriate compensation.

Article 59. The Accounting Board.

1. The Accounting Board is the competent body, after hearing the Accounting Advisory Committee, in order to assess the suitability and appropriateness of any proposed legislation or interpretation of general interest in accounting matters with the Conceptual of the Accounting Regulated in the Code of Commerce. To this end, it shall inform the competent bodies and bodies prior to the approval of the accounting standards and their interpretations by issuing the relevant non-binding report.

2. The Accounting Board shall be chaired by the President of the Institute, who shall have a vote of quality, and shall, together with him, be composed of a representative of each of the other institutions, bodies or institutions assigned to it. Financial system accounting regulation: Banco de España, Comisión Nacional del Mercado de Valores y Dirección General de Seguros y Fundas de Pension. He will be in voice, but without a vote, as Secretary of the Council, a public employee of the Accounting and Audit Institute of Accounts.

You will also be part of the Accounting Board with a voice but no vote by a representative of the Ministry of Finance and Public Administration appointed by the Department's holder.

3. The Accounting Advisory Committee is the advisory body of the Accounting Board. This Committee shall be composed of accounting experts of recognised prestige in relation to economic and financial information, representing both public administrations and the various sectors involved in the preparation, use and disclosure of such information. In any case, the Ministries of Justice, Economic and Competitiveness and Finance and Public Administrations will have to be represented, through the Accounting and Audit Institute of the General Directorate of Insurance and Funds. Pensions, the National Statistics Institute, the General Intervention of the State Administration and the General Directorate of Taxation; the Banco de España; the National Securities Market Commission; the General Council of the Economists; the Superior Council of Commercial Holders; a representative of the associations or organisations representing the economic information issuers of undertakings and another of the users of accounting information; a representative of the issuing associations of principles and accounting criteria; an audit professional Proposal from the Institute of Jurors of Accounts and another from the University.

The President may also appoint up to five persons of recognized prestige in accounting matters.

In addition, when the complexity of the matter so requires, the President may invite an expert to the meetings. Any draft or legislative proposal or proposal in the accounting field shall be submitted for deliberation by the Accounting Advisory Committee.

4. The powers of proposal to the Accounting Advisory Committee correspond, in the form and conditions that are regulated, in general, to the Accounting and Audit Institute of Accounts, without prejudice to the financial sector which shall correspond in each case to the Banco de España, the National Securities Market Commission and the General Directorate of Insurance and Pension Funds, in accordance with their respective powers, and without prejudice to the joint proposals.

The composition and form of designation of its members and the form of action of the Committee shall be those determined by regulation.

5. Assistance to the Accounting Advisory Committee shall be entitled to the appropriate compensation.

Article 60. Confidentiality and duty of secrecy.

1. The information or data that the Accounting and Audit Institute has obtained in the exercise of its functions of public oversight and audit of the audit of accounts provided for in this Law shall be confidential. and may not be disclosed or provided to any person or authority.

2. All persons who perform or have carried out an activity for the Accounting and Audit Institute of Accounts and have had knowledge of data of a confidential nature are obliged to keep secret. Failure to comply with this obligation will determine the criminal, civil, and administrative responsibilities foreseen by the laws.

These persons may not provide a statement or testimony, or publish, communicate, display confidential data or documents, even after they have ceased the service, except for the express permission granted by the Institute of Accounting and Audit of Accounts. If such permission is not granted, the person concerned shall maintain the duty of secrecy and shall be exempt from the responsibility which emanates from this.

3. They are excepted from the duty of secrecy regulated in this article:

(a) When the data subject expressly consents to the dissemination, publication or communication of the data.

b) The publication of aggregated data for statistical purposes, or communications in summary or aggregate form so that auditors and audit firms cannot be identified, according to the provision Fifth additional.

(c) The information required by the competent judicial authorities or the Prosecutor's Office in criminal proceedings, or in a civil trial.

(d) Information which, in the context of administrative or judicial remedies instituted in respect of administrative decisions given in the exercise of the power of sanction referred to in Article 68, is required by the competent administrative or judicial authorities.

e) The information that the Accounting and Audit Institute of Accounts publishes in accordance with the provisions of Articles 8, 61 and 82.

(f) The results of the quality control actions carried out on an individual basis to the auditors and audit firms, without including the identification of the audited entities. The form and content of such publication shall be determined.

4. By way of derogation from the above paragraphs, confidential information may be provided by the Accounting and Audit Institute to the following persons and entities to facilitate the fulfilment of their obligations. respective functions, which will be in turn obliged to keep the duty of secrecy regulated in this article:

(a) Those who are appointed by judicial resolution.

b) Those who are authorized by law.

(c) The Banco de España, the National Securities Market Commission and the General Directorate of Insurance and Pension Funds, as well as the regional bodies with the responsibility for the management and supervision of insurance institutions.

(d) The authorities responsible for combating money laundering and terrorist financing, as well as communications which may be made pursuant to Section 3 of Chapter I of Title III of Law 58/2003 of 17 December, General Tax.

e) Persons and entities to whom the Accounting and Audit Institute of Accounts shall be responsible for the execution of the tasks or tasks in the terms set out in the third provision third.

(f) The competent authorities of the Member States of the European Union and of third countries in the terms referred to in Articles 63 and 67 respectively, as well as the colleges of supervisors in the field of audit accounts in accordance with the provisions of Article 66.

g) The Commission of European Audit Bodies, the European Securities and Markets Authority, the European Banking Authority, the European Insurance and Occupational Pensions Authority, the Commission, the European System of Central banks, the European Central Bank and the European Systemic Risk Board in the terms set out in Chapter IV of this Title.

h) To the Audit Commissions of the public interest entities the inspection reports on the part corresponding to the audit work concerning the respective entity of public interest, and for the purposes of the compliance of its powers, as provided for in Regulation (EU) No 537/2014 of 16 April 2014, and in Article 529 quaterths of the recast of the Capital Companies Act, approved by Royal Decree-Law 1/2010 of 2 July 2010.

Article 61. Transparency and publicity.

The Institute for Accounting and Audit of Accounts shall publish on a yearly basis a report containing at least the programmes or plans of action carried out by the Institute, a Memory of Activities and the general results and conclusions reached from the quality control system.

In relation to auditors and audit firms carrying out audits of public interest entities, the transparency and publicity obligation shall be subject to the provisions of Article 28 of the Regulation (EU). n. No. 537/2014 of 16 April 2014. In addition, the Accounting and Audit Institute of Accounts shall publish the results and conclusions of the quality control reports referred to in Article 26 of that Regulation. This publication shall not include identifying data for audited entities whose audit work has been subject to inspection.

CHAPTER III

Supervisory regime applicable to auditors, as well as companies and other audit entities authorised in Member States of the European Union and in third countries

Article 62. Auditors, companies and other audit entities authorised in Member States of the European Union and in third countries.

Will be subject to the control powers and disciplinary regime attributed to the Accounting and Audit Institute of Accounts in this title:

(a) auditors and audit firms authorised to carry out the audit of accounts originally in a Member State of the European Union and entered in the Official Register of Auditors, in relation to the audit work carried out in respect of the accounts of institutions with registered offices in Spain, without prejudice to the establishment of regulatory arrangements which may be concluded with the Member States of the European Union.

(b) Auditors of accounts authorised originally to carry out the audit activity in third countries which, registered in the Official Register of Auditors, are authorised to carry out the audit activity of accounts in Spain.

(c) Auditors of accounts, as well as companies and other audit entities authorised to carry out the audit of accounts in third countries issuing audit reports on annual accounts or accounts consolidated annual accounts of an entity referred to in Articles 10.3 and 11.5, in accordance with the provisions to be developed on a regulated basis, in accordance with the equivalence declaration and assessment carried out by the Commission of the European Union.

CHAPTER IV

International cooperation

Article 63. Duty to cooperate with the Member States of the European Union and with the European supervisory authorities.

1. The Accounting and Audit Institute of Accounts shall collaborate with the European Securities and Markets Authority, the European Banking Authority, the European Insurance and Occupational Pensions Authority and the authorities of the Member States of the European Union. European Union which have powers conferred on the authorization, registration, quality control, investigation and disciplinary procedure of the audit of accounts and may, for that purpose, exchange all information which is precise, and carry out both an investigation at the request of a Member State of the European Union and to allow its staff to accompany the staff of the Accounting and Audit Institute of Accounts in the course of the investigation and to request a Member State to carry out an investigation under the same conditions.

Without prejudice to Article 11.4, in cases where an auditor or audit firm ceases to be registered in the Official Register of Auditors, the Accounting and Audit Institute It shall communicate it to the authorities of the Member States referred to in the preceding paragraph, in which the auditor or the company is authorised for the exercise of the audit activity, together with the reasons justifying it.

2. The exchange of information provided for in the previous paragraph shall be carried out with due diligence and due diligence and shall, in the event of failure to provide the information under such conditions, communicate the reasons to the requesting authority.

The European supervisory authorities referred to in the previous paragraph, the competent authorities of the Member States referred to above, as well as the Accounting and Audit Institute of Accounts, shall observe the duty of secrecy to with regard to Article 60, of the information to which they have had access in accordance with the preceding paragraph. Such information may only be used for the exercise of the functions referred to in this Law, in the context of administrative procedures relating to such functions and in judicial proceedings, and may not be disclosed unless otherwise provided for in this Law. in the cases referred to in Article 60 and where required by European or national Union law.

3. Without prejudice to the above paragraphs, the Accounting and Audit Institute may refuse to provide information to the competent authorities of other Member States to carry out an investigation requested by the competent authorities of other Member States. these authorities, or to which their staff is accompanied by the staff of those authorities, where the provision of such information or the conduct of such investigation may prejudice the sovereignty, security or public order, or have been initiated by the Spanish authorities, judicial proceedings or diktat by those authorities (a) a final judgment in those proceedings on the same facts and against the same auditors and audit firms.

4. Where the Institute for Accounting and Audit of Accounts concludes that activities contrary to the national provisions of that Member State are being carried out or have been carried out in the territory of another Member State, Those which have been transposed into Directive 2006 /43/EC of the European Parliament and of the Council of 17 May 2006 on the statutory audit of the annual accounts and consolidated accounts shall inform the competent authority of that State member.

5. In relation to auditors or audit firms which audit entities of public interest, the Institute of Accounts and Audit of Accounts may cooperate with the competent authorities of another Member State in accordance with Article 31 of Regulation (EU) No 537/2014 of 16 April 2014.

Article 64. Commission of European Bodies of Audit Supervision.

The Accounting and Audit Institute, as supervisory authority in the audit of accounts, shall cooperate with the Commission of European Audit Bodies, in accordance with the provisions of this Regulation. in Regulation (EU) No 537/2014 of 16 April 2014.

In particular, the Accounting and Audit Institute of Accounts shall exchange information in accordance with the provisions of Regulation (EU) No 537/2014 of 16 April 2014.

Additionally, the Accounting and Audit Institute of Accounts shall provide the Commission with the European Audit Bodies with at least the following information:

(a) On an annual basis, aggregated information in relation to the administrative measures and penalties imposed in the exercise of their supervisory powers.

(b) On a timely basis and as soon as possible, on the penalties imposed, which have been firmly established on the administrative basis, to the audit firms and auditors of accounts involving the withdrawal of authorization or final discharge in the Official Register of Auditors, as well as the suspension of the authorisation and the temporary discharge of up to five years in the Official Register of Auditors.

(c) On a timely and as soon as possible basis, the penalties imposed for the suspension of up to three years, which have been established on an administrative basis, to the members of an administrative or management body of an institution of public interest for the failure of the duties imposed by this Law.

The Accounting and Audit Institute shall also cooperate with the Commission of European Audit Bodies and the competent authorities of the Member States to converge on the implementation of the requirements relating to the training required to carry out the audit and access of auditors authorised in other Member States.

Article 65. Transmission of information to the European Central Bank, European System of Central Banks and to the European Systemic Risk Board.

The Institute of Accounts and Audit of Accounts may transmit to the European System of Central Banks, the European Central Bank and the European Systemic Risk Board the information necessary for the exercise of its respective functions.

