Italy

Member Organizations

Member Organization Associate Other PAOs

  Consiglio Nazionale dei Dottori Commercialisti e degli Esperti Contabili

Legal and Regulatory Environment

  • Overview of Statuatory Framework for Accounting and Auditing

    Italy, a member of the European Union (EU), is subject to the accounting, auditing, and financial reporting directives and regulations issued by the European Commission, which have been transposed into national law.

    Accounting Framework

    The EU Regulation EC 1606/2002 and the Legislative Decree No. 38/2005 require companies to apply IFRS as endorsed by the EU. In Italy, the following criteria require mandatory application of EU-endorsed IFRS:

    • Preparation of both individual and consolidated financial statements of listed companies and public companies monitored by the Commissione Nazionale per le Società e la Borsa (CONSOB);
    • Preparation of both individual and consolidated financial statements of banks and other credit-institutions monitored by Banca d’Italia;
    • Preparation of individual financial statements of listed assurance enterprises and of consolidated financial statements of unlisted assurance enterprises; and
    • Application of EU-endorsed IFRS is optional for both individual and consolidated financial statements of non-small unlisted companies.

    Accounting requirements set in the Civil Code (art.2423-2435-bis, c.c.)—as amended by the Legislative Decree No. 139/2015, which implements the Accounting Directive 34/2013/EU—can be applied in the preparation of the individual and consolidated financial statements of all companies that are not obliged to apply IFRS. These entities, except for small entities as defined by the Civil Code and detailed below, are also permitted, as mentioned before, to use the EU-endorsed IFRS in the preparation of their individual and consolidated financial statements.

    The Civil Code requirements are interpreted and integrated in the Italian Accounting Standards issued by the Organismo Italiano di Contabilità, in accordance with the Law No. 116/2014. The Italian Accounting Standards differ from IFRS; however, there is reportedly a convergence process underway to align the national standards with their international counterparts.

    Small entities are authorized to prepare abridged financial statements, which include a condensed balance sheet and income statement and few specific notes disclosures. A company is defined in the Civil Code as a small entity if, for two consecutive fiscal years (or the first fiscal year in case of a newly incorporated company), it meets two of the following criteria: (i) net turnover is below EUR 8.800.000; (ii) total assets are below EUR 4.400.000; and (iii) average number of employees in the fiscal year is not above 50. In accordance with the requirements of the Civil Code, financial statements of all entities must be filed with the Register of Companies within one month of approval.

    Listed entities are also required to comply with the additional reporting requirements established by the CONSOB, in accordance with the Law No. 216/1974. The CONSOB is responsible for the regulation and supervision of the Italian securities markets and protection of investors as well as oversight of financial intermediaries, regulated markets, issuers, and statutory auditors.

    In addition, banks and credit institutions must comply with the regulations and other disclosure requirements adopted by the Banca d’Italia (the central bank) established in accordance with the Law No. 449/1893, while insurance companies are required to comply with additional regulations set by IVASS (oversight authority of the insurance sector in accordance with Law No. 135/2012).

    Auditing Framework

    The Legislative Decree No. 39/2010 and the Legislative Decree No. 135/2016 (respectively implementing Directive 2006/43/EC and Directive 2014/56/EU) and article 2477 of the Civil Code require corporations meeting specific conditions to have their financial statements audited. The annual and consolidated financial statements of companies are required to be audited as follows:

    • All PIEs, audited by external audit firms;
    • All companies limited by shares, audited by external audit firms or collegio sindacale, an independent professional supervisory board regulated by Italian company law, which includes professional auditors among its members; and
    • Limited Liability Companies, audited by external audit firms or collegio sindacale if they (i) must prepare consolidated financial statements, (ii) control another company required to be audited according to the law, or (iii) exceed two of the criteria set for small entities for two consecutive fiscal years, mentioned above.

