1. M. ANGELA JIMENEZ 1 UNIT 5. REGULATION OF EXTERNAL AUDIT IFAC AND E.C.

2. M. ANGELA JIMENEZ2 5.1. REGULATION: IFAC THE MOST IMPORTANT ORGANIZATION TO REGULATE THE EXTERNAL AUDITING IS THE IFAC. IFAC: INTERNATIONAL FEDERATION OF ACCOUNTANTS. ITS MISSION IS THE WOLDWIDE DEVELOPMENT AND ENHANCEMENT OF AN ACCOUNTANCY PROFESSION WITH HARMONIZED STANDARDS, ABLE TO PROVIDE SERVICES OF CONSISTENTLY HIGH QUALITY IN THE PUBLIC INTEREST. IFAC MAKES RECOMMENDATIONS. MEETS REQUIREMENTS OF REGULATORS AND OTHER EXTERNAL OBSERVES IN TERMS OF ITS EFFICIENCY, TRANSPARENCY AND CREDIBILITY.

3. M. ANGELA JIMENEZ3 5.1.REGULATION.IFAC THE MAIN OBJECTIVES ARE: THE MAIN OBJECTIVES ARE: – TO DEVELOP AND ISSUE STANDARDS AND STATEMENTS ON AUDITING, –TO ASSURANCE AND RELATED SERVICES, –TO DEVELOP QUALITY CONTROL STANDARDS FOR USE AROUND THE WORLD. THE IFAC ISSUES “INTERNATIONAL STANDARDS ON AUDITING” (ISAS) AS THE STANDARD TO BE APPLIED IN REPORTING ON THE CREDIBILITY OF HISTORIC FINANCIAL INFORMATION. THE IFAC ISSUES “INTERNATIONAL STANDARDS ON AUDITING” (ISAS) AS THE STANDARD TO BE APPLIED IN REPORTING ON THE CREDIBILITY OF HISTORIC FINANCIAL INFORMATION.

4. M. ANGELA JIMENEZ4 5.1. REGULATION: IFAC THE INTERNATIONAL STANDARD ON AUDITING PROVIDES AN OPPORTUNITY TO FOCUS THE STRUCTURE OF THE HANDBOOK OF AUDITING AND ASSURANCE PRONOUNCEMENTS TO BEST ACCOMMODATE CURRENT AND FUTURE DOCUMENTS. THE INTERNATIONAL STANDARD ON AUDITING PROVIDES AN OPPORTUNITY TO FOCUS THE STRUCTURE OF THE HANDBOOK OF AUDITING AND ASSURANCE PRONOUNCEMENTS TO BEST ACCOMMODATE CURRENT AND FUTURE DOCUMENTS. THEY ARE LIKELY TO FALL INTO THE FOLLOWING CATEGORIES: THEY ARE LIKELY TO FALL INTO THE FOLLOWING CATEGORIES: –STANDARDS FOR QUALITY CONTROL –STANDARDS FOR AUDITS AND HISTORIC FINANCIAL STATEMENTS –STANDARDS FOR REWIES OF HISTORIC FINANCIAL STATEMENTS

5. M. ANGELA JIMENEZ5 5.1. REGULATION: IFAC –STANDARDS FOR ASSURANCE ENGAGEMENTS ON SPECIFIC SUBJECT MATTERS OTHER THAN HISTORIC FINANCIAL STATEMENTS –STANDARDS ON GENERIC ASSURANCE TOPICS SUCH AS EVIDENCE AND DOCUMENTATION –STANDARDS FOR RELATED SERVICES –PRACTICE STATEMENTS AS NECESSARY FOR EACH OF THE ABOVE.

