By: Terry Ahtziry Cardenas Banda, attorney and law professor.
Nowadays, constant learning is a necessity in any specific area of knowledge, and also in an interdisciplinary way between two or more other branches of knowledge, corporations need to form the bases to know about the statutory audit, which consists of the review of all related documentation of a corporate legal and administrative area from the date a company was incorporated until the moment it was requested, in general terms.
There are various reasons why an organization requires a statutory audit, such as for a specific event, suspicions of misconduct, due to the regulatory or procedural provision, or in an ordinary way as a preventive means to evaluate the performance of the company.
The purpose of statutory audits is to obtain information on which an opinion can be provided of the legal status of a company and thus keep the partners or shareholders accurately informed of the reality of the company, specifying the strengths and weaknesses of the company, under the application of corporate law.
Therefore, it is necessary to delimit and question the operation of a company through a statutory audit which provides the essential elements of its constitution until its consolidation, it is worth mentioning that this issue covers a number of factors to consider to be able to carry out the work correctly, all aspects of a company must be considered, from the existence of the company to the verification of compliance with all the legal regulations applicable to a company to be constituted or incorporated.
It is worth mentioning that many times the confusion arises of determining a statutory audit as the verification of compliance with the financial information standards, however, a legal audit is more focused, as its name says, on the company to comply with all the legal provisions applicable to it. How should this be done? By external and independent lawyers to the audited entity, since the auditor cannot be judge and party.
We must bear in mind that in general there are currently three types of audits: information of technology (systems); accounting and finance; and legal, so it must be specified that all are applicable to the audited entity, so they must be known and integrated into a more complete knowledge about the organization, which can be appropriated through an audit committee.
In accordance with the provisions of article 172 of the General Law of Commercial Companies in México, it is the obligation of every company, under the responsibility of its administrators, to present annually to the shareholders a report that includes: a report of the administrators on the progress of the company in the year, as well as on the policies followed by the administrators and, where appropriate, on the main existing projects; financial reports in which the main accounting policies and criteria are declared and explained, financial statements at the end of the year, changes in the items that make up the company’s equity and explanatory notes. It should be noted that this provision has been interpreted restrictively that the obligation is only to present a report of financial results, but not the legal status of the company.
For its part, at the international level and from there taken to the national plan, we have official rules that regulate this legal institution. The international standard ISSAI 4000 of the “Guidelines for compliance auditing” (International Standards of Supreme Audit Institutions ISSAI, for its acronym in English), defines the compliance audit as the function attributed to control that the activities of the public entities comply with the laws, regulations, and rules that regulate them. In this sense, the compliance audit is a reference and provides the basis for the statutory audit in the different legal systems.
Finally, it can be said that creating a basis for a statutory audit is necessary not only to be carried out in the best way but to know how to carry it out, we need to know beyond all the points to consider to carry it out and not only the legal aspect, we need to consider other areas and subjects to carry it out as complete as possible.
Talking about statutory audit we are not only referring to the study itself of the company, but it covers beyond the simple audit procedure, each and every one of the aspects that they involve must be considered from the constitution up to the detailed operation of the company. In addition, we must consider that a corporate statutory audit is a magnificent tool so that the company can know where it is and define what it needs to operate in accordance with current regulations. Organizations have a commitment to society, they are one of the pillars of our society and they support social welfare, especially the well-being of the people who work in them, therefore it is necessary to ensure their proper functioning through these control and evaluation tools.
As a reference, the following was used: MANZANILLA GALAVIZ José Ma., “Conceptual Bases for a Legal Audit”, Mexico, May 2007.