Article 66. Colleges of supervisory authorities competent for auditing of accounts.

The Accounting and Audit Institute of Accounts shall participate in the colleges of competent authorities in order to facilitate the performance of the actions set out in Articles 46 and 63 of this Law and Article 31 of the Regulation (EU) No 537/2014 of 16 April 2014.

Article 67. Coordination with competent authorities of third countries.

1. The Institute for Accounting and Audit of Accounts, having regard to the principle of reciprocity, may conclude information exchange agreements with the authorities of third countries, which are declared appropriate by the Commission of the European Union, competent in matters of authorisation, registration, quality control, investigation and disciplinary regime regulated in this Law. Such information exchange arrangements shall ensure that the competent authorities of third countries justify each request, that the persons employed or previously employed by the competent authorities receiving the request information is subject to professional secrecy obligations, which those competent authorities of third countries may use for the exercise of their functions of public oversight, quality control and investigations; and sanctions equivalent to those laid down in this Law and that the agreement does not undermine the protection of the commercial interests of the audited entity, including industrial and intellectual property.

The Accounting and Audit Institute of Accounts shall notify these exchange of information agreements to the Commission of European Audit Bodies and to the Commission.

In particular, and in terms of agreement with the competent authorities of third countries, the Institute of Accounts and Audit of Accounts may allow, upon justification of the request by the competent authority of a third country, the sending to that competent authority of working papers or other documents held by those auditors, as well as of the companies and other audit entities which audit the accounts of companies with registered office in Spain and having issued securities in that third country or of companies forming part of a group that publishes the consolidated annual accounts in that third country, as well as of the inspection or investigation reports relating to those audit accounts.

2. Without prejudice to the above paragraph, the Accounting and Audit Institute may refuse to provide information to the competent authorities of third countries where the provision of such information is detrimental to the provision of information to the competent authorities of third countries. sovereignty, security or public order, or have been initiated before the Spanish authorities judicial proceedings or handed down by those authorities to the same facts and against the same auditors and against the same auditors and audit firms or have been adopted by the Accounting and Audit Institute of Accounts which would have gained firmness in relation to the same facts and against the same auditors or audit firms.

3. In exceptional cases, the Accounting and Audit Audit Institute may allow the submission of information directly by auditors and audit firms, which are entered in the Official Register of Auditors, to the competent authorities of a third country, provided that information exchange agreements have been concluded with those authorities, that they have initiated investigations in that country and they have previously informed the Institute of each request. Accounting and Audit of Accounts, and the sending of the information does not prejudice the supervisory actions of the Accounting and Audit Institute of Accounts to which auditors and audit firms are subject.

4. The information in his case provided in accordance with this Article shall apply to him the duty of secrecy referred to in Article 60. Without prejudice to the law of the European Union, such information may be used only for the exercise of the supervisory functions governed by this Law, as well as to the functions equivalent to those conferred on them. the authorities referred to in paragraph 1 of this Article.

5. The Accounting and Audit Audit Institute may disclose confidential information received from the competent authority of a third country in accordance with Article 37 of Regulation (EU) No 537/2014 of 16 April 2014.

6. The Accounting and Audit Institute of Accounts shall require that confidential information communicated to the competent authority of a third country be disclosed in accordance with Article 38 of Regulation (EU) No 537/2014, of 16 April.

The Accounting and Audit Institute of Accounts shall collaborate with the competent authorities or third countries in accordance with Article 36 of Regulation (EU) No 537/2014 of 16 April 2014.

TITLE III

Violations and Sanctions Regime

Article 68. Sanctioning administrative power.

It will be up to the Accounting and Audit Institute of Accounts to exercise the power of sanction for the commission of violations established in this Law, with respect to the responsible persons referred to in the Article 70.1.

Article 69. Specialties in the field of procedure.

1. The sanctioning authority referred to in the foregoing Article shall be exercised in accordance with the provisions of Title IX of Law No 30/1992 of 26 November of the Legal Regime of Public Administrations and of the Administrative Procedure. Common, in this Law and in the Regulations that develop it.

2. They shall be considered to be interested in the sanctioning procedures dealt with under this Title who are identified in the opening agreement as being liable to be responsible.

3. The complainant of facts which may be the constituent of any of the offences established in this Law shall not be considered to be interested in the proceedings which, if appropriate, are initiated, and the complaint shall not form part of the file, being entitled to the interposition of resources or complaints in relation to the results of previous actions which may have been carried out, where appropriate, prior to the initiation of the sanctioning procedure, or to the resolution which put an end to it.

4. The time limit for the resolution and notification of the decision in the sanctioning proceedings arising from the commission of the offences provided for in this Law shall be one year, extensible as provided for in Articles 42.6 and 49 of Law 30/1992, of 26 November, the Legal Regime of Public Administrations and the Common Administrative Procedure.

5. In the terms that are provided for in regulation, the shortened processing of the sanctioning procedure may be agreed upon when the sanctioning file is initiated at the same time as the Accounting and Audit Institute of Accounts. all the elements which make it possible to formulate the motion for a resolution. In this case, the proposal will be incorporated into the initiation agreement, which will be notified to the person concerned, indicating the application of the file and giving it a period of 15 days to take account of the appropriate and present circumstances. documents, supporting documents and evidence as appropriate.

6. The civil or criminal liability in which, if any, the persons liable for the offences established in this Law may incur in the form that they establish in Article 26 of this Law and the other laws that regulate those responsibilities.

7. In the opening agreement or at any later time it may be adopted, as a precautionary measure and in the light of the particular circumstances of the alleged alleged infringement, a requirement addressed to the auditor or the company of the audit to end their performance and refrain from repeating it.

In the event of the termination of the procedure with a sanctioning resolution, referring to the facts taken into consideration in order to make the indicated requirement, this requirement shall be stated in the operative part thereof, without prejudice to the addition of the penalties provided for.

Article 70. Administrative responsibility.

1. In any case, they shall be held liable for the offences defined in this Law:

(a) Auditors of accounts and audit firms and other audit entities.

(b) In the case of infringements committed by audit firms, arising from a particular audit work, whether or not the auditors, partners or not, have signed the audit report on behalf of the audit firm. those.

(c) Persons and entities referred to in Articles 18.19 and 20.

(d) The non-auditors to whom the prohibitions laid down in Articles 23 and 31 apply, and other persons or entities referred to in the actions referred to in Article 46.1.

2. Failure to comply with the audit standards resulting from a reasonably justified legal or technical discrepancy in its interpretation or application shall not be considered to be punishable. For these purposes, and in order to enable verification of the reasonableness of the interpretation of the technical audit standards carried out by the auditor or audit firm, they shall document the reasonableness of the interpretation. performed.

3. The commission of any of the offences referred to in this Act deduced from a single act may only result in the imposition of a single penalty on the undersigned auditor of the audit report on behalf of an audit firm, and a the only sanction to the audit firm on whose behalf the report was signed.

Article 71. Violations.

The offences committed by the subjects referred to in Article 70.1 shall be classified as very serious, serious and minor.

Article 72. Very serious infringements.

Serious violations will be considered:

(a) The issuance of audit reports of accounts whose opinion was not in accordance with the evidence obtained by the auditor in his work, provided that he had mediated it or negligence especially serious and inexcusable.

(b) Failure to comply with Articles 4.1, 4.2 and 5.1 of Regulation (EU) No 537/2014 of 16 April 2014 or Articles 14 to 20, 25 and 39 in relation to the duty of independence, provided that it has been (a) a particularly serious negligence; the obligation of a maximum duration of employment required by Article 40.1; or the limitation of fees referred to in Article 41.1 and 2.

(c) The refusal or resistance by auditors or audit firms to the exercise of the control or discipline powers of the Accounting and Audit Institute or the failure to refer them to that body of any information or documents required for the exercise of the legally assigned functions of control and discipline in the exercise of the audit of accounts, in accordance with the provisions laid down in Chapter I of Title II of the this Act.

(d) The breach of the duty of secrecy laid down in Article 31.

e) Use for the benefit of or outside the information obtained in the performance of their duties.

(f) Failure to comply with the prohibition imposed in accordance with the second paragraph of Articles 77 and 78.1.

(g) Failure to comply with the duty of preservation and custody established in Article 30, unless the auditor or the audit firm is not responsible for the causes of force majeure.

h) The non-issuance of the audit report of an entity of public interest, for reasons attributable to the auditor or the audit firm, including the case where the circumstances required in the case are not present. Article 5.2 for the failure to issue the audit report or the waiver of the continuation of the audit contract, as well as the issuance of that audit report which, by reason of the date of its issuance, is not likely to comply with the audit report. the purpose for which the relevant audit work was commissioned, for reasons attributable to the auditor accounts or the audit firm.

i) Non-issuance or delivery of the additional report for the Audit Committee of public interest entities, or their delivery with substantially incorrect or incomplete content, provided that it has been mediated Requirement of the Audit Committee.

j) The performance of audit accounts without being registered as an exercise in the Official Register of Auditors or without sufficient bail.

k) The signature of an audit report on behalf of an audit firm, by an auditor who is not expressly designated by such a company for completion.

Article 73. Serious infringements.

Serious violations will be considered:

(a) Failure to comply with the obligation to carry out an audit of accounts contracted on a firm or accepted basis, in the case of a judicial designation or by the Commercial Registrar, for reasons attributable to the auditor or the company audit, including the case where the circumstances required in Article 5.2 are not present for the failure to issue the audit report or the waiver of the continuation of the audit contract; as well as the issuance of an audit report which, by reason of the date of its issuance, is not liable to meet the purpose for which it was (a) the relevant audit work, for reasons attributable to the auditor or the audit firm.

b) Failure to comply with audit standards that could have a significant effect on the outcome of their work and, therefore, in their report.

(c) Failure to comply with Articles 4.1, 4.2 and 5.1 of Regulation (EU) No 537/2014 of 16 April 2014 or Articles 14 to 20, 25 and 39 in relation to the duty of independence, provided that it has not been or particularly gross negligence, as well as Articles 22 to 24, 40.2 and 40.3.

d) The lack of referral to the Accounting and Audit Institute of accounts of the information, of a periodic or circumstantial nature, required by law or regulation, when three months have elapsed since the the completion of the time limits laid down for this purpose, or the referral of such information where it is substantially incorrect or incomplete.

e) The acceptance of audit accounts of accounts that exceed the annual capacity measured at the auditor's hours, in accordance with the rules of auditing of accounts.

(f) Failure to comply with the provisions of the seventh additional provision; or the issuance of the report or communication referred to in that provision containing substantially incorrect or incomplete information; or non-compliance with the obligation to communicate to the national supervisory authorities of the public interest entities required by Article 38 of this Law.

g) The issuance of a report, identifying as an auditor, in a work other than those governed by Article 1, or other than those which, not having the audit nature of accounts, are attributed by law to auditors, when their wording or presentation may cause confusion with regard to their nature as an audit of accounts.

(h) Failure to comply with Article 15, in relation to the identification of threats and the safeguard measures applied, where these are insufficient or have not been established.

i) The failure to meet the requirements of the quality control referred to in Article 54 or a substantial lack of compliance with the deadline for these requirements.

j) Failure to comply with the obligation to publish the annual transparency report; the obligation to communicate and justify the reasons for not including information on the identification of entities of public interest; or published report contains substantially incorrect or incomplete information, in accordance with the content provided for in Article 37, provided that one month has elapsed since the end of the period provided for.

(k) The refusal or resistance by the non-auditors referred to in Articles 19, 20 and 48.1 to the exercise of the control or discipline powers of the Accounting and Audit Institute of Accounts or the lack thereof for the referral to that body of any information or documents required for the exercise of those powers, as laid down in Chapter I of Title II.