6. M. ANGELA JIMENEZ6 5.1. REGULATION: IFAC ISAs ARE TO BE APPLIED IN THE AUDIT OF FINANCIAL STATEMENTS. ISAs ARE TO BE APPLIED TO THE AUDIT OF OTHER INFORMATION AND TO RELATED SERVICES IN THE COUNTRIES THAT ARE MEMBERS OF THE IFAC. ISAs ARE TO BE APPLIED IN THE AUDIT OF FINANCIAL STATEMENTS. ISAs ARE TO BE APPLIED TO THE AUDIT OF OTHER INFORMATION AND TO RELATED SERVICES IN THE COUNTRIES THAT ARE MEMBERS OF THE IFAC. ISAs DEVELOP THE IFAC CODE ABOUT ETHICAL REQUIREMENTS: (PRINCIPLES OF PROFESIONAL ETHICS) ISAs DEVELOP THE IFAC CODE ABOUT ETHICAL REQUIREMENTS: (PRINCIPLES OF PROFESIONAL ETHICS) –INTEGRITY –OBJECTIVITY –PROFESIONAL COMPETENCE AND DUE CARE –CONFIDENTIALITY –PROFESIONAL BEHAVIOR

7. M. ANGELA JIMENEZ7 5.2. REGULATION: E.C. AUDITING IN CONFIGURED UNDER THE DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL ON STATUTORY AUDIT OF ANNUAL ACCOUNTS AND CONSOLIDATED ACCOUNTS AND AMENDING COUNCIL DIRECTIVES 78/660/EEC AND 83/349/EEC. AUDITING IN CONFIGURED UNDER THE DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL ON STATUTORY AUDIT OF ANNUAL ACCOUNTS AND CONSOLIDATED ACCOUNTS AND AMENDING COUNCIL DIRECTIVES 78/660/EEC AND 83/349/EEC. AUDITING: ACTIVITY THAT, THROUGH USE OF CERTAIN REVIEW TECHNIQUES, IS AIMED AT ISSUING A REPORT CONCERNING THE RELIABILITY OF THE ACCOUNTING DOCUMENTS AUDITED. TRUE AND FAIR VIEW. AUDITING: ACTIVITY THAT, THROUGH USE OF CERTAIN REVIEW TECHNIQUES, IS AIMED AT ISSUING A REPORT CONCERNING THE RELIABILITY OF THE ACCOUNTING DOCUMENTS AUDITED. TRUE AND FAIR VIEW. IT IS ACTIVITY COMPRISED OF REVIEW AND VERIFICATION OF ACCOUNTING DOCUMENTS. IT IS ACTIVITY COMPRISED OF REVIEW AND VERIFICATION OF ACCOUNTING DOCUMENTS.

8. M. ANGELA JIMENEZ8 5.2. REGULATION: E.C DIRECTIVE ON STATUTORY AUDIT OF ANNUAL ACCOUNTS: DIRECTIVE ON STATUTORY AUDIT OF ANNUAL ACCOUNTS: –STATUTOTY AUDIT IN DEFINED AS THE AUDIT OF ANNUAL OR CONSOLIDATED ACCOUNTS OF ENTITIES COVERED BY COMMUNITY LAW DIRECTIVES. –EACH MEMBER STATE SHALL DESIGNATE COMPETENT AUTHORITIES WHICH ARE RESPONSIBLE FOR APPROVING STATUTORY AUDITORS AND AUDIT FIRMS.

9. M. ANGELA JIMENEZ9 5.2. REGULATION: E.C AUDITING ACTIVITY INCLUDES THE VERIFICATION OF THE RESULTS OF ITS OPERATIONS AND THE RESOURCES OBTAINED AND APPLIED DURING THE PERIOD EXAMINED, ACCORDING TO THE COMMERCIAL CODE AN OTHER LEGISLATION APLLICABLE THERETO. AUDITING ACTIVITY INCLUDES THE VERIFICATION OF THE RESULTS OF ITS OPERATIONS AND THE RESOURCES OBTAINED AND APPLIED DURING THE PERIOD EXAMINED, ACCORDING TO THE COMMERCIAL CODE AN OTHER LEGISLATION APLLICABLE THERETO. UNDERSTAND THE FINANCIAL SITUATION AND ASSETS OF THE COMPANY OR BODY AUDITED. UNDERSTAND THE FINANCIAL SITUATION AND ASSETS OF THE COMPANY OR BODY AUDITED.

