Statutory auditors in Colombia
What is the statutory audit in Colombia?
The statutory audit in Colombia is responsible for the control of economic entities to ensure the proper performance and transparency and adequacy of economic operations, their compliance with legal regulations, as well as the effectiveness and efficiency of administrative management.
It is an institution exercised by a professional accountant capable of attesting to the reasonableness of financial statements, validating reports to government entities and monitoring the actions of managers.
It has a much broader responsibility than an external audit and is subject to civil, criminal and legal consequences in Colombia according to the information contained in the reports.
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. In addition, it is also mandatory for simplified joint stock companies that meet either of the following two conditions:
- That, at the close of December 31 of the previous fiscal year, the annual income is higher than 3,000 SMMLV (Minimum Legal Monthly Wages in Force), that is, 2,633,409,000.00 Colombian pesos (about 590,000 euros) for the fiscal year 2022.
- That, at the close of December 31 of the previous fiscal year, gross assets exceed 5,000 SMMLV, i.e. 4,389,015,000.00 Colombian pesos (approximately 980,000 euros) for the fiscal year 2022.
Even if 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.
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.
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.
Mainly, three types of audits are performed:
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.
¿Cuándo se requiere un auditor legal en 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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