Contributed By CMS Adonnino Ascoli & Cavasola Scamoni
Article 16 of Legislative Decree no 39/2010 provides that, for companies with publicly traded shares, asset management companies, banks, insurance and re-insurance companies and other so-called Public Interest Entities (PIEs) cannot entrust internal auditors with the auditing of the company’s accounts and must therefore appoint an external auditing firm.
The mandate of the external auditing firm must have a three-year term and can be revoked by the shareholders with just cause at any time after consulting the controlling body (if any).
While SPAs are always obliged to appoint statutory auditors, they must appoint an independent auditor (either a registered accountant or an external auditing firm) if the company is obliged to prepare consolidated financial statements or is a listed company.
Otherwise (and provided that it is not a PIE), the company has the possibility to entrust the auditing of the company’s accounts to the statutory auditors.
With regard to SRLs, Article 2477 ICC provides that a controlling body, eg, board of statutory auditors, or an external auditing firm must be appointed if the company:
The duty to appoint a controlling/auditing body ceases if none of these conditions is exceeded for three consecutive financial years.
Therefore, if the above conditions are met, the SRL will generally have the possibility to choose between an external auditing firm and the appointment of a controlling body (whose members need however to be enrolled at the Registry of Auditors) entrusted also with the auditing of the company’s accounts.
The obligation to appoint an external auditor can be included in the bylaws of the company.
As a general rule, the directors have the exclusive responsibility over the management of the company. Pursuant to Article 2086(2) ICC, this entails the creation of an organisational, administrative and accounting structure that is appropriate to the nature and size of the business, also in relation to the timely detection of the crisis of the business and the loss of business continuity.