10. M. ANGELA JIMENEZ10 5.2. REGULATION: E.C FOR THE PURPOSE OF THIS DIRECTIVE, THE FOLLOWING DEFINITIONS SHALL APPLY> FOR THE PURPOSE OF THIS DIRECTIVE, THE FOLLOWING DEFINITIONS SHALL APPLY> –STATUTORY AUDIT> MEANS AN AUDIT OF ANNUAL ACCOUNTS OR CONSOLIDATED ACCOUNTS INSOFAR AS REQUIRED BY COMMUNITY LAW. –STATUTORY AUDITOR> MEANS A NATURAL PERSON WHO IS APPROVED IN ACCORDANCE WITH THIS DIRECTIVE BY THE COMPETENT AUTHORITIES OF A MEMBER STATE TO CARRY OUT STATUTORY AUDITS. –AUDIT FIRMS> MEANS A LEGAL PERSON OR ANY OTHER ENTITY, REGARDLESS OF ITS LEGAL FORM, THAT IS APPROVED IN ACCORDANCE WITH THIS DIRECTIVE.

11. M. ANGELA JIMENEZ11 5.2. REGULATION: E.C UNDER THE DIRECTIVE VIII, THE REQUISITES TO BE AN AUDITOR ARE: UNDER THE DIRECTIVE VIII, THE REQUISITES TO BE AN AUDITOR ARE: –TO BE OF LEGAL AGE. –TO BE A NATIONAL OF THE MEMBER STATES OF THE EUROPEAN COMMUNITIES. –TO LACK A CRIMINAL RECORD FOR FRAUD RELATED OFFENSES. –TO HAVE OBTAINED THE RELEVANT AUTHORIZATION FROM THE ACCOUNTING AND AUDITING INSTITUTE

12. M. ANGELA JIMENEZ12 5.2. REGULATION: E.C THE AUTHORIZATION: CONDITIONS : THE AUTHORIZATION: CONDITIONS : –HAVING ATTAINED UNIVERSITY ENTRANCE LEVEL –HAVING COMPLETED THEORETICAL TEACHING PROGRAMMES AND CARRIED OUT PRACTICAL TRAINING –HAVING PASSED A PROFESSIONAL PROFICIENCY EXAMINATION ORGANISED AND RECOGNISED BY THE STATE.

13. M. ANGELA JIMENEZ13 5.2.REGULATION: E.C A./ THE THEORETICAL TRAINING COURSES COVER TO THE FOLLOWING SUBJECTS: A./ THE THEORETICAL TRAINING COURSES COVER TO THE FOLLOWING SUBJECTS: –INTERNATIONAL AUDITING STANDARD –ECONOMIC, FINANCIAL AND ASSETS ANALYSIS –GENERAL ACCOUNTING THEORY AND PRINCIPLES –CONSOLIDATION –ANALYTICAL OPERATIONS ACCOUNTING AND MANAGEMENTE ACCOUNTING –INTERNAL CONTROL AND RISK MANAGEMENT –RULES RELATED TO ANNUAL ACCOUNTS AND CONSOLIDATED ACCOUNTS

14. M. ANGELA JIMENEZ14 5.2. REGULATION: E.C –JURIDICAL AND PROFESSIONAL RULES RELATED TO CONTROL OF AUDITS AND AUDITORS –INTERNATIONAL ACCOUNTING STANDARDS –COST AND MANAGEMENT ACCOUNTING –AUDITING –PROFESSIONAL SKILLS, ETHICS AND INDEPENDENCE

15. M. ANGELA JIMENEZ15 5.2. REGULATION: E.C –OTHER MATTERS LIKE > CORPORATE LAW, TAX, CIVIL AND MERCANTILE LAW, LABOUR AND SOCIAL SECURITY LAW, INFORMATION SYSTEM AND COMPUTING, CORPORATE ECONOMICS, ECONOMIC POLICY AND FINANCIAL ECONOMICS, MATHEMATICS, STATISTICS AND FUNDAMENTAL PRINCIPLES OF CORPORATE FINANCIAL MANAGEMENT. CORPORATE LAW, TAX, CIVIL AND MERCANTILE LAW, LABOUR AND SOCIAL SECURITY LAW, INFORMATION SYSTEM AND COMPUTING, CORPORATE ECONOMICS, ECONOMIC POLICY AND FINANCIAL ECONOMICS, MATHEMATICS, STATISTICS AND FUNDAMENTAL PRINCIPLES OF CORPORATE FINANCIAL MANAGEMENT.