(l) The absence or substantial lack of application of internal quality control systems by auditors or audit firms; failure to comply with the obligation to keep records established in Articles 28, 29, 42 and 43 in respect of the internal organisation of the auditor or its substantially incomplete or incorrect conduct; or the failure to carry out the review of quality control referred to in Article 8 of the Regulation (EU) No 537/2014 of 16 April 2014 before the audit report is issued.

ll) The failure to communicate any of the requirements required of auditors or audit firms for the registration in the Official Register of Auditors of Accounts as exercisers or companies audit, when they have continued to exercise their activity.

m) Failure to comply with the provisions of Article 8.7 as regards continuous training follow-up.

n) Failure to comply with the obligation to allow the auditor or the successor audit firm, in the case of replacement of the auditor of the audited entity, or the auditor or audit firm of the group, in the case of audit of consolidated accounts, access to the documentation related to the audited entity or to the consolidated entities, respectively.

n) Non-issuance or delivery to the Audit Committee of the additional report provided for in Article 36, or its delivery with substantially incorrect or incomplete content.

Article 74. Minor infractions.

Minor violations will be considered:

a) Any actions and omissions that result in non-compliance with the audit standards and which are not included in the previous articles.

(b) The non-referral to the Accounting and Audit Institute of accounts of such information, of a periodic or circumstantial nature, required by law or regulation, within the time limits laid down for this purpose, provided that three months have not elapsed since the end of these periods.

Article 75. Penalties for infringements committed by auditors of individual accounts.

In the case of infringements committed by an individual auditor, the following sanctions regime shall apply to the infringer:

1. For the commission of very serious infringements, one of the following penalties shall be imposed on the infringer:

a) Revocation of the authorisation and final discharge in the Official Register of Auditors.

(b) Suspension of authorisation and temporary leave of absence for two years and one day to five years in the Official Register of Auditors.

(c) Multa for the amount of six to nine times the amount invoiced for the audit work in which the offence was committed, without any, in any case, being less than EUR 18,001, nor more than EUR 36,000. This maximum shall not apply in cases where the infringement relates to an audit of the accounts of an entity of public interest. Where the infringement has not been committed in relation to a particular audit work, a penalty of a minimum amount of EUR 18,001 and a maximum of EUR 36,000 shall be imposed on the auditor.

2. For the commission of serious infringements, one of the following penalties shall be imposed on the infringer:

(a) Suspension of the authorisation and temporary leave of absence for up to two years in the Official Register of Auditors.

(b) Multa for the amount of two to five times the amount invoiced for the audit work in which the offence was committed, without any, in any case, being less than EUR 6,001, nor more than EUR 18,000. This maximum shall not apply in cases where the infringement relates to an audit of the accounts of an entity of public interest. Where the infringement has not been committed in relation to a particular audit work, a fine of a minimum amount of EUR 6,001 and a maximum of EUR 18,000 shall be imposed on the auditor.

By the commission of the serious infringement referred to in Article 73,d) the auditor of accounts shall be imposed on an individual basis in any event the withdrawal of the authorization and low in the Official Register of Auditors of Accounts when in the last five years would have been imposed a firm sanction on the administrative basis for the same type of infringement.

3. One of the following penalties shall be imposed on the infringer by the commission of minor infractions:

a) Multa for up to 6,000 euros.

b) The private assembly.

Article 76. Penalties for offences committed by audit firms.

In the case of infringements committed by audit firms, the following sanctions regime shall apply:

1. The commission of very serious infringements will impose on the offending audit firm one of the following penalties:

a) Withdrawal of the authorization and final discharge in the Official Register of Auditors.

(b) Multa for an amount of between three and six percent of the fees charged for auditing of accounts in the last financial year declared to the Accounting and Audit Institute of Accounts prior to the imposition of the penalty, without the resulting penalty being less than EUR 24,000.

2. The auditor of accounts, designated for this purpose, who signs the report on behalf of an audit firm responsible for the very serious infringement committed by that audit firm, shall be subject to one of the following penalties:

a) Withdrawal of the authorization and final discharge in the Official Register of Auditors.

(b) Suspension of authorisation and temporary leave of absence for two years and one day to five years in the Official Register of Auditors.

(c) Mull for a minimum amount of EUR 12,001 and a maximum of EUR 24,000.

3. A penalty of up to three per cent of the fees charged for auditing of accounts in the last financial year shall be imposed on the offending audit firm by the commission of serious infringements. before the Accounting and Audit Institute of Accounts prior to the imposition of the penalty, without the resulting penalty being less than EUR 12,000.

By the commission of the serious infringement referred to in Article 73,d) the audit firm shall in any event be imposed the withdrawal of the authorization and low in the Official Register of Auditors of Accounts when in the last Five years would have been imposed a firm sanction on administrative basis for the same type of infringement.

By the commission of the serious infringement referred to in article 73.ll) the hearing society will be imposed the suspension or withdrawal of the authorization and low in the Official Register of Auditors of Accounts, or a penalty of fine for amount of up to three per cent of the fees charged for auditing of accounts in the last financial year closed prior to the imposition of the penalty.

4. The auditor of accounts, appointed for this purpose, who, on behalf of an audit firm responsible for the serious infringement committed by that audit firm, shall be subject to one of the following penalties:

(a) Suspension of the authorisation and temporary leave of absence for up to two years in the Official Register of Auditors.

b) Multa for a minimum amount of EUR 3,000 and a maximum of EUR 12,000.

5. For the commission of minor infractions a penalty of fine of up to 6,000 euros will be imposed on the society of infringing audit.

6. The auditor of accounts, designated for that purpose, who signs the report on behalf of an audit firm responsible for the minor infringement committed by that company, shall be subject to a private reprimand penalty.

Article 77. Penalties for infringements committed by auditors and audit firms in relation to entities of public interest.

When the imposition of a fine penalty is the result of an audit work of accounts in relation to an entity of public interest or of non-compliance with obligations imposed on those who are auditors of entities of public interest may be increased by up to 20% of the amount of the same amount which would normally be applied in accordance with Articles 75 and 76. The minimum and maximum amounts shall be increased by the same ratio.

In the event that penalties are imposed consisting of fines, in addition, the audit firm and the auditors responsible for the infringement may be imposed on the suspension to carry out audits of the accounts of entities of public interest for up to 2 years in the case of serious infringements and up to 5 years in the case of very serious infringements. That period shall begin to be counted from the beginning of the financial year following the year in which the penalty is applied on an administrative basis.

Article 78. Other additional sanctions.

1. Where the imposition of a penalty for a very serious or serious infringement is the result of an audit of the accounts of a given entity, such a sanction shall lead to the prohibition of the auditor of individual accounts or of the company of the audit and the main auditors responsible for the work of carrying out the audit of the accounts of the said entity for the first three financial years starting after the date on which the sanction becomes final administrative path.

2. In addition to the penalties imposed for very serious or serious infringements consisting of withdrawal or suspension of the authorisation and final or provisional losses in the Official Register of Auditors, the subjects shall be imposed. (s) the penalty of disqualification to exercise administrator positions in audit firms for the same period for which they are imposed.

3. If, in connection with the audit work carried out, a very serious or serious infringement has been committed, including, in any case, its performance by the person who is not empowered to do so, the penalty decision shall contain, in part (a) a declaration stating the non-compliance in the audit report issued with the requirements of the audit report set out in Article 5.

In the event that the audit has been carried out on an entity of public interest, it shall be referred to the non-compliance with the requirements laid down in Article 10 of Regulation (EU) No 537/2014 of 16 April 2014 and in Article 35.

Article 79. Penalties for offences committed by non-auditors.

In the case of violations committed by non-auditors, the following rules apply:

(a) For the very serious infringement provided for in Article 72.b), for non-compliance with the prohibition set out in Article 39.2 (d), the fine shall be imposed for a minimum amount of EUR 26,000 and a maximum of EUR 54,000. In this case, the audit firm shall not be held liable for the non-compliance, without prejudice to its obligation not to carry out the audit referred to in Article 23.

(b) For the very serious infringement referred to in Article 72,d), a fine shall be imposed for a minimum amount of EUR 18,000 and a maximum of EUR 36,000 for non-compliance with the obligation to keep secret laid down in Article 31.

(c) For the very serious infringement referred to in Article 72,j), for carrying out audit work of accounts without being registered as an exercise in the Official Register of Auditors or without sufficient bail, impose a fine for a minimum amount of EUR 30,000 and a maximum of EUR 60,000.

(d) For the serious infringement provided for in Article 73,c), for failure to comply with the prohibition laid down in Article 23, the fine shall be imposed for a minimum of EUR 6,000 and a maximum of EUR 48,000. In this case, the audit firm shall not be held liable for the non-compliance, without prejudice to its obligation not to carry out the audit referred to in Article 23.

(e) For the serious infringement, as referred to in Article 73.k), a fine shall be imposed for a minimum of EUR 12,000 and a maximum of EUR 18,000.

In the case of infringements provided for in Article 73.k) committed by the audited or linked entities, a fine shall be imposed for a minimum amount of EUR 12,000 and a maximum of EUR 36,000.

In the case of entities of public interest, a fine shall be imposed for a minimum amount of EUR 36,000 and a maximum of EUR 72,000.

Article 80. Determination of the penalty.

1. The penalties applicable in each case for the commission of infringements shall be determined taking into account the following criteria:

a) The nature and importance of the infringement.

b) The severity of the damage or damage caused or that it may cause.

c) The existence of intentionality.

d) The importance of the audited entity, measured according to the total number of assets, their annual turnover or the number of employees.

e) The unfavorable consequences for the national economy.

f) The previous conduct of the offenders.

g) The circumstance of having carried out own-initiative actions aimed at remedying the infringement or to undermine its effects.

2. Where, in the last five years, a penalty has been imposed which has reached the same level of infringement, the penalties referred to in Articles 75 to 79 shall be imposed in the upper half of the country, except for the established in relation to the commission of the serious infringement referred to in Article 73.d).

Article 81. Enforcement of resolutions.

Resolutions by which any of the sanctions listed in this Title are imposed shall only be enforceable when they have gained firmness on an administrative basis.

Article 82. Advertisement of the sanctions.

1. The operative part of the sanctions resolutions that are enforceable will be published in the "Bulletin of the Accounting and Audit Institute of Accounts", and will be entered in the Official Register of Auditors of Accounts. The private admonition sanctions are excepted.

Where the penalties are under appeal in the administrative-administrative procedure, that circumstance shall be recorded in the Official Register of Auditors and, where possible, the state of processing of the action shall be indicated. and the result of it.

2. The information described in the above section can be accessed through the Accounts Audit and Audit Institute website.

3. Penalties for offences committed in connection with work and audit reports of public interest entities shall be published in the "Official State Gazette" after they have gained firm administrative action.

The penalties for separation and disablement shall also be included in the Trade Register, once they have gained firmness on the administrative path.

4. The publication of the penalties shall include information on the type and nature of the offence and the identity of the natural or legal person on whom the sanction is placed.

5. Exceptionally, penalties which have gained firmness on the administrative basis, in cases where, in addition to the provisions laid down in Article 3 (2) of the Regulation, may be entered in the Official Register of Auditors of the Audit in the applicable legislation, any of the following circumstances are present:

(a) That the publication of the sanction could endanger the stability of the financial markets or an ongoing criminal investigation.

(b) That the publication of the sanction could cause disproportionate harm to the institutions or persons concerned in relation to which the offence was committed.

The exclusion of the publication of the sanction may be agreed by the Minister for Economic Affairs and Competitiveness, at the request of the interested parties, in order to resolve the appeal that has been filed.

Article 83. Administrative responsibility for extinguished audit firms.

1. Penalties for fines imposed by the Commission on infringements established in this Law to the dissolved and liquidated audit firms in which the law limits the liability of the partners, members or co-holders transmit to them, which shall be jointly and severally bound up to the limit of the value of the settlement fee corresponding to them.

The penalties for fines imposed by the commission on the offences established in this Law to the dissolved and liquidated companies in which the Law does not limit the liability of the partners, members or co-holders They shall be fully transmitted to them, which shall be jointly and severally bound.

Also, the penalties for the absence of any infringement or incompatibility imposed by the offences committed by the dissolved or extinguished companies shall be transmitted only to the companies or entities in which they participate and are the same. partners or the same members that existed in the dissolved or extinct societies.

2. In the case of extinction or dissolution without the liquidation of audit firms, the penalties for fines imposed by the commission of the offences established in this Law shall be transmitted to the persons or entities who succeed or who are beneficiaries of the corresponding operation.

