Spain

As a member of the European Union (EU), Spain is subject to the accounting, auditing, and financial reporting requirements established in EU Regulations and Directives as transposed into national laws and regulations.

The Code of Commerce establishes the obligation for companies to keep books of accounts and provides the basic legal framework for accounting. As stipulated in the Code of Commerce, all companies must prepare financial statements in accordance with the Spanish General Accounting Plan (Spanish GAAP) and file these with the Mercantile Register. Under the Royal Decree 302/1989, the Instituto de Contabilidad y Auditoría de Cuentas (ICAC), an agency within the Ministry of Economy, Industry and Competitiveness (MoEIC), is responsible for proposing a Spanish GAAP adapted to EU Regulations and harmonized with EU-endorsed standards.

Throughout the 2000s, Spanish accounting legislation was amended to adapt to international standards and the EU accounting requirements. Since 2005, publicly traded companies have been required to prepare their consolidated financial statements in accordance with EU-endorsed IFRS following the EU Regulation (EC) No 1606/2002. In 2007, Royal Decree 1514/2007 approved the revised Spanish GAAP for separate statements of all companies, and in 2010 Royal Decree 1159/2010 approved the Spanish GAAP for consolidated annual statements. In addition, Royal Decree 1515/2007 approved the Spanish GAAP for SMEs and a Spanish GAAP for micro-entities for eligible companies. The above-mentioned decrees were amended by the Royal Decree 602/2016, to transpose the EU Audit Directive 2013/34. There are some differences between the IFRS and Spanish GAAP.

The auditing requirements are set in Law 22/2015, which transposes the EU Audit Directive 2014/56 and EU Regulation 2014/537. The Law stipulates that the Spanish Generally Accepted Auditing Standards (Spanish GAAS) include international auditing standards as adopted by the EU. The Law stipulates that Spanish GAAS are ISA adapted for their application in Spain and also includes Spain-based technical standards, Law 22/ 2015 and its Regulation, Royal Decree 2/2021.

The recognized professional accountancy organizations draft the Spanish GAAS based on ISA (NIA-ES as adopted in Spain). The ICAC formally approves and publishes the standards and requires all auditors to apply them. In practice, as reported by the Instituto de Censores Jurados de Cuentas de España, the ICAC adopted the 2009 ISA translated into Spanish by Resolution in 2013, effective for audits of financial statements starting on or after January 1, 2014. When the IAASB issues new and revised ISA, the standards are reviewed, translated, and published. As of the date of the assessment, the 2021 ISA are being applied.

Law 22/2015 requires all PIEs, including, among others, listed entities, credit institutions, insurance companies, and financial brokerage companies, to undergo a mandatory audit and appoint a statutory auditor. In addition, companies that meet at least two of the following criteria in two consecutive years are required to have their financial statements audited: (i) balance sheet total not exceeding EUR 2.85 million; (ii) net turnover not exceeding EUR 5.7 million; and (iii) average number of employees exceeds 50 for the financial year.

In addition, PIEs are required to file their financial statements with their respective regulator—the Bank of Spain, the National Securities Market Commission, or the Directorate-General of Insurance and Pension Funds.

The audit profession is the only segment of the accountancy profession formally regulated in Spain by Law 22/2015. The Law establishes initial and continuing professional development (IPD and CPD, respectively) requirements, a quality assurance (QA) review system, and an investigation and discipline (I&D) mechanism. The Law empowers the Instituto de Contabilidad y Auditoría de Cuentas (ICAC), an agency within the Ministry of Economy, Industry and Competitiveness, to oversee the audit profession. Candidates who wish to acquire the title of an auditor must meet specific requirements defined in the Law, such as: obtaining a university degree, passing a final exam, completing practical experience, and fulfilling CPD requirements. The ICAC maintains an Official Registry of Auditors, and auditors must be registered to practice.