    In accordance with the Legislative Decree No. 39/2010 and Legislative Decree No. 135/2016, all audits (including voluntary ones) must be conducted by statutory auditors (Revisori Legali) enrolled with the register of statutory auditors held by the Ministry of Economy and Finance (MEF) in accordance with national auditing standards. The standards are fully compliant with ISA and are prepared by a special advisory panel participated by the Italian professional body—the Consiglio Nazionale dei Dottori Commercialisti e degli Esperti Contabili—and professional associations (Assirevi and Istituto Nazionale Revisori Legali) and the CONSOB. The drafted standards are then formally adopted with a ministerial act issued by the MEF.

  • Regulation of Accountancy Profession

    The Legislative Decree No. 139/05, Decree No. 39/2010, and Decree No. 135/2016 constitute the key legislation establishing the regulatory framework for professional accountants. The laws also establish the responsibilities of the organizations responsible for regulation of the accountancy profession, including the Consiglio Nazionale dei Dottori Commercialisti e degli Esperti Contabili (CNDCEC), the Ministry of Economy and Finance (MEF), and the Commissione Nazionale per le Società et la Borsa (CONSOB).

    Professional Accountants

    Professional accountants may be qualified as one of the following designations, with associated rights and responsibilities:

    • Esperti Contabili—professional accountants authorized to deliver accounting services, perform tax fillings, and perform limited audit functions; and
    • Dottori Commercialisti—professional accountants authorized to perform the same services as Esperti Contabili as well as to undertake company appraisals, insolvency procedures, defend clients before tax courts, and perform full scope audit and assurance services for non-statutory audits.

    Professionals are allowed to use their professional title of Dottore Commercialista or Esperto Contabile according to registration in Section A or Section B of the professional roll. All members, both of section A and section B may use the general professional title of Cmmercialisti.

    The Legislative Decree No. 139/05 contains the main provisions regarding the initial professional development (IPD) and registration of the Dottori Commercialisti and Esperti Contabili. Both are subject to the general supervision of the Ministry of Justice.

    In accordance with the Legislative Decree No. 139/05, Dottori Commercialista and Esperti Contabili are required to complete a professional accountancy education program, meet practical experience requirements, and pass final state examinations as well as fulfill the detailed requirements set by the Ministry of Education, University, and Research, and to be registered members of the CNDCEC.

    The CNDCEC is designated by the Legislative Decree No. 139/05 as the responsible entity for (i) developing ethical requirements for its members; (ii) monitoring and enforcing its members’ compliance with the profession’s technical and ethical standards; (iii) assessing and approving the continuing professional development (CPD) programs established by the territorial chapters; (iv) representing the profession at the national and international level; and (iv) formulating opinions on draft laws, as necessary.

    Statutory Auditors

    Legislative Decree No. 39/2010 and Decree No. 135/2016 prescribe the IPD, CPD, and registration requirements for statutory auditors or Revisori Legali and the main functions of the organizations charged with the public oversight of the audit profession.

    Dottori Commercialista and Esperti Contabili can become statutory auditors or Revisori Legali if they meet the IPD and requirements specified in the Legislative Decree No. 39/2010 and Decree No. 135/2016. To become a Revisori Legali, individuals must hold a university degree of at least three years, complete a supervised three-year practical experience requirement, and complete a national examination to register with the MEF.

    The MEF’s responsibilities regarding the Revisori Legali include: (i) endorsing the auditing standards and the code of ethics for statutory auditors of non-Public Interest Entities (PIEs); (ii) establishing a quality assurance (QA) review system for audits of non-PIEs; and (iii) implementing disciplinary measures and possible sanctions for statutory auditors of non-PIEs.

    Revisori Legali who audit PIEs are subject the oversight of the CONSOB, in accordance with the Delegated Decree No. 39/2010. The CONSOB is responsible for (i) endorsing auditing standards; (ii) overseeing the organization and activities of statutory auditors and audit companies of PIEs; (iii) monitoring the respective statutory auditors’ and audit companies’ independence and technical competence; (iv) establishing a QA review system for the statutory audits of PIEs; and (v) investigating and disciplining statutory auditors of PIEs for misconduct and breach of the rules and legal requirements.

    Revisori Legali may voluntarily join the Istituto Nazionale Revisori Legali (INRL). The INRL is a voluntary membership organization, whose membership is restricted to statutory auditors registered with the MEF.