Likewise, only the penalties for the reduction or incompatibility imposed by the infringements committed by the audit firms dissolved or extinguished without liquidation shall be transmitted to the aforementioned companies. such operations in cases where the same partners or members of the same unit-holders who existed in the dissolved or extinguished companies without liquidation are involved in those cases.

The provisions of this paragraph shall apply to any assumption of a global transfer of the assets and liabilities of a trading company.

3. The provisions of the preceding paragraphs shall apply in cases where a disguised or merely apparent dissolution occurs. It is considered that, in any case, there is a covert or merely apparent dissolution of the legal person when the economic activity continues and the substantial identity of customers, suppliers and employees, or of the most relevant party, is maintained. of all of them. In such cases, the penalties shall be transmitted to the company or natural person in which the identity referred to in the preceding paragraph is met.

4. In the event that the corresponding sanctioning file had not been initiated to declare the administrative responsibility for the commission of infringements provided for in this Law at the time of the extinction of the legal personality of the audit firm, the penalties which may be imposed on the successors referred to in this Article shall be required, and the proceedings with any of them may be understood. The same shall apply where liability is not yet declared at the time of the termination of the legal personality.

Article 84. Obligation to preserve the documentation.

In the case of temporary or permanent discharge in the Official Register of Auditors, auditors and audit firms shall take the necessary measures to safeguard the documentation relating to the those audits of accounts which they have carried out and which are the subject of a civil liability action.

Article 85. Limitation of the infringements.

1. Minor infractions will be prescribed for the year, the serious ones at two years and the very serious ones at three years of your commission.

2. The limitation period shall be interrupted by the initiation, with the knowledge of the person concerned, of the sanctioning procedure, the time limit being resumed if the file remained at a standstill for more than six months for reasons not attributable to the auditor or audit society of accounts subject to the procedure.

Article 86. Prescription of penalties.

1. The penalties imposed for minor offences will be prescribed for the year, those imposed for serious infringements at two years, and those imposed for very serious infringements at three years.

2. The limitation period shall begin to be counted from the day following the day on which the decision imposing the sanction becomes final, the time limit being resumed if the file remained paralyzed for more than six months due to the absence of a imputable to the auditor or audit firm of accounts subject to the procedure.

TITLE IV

Accounting and Audit Institute rates

Article 87. Rate of the Accounting and Audit Institute of Accounts for the control and supervision of the audit of accounts activity.

1. The rate of control and supervision of the audit activity of accounts shall be governed by this Law and by the other normative sources referred to in Article 9 of Law 8/1989, of 13 April, of Fees and Public Prices, in order to cover the costs relating to the exercise of the powers of the Accounting and Audit Institute of Accounts.

2. It is the taxable fact of this fee to exercise the powers of audit of the audit of accounts by the Institute of Accounts and Audit of Accounts referred to in Chapter I of Title II in relation to the issuing audit reports of accounts.

3. This fee shall be due on the last day of each calendar quarter, in relation to the audit reports issued in each quarter.

4. The auditors and audit firms registered in the exercise of the Official Register of Auditors of the Audit Office of the Audit Office of Accounts, which issue reports on the audit, shall be subject to this fee. auditing of accounts.

5. The tax share of this fee will consist of a fixed amount of EUR 123.40 for each audit report of accounts issued on an entity that is not in the public interest, and EUR 246.90 in the event that the fees invoiced by the Audit report on issued accounts is greater than 30,000 euros.

The tax share of this fee will consist of a fixed amount of 246.90 euros for each audit report of accounts issued on an entity of public interest, and of 493.80 euros in the event that the fees invoiced by the account audit report issued on an entity of this type is greater than EUR 30,000.

6. The voluntary management and collection of this fee corresponds to the Accounting and Audit Institute of Accounts. The tax collection is the responsibility of the State Tax Administration Agency, in accordance with the current legislation.

7. The rules for the settlement and payment of the said fee shall be determined, and the obligation for the taxable persons for self-validation and entry of the corresponding amount may be established.

8. The revenue derived from the levy referred to in this Article shall be considered as budgetary revenue of the Accounting and Audit Institute of Accounts, with the aim of financing the items corresponding to the expenditure provided for in this Article. the control and discipline functions of the audit accounts activity.

9. The fixed amounts of the levy referred to in paragraph 5 of this Article may be amended by the General Budget Law of the State of each year.

Article 88. Fee of the Accounting and Audit Institute of Accounts for the issue of certificates or documents at the request of a party and for entries and entries in the Official Register of Auditors.

1. The fee for issuing certificates or documents at the request of a party, as well as for entries and entries in the Official Register of Auditors, is hereby established. This fee shall be governed by this Law and by the other regulatory sources referred to in Article 9 of Law 8/1989 of 13 April 1989 on Public Fees and Prices, in order to cover the costs relating to the exercise of the powers of the organisation and maintenance of the Official Register of Auditors of Accounts referred to in Article 8.

2. It is the taxable fact of this fee to exercise the powers of the Institute of Accounts and Audit of Accounts referred to in Article 6.2 of the Statute and the organic structure of the Accounting and Audit Institute, approved by Royal Decree 302/1989 of 17 November 1989 as regards the issue of certificates or documents at the request of a party and to the entries and entries in the Official Register of Auditors.

3. This fee shall be payable on the same day as the application at the request of part of the issue of certificates or documents and of the communication by the person concerned to the Official Register of Auditors.

4. Persons who request to the Accounting and Audit Institute of Accounts the actions that constitute the taxable fact of this fee shall be taxable persons.

5. The tax rate of this fee shall be a fixed amount for each issue of certificates or documents at the request of a party and for the entries and entries in that Register. This amount shall be:

(a) Registration of an auditor in the Official Register of Auditors: EUR 75.

b) Situation change: 75 euros.

c) Modification of data contained in the Official Register of Auditors of Auditors: EUR 75.

(d) Registration of an audit firm in the Official Register of Auditors: a fixed amount of EUR 100, plus EUR 48 per adviser/administrator.

e) Modification of data contained in the Official Register of Auditors of Audit Companies: EUR 75.

(f) Issue of certificates of registration in the Official Register of Auditors of Accounts to auditors and audit firms: EUR 24.

6. The voluntary management and collection of this fee corresponds to the Accounting and Audit Institute of Accounts. The tax collection is the responsibility of the State Tax Administration Agency, in accordance with the current legislation.

7. The rules for the settlement and payment of the said fee shall be determined, and the obligation for the taxable persons for self-validation and entry of the corresponding amount may be established.

8. The revenue derived from the levy referred to in this Article shall be considered as budgetary revenue of the Accounting and Audit Institute of Accounts, with the aim of financing the items corresponding to the expenditure provided for in this Article. the exercise of the powers of organisation and maintenance of the Official Register of Auditors.

9. The amounts of the levy referred to in paragraph 5 of this Article may be amended by the General Budget Law of the State of each year.

TITLE V

Personal data protection

Article 89. Protection of personal data.

Access to the information and data required by the Accounting and Audit Institute of Accounts in the exercise of its supervisory functions is carried out in accordance with Article 11.2.a) of Organic Law 15/1999, of 13 December, Protection of Personal Data.

The Accounting and Audit Institute will apply the current data protection regulations to the processing of personal data exchanged within the scope of Community cooperation and with third parties. countries.

The processing of the personal data of the complainant shall be carried out in accordance with the Organic Law 15/1999 of 13 December on the Protection of Personal Data.

Additional disposition first. Mandatory audit.

1. Without prejudice to other provisions, they shall in any event be subject to the audit of accounts provided for in Article 1.2 of this Law, the entities, irrespective of their legal nature, in which one of the Following circumstances:

a) That they issue securities admitted to trading on official secondary markets of securities or multilateral trading systems.

b) That they issue obligations on public offer.

c) To be used in the usual way to financial intermediation, and, in any case, credit institutions, investment firms, companies governing the official secondary markets, institutions (a) the management of the multilateral trading system, the Systems Society, the central counterparties, the Stock Exchange Company, the investment guarantee fund management companies and the other financial institutions, including collective investment institutions, securitisation funds and their management companies, registered in the corresponding Records of the Banco de España and the National Securities Market Commission.

(d) Having as a social object any activity subject to the recast of the Law on the Management and Supervision of Private Insurance, approved by Royal Decree-Law 6/2004 of 29 October, within the limits of Regulation (s) shall be established, as well as pension funds and their managing entities.

e) That they receive grants, aid or carry out works, services, services or supply goods to the State and other public bodies within the limits that the Government establishes by royal decree.

(f) Other entities that exceed the limits that the government will regulate by royal decree. Such limits shall cover at least the turnover, the total amount of the asset on balance sheet and the average annual number of employees, and shall apply, each or every one of them, as permitted by the respective legal nature of each company or entity.

2. This additional provision does not apply to entities that are part of the state, regional or local public sector, without prejudice to the rules governing those public sector entities. In any event, the provisions of this additional provision shall apply to commercial companies forming part of the public, regional or local public sector.

3. Branches in Spain of foreign credit institutions, where they do not have to submit annual accounts for their activity in Spain, shall submit to audit financial economic information which is to be made public on an annual basis, and which with a reserved character refer to the Banco de España, in accordance with the accounting regulatory framework applicable to the Bank of Spain.

Additional provision second. Audit in public sector entities.

1. This Law shall not apply to the activities of the review and verification of annual accounts, financial statements or other accounting documents, or to the issuance of the corresponding reports, which are carried out by supervisory bodies. General government in the exercise of its powers, which will continue to be governed by its specific legislation.

2. The audit work on annual accounts or other financial statements or accounting documents of entities that are part of the state, regional or local public sector and are legally assigned to the public control bodies of the financial management of the public sector in the exercise of its powers, are governed by its specific rules, not resulting from the application of those works as laid down in the regulatory regulation of the audit of accounts.

The collaborative work which may be carried out by the auditors or audit firms entered in the Official Register of Auditors, under contracts concluded by the public control bodies to which they are refers to paragraph 1, and in implementation of the annual planning of audits of such bodies, shall be governed by their specific legislation, not resulting from the application of this Law.

The reports referred to in this paragraph, which may be issued by auditors or audit firms on public entities, may not be identified as an audit of accounts, nor may their wording or presentation be generate confusion regarding their nature as an audit of accounts.

3. By way of derogation from the preceding paragraph, in cases where contracts concluded between the public control bodies and the auditors of accounts entered in the Official Register of Auditors are included, together with the implementation of the of the public audit, the issuance of an audit report of the accounts provided for in Article 1 of this Law, intended to meet certain requirements laid down in sectoral rules or for other reasons of a commercial or financial nature, such as concurrency to international tenders or to obtain resources in markets financial, the audit report shall be subject to the provisions of the regulatory rules for the audit of accounts.

Except for the provisions of this paragraph, the reports relating to accounts or statements which are formulated in accordance with the accounting rules of the public sector or that the audit works are carried out in accordance with the rules of applicable audit of the public sector.

4. The audit work of accounts carried out by an auditor or audit firm, entered in the Official Register of Auditors, on the annual accounts or financial statements or other accounting documents of institutions members of the state, regional or local public sector which, in accordance with its implementing rules, are legally obliged to submit their annual accounts to the audit of accounts provided for in Article 1 of this Law, are subject to (a) the rules governing the audit of accounts, provided that they do not accounts or states are not formulated in accordance with the accounting rules of the public sector or the audit work is not carried out in accordance with the applicable public sector audit standards. In particular, audit work carried out by an auditor or audit firm entered in the Official Register of Auditors of Accounts on the accounts is subject to the aforementioned regulatory framework for audit activity. the annual accounts of commercial companies belonging to the public sector subject to the obligation to submit their annual accounts to audit in accordance with the rules of trade.

5. In the case of annual accounts or other consolidated financial statements in which the dominant company is a business public entity or another entity governed by public law and the dominated companies may be a commercial company, where the the audit of these annual accounts shall be carried out by the public authorities responsible for the control of the economic and financial management of the public sector; the provisions of Article 7 of this Law shall not apply in the performance of that function, specific public sector regulations.