ICAC’s further responsibilities include: (i) authorizing auditors and audit firms to be registered in the Official Registry of Auditors and maintaining the Official Registry; (ii) adopting ethical standards and internal control standards for the auditing profession, which are drafted by the recognized professional accountancy organizations, (iii) proposing technical auditing standards in accordance with the terms of Law 22/2015 if the recognized professional accountancy organizations fail to propose the standards, and ensuring compliance; (iv) proposing a Spanish General Accounting Plan adapted to EU Regulations; (v) monitoring and overseeing auditors’ fulfillment of CPD requirements; (vi) establishing and operating a quality assurance (QA) review system for audits; and (vii) carrying out I&D procedures for auditors, among others.

In addition, auditors may voluntarily join a professional accountancy organization (PAO) and therefore become subject to the membership requirements and internal regulations of the PAO. The Instituto de Censores Jurados de Cuentas de España (ICJCE) is a PAO that unites auditors and firms voluntarily. The ICJCE requires candidates to be registered on the ICAC’s Official Registry of Auditors to be considered for membership. The ICJCE establishes ethical standards, investigates and disciplines its members, promotes the adoption and implementation of international standards, represents and promotes the auditing profession, develops training activities, and promotes improvements to professional practices.

Other accounting activities, such as tax advisory, bookkeeping, consulting or accounting, do not require qualifications and are not regulated.

The Instituto de Contabilidad y Auditoría de Cuentas (ICAC)—an agency within the Ministry of Economy, Industry and Competitiveness—as established by the Royal Decree No. 302 of 1989 and empowered by the Law 22/2015 is the public audit oversight entity in Spain.

ICAC’s scope of responsibilities includes the following: (i) authorizing auditors and audit firms to be registered in the Official Registry of Auditors and maintaining the Official Registry; (ii) adopting ethical standards and internal control standards for the auditing profession, which are drafted by the recognized professional accountancy organizations, (iii) proposing technical auditing standards in accordance with the terms of Law 22/2015 if the recognized professional accountancy organizations fail to propose the standards, and ensuring compliance with the standards; (iv) proposing a Spanish General Accounting Plan adapted to European Regulations; (v) monitoring and overseeing auditors’ fulfillment of CPD requirements; (vi) establishing and operating a quality assurance (QA) review system for audits; and (vii) carrying out I&D procedures for auditors, among others.

The ICAC is a member of the International Forum of Independent Audit Regulators and the Committee of European Auditing Oversight Bodies.

The Instituto de Censores Jurados de Cuentas de España (ICJCE)

The ICJCE, established in 1942, unites auditors and firms voluntarily. The ICJCE establishes ethical standards, investigates and disciplines its members, promotes the adoption and implementation of international standards, represents and promotes the auditing profession, develops trainings activities, and promotes improvements to professional practices.

In addition to being an IFAC Member, the ICJCE is a member of Accountancy Europe (formerly known as the Federation of European Accountants ).

The Consejo General De Economistas de España (CGCEE)

The CGCEE unites professionals with a university degree in Economics, Business Administration or Commerce voluntarily. Some of CGCEE’s members provide accountancy services, such as tax advisory, bookkeeping, consulting, or accounting. No other information is available.

In 2015, the Instituto de Censores Jurados de Cuentas de España and the Consejo General De Economistas de España established a voluntary Registry for Accounting Experts. Given that Law regulates only auditors, the two organizations signed a Memorandum of Understanding (Mou) to represent other accountancy professionals. The institutes have established minimum initial professional development requirements through the MoU, such as professional education and practical experience. Although the registry is not legally recognized, the organizations have established a board that evaluates candidates applying to the register. In 2022, the PAOs contacted the Spanish Government to discuss the official recognition of the Expert in Accounting.

A mandatory quality assurance (QA) review system in Spain has existed since 1993. In accordance with Law 22/2015, the Instituto de Contabilidad y Auditoría de Cuentas (ICAC)—an agency within the Ministry of Economy, Industry and Competitiveness—is responsible for adopting and implementing a QA review system in the jurisdiction. The ICAC has adopted quality management standards (ISQM 1 and 2 and ISA 220 (Revised)) in April 2022, effective for audits of financial statements starting on or after January 1, 2023.

