“In Colombia, the practice of the Fiscal Audit is of capital importance to companies across all sectors. It is a legally regulated inspection which ensures good-practice, transparency and competence. It guarantees that companies are abiding by the law and that they are being managed both effectively and efficiently.” – Technical Council of Public Accounting (Consejo Técnico de la Contaduría Pública)
What Is a Revisoría Fiscal or Fiscal Audit in Colombia?
If you own a business in Colombia, you may need to hire a fiscal auditor to carry out a revisoría fiscal or fiscal audit; a practice unique to Colombia. It is a type of external audit that is required by law for certain companies and it is designed to achieve two main aims:
- It provides a method for shareholders to monitor how their company is being managed and;
- It provides the government with an accurate account of the company’s activities for tax calculation purposes.
What Does a Fiscal Auditor Do?
The objective of a fiscal auditor is to give the most accurate and complete representation of the company as possible, therefore their audits must cover all aspects of the company including its finances, its operations and its management. Fiscal auditors are contracted on a permanent basis to monitor the company year-round and they must report the company’s activities as they occur rather than retrospectively as external auditors normally do.
Some examples of the tasks of a fiscal auditor are:
- Ensuring that the company directors are acting within the law.
- Verifying that the company resources are being well spent and that the company’s operations are run efficiently.
- Checking that all the company’s books are correct and to the legal standard and to ensure that the required documentation is stored appropriately.
- Certifying and reporting the company’s financial statements and operations.
- Collaborating with the regulatory government bodies.
Why Is a Fiscal Auditor Important?
Fiscal auditors are important because they provide an impartial and independent judgement of a company from the perspective of an ‘outsider’; this means that their reports will be unaffected by influences from within the company thus protecting the shareholders’ best interests and ensuring the company is fulfilling its legal and fiscal duties. They are contracted by the shareholders of the company directly (and independently from the company directors) in order to ensure that impartiality and they are legally entitled to request the management to disclose any kind of information regarding the business.
Because fiscal auditors are contracted directly by the shareholders, they are able to report impartially on the company’s activities without influence from the company directors.
Who Can and Can’t Be a Fiscal Auditor in Colombia?
Colombian law states that the only requirement to practice as a fiscal auditor is that the auditor must be a Certified Public Accountant (contador público); no further specialisation is required.
With that being said, shareholders may seek out an accountant with a specialisation in fiscal audits to ensure that the auditor has the specialist knowledge and experience necessary for the position.
On the other hand, there are certain conditions that make you ineligible to practice as a fiscal auditor for a company, including:
- Being a shareholder or partner of the company, any of its subsidiaries or its parent company.
- Being connected to the directors or accountants of the company through marriage, family or through partnership in a third business.
- Being an employee of the company or any of its subsidiaries or parent company.
Furthermore, if a company’s accountant wishes to become the company’s fiscal auditor they must leave the initial position and wait a 6-month period before taking up the new one.
Who Needs a Fiscal Auditor in Colombia in 2018?
According to Colombian law there are three specific types of companies that must contract a fiscal auditor:
1) Publicly traded companies
2) Branches of foreign companies in Colombia
3) Companies with any number of shareholders who own a combined 20% or more of the total equity of the company and who aren’t part of the senior management team.
In addition to the above, any company or legal entity that exceeded either of the following thresholds by 31 December of the previous year must contract a fiscal auditor for the current one:
- Gross assets: equivalent to 5000+ minimum wages
- Gross income: equivalent to 3.000+ minimum wages
In 2017, the Colombian minimum wage was COP$737,717, meaning that if your company exceeded either of the figures below you must contract a fiscal auditor for 2018:
Gross assets: COP$3.688.585.000
Gross income: COP$2.213.151.000
Where Can I Find More Information on Fiscal Auditors in Colombia?
The Biz Latin Hub group have a team of fiscal auditors with the experience and knowledge to support you with your Latin American business needs. If you need a fiscal auditor or you have any questions or concerns about fiscal audits in Colombia, please contact our CEO and founder Mr Craig Dempsey at [email protected] for more information.