Additional provision third. Commission of Audit of Public Interest Entities.

1. Entities of public interest, whose rules do not require it, shall have an Audit Committee with the composition and functions referred to in Article 529 quaterths of the Recast Text of the Capital Companies Act, approved by Real Legislative Decree 1/2010 of 2 July.

2. In the entities referred to in paragraph 1 which have an organ with functions equivalent to those of the Audit Board, which has been established and operates in accordance with its applicable rules, the functions of the Audit Board shall be the body responsible for these functions and its composition shall be made public on its website by the said body.

In the Savings Banks the functions of the Audit Committee may be assumed by the Control Commission.

3. By way of derogation from paragraph 1, they shall not be required to have an Audit Committee:

(a) Public interest entities whose sole activity is to act as an issuer of securities guaranteed by assets, as defined in point (5) of Article 2 of Regulation (EC) No 809/2004 Commission.

b) the public interest entities referred to in Article 3.5 (b) which are small and medium-sized, provided that their functions are assumed by the administrative body. Where the administrative body exercises the functions of the Audit Board and its Chairman has executive functions, the latter may not exercise the functions which are legally or legally appropriate to him in his capacity as such.

(c) Public interest entities provided for in Article 3.5 (b) to which the Community rules permit to exempt from this requirement and to be determined by regulation.

(d) Public interest entities that are dependent, as provided for in Article 42 of the Trade Code, from other entities of public interest, provided that the following requirements are met:

1. º That the dependent entities are fully engaged by the dominant entity.

2. º That the administration of the dependent entities is not attributed to an administrative board.

3. The Audit Committee of the dominant entity also assumes, in the area of the dependents referred to in this paragraph, the functions of such a commission and any other functions that may be attributed to it.

Public interest entities referred to in this paragraph shall make public on their website the reasons why they consider it not appropriate to have an Audit Commission or an administrative body or monitoring to perform the functions of the Audit Committee.

4. They shall be exempt from the requirement of independence required of the Audit Commission by Article 529 (1) and (2) of the Recast Text of the Capital Companies Act, approved by Royal Decree Legislative 1/2010 of 2 July, entities meeting the following requirements:

(a) In the case of entities of public interest as provided for in Article 3.5.b) and have an obligation to have an Audit Committee.

b) That the members of the Audit Committee are, in turn, their management body.

c) That your specific regulations do not require the presence of independent directors in the administrative body.

5. Institutions of public interest referred to in paragraphs 2 to 4 above shall communicate the circumstances in which they are collected to the national supervisory authorities of those entities. Such communication shall be made within one month of the adoption of the relevant corporate agreement.

6. The functions provided for in points (d) to (g) of Article 529 (4) of the recast of the Capital Companies Act shall be without prejudice to the powers conferred on the Institute of Accounting and Audit of Accounts in regulatory auditing of accounts in relation to the observance of the duty of independence.

7. The supervision of compliance with this additional provision corresponds to the National Securities Market Commission, in accordance with the provisions of Title VIII of Law 24/1988 of 28 July of the Securities Market. This competence is without prejudice to the competence of the Accounting and Audit Institute of Accounts for the oversight of the audit of accounts.

On a timely basis and as soon as possible, the National Securities Market Commission will provide the Accounting and Audit Institute of Accounts for referral to the European Commission of European Supervisory Bodies. Auditors the information relating to the sanctions, if any, imposed on them, which have been firmly established on an administrative basis, to the members of the Audit Committee referred to in this additional provision.

Additional provision fourth. Collaboration of the National Commission on Markets and Competition in the implementation of competences in relation to the Audit of Accounts market.

1. For the exercise of the powers referred to in Article 46.2.e of this Law, the Institute for Accounting and Audit of Accounts may request the collaboration of the National Markets and Competition Commission, in particular for the drawing up an annual report in which it is reflected at least:

(a) The evolution of the market for legal audit services provided to entities of public interest, and the functioning of audit fees.

(b) The main operations that have occurred in the sector, which could affect the level of market concentration, and the availability or provision of audit services at particular times or sectors.

(c) The identified risks, and in particular the identification of risks arising from a high incidence of quality failures by a statutory auditor or audit firm and the measures to be taken for mitigation.

2. The National Markets and Competition Commission and the Accounting and Audit Institute of Accounts shall exchange the relevant information for the purposes of the fulfilment of their respective powers. In particular, the Accounting and Audit Institute of Accounts shall inform the National Commission of the Markets and the Competition of the facts, conduct or practices of which it may suspect or deduce that there are indications of anticompetitive practices. the competition rules laid down in Law No 3/2013 of 4 June of the establishment of the National Commission on Markets and Competition.

3. The competent authorities and persons working or having worked in compliance with the provisions of this provision shall observe the duty of secrecy laid down in Article 60, without prejudice to the legal exceptions provided for, and Law 3/2013, of 4 June, of the creation of the National Commission of Markets and Competition.

Additional provision fifth. Report on market developments.

Before 17 June 2016, and every three years at least from that date, the Accounting and Audit Institute of Accounts and the European Competition Network will draw up a report on the evolution of the service market. of legal audit provided to entities of public interest and shall submit it to the Commission of European Audit Bodies, European Securities and Markets Authority, European Banking Authority, the European Insurance Authority and Retirement pensions and the Commission.

Additional provision sixth. Audit firms.

The audit firms shall make the corresponding amendments to comply with the requirements of Article 11 within one year from the date of publication of this Law in the "Official State Gazette".

In the event that the audit firms have not been modified prior to that date, the Accounting and Audit Institute of Accounts shall proceed to discharge them from the Official Register of Auditors.

Additional provision seventh. Coordination mechanisms with public bodies or institutions with control or inspection powers.

In addition to the provisions of Article 38 of this Law, when by law-range provisions, public bodies or institutions are assigned powers of control or inspection on entities subject to audit accounts, the government, by means of a royal decree, shall establish the systems, rules and procedures that enable its proper coordination, for the purposes of collecting auditors and audit firms as much information as is necessary for the exercise of those powers.

The auditors of the annual accounts of entities other than those of public interest subject to the supervision and control regime attributed to the Banco de España, the National Securities Market Commission and the Directorate General of Insurance and Pension Funds, as well as to the regional bodies with powers of management and supervision of the insurance institutions, will have the obligation to communicate quickly in writing to the aforementioned organs or institutions competent public as appropriate, any event or decision, on the audited entity or institution which they have been aware of in the performance of their duties, and who may:

(a) Constitute a serious violation of the content of the laws, regulations or administrative provisions which lay down the conditions of their authorization or which specifically regulate the exercise of their activity.

b) Prejudice the continuity of their operation, or seriously affect their stability or solvency.

c) Involve an opinion with caveats, unfavorable or denied, or prevent the issuance of the audit report.

Without prejudice to the above obligation, the audited entity shall have the obligation to forward a copy of the audit report from the annual accounts to the competent supervisory authorities referred to above. If, within one week of the date of delivery of the report, the auditor was not satisfied with the fact that such a referral has occurred, he shall send the report directly to the said authorities.

Additionally, the auditors of the dominated entities that are subject to the supervisory regime, in addition to informing the competent supervisory authorities, as set out in the first subparagraph, also report to the auditors of the parent entity.

Good faith communication of the above facts or decisions to the competent supervisory authorities shall not constitute a breach of the duty of secrecy laid down in Article 31 of this Law, or of which it may be enforceable. contractually to the auditors, nor will it involve any liability for these.

Additional disposition octave. Electronic communications.

Audit auditors and audit firms shall be required to enable, within the time limit set for this purpose, the technical means required by the Accounting and Audit Institute for the effectiveness of their accounts. electronic notification systems in accordance with the provisions of Article 27.6 of Law 11/2007 of 22 June 2007 on the electronic access of citizens to public services.

Additional provision ninth. Collaboration with the General Directorate of the Registers and the Notary.

1. The General Directorate of the Registers and the Notary Office will send to the Accounting and Audit Institute of Accounts, in the months of September and March, a relationship of the companies and other entities registered in the business registers. they have submitted annual accounts accompanied by the audit report for their deposit in the preceding six months for their deposit, specifying the identification data of the auditor or audit firm, as well as the period of appointment. For such purposes, the business registrars must submit the information corresponding to their registration to the General Directorate of the Registers and the Notary in the month preceding those mentioned in the preceding paragraph.

2. Prior to registering the appointment of auditor in the Commercial Register, the registrar shall verify that the auditor of the audit accounts or company is registered in the Official Register of Auditors of Accounts in the situation of exercise and are not in a situation that prevents them from performing the audit.

Additional provision 10th. Information on payments made to public administrations.

First. Obligation to publish information on payments made to public administrations.

1. Undertakings active in the extractive industries or the timber holding of primary forests in which the circumstances of the following paragraphs are met, shall be required to draw up and publish an annual report on the payments. made to the Public Administrations.

It will be understood as companies active in extractive industries, companies that carry out any activity involving exploration, prospecting, discovery, development and extraction of minerals, petroleum, deposits of natural gas or other materials in the field of economic activities listed in Section B, Divisions 05 to 08 of Annex I as well as the activities referred to in Section A, Division 02, Group 02.2 of Annex I to the Regulation (EC) No 1893/2006 of the European Parliament and of the Council of 20 December 2006 on the establishes the statistical classification of economic activities NACE in its current version, respectively.

It is understood by primary forest for the purposes of the provisions of this provision, the naturally regenerated mountain, composed of native species and in which there are no evident indications of human activities and where the processes They have not been significantly altered.

For its part, Public Administration shall be any national, regional or local authority of a State, including departments, agencies or companies subject to the control of such authorities, in accordance with the provisions of the Article 42 of the Trade Code.

2. However, the obligation referred to in the preceding paragraph shall apply only to undertakings which comply with one of the following circumstances and which are not exempted under the fourth paragraph:

a) That is a large company, considering as such to these exclusive effects the one that, at the date of balance closing, rebase, at least, the numerical limits of two of the following three criteria:

i. That the total of the assets in the balance sheet exceeds EUR 20 million.

ii. That the net amount of its annual turnover exceeds EUR 40 million.

iii. That the average number of employees employed during the financial year is more than two hundred and fifty.

b) That is an entity of public interest, understanding as such those that meet the conditions set forth in Article 3.5 of this Law.

Second. Contents of the report.

1. The report shall contain the following information concerning the financial year concerned and the activities referred to in the second subparagraph of paragraph

:

(a) The total amount of the payments to each Public Administration and which will comprise any amount paid, either in money or in kind, for the activities subject to it.

b) The total amount of payments made to each Public Administration broken down into the following types of payments:

I. Production rights.

II. Taxes on income, production or profits of companies, excluding taxes on consumption, such as value added tax, taxes on the income of natural persons or taxes on the income of the public sales.

III. Fees.

IV. Dividends.

V. Initial prospecting, discovery and production premiums.

VI. Licenses, rentals, access rights and other benefits by licenses and/or concessions; and

VII. Payments for infrastructure improvements, excluding those made under corporate social responsibility.

c) When payments have been attributed to a specific project, the total amount, broken down by type of payment, as well as the total amount of the payments for each project.

However, payments made by the company in relation to obligations imposed at the institution level may be reported at the institution level rather than at the project level.

Project is understood as operating activities that are governed by a single contract, license, lease, concession or similar legal agreement and form the basis of a liability for payment in respect of an Administration Public. However, if several of these agreements are substantially interconnected, they will be considered a project.

2. No payment, made as a single payment or as a series of related payments, which is less than EUR 100,000 during the financial year, shall not be entered in the report.

3. Where payments are made in kind, they shall be entered by their value and, where appropriate, by their volume, including explanatory notes to clarify how such a value has been determined.

4. The payment of the payments referred to in this paragraph shall be more than the form of the payment or activity concerned and shall not be broken down or artificially added to the payments or activities with the intention of circumventing the application of this Law.

Third. Consolidated report.

1. Undertakings which carry out the activities subject to the obligation of the first paragraph must make and publish a consolidated report on their payments to the public authorities in the terms laid down in this Law if the dominant company is is subject to the obligation to draw up annual accounts and consolidated management reports in accordance with Article 42 of the Trade Code.