16. M. ANGELA JIMENEZ16 5.2.REGULATION: E.C B./THE PRACTICAL TRAINING MUST LAST AT LEAST THREE YEARS, ON WORK CARRIED OUT IN THE FINANCIAL AND ACCOUNTING FIELDS, SUBJECTS RELATED TO CONTROL OF ANNUAL ACCOUNTS, CONSOLIDATED ACCOUNTS OR SIMILAR FINANCIAL STATEMENT. B./THE PRACTICAL TRAINING MUST LAST AT LEAST THREE YEARS, ON WORK CARRIED OUT IN THE FINANCIAL AND ACCOUNTING FIELDS, SUBJECTS RELATED TO CONTROL OF ANNUAL ACCOUNTS, CONSOLIDATED ACCOUNTS OR SIMILAR FINANCIAL STATEMENT. AT LEAST TWO YEARS OF WHICH SHALL BE PERFORMED WITH A STATUTORY AUDITOR OR AUDIT FIRM. AT LEAST TWO YEARS OF WHICH SHALL BE PERFORMED WITH A STATUTORY AUDITOR OR AUDIT FIRM.

17. M. ANGELA JIMENEZ17 5.2. REGULATION: E.C AUDITOR´S RESPONSIBILITIES: AUDITOR´S RESPONSIBILITIES: –RESPONSIBILITY: AUDITORS SHALL BE DIRECTLY RESPONSIBLE, IN SOLIDUM AND WITHOUT LIMIT, TO THE COMPANIES OR BODIES AUDITED AND TO THIRD PARTIES, FOR THE DAMAGE AND LOSSES ARISING FROM FAILURE TO FULFIL THEIR DUTIES. –SECRECY: AUDITORS SHALL BE OBLIGED TO KEEP SECRECY AS TO ALL INFORMATION THAT COMES TO THEIR KNOWLEDGE WHILE PERFORMING THEIR ACTIVITY, AND MAY NOT MAKE USE OF SAME FOR PURPOSE OTHER THAN THOSE INHERENT TO AUDITING

18. M. ANGELA JIMENEZ18 5.2. REGULATION: E.C DUTY OF CUSTODY: AUDITORS AND AUDITING FIRMS SHALL CONSERVE AND SAFEGUARD THE DOCUMENTATION RELATED TO EACH AUDIT THEY PERFORM, FOR THE TERM OF FIVE YEARS AS FO THE DATE OF THE AUDITOR´S REPORT, INCLUDING THE AUDITOR´S WORKING PAPERS CONSTITUTING THE PROOF AND BASIS FOR THE CONCLUSIONS RECORDED IN THE REPORT. DUTY OF CUSTODY: AUDITORS AND AUDITING FIRMS SHALL CONSERVE AND SAFEGUARD THE DOCUMENTATION RELATED TO EACH AUDIT THEY PERFORM, FOR THE TERM OF FIVE YEARS AS FO THE DATE OF THE AUDITOR´S REPORT, INCLUDING THE AUDITOR´S WORKING PAPERS CONSTITUTING THE PROOF AND BASIS FOR THE CONCLUSIONS RECORDED IN THE REPORT. INDEPENDENCE: STATUTORY AUDITOR IS INDEPENDENT FROM THE AUDITED ENTITY AND IN NOT IN ANY WAY INVOLVED IN MANAGEMENT DECISIONS OF THE AUDITED ENTITY. INDEPENDENCE: STATUTORY AUDITOR IS INDEPENDENT FROM THE AUDITED ENTITY AND IN NOT IN ANY WAY INVOLVED IN MANAGEMENT DECISIONS OF THE AUDITED ENTITY.

