The answer to ‘do I need an audit?’ lies in the Spanish Companies Act (LSC), the Spanish Audit Act, Law 22/2015 (LAC), and its implementing regulation (Royal Decree 2/2021, RLAC). Here we explain the rules in force; what has happened to the reform that was going through Congress is analysed in our article on the bill introducing new audit thresholds.
Which companies must have their accounts audited?
Under Article 263.1 LSC, the annual accounts and, where applicable, the management report must be reviewed by a statutory auditor. The general rule is to be audited; the size exemption in paragraph 2 is the exception. The First Additional Provision of the RLAC extends this criterion to any entity required to prepare annual accounts, whatever its legal form.
The three limits in Article 263.2 LSC and the two-year rule
A company is exempt from audit if, for two consecutive financial years, it meets at the year-end of each at least two of these three circumstances:
| Limit | In force (Article 263.2 LSC) | Proposed by Bill 121/000075 (lapsed on 6 October 2026, not passed) |
|---|---|---|
| Total assets | Not more than €2,850,000 | Not more than €3,565,000 |
| Annual net turnover | Not more than €5,700,000 | Not more than €7,125,000 |
| Average number of employees | Not more than 50 | Not more than 50 |
The rule works both ways: an exempt company loses the exemption if it ceases to meet two of the three circumstances for two consecutive financial years. A single year above, or below, does not change the situation.
An example with hypothetical figures: a company closes 2025 and 2026 with around €3,100,000 in assets, €5,200,000 in net turnover and 38 employees. It exceeds the asset limit, but not the other two, so it meets two circumstances at both year-ends and is exempt. If its net turnover exceeded €5,700,000 at one year-end, it would meet only one; the obligation would arise if this were repeated at the following year-end.
A quick decision guide:
- Does the entity fall within any of the special cases listed below? If so, it must be audited regardless of its size.
- Is this its first financial year after incorporation, conversion or merger? Apply the special rule in Article 263.3.
- If not, check the last two year-ends: did it meet at least two of the three circumstances at each one? If the answer is yes for both, it is exempt on the basis of size.
The first financial year after incorporation, conversion or merger
Article 263.3 LSC contains its own rule: in the first financial year after incorporation, conversion or merger, the company is exempt if, at the end of that financial year, it meets at least two of the three circumstances. There is no need to wait for a second financial year to apply the exemption.
Cases that do not depend on size
The First Additional Provision of the LAC requires an audit in all cases for entities, whatever their legal form, that:
- Issue securities admitted to trading on official secondary markets or multilateral trading facilities.
- Issue bonds in a public offering.
- Habitually engage in financial intermediation.
- Carry on an activity subject to the rules on the regulation and supervision of private insurance, as well as pension funds and their management companies.
- Receive grants or aid, or enter into contracts with the public sector, within the limits set by regulation.
In addition, even if the company is not required to be audited, shareholders representing at least 5% of the share capital may ask the commercial registrar to appoint an auditor, at the company’s expense, for a specific financial year. They must do so within three months of the end of that financial year (Article 265.2 LSC). Other sector-specific rules, such as those for foundations or cooperatives, may impose their own audit obligation: they should be checked in each case.
Grants and public contracts of more than €600,000
The two €600,000 cases are set out in the RLAC and have different consequences over time:
- Grants or aid charged to public budgets or to European Union funds for a total aggregate amount of more than €600,000 in a financial year (Second Additional Provision of the RLAC): that financial year is audited, together with the financial years in which the subsidised operations are carried out or investments are made.
- Public sector contracts for an aggregate amount of more than €600,000 which also represents more than 50% of net turnover (Third Additional Provision of the RLAC): that financial year and the following one are audited.
In the province of Alicante this often affects companies with regional aid or EU funds. We explain it in detail in our guide to mandatory audits for grants or public contracts of more than €600,000.
Who appoints the auditor, and when?
The general meeting appoints the auditor before the end of the financial year to be audited, for an initial period of between three and nine years (Article 264.1 LSC). The Fourth Additional Provision of the RLAC sets the same rule for entities required to be audited because of their size, grants or public contracts. If the general meeting does not make the appointment in time, the directors or any shareholder may ask the commercial registrar to appoint the auditor (Article 265.1 LSC). The deadlines for appointment, preparation, approval and filing are set out in our calendar for annual accounts and the appointment of the auditor.
Corporate transactions may also require the involvement of an auditor even if the company is not required to have its accounts audited. This is the case, for example, with a capital increase by debt-to-equity conversion under Article 301 LSC in a public limited company (sociedad anónima).
Will this change? The reform has lapsed
Bill 121/000075, amending the company size criteria for financial reporting purposes, proposed raising the exemption limits to €3,565,000 in assets and €7,125,000 in net turnover, while keeping the 50 employees. Following the dissolution of the Cortes Generales by Royal Decree 806/2026 of 5 October (BOE of 6 October 2026), the Congress record lists it as ‘Concluido – (Caducado)’ (concluded, lapsed) since 6 October 2026. It was never passed: the limits in force shown in the table are those that apply at the 2026 year-end. Any change will require a new legislative initiative in the new parliamentary term, and there is currently no foreseeable date.
Frequently asked questions
Have the new thresholds of €3,565,000 and €7,125,000 been approved?
No. The bill proposing them lapsed on 6 October 2026 when the Cortes Generales were dissolved. For the 2026 financial year, the limits of €2,850,000, €5,700,000 and 50 employees apply (Article 263.2 LSC).
What happens if I exceed the limits for just one year?
Nothing, as far as the size-based obligation is concerned. The exemption is only lost if the company ceases to meet two of the three circumstances for two consecutive financial years (Article 263.2 LSC).
Do grants count even if my company is small?
Yes. If in a financial year it receives grants or public aid of more than €600,000 in total, it must be audited regardless of its size (Second Additional Provision of the RLAC). Whether they have been received depends on when they must be recognised in the accounts.
Who appoints the auditor?
The general meeting, before the end of the financial year to be audited. If it fails to do so when required, the directors or any shareholder may ask the commercial registrar to make the appointment.
Can I have a voluntary audit?
Yes. A voluntary audit provides credibility with banks, shareholders or buyers. If the auditor’s appointment is recorded in the Companies Register (Registro Mercantil), the audit report must be filed together with the accounts (Article 279.1 LSC).
Official sources
- Spanish Companies Act, consolidated text (BOE): Articles 263, 264, 265 and 279
- Spanish Audit Act, Law 22/2015, consolidated text (BOE): First Additional Provision
- Royal Decree 2/2021, Regulation implementing the LAC (BOE): First to Fourth Additional Provisions
- BOCG (Official Gazette of the Cortes Generales), Congress, Series A, no. 75-1: Bill 121/000075 (lapsed)
- Congreso de los Diputados: legislative record of 121/000075
- Royal Decree 806/2026 of 5 October dissolving the Cortes Generales and calling elections (BOE-A-2026-20742)
If you are unsure whether your company is required to be audited this financial year, we can review it using your figures for the last two year-ends. Find out about our annual accounts audit service and, if what you need is to prepare the accounts, our annual accounts preparation service. We work from Alicante throughout the province, as we explain on our auditors in Alicante page. Contact our team and we will reply with no obligation.
Article prepared by Controlaudit’s technical team. Updated on 8 October 2026. This content is for information purposes only and is not a substitute for professional advice on your specific case.