A dominant company will be considered to have activities in the extractive industry or in the timber exploitation of primary forests when any of its companies are engaged in activities in the extractive industry or in the Timber exploitation of primary forests.

2. The consolidated report shall include only payments resulting from the extraction and/or operations related to the logging of primary forests.

Fourth. Exemptions.

1. They shall not be required to draw up and publish the report set out in the first subparagraph, in the following circumstances:

(a) Companies whose parent company is subject to Spanish law or a Member State of the European Union and whose payments are included in the consolidated report referred to in the previous third paragraph in accordance with the provisions of the State concerned.

(b) Companies that prepare and publish a report that meets the information requirements of a third country provided that those requirements have been declared equivalent to those set out in this Act, after applying the the equivalence procedures referred to in Articles 46 (2) and (3) and (47) of Directive 2013 /34/EU of the European Parliament and of the Council of 26 June 2013 on annual financial statements, consolidated financial statements and other related reports of certain types of undertakings, amending Directive 2006 /43/EC of the European Parliament and of the Council European Parliament and the Council and Council Directives 78 /660/EEC and 83 /349/EEC are repealed. However, the undertaking concerned shall publish and deposit in the Trade Register the report in accordance with the provisions of paragraph 5.

2. They shall not be required to make the consolidated report referred to in the third paragraph, the following parent companies:

(a) The dominant companies of a small group, except in the case that any of the companies dominated is a public interest entity. For these exclusive purposes, a group shall be deemed to be small when on a consolidated basis, at least two of the following limits are not exceeded on the date of closure of the balance sheet of the dominant company:

i. That the total of the assets in the balance sheet does not exceed EUR 6 million.

ii. The net amount of its annual turnover does not exceed EUR 12 million.

iii. That the average number of employees employed during the financial year is not more than fifty.

(b) The dominant companies of a medium group, except in the case that any of the companies dominated is a public interest entity. For these exclusive purposes, a group is meant to be medium when it is not small and on a consolidated basis is not exceeded, at least two of the following limits at the closing date of the balance sheet of the parent company:

i. That the total of the assets in the balance sheet does not exceed EUR 20 million.

ii. The net amount of its annual turnover does not exceed EUR 40 million.

iii. That the average number of employees employed during the financial year is not more than two hundred and fifty.

c) The dominant companies subject to Spanish law which are at the same time dominated companies and their own dominant company is subject to the law of a Member State of the European Union.

3. Undertakings in which at least one of the circumstances of the following letters are present shall not have to be included in a consolidated report:

(a) That severe and long-lasting circumstances substantially impede the exercise by the dominant company of its rights to the assets or management of that undertaking.

(b) That, exceptionally, the information necessary for the preparation of the consolidated report on payments made to the public authorities covered by this Law cannot be obtained without disproportionate or disproportionate unjustified delay.

(c) that the holding of the shares or units of such undertaking has exclusively the objective of its subsequent disposal.

However, the exceptions in this section apply only if they are also used for the purposes of consolidated financial statements.

Fifth. Approval and publicity.-Reports on payments to general government shall be subject to approval and publication within the first six months after the end of each financial year and shall be kept publicly available for at least 10 months. years. They shall also be deposited in the trade register in conjunction with the documents integrating the annual accounts.

Sixth. Responsibility for preparing and publishing reports.

1. The directors of the company shall be responsible for ensuring, to the extent of their knowledge and capacity, that the report on payments made to the general government is drawn up, approved, deposited and published in accordance with the requirements required by this Act.

2. Failure by the administrative body to draw up, publish and deposit, within the prescribed period, the documents referred to in this Law and without prejudice to other responsibilities, shall give rise to the imposition of the a corresponding penalty in the terms and conditions of the law applicable to the company in question.

First transient disposition. Graduates, Engineers, Commercial Teachers, Architects or University Diplomates.

Who to the date of entry into force of Law 12/2010, of June 30, by which the Law 19/1988, of July 12, of Audit of Accounts was modified, were in possession of the titles of Licentid, Engineer, Professor Mercantile, architect or university diploma shall retain the right of waiver in the examination of professional competence, in those matters which have been exceeded in the studies required to obtain such qualifications, in the established terms by resolution of the Accounting and Audit Institute of Accounts.

Second transient disposition. Incompatibility situations.

The situations of incompatibility arising from the circumstances provided for in Article 16.1 (a), 2., 3. and 4. º, as well as in Article 39.2, which modify the system prior to the entry into force of this Law, will not determine the the lack of independence of auditors and audit firms when they were originated and concluded before 1 January 2016.

The prohibited services referred to in Article 39.1, which modify the scheme prior to the entry into force of this Law, will not determine the lack of independence of auditors and audit firms in the relationship to audits of accounts initiated prior to that date and which have not been completed with the issuance of the required audit report.

Transitional provision third. Economic year of application of the forecasts contained in the additional provision tenth.

The obligations under the additional provision of this Law shall only be payable in respect of the activities carried out in the financial years beginning on or after 1 January 2016.

Single repeal provision.

As many provisions of equal or lower rank are repealed, they oppose the provisions of this Law, and in particular the Recast Text of the Audit of Accounts Law, approved by the Royal Legislative Decree 1/2011, of 1 of July.

Final disposition first. Amendment of the Code of Commerce, approved by Royal Decree of 22 August 1885.

The following changes are made to the Trade Code, approved by Royal Decree of 22 August 1885:

One. Article 34 (1) shall be read as

:

" 1. At the end of the financial year, the employer shall draw up the annual accounts of his undertaking, which shall include the balance sheet, the profit and loss account, a statement reflecting the changes in the net worth of the financial year, a statement of flows of cash and Memory. These documents form a unit. The state of changes in net worth and the statement of cash flows shall not be mandatory when so established by a legal provision. "

Two. Article 38a (1) is worded as follows:

" 1. Assets and liabilities may be valued at fair value on the terms that are regulated in accordance with European rules.

In both cases, it must be indicated whether the variation in value originating in the equity element as a result of the application of this criterion should be attributed to the profit and loss account, or it should be directly included in the net worth. "

Three. Paragraphs 3, 4 and 5 of Article 38a are deleted.

Four. Article 39 (4) is worded as follows:

" 4. Intangible immobilizes are defined useful life assets. Where the useful life of these assets cannot be reliably estimated, they shall be amortised within ten years, unless another legal or regulatory provision sets a different time limit.

The goodwill may be included in the balance sheet asset only when it has been acquired for consideration. It shall be presumed, unless otherwise proved, that the life of the goodwill is ten years.

In the Annual Accounts Report, the time limit and the method of amortization of intangible fixed assets should be reported. "

Five. Article 43 is worded as follows:

" Article 43.

1. By way of derogation from the foregoing Article, the companies in the abovementioned Article shall not be required to carry out the consolidation if any of the following situations are met:

1. When on the date of the closing of the exercise of the company obliged to consolidate the whole of the companies does not exceed, in its last annual accounts, two of the limits mentioned in the Royal Legislative Decree 1/2010, of 2 July, approving the recast text of the Capital Companies Act, for the formulation of an abbreviated profit and loss account, unless one of the companies in the group has the consideration of an entity of public interest according to the definition set out in Article 3.5 of Law 22/2015 of 20 July of Audit of Accounts.

2. When the company required to consolidate under Spanish law is at the same time dependent on another company governed by that legislation or by that of another Member State of the European Union, if the latter company owns 50% or more of the social holdings of those and, at least, 10% of the shareholders or shareholders who hold at least 10% have not applied for the formulation of consolidated accounts 6 months before the end of the financial year. In any case, the following requirements shall be met:

(a) That the company exempt from formalizing the consolidation, as well as all the companies it should include in the consolidation, are consolidated in the accounts of a larger group, the dominant company of which is subject to the legislation of a Member State of the European Union.

b) That the company exempt from formalizing the consolidation indicates in its accounts the mention of being exempt from the obligation to establish the consolidated accounts, the group to which it belongs, the social reason and the domicile of the parent company.

(c) The consolidated accounts of the dominant company, as well as the management report and the auditors ' report, are deposited in the Trade Register, translated into one of the official languages of the Autonomous Community, where the dispensed company has its registered office.

(d) that the company exempt from formalising the consolidation has not issued securities admitted to trading on a regulated market of any Member State of the European Union.

3. When the company is obliged to consolidate its participation exclusively in dependent companies which do not have a significant, individual and overall interest in the true image of the assets, the financial and the results of the companies in the group.

4. When all dependent societies can be excluded from consolidation by any of the following causes:

(a) In extremely rare cases where the information necessary to prepare the consolidated financial statements cannot be obtained for duly justified reasons.

(b) That the holding of the shares or units of this company is exclusively aimed at its subsequent disposal.

c) That severe and long-lasting restrictions hinder the exercise of control of the dominant society over this subsidiary.

2. A company shall not be included in the consolidation where one of the circumstances indicated in the previous indication 4 is present. '

Final disposition second. Amendment of the Law 24/1988, of July 28, of the Stock Market.

A (b) is added to Article 100 of the Law 24/1988, of July 28, of the Securities Market.

" (b) The lack of preparation or publication of the annual corporate governance report or of the annual report on remuneration of the directors referred to, respectively, Articles 540 and 541 of the recast of the Capital Companies Act, approved by Royal Legislative Decree 1/2010 of 2 July, or the existence in such reports of omissions or false or misleading data; failure to comply with the obligations laid down in Articles 512 to 517, 525.2, 526, 528, 529, 530, 531, 532, 533, 534, 538, 539, 540 and 541 of the said Law, without the issuing entities of securities admitted to trading on official secondary markets of an audit committee and a commission of appointments and remuneration in accordance with the terms laid down in Articles 529 quaterdecies and fifths of that Act or the non-compliance with the rules of composition and the allocation of functions of those audit committees of the public interest entities referred to in Article 529 quaterths. '

Final disposition third. Amendment of Law 29/1998 of July 13, regulating the Administrative-Administrative Jurisdiction.

A new paragraph 6 is added to the fourth additional provision of Law 29/1998 of July 13, regulating the Administrative-Administrative Jurisdiction, with the following wording:

" 6. The decisions of the Minister for Economic Affairs and Competitiveness, which resolve the resources of the Institute for Accounting and Audit of Accounts, as well as the resolutions of a normative nature dictated by the Institute of Accounting and Audit of Accounts directly, in a single instance, before the Room of the Administrative-Administrative of the National Audience. "

Final disposition fourth. Modification of the Recast Text of the Law of Capital Societies, approved by the Royal Legislative Decree 1/2010, of July 2.

The following amendments are made to the Recast Text of the Capital Companies Act, approved by Royal Legislative Decree 1/2010, of 2 July:

One. Article 107 (2) (d) shall be read as follows:

" (d) The price of the shares, the form of payment and the other terms of the transaction shall be those agreed and communicated to the company by the transferring partner. If the payment of the whole or part of the price is deferred in the transmission project, for the acquisition of the units it will be a prerequisite for a credit institution to guarantee the payment of the deferred price.

In cases where the intended transmission is for consideration other than the sale or free of charge, the purchase price shall be fixed by common agreement between the parties and, failing that, the fair value of the participation on the day when the purpose of broadcasting was communicated to the company. A fair value shall be deemed to be determined by an independent expert, other than the company auditor, designated for that purpose by the company's administrators.

In the case of a contribution to a public limited liability company or a share of shares, the actual value of the shares shall be the value of the report drawn up by the independent expert appointed by the trade registrar. "

Two. Article 124 (2) is hereby worded as

:

" 2. In this case, in order to reject the registration of the transfer in the book of nominative shares, the company must present to the heir an acquirer of the shares or offer to acquire them itself for its fair value in the the time when the registration was requested, in accordance with the provisions for the derivative acquisition of own shares in Article 146.