19. M. ANGELA JIMENEZ19 5.2. REGULATION: E.C STATUTOTY AUDITOR OR AN AUDIT FIRM SHALL NOT CARRY OUT A STATUTORY AUDIT IF THERE IS ANY FINANCIAL, BUSINESS, EMPLOYMENT OR OTHER RELATIONSHIP, INCLUDING THE PROVISION OF ADDITIONAL SERVICES. STATUTOTY AUDITOR OR AN AUDIT FIRM SHALL NOT CARRY OUT A STATUTORY AUDIT IF THERE IS ANY FINANCIAL, BUSINESS, EMPLOYMENT OR OTHER RELATIONSHIP, INCLUDING THE PROVISION OF ADDITIONAL SERVICES. OBJECTIVITY. OBJECTIVITY. THE AUDITOR WILL CONSIDER THE PRINCIPLES OF THE INTERNATIONAL FEDERATION OR ACCOUNTATS, *IFAC*, CODE OF ETHICS. THE AUDITOR WILL CONSIDER THE PRINCIPLES OF THE INTERNATIONAL FEDERATION OR ACCOUNTATS, *IFAC*, CODE OF ETHICS.

20. M. ANGELA JIMENEZ20 5.2. REGULATION : E.C THE COMMISSION SHALL ADOPT INTERNATIONAL AUDITING STANDARDS FOR APPLICATION IN THE COMMUNITY ONLY IF THEY: THE COMMISSION SHALL ADOPT INTERNATIONAL AUDITING STANDARDS FOR APPLICATION IN THE COMMUNITY ONLY IF THEY: –ARE GENERALLY ACCEPTED INTERNATIONALLY AND ARE DEVELOPED WITH PROPER DUE PROCESS, PUBLIC OVERSIGHT AND TRANSPARENCY –PROVIDE A HIGH LEVEL OF CREDIBILITY TO THE ANNUAL ACCOUNTS –ARE CONDUCTIVE TO THE EUROPEAN PUBLIC GOOD

21. M. ANGELA JIMENEZ21 5.2. REGULATION: E.C THE TECHNICAL STANDARDS ON AUDITING ESTABLISHES THE PRINCIPLES AND REQUISITES THAT MUST NECESSARILY BE COMPLIED WITH BY AUDITORS IN PERFORMANCE OF THEIR DUTIES AND TO EXPRESS AN EXPERT TECHNICAL OPINION. THE TECHNICAL STANDARDS ON AUDITING ESTABLISHES THE PRINCIPLES AND REQUISITES THAT MUST NECESSARILY BE COMPLIED WITH BY AUDITORS IN PERFORMANCE OF THEIR DUTIES AND TO EXPRESS AN EXPERT TECHNICAL OPINION. THE TECHNICAL STANDARDS ON AUDITING COVER THE FOLLOWING MATTERS: THE TECHNICAL STANDARDS ON AUDITING COVER THE FOLLOWING MATTERS: –T.S. OF A GENERAL NATURE –T.S. OF PERFORMANCE OF THE WORK –T.S. ON REPORTS

22. M. ANGELA JIMENEZ22 5.2. REGULATION: E.C TECHNICAL STANDARDS OF A GENERAL NATURE: TECHNICAL STANDARDS OF A GENERAL NATURE: –AFFECT THE CONDITIONS THE AUDITOR MUST COMPLY WITH, AND HIS BEHAVIOUR IN PERFORMANCE OF THE AUDITING ACTIVITY. MATTERS: REGULATION OF THE CRITERIA THAT MUST BE APPLIED BY AUDITORS IN PERFORMANCE OF THEIR ACTIVITIES, IN ORDER TO GUARANTEE THEIR INDEPENDENCE. REGULATION OF THE CRITERIA THAT MUST BE APPLIED BY AUDITORS IN PERFORMANCE OF THEIR ACTIVITIES, IN ORDER TO GUARANTEE THEIR INDEPENDENCE. THE PRINCIPLES THE AUDITOR MUST FOLLOW TO GUARANTEE AFFECTIVE PROFESSIONAL SECRECY. THE PRINCIPLES THE AUDITOR MUST FOLLOW TO GUARANTEE AFFECTIVE PROFESSIONAL SECRECY.

