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    Accounting and audit requirements

    Accounting requirements
    All companies and partnerships are required to keep books and records of accounts, as well as keep in order all original documents sent and received for each concern.
    The accounting documents must be kept for no less than ten years.


    Accounting records may be kept directly by the business at their premises, or by third parties outside the com- pany offices.
    There are two main compulsory accounting systems available depending on the company’s features and the amount of income declared in the previous year: one ordinary and one simplified (suitable for small entities with a simple organization).
    The ordinary accounting scheme is compulsory:
    • for company providing services with a turnover exceeding EUR 400,000 yearly;
    • for the other companies with a turnover exceeding EUR 700,000 yearly.
    The following registers and corporate books can be compulsory on the basis of the size and of the activity per- formed:
    • the journal;
    • the general ledger;
    • the VAT registers;
    • the inventory register;
    • the shareholders/quotaholders meeting books;
    • the BoD meeting book (if applicable);
    • the Board of Auditors meeting book (if applicable).
    Books and records of accounts are kept according to the provisions of the Italian Civil Code and the tax regu- lations.
    Accounting books can also be kept electronically.
    Companies with share capital are also required to prepare their annual Financial Statements and to file them with the Companies Register, within 30 days from its approval by shareholders.
    In addition to the ordinary FS form provided by the Civil Code, a short form and a reduction in the amount of the information required are established for “small” and “micro” companies.
    Partnerships, instead, are required to draw up an annual report indicating profit and loss for tax purposes, al- though there is no filing obligation with the Register of Companies.
    Annual accounts must be presented to and approved by the shareholders’ annual general meeting within 120 days from the company’s financial year end (180 days in specific situations and under certain conditions).
    Audit requirement
    Auditing is required for:
    1) S.p.A.;
    2) S.r.l. exceeding two of the following limits for 2 consecutive years;
    • total assets of EUR 4,400,000;
    • sales and services revenues of EUR 8,800,000;
    • average number of employees during the year 50;
    • or, if the S.r.l. controls a company subject to statutory audit;
    3) all companies drawing up consolidated Financial Statements;
    4) listed companies;
    5) banks, stock broking companies, fund management companies, regulated financial institutions.
    The audit of the financial statements (“revisione legale dei conti”) shall be performed in accordance to the
    Italian Law and the Italian auditing standards.
    In Italy, the statutory audit can be assigned to a Board of Statutory Auditors (“Collegio Sindacale”), a sole auditor (“Sindaco Unico”), an audit firm (“società di revisione”) or an external auditor (“revisore”).
    Under some conditions the audit can be performed by the “Collegio Sindacale” which may be in charge of both Supervisory activities, including the compliance with the law and the Articles of Association, and on the statu-tory audit of the financial statements.
    Alternatively, the statutory audit on the financial statements (including the quarterly checks on the accounts) can be assigned to an audit firm or an external auditor.
    The assignment to two different bodies is compulsory for listed companies and companies required to prepare consolidated financial statements.
    Term of the audit assignment
    The auditors are appointed for a 3 year-term for non-listed companies and for a 9 year-term for listed compa- nies.
    The audit firm cannot be appointed for more than one 9-year term, while the external auditor cannot be appoin- ted for more than 7 years. The audit firm engagement as well as the external auditor one should guarantee a cooling-off period of 4 years.

     

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