It shall be understood as a fair value to be determined by an independent expert, other than the auditor of the company who, at the request of any interested party, appoints the directors of the company to that effect. "

Three. Article 128 (3) is read as

:

" 3. If the parties do not agree on the amount to be paid in the cases provided for in the two preceding paragraphs, the latter shall be fixed, at the request of either of them and at the expense of both, by an independent expert, other than the auditor of the the company, which designates the Trade Register for that purpose. "

Four. Article 257 (3) is worded as follows:

" 3. Where an abbreviated model balance sheet can be made, the state of changes in net worth and the statement of cash flows shall not be required. '

Five. Article 260 is worded as follows:

" Article 260. Contents of the Memory.

The Memory must contain, in addition to the indications specifically provided for by the Code of Commerce, by this Law, and by the corresponding regulatory developments, at least, the following mentions:

First. The valuation criteria applied to the various items of the annual accounts and the methods of calculation of the value adjustments.

For the items contained in the annual accounts which are currently or at their origin expressed in currency other than the euro, the procedure used to calculate the exchange rate shall be indicated in euro.

Second. The name, address and legal form of the companies in which the company is a collective partner or in which it holds, directly or indirectly, a percentage of not less than 20% of its capital, or in which it does not percentage exerts significant influence.

The participation in the capital and the percentage of voting rights, as well as the amount of the net worth of the last financial year of those, will be indicated.

Third. Where there are unequal social shares or shares, the content of each of them, and where there are several classes of shares, the number and the nominal value of the shares belonging to each of them and the content of the rights belonging to each class.

Fourth. The existence of bonds of enjoyment, of bonds of founder, of convertible bonds and of similar securities or rights, with an indication of their number and the extent of the rights they confer.

Fifth. The number and the nominal value of the shares subscribed during the financial year within the limits of an authorised capital, as well as the amount of the acquisitions and disposal of shares or units of own shares, and of the shares or interests of the dominant company.

Sixth. The amount of the debts of the company whose residual duration is greater than five years, as well as that of all debts with collateral, with an indication of their form and nature.

These indications shall be shown separately for each of the debt items.

Seventh.

(a) The overall amount of guarantees committed to third parties, without prejudice to their recognition within the liability of the balance sheet where it is likely that they will result in the effective fulfilment of an obligation.

The existing pension commitments and those relating to group companies should be mentioned with due clarity and separation.

(b) The nature and purpose of the business of the agreements of the company that do not appear on the balance sheet as well as its financial impact, provided that such information is significant and necessary for the determination of the situation financial of the company.

c) Significant transactions between the company and third parties linked to it, indicating the nature of the linkage, the amount and any other information about the transactions, which is necessary for the determination of the financial situation of the company.

Eighth.

(a) The difference which could be made between the calculation of the accounting result for the financial year and the difference which would result from an assessment of the items with tax criteria, because they did not coincide with the principles Accounting for mandatory application. Where such an assessment has a substantial impact on the future tax burden, indications should be given.

(b) The difference between the tax burden charged to the financial year and the previous financial years, and the tax burden already paid or to be paid for those financial years, to the extent that this difference has a certain interest in respect of to the future tax burden.

Ninth. The distribution of the net amount of the turnover corresponding to the ordinary activities of the company, by categories of activities as well as by geographical markets, in so far as, from the point of view of the organisation of the the sale of products and the provision of services or other income corresponding to the ordinary activities of the company, those categories and markets differ considerably from each other. Such particulars may be omitted by companies which may make an abbreviated profit and loss account.

10th. The average number of persons employed in the course of the financial year, expressed in categories, as well as the staff costs relating to the financial year, by breaking down the amounts relating to wages and salaries and those relating to social security contributions, with separate mention of those covering pensions, where they are not included in the profit and loss account.

The distribution by gender at the end of the exercise of the company's staff, broken down into a sufficient number of categories and levels, including those of senior managers and members.

The average number of persons employed in the course of the exercise with disabilities greater than or equal to thirty-three percent, indicating the categories to which they belong.

11th. The amount of the salaries, allowances and remuneration of any class accrued in the course of the year by senior management staff and members of the administrative body, whatever their cause, as well as the obligations incurred in the case of pensions or the payment of life insurance premiums or civil liability in respect of the former and current members of the management body and senior management staff. Where the members of the administrative body are legal persons, the above requirements shall relate to the natural persons who represent them.

This information may be given on a global basis for remuneration.

In the event that the company has satisfied, in whole or in part, the liability insurance premium of all or any of the administrators for damages caused by acts or omissions in the exercise of the charge, shall be expressly indicated in the Memory, with an indication of the amount of the premium.

12th. The amount of advances and credits granted to each of the members of the administrative bodies and senior management staff, with an indication of the interest rate, their essential characteristics and the amounts eventually returned, as the obligations assumed on behalf of them as collateral. Where the members of the administrative body are legal persons, the above requirements shall relate to the natural persons who represent them.

This information can be given globally for each category.

13th. The amount broken down by concepts of the audit fees of accounts and other services provided by the auditor, as well as those relating to the persons or entities related to the auditor.

Fourteenth. The movements of the various items of the non-current asset.

15th.

(a) Where financial instruments have been valued at fair value, the main assumptions underlying the valuation models and techniques; the changes in the value recorded in the credit account shall be reported. losses and gains for each category of financial instruments and, in the case of derivative financial instruments, their nature and principal conditions of amount and timing and the movements of the reserve by fair value during the exercise.

(b) Where financial instruments have not been valued at fair value, the fair value shall be indicated for each class in the terms and conditions laid down in the General Accounting Plan.

sixteenth. The conclusion, modification or early termination of any contract between a commercial company and any of its members or administrators or persons acting on behalf of them, in the case of an operation other than ordinary traffic of the company or that it is not performed under normal conditions.

seventeenth. Name and registered office of the company which draws up the consolidated financial statements of the group to which the company and the Commercial Registry belong to which the consolidated annual accounts are deposited or, if applicable, the circumstances which eximam of the obligation to consolidate.

Eighteenth. Where the company is the largest asset in the group of companies domiciled in Spain, subject to the same unit of decision, because it is controlled by any means by one or more natural or legal persons not obliged to consolidate, acting jointly, or because they are under the sole direction of agreements or statutory clauses, must include a description of the said companies, indicating the reason for which they are under the same decision-making unit, and shall inform on the aggregate amount of assets, liabilities, net worth, turnover and result of all the above companies.

It is understood by a higher-active society that at the time of its incorporation into the decision unit, it presents a higher figure in the total assets of the balance sheet model.

The remaining companies subject to a decision unit shall indicate in the Memory of their annual accounts the unit of decision to which they belong and the Trade Registry where the annual accounts of the company are deposited. containing the information required in the first paragraph of this indication.

Nineteenth. The amount and nature of the items of revenue or expenditure whose amount or impact is exceptional.

Twenty-one. The proposal to apply the result.

Twenty-first. The nature and financial consequences of circumstances of significant relative importance occurring after the balance sheet date and which are not reflected in the profit and loss account or the balance sheet, and the financial effect of the balance sheet. such circumstances. "

Six. Article 261 is worded as follows:

" Article 261. Short memory.

Companies that can make short balance sheet may omit in the Memory the indications that they will determine.

In any event, the information required in the first, fifth, sixth, tenth, and tenth of the average number of persons employed in the course of the financial year must be provided, and fourteenth, fifteenth, Nineteenth and 21st.

In addition, the Memory shall express in a comprehensive manner the data referred to in the seventh and the twelfth indication of that article, as well as the name and registered office of the company establishing the financial statements. consolidated group of smaller companies included in the group to which the company belongs. "

Seven. Article 264 is worded as follows:

" 1. The person to be audited shall be appointed by the general meeting before the end of the financial year, for an initial period of time, which may not be less than three years and not more than nine years, from the date of the first financial year to be audited is initiated, without prejudice to the provisions of the regulatory framework for the audit of accounts in respect of the possibility of extension and the duration of contracts in respect of qualified companies as entities of public interest.

2. The board may appoint one or more natural or legal persons to act jointly. Where the persons appointed are natural persons, the board shall appoint as many alternates as the holders of the auditors.

3. The general meeting may not revoke the auditor before the end of the initial period for which he was appointed, or before the end of each of the works for which he was hired after the end of the initial period, unless he is fair and fair. cause.

4. Any contractual clause limiting the appointment of certain categories or lists of statutory auditors or audit firms shall be null and void. "

Eight. Article 265 is worded as follows:

" 1. Where the general meeting has not appointed the auditor before the end of the financial year, and the person appointed does not accept the post or is unable to perform his duties, the administrators and any other partner may request the auditor to Corporate registrar of the registered office the designation of the person or persons to carry out the audit.

In public limited liability companies, the application may also be made by the commissioner of the bondholders ' union.

2. In companies which are not required to submit the annual accounts to be checked by an auditor, the partners representing at least five per cent of the share capital may apply to the business registrar of the registered office which, with the company is responsible for the name of an auditor to carry out the review of the annual accounts for a given financial year, provided that three months have not elapsed since the end of that financial year.

3. The application for the appointment of an auditor and his appointment shall be made in accordance with the provisions of the Regulation of the Trade Registry. Before accepting the appointment, the auditor shall assess the effective performance of the contract in accordance with the provisions of the regulatory rules for the audit of accounts. "

Nine. A final paragraph is added to Article 266 with the following wording:

" Additionally, in the case of companies of public interest, shareholders representing 5 percent or more of the voting rights or capital, the Audit Commission or the Accounting and Audit Institute of Accounts may ask the judge to revoke the auditor or auditors or the audit firm or companies appointed by the General Board or the Commercial Registry and the appointment of another or others, when it is fair to do so. "

Ten. A paragraph 3 is added to Article 267, with the following wording:

" 3. In the case of the appointment of an auditor by the commercial registrar, when making the appointment, he shall determine the remuneration to be paid by the auditor for the entire period to be carried out by the auditor or at least the criteria for his calculation. Before accepting the order and for registration in the Mercantile Register, the corresponding fees must be agreed. Auditors may request appropriate caution or provision of funds on account of their fees prior to the commencement of the performance of their duties. "

Once. Article 270 (2) is worded as follows:

" 2. If, once the audit report on the initial accounts has been signed and delivered, the administrators are obliged to reformulate the annual accounts, the auditor shall issue a new report on the reformulated annual accounts. "

Twelve. Article 273 (4) is deleted.

Thirteen. Article 279 (1) is worded as follows:

" 1. Within the month following the approval of the annual accounts, the directors of the company shall submit, for their deposit in the Commercial Registry of the registered office, certification of the agreements of the approval partners ' meeting accounts, duly signed, and of the result, as well as, where appropriate, of the consolidated accounts, to which a copy of each of them shall be attached. Administrators shall also submit the management report, if required, and the auditor's report, when the company is required to audit by a legal provision or has been agreed upon at the request of the minority or in a manner voluntary and have registered the appointment of auditor in the Commercial Register. "

Fourteen. Article 308 (2) (a) and (c) shall be worded as follows:

" (a) That the directors draw up a report specifying the value of the shares or shares of the company and the proposal and the consideration to be met in detail by the new shares or new shares, with the indication of the persons to whom they are to be attributed, and, in the joint stock companies, an independent expert, other than the auditor of the accounts of the company, appointed for the purposes of the Trade Register, draw up another report, under its responsibility, on the fair value of the actions of the company, on the theoretical value of the right of preference whose exercise is proposed to delete or limit and on the reasonableness of the data contained in the administrators ' report.

(c) The nominal value of the new units or new shares, plus, where applicable, the amount of the premium, corresponds to the actual value attributed to the shares in the managers ' report in the case of limited liability companies or the value resulting from the independent expert's report in the case of public limited liability companies. "

Fifteen. Article 353 (1) is worded as follows:

" 1. In the absence of an agreement between the company and the partner on the fair value of the shares or shares, or on the person or persons to be valued and the procedure to be followed for their valuation, they shall be valued by a independent expert, appointed by the business registrar of the registered office at the request of the company or any of the shareholders holding the shares or shares to be assessed. '

Sixteen. Article 354 is read as follows:

" Article 354. Independent expert report.

1. For the purpose of carrying out his duties, the expert may obtain from the company all the information and documents which he considers to be useful and shall carry out any verifications he deems necessary.