23. M. ANGELA JIMENEZ23 5.2. REGULATION: E.C REGULATION OF PRINCIPLES THAT MUST BE FOLLOWED AS TO REMUNERATIONS. REGULATION OF PRINCIPLES THAT MUST BE FOLLOWED AS TO REMUNERATIONS. REGULATION OF CONTROL SYSTEM THAT ALL AUDITORS OR AUDITING FIRMS MUST ESTABLISH IN ORDER TO REASONABLY ASSURE THAT THEIR PROFESSIONAL ACTIVITY WITH ACT AND REGULATIONS. REGULATION OF CONTROL SYSTEM THAT ALL AUDITORS OR AUDITING FIRMS MUST ESTABLISH IN ORDER TO REASONABLY ASSURE THAT THEIR PROFESSIONAL ACTIVITY WITH ACT AND REGULATIONS. OTHER ASPECTS THAT AFFECT THE AUDITORS IN PERFORMANCE OF THEIR ACTIVITY. OTHER ASPECTS THAT AFFECT THE AUDITORS IN PERFORMANCE OF THEIR ACTIVITY.

24. M. ANGELA JIMENEZ24 5.2. REGULATION: E.C TECHNICAL STANDARDS ON PERFORMANCE OF THE WORK: TECHNICAL STANDARDS ON PERFORMANCE OF THE WORK: –REFER TO PREPARATION AND PERFORMANCE OF THE WORK TO BE CARRIED OUT BY AUDITORS. –REGULATE THE SET OF INVESTIGATION AND INSPECTION TECHNIQUES APPLICABLE TO THE ACCOUNTING DOCUMENTS SUBJECT TO EXAMINATION. –REFER THE INTERNAL CONTROL SYSTEMS AT THE COMPANY OR BODY AUDITED.

25. M. ANGELA JIMENEZ25 5.2.REGULATION: E.C PLANNING AND PROGRAMING THE WORK. PLANNING AND PROGRAMING THE WORK. PERFORMANCE OF THE WORK, INCLUDING THE ADEQUATE METHODS AND PROOF TO OBTAIN THE EVIDENCE PERFORMANCE OF THE WORK, INCLUDING THE ADEQUATE METHODS AND PROOF TO OBTAIN THE EVIDENCE DEVELOP THE METHODS AND PROCEDURES FOR SPECIFIC APPLICATION TO THE DIFFERENT SECTORS OF ECONOMIC ACTIVITY. DEVELOP THE METHODS AND PROCEDURES FOR SPECIFIC APPLICATION TO THE DIFFERENT SECTORS OF ECONOMIC ACTIVITY. THE CONTENT, CUSTODY AND PRINCIPLES RELATED TO THE DOCUMENTATION THAT JUSTIFIES THE WORK CARRIED OUT. THE CONTENT, CUSTODY AND PRINCIPLES RELATED TO THE DOCUMENTATION THAT JUSTIFIES THE WORK CARRIED OUT.

26. M. ANGELA JIMENEZ26 5.2. REGULATION: E.C TECHNICAL STANDARDS ON REPORTS: TECHNICAL STANDARDS ON REPORTS: –REGULATE THE PRINCIPLES THAT MUST BE COMPLIED WITH TO PREPARE AND PRESENT THE AUDITING REPORT. –ESTABLISH THE EXTENT AND CONTENT OF THE DIFFERENT TYPES OF REPORT, AS WELL AS THE CRITERIA TAKEN AS THE BASIS FOR THE MODEL OF REPORT, TO BE USED IN EACH CASE.