    In accordance with the Legislative Decree No. 139/2005, the CNDCEC, INRL, and the Associazione Italiana Revisori Contabili, a voluntary association comprised of audit companies specializing in the audits of PIEs, constitute the special advisory panel in charge of drafting the auditing standards and the code of ethics for the audit profession and contributing to the development of other decrees applicable to the accountancy profession.

  • Audit Oversight Arrangements

    In accordance with the Delegated Decree No. 30/2010, which transposes the requirements of the EU Directive 2006/43/EC on statutory audits of annual accounts and consolidated accounts, the audit oversight system in Italy consists of the Ministry of Economy and Finance (MEF) and the Commissione Nazionale per le Società et la Borsa (CONSOB).

    According to the abovementioned decree, the MEF is responsible for a wide range of activities related to the audit profession, including (i) approving and registering statutory auditors; (ii) endorsing the auditing standards and the code of ethics for statutory auditors of non-Public Interest Entities (non-PIEs); (iii) establishing a quality assurance (QA) review system for audits of non-PIEs; and (iv) implementing disciplinary measures and possible sanctions for statutory auditors of non-PIEs.

    Additionally, under the same decree, the CONSOB is responsible for (i) adopting auditing standards for PIEs; (ii) overseeing the organization and activities of statutory auditors and audit companies of PIEs (iii) monitoring the respective statutory auditors’ and audit companies’ independence and technical competence; (iv) establishing a QA review system for the statutory audits of PIEs; and (v) investigating and disciplining statutory auditors of PIEs for misconduct and breach of the rules and legal requirements.

    The CONSOB is a member of the International Forum of Independent Audit Regulators.

  • Professional Accountancy Organizations

    The Consiglio Nazionale dei Dottori Commercialisti e degli Esperti Contabili (CNDCEC)

    The CNDCEC is a mandatory membership organization established by the Legislative Decree No. 139/2005. Its members include Esperti Contabili (accountants who are authorized to deliver accounting services, perform tax fillings, and perform limited audit functions); and Dottori Commercialista (accountants who are authorized to perform the same services as Esperti Contabili and may also undertake company appraisals, insolvency procedures, defend clients before tax courts, and perform full scope audit and assurance services for non-statutory audits). According to Article 29 of the Legislative Decree No. 139/2005, the CNDCEC operates as an umbrella organization that coordinates territorial chapters.

    The CNDCEC is responsible for a wide range of activities including: (i) developing ethical requirements for its members; (ii) monitoring and enforcing its members’ compliance with the profession’s technical and ethical standards; (iii) assessing and approving the continuing professional development programs established by the territorial chapters; (iv) representing the profession at national and international level; and (iv) formulating opinions on draft laws, as necessary.

    In addition to being an IFAC member, the CNDCEC is a member the European Federation of Accountants and Auditors for SMEs, the Latin Integration Committee of Europe and the Americas, the Fédération des Experts-Comptables Méditerranéens, and Accountancy Europe.

  • Projects or Other Information

    The Ministry of Economy and Finance (MEF) is expected to adopt a new decree which would address various matters, including detailing the structure of the quality assurance (QA) review system established for statutory auditors. After consultation with the Commissione Nazionale per le Società et la Borsa (CONSOB) and the accountancy profession, it is likely that the QA review system will be set with two tiers. The CONSOB would be responsible for the review of audits Public Interest Entities (PIEs) while the MEF would be responsible for audits of non-PIEs.

    Additional MEF decrees are also anticipated regarding defining the investigating and disciplining (I&D) statutory auditors. The project stipulates that the MEF would be responsible for the I&D of statutory auditors of non-PIEs whereas CONSOB would be responsible for the I&D of statutory auditors of PIEs.

Adoption of International Standards

  • Quality Assurance

    In accordance with the Legislative Decree No. 30 /2010, the Ministry of Economy and Finance (MEF) is responsible for establishing a quality assurance (QA) review system for audits of financial statements of non-Public Interest Entities (non-PIEs) and the Commissione Nazionale per le Società et la Borsa (CONSOB) is responsible for the QA of audits of Public Interest Entities (PIEs).