2. Within the maximum period of two months from his appointment, the expert shall issue his report, which shall immediately notify the company and the partners concerned by a notarial line, accompanied by a copy, and deposit another copy in the Trade Register. '

seventeen. Article 355 is worded as follows:

" Article 355. Remuneration of the independent expert.

1. The remuneration of the expert shall be borne by the company.

2. However, in cases of exclusion, the company may deduct from the amount to be reimbursed to the excluded partner whatever it is necessary to apply to the satisfied fees the percentage that the partner has in the share capital. "

Eighteen. Article 417 (2) (b) is read as follows:

" (b) The independent expert's report contains a technical judgment on the reasonableness of the data contained in the administrators ' report and on the suitability of the conversion ratio, and, where appropriate, of the their adjustment formulas to compensate for any dilution of the economic participation of shareholders. "

nineteen. Article 505 (1), (2) and (3) are hereby worded as

:

" 1. By way of derogation from the second paragraph of the previous Article, the general meeting of shareholders of the listed company, once it has the report of the administrators and the report of the independent expert required by Article 308, may agree to issue new shares at any price, provided that it is higher than the net asset value of the shares resulting from the auditor's report, and the board may be limited to establishing the procedure for its determination.

2. In order to enable the general meeting to adopt the agreement referred to in the preceding paragraph, the report of the directors and the report of the independent expert shall be required to determine the equity value of the shares.

3. The independent expert shall determine the net asset value on the basis of the last audited annual accounts of the company or, if they are later than the date, on the basis of the last audited financial statements of the company in accordance with Article 254, formulated in any of the cases by the administrators in accordance with the accounting principles set out in the Trade Code. The date of closure of these accounts or of these states shall not be earlier than six months before the date on which the general meeting adopts the extension agreement, provided that no significant operations are carried out. The determination of the value shall take into account any caveats that may have become apparent in the report of the auditor of the annual accounts or of the financial statements. '

Twenty. Article 529 quaterths shall be worded as follows:

" Article 529 quaterths. Audit committee.

1. The audit committee shall be composed exclusively of non-executive directors appointed by the Management Board, most of whom shall at least be independent directors and one of them shall be appointed taking into account their knowledge and experience in accounting, auditing or both.

As a whole, the members of the commission shall have the relevant technical knowledge in relation to the sector of activity to which the audited entity belongs.

2. The chairman of the audit committee shall be appointed from among the independent directors who are part of the audit committee and shall be replaced every four years, and may be re-elected after a period of one year from the end of the year.

3. The Statute of the company or the Rules of Procedure of the Administrative Board, in accordance with the provisions of the Rules of Procedure, shall establish the number of members and shall govern the operation of the Commission, exercise of their functions.

4. Without prejudice to the other tasks assigned to it by the Social Statutes or in accordance with the Rules of Procedure of the Administrative Board, the Audit Committee shall have at least the following:

(a) Inform the general meeting of shareholders on the issues raised in relation to matters falling within the competence of the committee and, in particular, on the outcome of the audit, explaining how it has contributed to the integrity of the financial information and the role the commission has played in that process.

b) Monitor the effectiveness of internal control of society, internal audit and risk management systems, as well as discuss with the auditor the significant weaknesses of the internal control system detected in the development of the audit, all without breaking its independence. For such purposes, and where appropriate, they may submit recommendations or proposals to the administrative body and the relevant time limit for monitoring.

c) Oversee the process of making and presenting the financial information required and submitting recommendations or proposals to the administrative body, aimed at safeguarding their integrity.

(d) Elevate the selection, appointment, re-election and replacement of the auditor to the board of directors, taking responsibility for the selection process, in accordance with the provisions of Articles 16, paragraphs 2, 3 and 5, and 17.5 of Regulation (EU) No 537/2014 of 16 April 2014, as well as the conditions for its recruitment and regular collection of information on the audit plan and its implementation, in addition to preserving its independence in the exercise of their functions.

e) Establish appropriate relations with the external auditor to receive information on issues that may pose a threat to his or her independence, for examination by the commission, and any other related matters the process of developing the audit of accounts, and, where appropriate, the authorisation of services other than those prohibited, in the terms referred to in Articles 5 (4) and 6.2.b) of Regulation (EU) No 537/2014 of 16 April 2014; and as provided for in Section 3 of Chapter IV of Title I of Law 22/2015 of 20 July 2015, Audit of Accounts, on the independence regime, as well as those other communications provided for in the Audit of Accounts legislation and in the audit standards. In any event, they shall receive annually from the external auditors the declaration of their independence in relation to the entity or entities linked to it directly or indirectly, as well as the detailed and individualized information of the services additional of any kind provided and the corresponding fees received from these entities by the external auditor or by the persons or entities linked to it in accordance with the provisions of the regulatory framework for the activity of auditing of accounts.

(f) To issue annually, prior to the issuance of the Audit of Accounts report, a report in which an opinion is expressed on whether the independence of auditors or audit firms is compromised. This report shall in any event contain a reasoned assessment of the provision of any and all additional services referred to in the above, individually considered and as a whole, other than the statutory audit and in relation to the independence regime or regulatory regulation of the audit of accounts.

g) Inform, on a prior basis, the Administrative Board on all matters provided for in the Law, the Social Statutes and the Council Regulation, and in particular, on:

1. The financial information society should periodically make public,

2. the creation or acquisition of units in special purpose entities or domiciled in countries or territories that have the consideration of tax havens and

3. º related party operations.

The Audit Committee shall not exercise the functions provided for in this letter when they are assigned to another commission, and the commission consists solely of non-executive directors and at least two directors. independent, one of which must be the president.

5. The provisions set out in points (d), (e) and (f) of the previous paragraph shall be without prejudice to the regulatory rules for auditing of accounts. '

Final disposition fifth. Amendment of Law 27/2014 of 27 November of the Company Tax.

With effect for the tax periods starting from January 1, 2016, the following amendments are introduced in Law 27/2014 of 27 November of the Corporate Tax:

One. Article 12 (2), which is worded as follows, is amended as follows:

" 2. Intangible fixed assets shall be amortised on the basis of their useful life. Where the same cannot be reliably estimated, the amortisation shall be deductible with the maximum annual limit of twenty-one part of its amount.

The amortisation of the goodwill will be deductible with the maximum annual limit of twenty-one part of its amount. "

Two. Article 13 (3) is repealed.

Three. The transitional third-fifth provision is amended, which is worded as follows:

" Transient disposition 30th. Tax regime applicable to intangible assets acquired prior to 1 January 2015.

The tax regime provided for in Article 12.2 of this Law shall not apply to intangible assets, including goodwill, acquired in tax periods initiated prior to 1 January 2015, to entities forming part of the acquirer of the same group of companies in accordance with the criteria laid down in Article 42 of the Trade Code, irrespective of residence and the obligation to draw up consolidated annual accounts. '

Final disposition sixth. Competence title.

This law is dictated by the provisions of article 149.1.6. of the Constitution, which attributes to the State exclusive competence over "mercantile legislation".

From this competition, the second final provision which falls within the competence of Article 149.1.11. and 13. of the Constitution which attribute to the State the competence on the basis of the order of credit, banking and 'and' bases and coordination of the general planning of economic activity ', respectively; and the third final provision, which is issued under Article 149.1.6. of the Constitution, which confers exclusive competence on the State to issue the "procedural law, without prejudice to the necessary specialities" this order is derived from the particularities of the substantive law of the Autonomous Communities. "

Final disposition seventh. Incorporation of European Union law.

This Law incorporates into Spanish law Directive 2014 /56/EU of the European Parliament and of the Council of 16 April 2014 amending Directive 2006 /43/EC on the statutory audit of annual accounts and of consolidated accounts.

Final disposition octave. Regulatory enablement.

The Government is authorized to, on the proposal of the Minister of Economy and Competitiveness, dictate the necessary rules for the development of the provisions of this Law.

Within one year of the publication of this Law, the Government, on the proposal of the Minister of Economy and Competitiveness, will determine the conditions that the entities must comply with in order to have the consideration of entities of interest. (a) by reason of its significant public importance by the nature of its activity, by its size or by its number of employees, as referred to in Article 3.5 (b) of this Law.

Final disposition ninth. Enablement for the modification of the Statutes of the Accounting and Audit Institute of Accounts.

The government by means of a royal decree, at the initiative of the Minister of Economy and Competitiveness and on the proposal of the Minister of Finance and Public Administration, will proceed, if necessary, to the corresponding statutory adaptation of the Accounting and Audit Institute of Accounts.

Final disposition tenth. Authorization of the Accounting and Audit Institute of Accounts.

The Accounting and Audit Institute is authorised to, by resolution, and in accordance with the implementing rules dictated by the Government, develop the criteria to be followed for the scope, implementation and monitoring of the quality control system, in accordance with the provisions of Directive 2014 /56/EU of the European Parliament and of the Council of 16 April 2014 amending Directive 2006 /43/EC on the statutory audit of accounts the annual accounts and consolidated accounts and with the provisions of Regulation (EU) No 537/2014 of 16 April 2014  2014, on the specific requirements for the statutory audit of public interest entities and repealing Commission Decision 2005 /909/EC. Such a decision shall be in accordance with the procedure laid down in Article 24.1 of Law 50/1997 of 27 November of the Government.

Final disposition eleventh. Tasks entrusted to the members of the Institute of Jurors of Accounts of Spain, prior to the entry into force of Law 19/1988, of July 12, of Audit of Accounts.

The functions entrusted to the members of the Institute of Jurors of Accounts of Spain in the laws and other provisions of general character are understood attributed, since the entry into force of Law 19/1988, of 12 of Audit of Accounts, Audit of Accounts, Audit of Accounts and Audit of Accounts for the Exercise of Audit of Accounts.

Final disposition twelfth. No increase in expenditure.

The measures provided for in this Law will not entail an increase in remuneration, allocations or other personnel costs.

Final disposition thirteenth. Legal status of the reserve by goodwill in the financial years started on or after 1 January 2016.

In the financial years starting from 1 January 2016, the reserve by goodwill shall be reclassified to the voluntary reserves of the company and shall be made available from that date on the amount exceeding the fund of trade accounted for in the balance sheet asset.

Final disposition fourteenth. Entry into force.

1. This Law will enter into force on June 17, 2016.

Notwithstanding the foregoing, as provided for in Chapters I, III and IV, Sections 1 to 4. of Title I, in relation to the carrying out of audit accounts and the issuance of the corresponding reports, shall apply. the audit work on annual accounts for financial years starting from that date, as well as those of other financial statements or accounting documents relating to that financial year.

2. Additionally, the following provisions will enter into force the day after the publication of this Law in the "Official State Gazette":

(a) Article 11, in relation to the requirements for audit firms.

(b) Article 69.5, as regards the rating contained in connection with the abbreviated processing of the sanctioning procedure.

c) The fourth additional provision, in relation to the collaboration of the National Commission on Markets and Competition.

3. The following provisions shall also enter into force on 1 January 2016:

(a) Articles 21.1, first paragraph, in relation to the period of validity of incompatibilities, and 39.1, in relation to the period of calculation of incompatibilities referred to in Article 5.1 of Regulation (EU) No 537/2014; of 16 April.

(b) Article 58 on the Audit of Accounts Committee of the Accounting and Audit Institute of Accounts.

(c) Articles 87 and 88, in relation to the rates of the Accounting and Audit Institute of Accounts.

(d) Paragraphs one to three, seven to eleven and fourteen to nineteen of the fourth final disposition, which amends the recast of the Capital Companies Act.

e) The final disposition twelfth, referred to the non-increment of expenditure.

4. As provided for in the additional provision (information of payments made to the general government), in the fourth final provision (amendment of the recast of the Capital Companies Act), paragraphs 4 to 6, 12 and 12 Thirteen, in the final provision first (amendment of the Code of Commerce), in the final provision fifth (Amendment of the Law of the Tax on Societies) and in the final provision thirteenth (Legal regime of the reserve by Fund of Trade) shall apply to the financial statements which correspond to the financial years start from 1 January 2016.

Therefore,

I command all Spaniards, individuals and authorities, to keep and keep this law.

Madrid, 20 July 2015.

FELIPE R.

The President of the Government,

MARIANO RAJOY BREY