We analyzed the DGRN resolution of March 30, 2017.

According to commercial regulations, there are certain companies that must submit their Annual Accounts to verification by an auditor, either because they meet certain objective requirements established by law (Article 263 of the Capital Companies Law), or because the company has appointed and registered an auditor in the Commercial Registry (either on its own initiative or at the request of one of its partners).

Now, regardless of the reason why the company must have its Annual Accounts audited, what happens when those accounts are submitted to the Commercial Registry for filing if the auditor disclaims an opinion on them in the audit report issued?

The Directorate General of Registries and Notaries (DGRN) has ruled on this matter (DGRN Resolution of March 30, 2017) in a case where, due to the auditor's refusal of an opinion, the Mercantile Registry rejected the filing of the company's Annual Accounts. In the aforementioned resolution, the DGRN decided to overturn the Mercantile Registry's refusal to file, thus allowing the filing of the Annual Accounts despite the auditor's disclaimer of opinion.

This decision contains several considerations that determine the meaning of the decision and which are outlined below:

• The first consideration is of a general nature and refers to a matter of principle, in the sense that "the refusal to deposit accounts based on the content of the auditor's report must be restrictive, since only exceptionally can those who have the right to know the content of the accounts be deprived of information."
• Another consideration contained in the resolution refers to the attitude maintained by the company towards the auditor and the audit report: “The filing of accounts should not be admitted when the reasons that prevent the auditor from expressing his opinion can be attributed to the attitude of the company itself, due to the objectivity and independence of the auditor having been compromised or due to the company not having delivered the corresponding documentation (...), since in these cases the admission of the filing of accounts would imply a frustration of the purpose of the Law, as well as the rights of the partners who requested the audit and of third parties, where appropriate.”
• The third consideration concerns the criteria for discerning when a disclaimer of opinion should prevent the filing of the Annual Accounts and when it should not: “This is certainly not a simple matter, given the brevity and ambiguity of the applicable regulations. In any case, it must be understood that the purpose of the regulation is to satisfy the interest of shareholders and third parties, or of a minority shareholder, in having an auditor appointed to review the annual accounts for a given financial year (Articles 263.1 and 265.2 of the Spanish Companies Act). Therefore, this criterion must serve as a guide to determine whether the submitted report fulfills this purpose. In this regard, this Directorate General has stated that the report cannot serve as the basis for filing the accounts when no clear information can be rationally deduced from it, as it merely expresses the absence of an opinion on the audited matters. Conversely, when clear information can be deduced from the audit report on the The financial statements of the company should not be rejected even if the auditor, for technical reasons, does not issue an opinion.”
• The final argument concerns the application of the previously outlined criteria to the specific case: “The auditor’s report accompanying the annual accounts for filing does indeed show that the auditor abstains from issuing an opinion, but its content does not indicate that the limitations on scope it points out could lead to the closure of the Registry. The report does not at any point suggest that the company has failed to comply with its duty to cooperate with the auditor (Article 6 of the current Audit Law). The limitations mentioned relate to matters unrelated to the company’s conduct and cannot prevent the filing of the accounts: the limitation regarding inventories (which is almost typical in audit reports) merely highlights the time difference between the close of the financial year and the moment the audit is carried out; the limitations arising from the insolvency proceedings of another company with which the audited company maintains significant commercial relationships, which occurred after the close of the financial year, merely highlight the uncertainty resulting from this event and its potential impact on the company’s accounts; the same applies to the valuation of certain…” credits, duly secured, that the company holds against the debtor; the same applies to the doubts expressed regarding the valuation of the company's stake in another company whose accounts the auditor has not reviewed and which the audited company obviously cannot provide. None of these limitations constitutes sufficient grounds to deny the filing in accordance with the aforementioned doctrine: there is no assertion that the duty to cooperate has been breached in a way that prevented the auditor from preparing their report.”

In short, in view of the Resolution studied here (and of the previous ones relating to similar cases), the disclaimer of opinion (and even the adverse opinion) in an audit report relating to Annual Accounts submitted for filing with the Commercial Registry, does not automatically entail the disclaimer of their filing, but in order to determine whether that circumstance will prevent it, it will be necessary to refer to the specific study of the audit report and the reasons put forward therein in justification of the disclaimer of opinion.

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Andreu Pujol i Camps

Professional Partner in legal and economic fields

A graduate in Law from the University of Barcelona and with a Master's degree in Business Law from the same university, he worked at the law firm Alonso-Cuevillas Advocats and later joined the Civil and Commercial Litigation department of the law firm Bufete Bueno Bartrina. He then joined the team at the firm Casamitjana-Cuyas-Morales, and subsequently continued his career at Bufete Herrera Advocats, in the Commercial and Litigation department. In November 2015, he joined aÀmbitJurídic i Econòmic, SLP, as a professional partner, to head the Commercial and Insolvency practice.

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