    A new ministerial decree issued by the MEF is expected to address the QA of audits of non-PIEs. After consultation with the CONSOB and the accountancy profession, it is likely that CONSOB would continue to be responsible for the review of audits of PIEs while the MEF would be responsible for audits of non-PIEs. The Consiglio Nazionale dei Dottori Commercialisti e degli Esperti Contabili (CNDCEC) may be delegated to manage the QA system for non-PIEs by the MEF. The final adoption of the QA system for non-PIEs is expected in 2017.

    The CNDCEC reports that CONSOB’s system is based on ISA 220 and ISQC1 and that various aspects related to the quality control system as provided for by SMO1 are included in CONSOB’s procedures, including: subject matter of the reviews, review cycle, review team, reporting, corrective actions, consequences for failure to pass quality reviews, and public oversight considerations.

    Current Status: Partially Adopted

  • International Education Standards

    The Legislative Decree No. 139/2005 outlines the initial professional development (IPD) requirements for professional accountants. In accordance with the decree, the Ministry of Education, University, and Research is responsible for implementing IPD requirements and the Consiglio Nazionale dei Dottori Commercialisti e degli Esperti Contabili (CNDCEC) is responsible for adopting the continuing professional development (CPD) requirements.

    Professional accountants—qualified as either Dottori Commercialista or Esperti Contabilare subject to educational requirements, delivered by the universities, practical experience requirements, and passing state final examinations. Both are also subject to the CPD requirements of the CNDCEC.

    The IPD and CPD requirements for statutory auditors—Revisori Legali—are established in Legislative Decrees No. 39/2010 and No. 135/2016. Statutory auditors must be registered with the Ministry of Economy and Finance.

    The CNDCEC reports that the IPD and CPD requirements in Italy have been converged with the IES.

    Current Status: Adopted

  • International Standards on Auditing

    The Legislative Decrees No. 39/2010 and No. 135/2016 (respectively implementing Directive 2006/43/EC and Directive 2014/56/EU) and article 2477 of the Civil Code require the following companies to be audited: all Public Interest Entities (PIEs), companies limited by shares, and limited liability companies.

    In accordance with the above-mentioned decrees, all audits (including voluntary ones) must be conducted by statutory auditors (Revisori Legali) enrolled with the register of statutory auditors held by the Ministry of Economy and Finance (MEF) in accordance with national auditing standards.

    The national standards are prepared by a special advisory panel that includes the national professional accountancy organization—the Consiglio Nazionale dei Dottori Commercialisti e degli Esperti Contabili (CNDCEC)—and professional associations (Assirevi and Istituto Nazionale Revisori Legali) and the Commissione Nazionale per le Società et la Borsa (CONSOB). The drafted standards are formally adopted with a ministerial act issued by the MEF. The CONSOB endorses the audit standards for audits of PIEs.

    The latest translation of the IAASB Handbook was performed in 2014 by the CNDCEC. The new and revised ISA issued in 2015 have been translated for adoption by the MEF in June 2017.

    Current Status: Adopted

  • Code of Ethics for Professional Accountants

    Legislative Decree No. 139/2005 grants the Consiglio Nazionale dei Dottori Commercialisti e degli Esperti Contabili (CNDCEC) the responsibility for setting ethical requirements for professional accountants—qualified as either Dottori Commercialista or Esperti Contabil. The CNDCEC issued its Code of Ethics in 2009 and subsequently updated it in 2015, taking into consideration the IESBA Code of Ethics, which was last translated into Italian in 2010. The CNDCEC reports that the combination of the legal requirements and the rules incorporated in its Code of Ethics are set in accordance with the IESBA requirements and are more restrictive in some respects.

    For statutory auditors (Revisori Legali), the ethical requirements are set by the special advisory panel comprised of the CNDCEC, professional associations (Assirevi and the Istituto Nazionale Revisori Legali), and the Commissione Nazionale per le Società e la Borsa (CONSOB) in accordance with the Legislative Decree No. 39/2010. The Ministry of Economy and Finance, in coordination with the Ministry of Justice, is responsible for formal adoption.

