Statutory auditors in Colombia
What is the statutory audit in Colombia?
What is the statutory audit in Colombia?
In Colombia, the statutory audit is a control and supervision mechanism that aims to ensure transparency and legality in the financial and administrative operations of a company.
This function is performed by a statutory auditor, who must be a duly authorized public accountant.
It has a much broader liability than an external audit and is subject to civil, criminal and legal consequences in Colombia.
When is a statutory auditor required in Colombia?
In accordance with Law 43 of 1990 of the Code of Commerce, the statutory audit in Colombia is a mandatory service for all branches and corporations.
Those entities that have a statutory auditor must have a statutory auditor elected by the board of directors or shareholders’ meeting:
- Gross assets as of December 31, 2023 equal to or greater than 5,800,000,000 Colombian pesos (approx. 1,260,000 EUR)
- Gross income as of December 31, 2023 equal to or greater than 3,480,000,000 Colombian pesos (approx. EUR 750,000)
Even when the obligation is not fulfilled, it is convenient to have the service of a statutory auditor in Colombia. This will help the company to elucidate options for improvement in terms of financial, accounting, tax, legal, administrative, portfolio… as well as to avoid incurring penalties. In addition, the Code of Commerce, in its article 203, establishes the obligation to have a statutory auditor in joint stock companies, branches of foreign companies.
Companies required to have a Statutory Auditor in Colombia must appoint the maximum statutory auditor at the annual meeting, which must be held no later than March 31.
- According to current regulations, it is mandatory to have a statutory auditor for companies that meet any of the following criteria as of December 31, 2024:
- Gross assets equal to or greater than $6,500,000,000 Colombian pesos.
- Gross income equal to or greater than $3,900,000,000 Colombian pesos.
- A2M, a company of the UR GLOBAL group, was created to develop this service with the highest quality standards. Together with a team of experts, we have created an efficient process that guarantees regulatory compliance, provides transparency and offers the necessary support for management and decision making in your company.
How do we perform the statutory audit service in Colombia?
The control exercised by the statutory auditors in Colombia over the economic entity is integral to all areas and operations of the company.
- Tax review. It involves the recalculation of items, random sample review of items subject to review, verification of applied rates and tariffs, among others.
- Balance sheet review
- Review of payrolls and social security forms
- Review of internal control and core business processes and procedures.
- Circularization to control entities and social security and tax entities to verify that there are no debts (account statements).
- Review of contracts (not in terms of content, but in terms of form)
- Contractual compliance and signature formalities
- If they contain harmful clauses
- Possible risks for the company
- Issuance of tax and internal control recommendations.
Our added value is related to the scope of the tax review, we get to the detail of the figures, while other firms make a more superficial analysis and are limited to the crossing of figures with the Balance Sheet; reviews and recommendations of inventories or cost systems.
An opinion is issued on the financial statements of the company as of December 31 of each year, prepared under the accounting and financial reporting standards accepted in Colombia.
Evaluation of compliance with the legal-accounting regulations applicable to the Company, the bylaws and the decisions of the highest corporate body. Review and signature of monthly tax returns, value added tax returns and annual income tax returns.
Its purpose is to conclude whether the company’s internal control has been adequate to ensure the conservation and custody of the company’s assets and those of third parties in its possession.
The statutory auditor in Colombia must determine in the report whether the financial statements are prepared on generally accepted principles and whether they have complied with legal standards. It must also evaluate the degree of efficiency and effectiveness in the achievement of the company’s objectives, the proper management of resources and the evaluation of the Internal Control System (ICS) in order to give an opinion on its management.
When is a statutory auditor required in Colombia?
UR Global Colombia has more than 8 years of experience in Colombia, a consolidated local team of 30 people that manages 60 Spanish companies, of which it acts as tax auditor in 30 of them, as well as in other external companies.
Due to the Company’s presence in Spain, it generates trust, closeness and close contact with its customers, without neglecting the guarantee and excellence in the provision of services. This is possible thanks to professionals who are specialized in Spanish companies that decide to undertake international projects.
Frequently asked questions about statutory audit in Colombia
How do I choose my statutory audit provider in Colombia?
It must be a fully trustworthy company, since it safeguards the interests of the associates and/or the parties that make up the economic entity and thus the interest of the government itself, aimed at the company, third parties, the State and society.
It should be borne in mind that the functions of the statutory auditor in Colombia are much broader than in an external audit and that he/she must rule on the reasonableness of the financial statements as well as authorize them with his/her signature.
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