Legal audit is required by the Italian legislation in order to assess the fairness and the compliance of separate and consolidated financial statments with the general accepted accounting principles. A large number of unlimited companies, listed or not, are suject to legal audit.
The Legislative Decree n° 39/2010 has significantly changed this field of activity. Currently legal audit is a complex activity that requires higly specialized skills and an adequate professional structure. In particular:
- Legal audits must comply with recognized audit principles (currently the Italian Audit Principles stated by the National Accounting body of chartered accountants, in the future those designated by the European Commission);
- The Italian Auditing Principles, that comes from International Audit Principles (ISA), require the auditor to perform a deep analisys aimed to identify and evaluate risks of material mistatements in the financial statement and of the internal control system designed by the entity in order to mitigate such risks. The auditor must adopt audit procedures specifically designed to answer to the risks identified and valuated and aimed to minimize the risk of significative mistatement in the financial statement;
- Italian legislation on legal audit states severe rules on matter such as: professional requirements, quality control, independence. Lack of compliance with such rules lead to serious consequences.
Current audit regulation based on quality, training and risk approach are aimed to high quality assurance and require high professional skills and an adequate organization.