    In 2013, the special advisory panel developed ethical requirements for statutory auditors based on the 2013 IESBA Code of Ethics. A ministerial act is expected to adopt an up-to-date draft of the Code in June 2017 which incorporates all of the requirements of the 2016 IESBA Code of Ethics, including the NOCLAR standard. A CONSOB regulation should mandate the relevant independence rules for audits of PIEs.

    Current Status: Adopted

  • International Public Sector Accounting Standards

    Public sector accounting standards are set in Law No. 196/2009. The implementation of the national standards is supported by the Corte dei Conti (Auditor General) and Ragionera Generale dello Stato (State Comptroller), a unit of the Ministry of Economy and Finance. Most public sector entities are still using cash-based accounting, with no linkage to IPSAS, although legislative changes in this area are anticipated and would mandate a stronger application of accrual-based accounting standards. A new project to assess the applicability of IPSAS to different public sector entities was launched at the end of 2015 in cooperation with Consiglio Nazionale dei Dottori Commercialisti e degli Esperti Contabili and academics. A first draft of this study has been finalized in December 2016.

    Current Status: Not Adopted

  • Investigation and Discipline

    The Legislative Decree No. 139/2005 and the regulation adopted by the Consiglio Nazionale dei Dottori Commercialisti e degli Esperti Contabili (CNDCEC) govern the mechanisms for investigating and disciplining (I&D) professional accountants—qualified as either Dottori Commercialista or Esperti Contabil. Under the Law, the territorial bodies are responsible for hearing and judging cases at the first level while the CNDCEC acts as an appeal court. Appeals against the decisions of the CNDCEC can also be filed with the ordinary court. The CNDCEC reports that its system is in line with SMO 6 requirements.

    The Legislative Decree No. 39/2010 establishes the main requirements applicable to the I&D for statutory auditors (Revisori Legali). In accordance with the decree, the Ministry of Economy and Finance is responsible for the I&D procedures of statutory auditors of non-PIEs whereas the Commissione Nazionale per le Società e la Borsa (CONSOB) is responsible for the I&D system for statutory auditors of PIEs. The CNDCEC reports that while the system fulfills many of practices of SMO 6, the two-tiered system is expected to be further defined by new Ministerial Decrees and will be coordinated with the QA review system established by CONSOB.

    Current Status: Partially Adopted

  • International Financial Reporting Standards

    The Organismo Italiano di Contabilità is responsible for setting the Italian Accounting Standards, in accordance with the Law No. 116/2014.

    As a member of the European Union (EU), Italy is subject to Regulation EC 1606/2002 on the application of International Financial Reporting Standards and the Directive 2013/34/EU. EU-endorsed IFRS are mandatory for the preparation of financial statements of listed and public companies. IFRS are adopted both for annual accounts and for consolidated accounts.

    All other companies, except for small entities as defined by the Civil Code, have the option to use the Italian Accounting Standards or the EU-endorsed IFRS in the preparation of their individual and consolidated financial statements. Italian accounting standards differ from IFRS but there is a convergence process underway. IFRS for SMEs has not been adopted in Italy as the main set. Small entities defined by the Civil Code are allowed to prepare abridged statements.

    Current Status: Partially Adopted

Disclaimer

IFAC bears no responsibility for the information provided in the SMO Action Plans prepared by IFAC member organizations. Please see our full Disclaimer for additional information.

Methodology

Methodology
Last updated: 07/2017
We welcome feedback. Please email compliance@ifac.org

Thank you for your interest in our publications. These valuable works are the product of substantial time, effort and resources, which you acknowledge by accepting the following terms of use. You may not reproduce, store, transmit in any form or by any means, with the exception of non-commercial use (e.g., professional and personal reference and research work), translate, modify or create derivative works or adaptations based on such publications, or any part thereof, without the prior written permission of IFAC.

Our reproduction and translation policies, as well as our online permission request and inquiry system, are accessible on the Permissions Information web page.

For additional information, please read our website Terms of Use. ALL RIGHTS RESERVED.