Under Law 22/2015, the scope of ICAC’s QA system includes reviews of all audit firms and individual auditors of public interest entities (PIEs) and non-PIEs. However, as reported by the Instituto de Censores Jurados de Cuentas de España (ICJCE), if the ICAC does not have enough resources to fulfill its annual plan, it may delegate the “instrumental tasks” of non-PIE audit inspections to the recognized professional accountancy organizations. The ICJCE renewed an agreement with ICAC in 2022 to collaborate on the non-PIE reviews under the responsibility and supervision of the ICAC. The ICJCE reports that the QA review systems in the jurisdiction fulfill all the requirements of SMO 1.

Current Status: Adopted

Law 22/2015 establishes the initial and continuing professional development (IPD and CPD) requirements for auditors. Candidates who wish to acquire the title of auditor must meet specific requirements defined in the Law, such as: obtaining a university degree, passing a final exam, completing practical experience, and fulfilling CPD requirements.

The Law authorizes the Instituto de Contabilidad y Auditoría de Cuentas (ICAC)—an agency within the Ministry of Economy, Industry and Competitiveness—to approve IPD and CPD providers.

The Instituto de Censores Jurados de Cuentas de España—a professional accountancy organization that unites auditors and firms voluntarily in the country—reports that ICAC has not yet incorporated the requirements of the 2019 IES—which emphasize learning outcomes—into its national educational requirements.

Current Status: Partially Adopted

The Law 22/2015 stipulates that the Instituto de Contabilidad y Auditoría de Cuentas (ICAC), an agency within the Ministry of Economy, Industry and Competitiveness, is responsible for adopting Spanish Generally Accepted Auditing Standards (Spanish GAAS) for all companies. The Law stipulates that Spanish GAAS are ISA adapted for their application in Spain and also includes Spain-based technical standards, Law 22/ 2015 and its Regulation, Royal Decree 1517/2011.

The recognized professional accountancy organizations draft the Spanish GAAS based on ISA (NIA-ES as adopted in Spain). The ICAC formally approves and publishes the standards and requires all companies to apply them. The ICAC first adopted the 2009 ISA translated into Spanish by Resolution in 2013, effective for audits of financial statements starting on or after January 1, 2014. When the IAASB issues new and revised ISA, the standards are reviewed, translated, and published. As of the date of the assessment, the 2021 ISA are being applied.

Law 22/2015 requires all public interest entities (PIEs), including listed entities, credit institutions, insurance companies, and financial brokerage companies, to undergo a mandatory audit and appoint a statutory auditor. In addition, companies that meet at least two of the following characteristics in two consecutive years are required to have their financial statements audited: (i) balance sheet total not exceeding EUR 2.85 million; (ii) net turnover not exceeding EUR 5.7 million; and/or (iii) average number of employees exceeds 50 for the financial year.

Current Status: Adopted

In Spain, only auditors are mandated by Law to adhere to ethical requirements. The Law 22/2015 grants authority to the Instituto de Contabilidad y Auditoría de Cuentas (ICAC)—an agency within the Ministry of Economy, Industry and Competitiveness—to adopt ethical requirements for auditors which are drafted by the recognized professional accountancy organizations, except for the independence requirements which are outlined in the legislation.

In Spain, the general ethical requirements and independence requirements are set in Law 22/2015, which the Instituto de Censores Jurados de Cuentas de España (ICJCE)—a professional accountancy organization that voluntarily unites auditors in the country—reports are more restrictive than what is contained in the IESBA Code as related to independence requirements, and that the Law also authorizes the ICAC to establish further ethical requirements in the form of ethics standards. However, the ICAC has not yet adopted a set of ethics standards for auditors.

As a member of the European Union, Spain must follow the EU regulation and the EU Directive on Audit, which prescribes the applicable independence standards. Therefore, Spain’s potential adoption of independence requirements in the International Code of Ethics issued by the IESBA would only happen through the EU.

