An audit in Italy is mandatory by the legislative decrees of the Italian government, in accordance with the EU directives. Public interest entities (PIE), companies and partnerships limited by shares, and, in some cases, limited liability companies, are subject to audits in Italy. PIE refers to listed companies, financial institutions, insurance companies, and pension funds. Our company formation specialists in Italy will explain the audit requirements and process and offer assistance through our auditors.
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Audit requirements
An audit in Italy is required if a company exceeds a specific threshold for two consecutive years. The thresholds refer to:
- The company’s balance sheet total, which exceeds 4 million euros;
- The company’s sales and services revenues – over 4 million euros;
- The company’s average employee number – more than 20 employees per year.
Companies subject to audits must appoint an auditor or a supervisory body. The auditor is appointed through the shareholders’ meeting. Generally, the duration of the auditor’s appointment lasts 3 years. Companies have the option to choose either an individual auditor or an auditing firm to conduct audits in Italy.
Some companies may opt for voluntary audits in Italy, to increase their transparency, credibility, and trust in their financial reporting processes. This is due to the fact that many banks or financial institutions might require audited financial statements as part of their lending criteria. The voluntary audit in Italy can be a useful strategy for businesses to improve their eligibility for financing.
Our accountants in Italy can offer support during the audit process.
Auditor’s duties and responsibilities
Auditors in Italy must respect the regulations outlined in the Italian Civil Code which refers to the auditing requirements, standards, and procedures. Auditors will evaluate the company’s compliance with regulations and identify possible traces of illegal activities or fraud. Some of the essential duties and responsibilities of the auditors include:
- Evaluating the company’s financial statements. This includes reviewing the balance sheet, income statement, cash flow statement, and other relevant financial documents;
- Ensuring that the company’s financial statements comply with relevant accounting standards, regulations, and legal requirements;
- Preparing the audit report based on the company’s financial statements;
- Conducting inquiries about the transactions within the company, sales, purchases, management, or investment activities;
- Our auditors in Italy also report any fraudulent activities or discrepancies in the financial statements;
- Respect and adhere to the Code of Professional Ethics and Conduct.
If the auditor is responsible for auditing a branch of a company, he/she will provide assistance in completing the branch audit. The audit report is issued in accordance with the International Standards on Auditing (ISA Italia).
If you opened a business in Italy subject to statutory audit, our team can provide guidance and assistance.
Economy in Italy
If you are interested in more details about Italy’s economy and labor market, our team of specialists in company incorporation in Italy will present to you some interesting statistics from Istituto Nazionale di Statistica (ISTAT):
- Italian GDP increased by 0.3% during the first quarter of 2024;
- The construction sector saw an increase of 3.6% in productivity between December 2023 and February 2024;
- The total number of employees in Italy has reached over 23 million individuals in March 2024.
If you are interested in more of our services, we can also handle payroll in Italy for your company.
In case you need assistance with the audit process in Italy, please do not hesitate to contact our team for support and guidance.