The ICJCE adopted a Code of Ethics for its members, which includes the general principles of the 2014 IESBA Code of Ethics. The requirements related to the general principles are in place for those professionals who voluntarily become members.

Current Status: Partially Adopted

The Ministry of Finance (MoF) is responsible for establishing public sector accounting standards in Spain. In 2010, the MoF adopted National Public Sector Accounting Standards for all public sector entities based on accrual IPSAS (IFAC/CIPFA International Public Sector Financial Accountability Index 2020).

Current Status: Adopted

In accordance with Law 22/2015, the Instituto de Contabilidad y Auditoría de Cuentas (ICAC)—an agency within the Ministry of Economy, Industry and Competitiveness—is responsible for investigating and disciplining (I&D) auditors in Spain. The ICAC has established an I&D system. The ICJCE reports that ICAC’s I&D procedures fulfill the requirements of the SMO 6.

In addition, the Instituto de Censores Jurados de Cuentas de España (ICJCE)—a professional accountancy organization that unites auditors voluntarily— carries out supplemental I&D procedures for its members. The ICJCE reports that its system is aligned with the main requirements of SMO 6.

Current Status: Adopted

The Code of Commerce establishes the obligation for companies to keep books of accounts and provides the basic legal framework for accounting. As stipulated in the Code of Commerce, all companies must prepare financial statements in accordance with the Spanish General Accounting Plan (Spanish GAAP) and file these with the Mercantile Register. Under the Royal Decree 302/1989, the Instituto de Contabilidad y Auditoría de Cuentas (ICAC), an agency within the Ministry of Economy, Industry and Competitiveness, is responsible for proposing a Spanish GAAP adapted to EU Regulations and harmonized with EU-endorsed standards.

Throughout the 2000s, Spanish accounting legislation was amended in order to adapt to international standards and the EU accounting requirements. Since 2005, publicly traded companies have been required to prepare their consolidated financial statements in accordance with EU-endorsed IFRS following the EU Regulation (EC) No 1606/2002. In 2007, Royal Decree 1514/2007 approved the revised Spanish GAAP for separate statements of all companies, and since 2010, Royal Decree 1159/2010 approved the Spanish GAAP for consolidated annual statements. In addition, Royal Decree 1515/2007 approved the Spanish GAAP for SMEs and a Spanish GAAP for micro-entities for eligible companies. All these decrees were amended by the Royal Decree 602/2016, to transpose the EU Audit Directive 2013/34. In 2021, Royal Decree 1/2021 was approved to transpose IFRS principles related to financial instruments (IFRS 9) and revenue (IFRS 15).

There are some differences between the IFRS and Spanish GAAP. For example, Spanish GAAP are set out in a series of ‘accounting plans’ and specific publications for sectors such as not-for-profit organizations, energy, and construction.

Current Status: Partially Adopted

Relevant Organizations

• Committee of European Auditing Oversight Bodies
• General State Comptroller (IGAE)
• Instituto de Censores Jurados de Cuentas de España (ICJCE)
• Instituto de Contabilidad y Auditoría de Cuentas (ICAC)
• International Forum of Independent Audit Regulators (IFIAR)
• Ministry of Economy, Industry and Competitiveness
• Ministry of Finance (MoF)

Relevant Legislation

• Law 22/2015
• EU Regulation (EC) No 1606/2002
• EU, Audit Law No. 22 of 2015
• ICAC, Spanish Generally Accepted Auditing Standards, NIA-ES, 2013
• Royal Decree 302/1989
• Royal Decree 1514/2007
• Royal Decree 1515/2007
• Royal Decree 1159/2010
• Royal Decree 602/2016

Relevant Publications

AE, “Definition of Public Interest Entities in Europe,” March 2019

AE, “Structure and organisation of the profession–Spain,” 2022

ICJCE, SMO Action Plan, December 2022.

IFRS Foundation, “IFRS Application Around the World?Jurisdictional Profile: Spain,” July 2016.

IFIAR, 2022 Member Profile –ICAC, 2022