Best Accounting & Auditing Lawyers in Faro

About Accounting & Auditing Law in Faro, Portugal

Accounting and auditing activities in Faro, Portugal, play a crucial role in fostering transparency, supporting business growth, and ensuring compliance with local and international financial standards. Faro, located in the Algarve region, follows Portuguese law, which is harmonized with European Union directives regarding accounting and auditing. Legal frameworks dictate how companies must maintain records, prepare financial statements, and disclose economic information. This field also covers the responsibilities and requirements related to statutory audits, aimed at protecting shareholders, creditors, and the public interest from financial misrepresentation or errors.

Why You May Need a Lawyer

There are various situations where seeking legal support in accounting and auditing becomes necessary:

• Establishing a company and understanding reporting obligations.
• Responding to tax audits or inquiries from the Portuguese Tax Authority (Autoridade Tributária e Aduaneira).
• Handling alleged non-compliance or errors in financial statements.
• Preparing for business mergers, acquisitions, or restructuring which require due diligence and precise financial documentation.
• Defending against penalties related to incorrect or late submissions of accounting records.
• Ensuring compliance with complex sector-specific or EU-wide accounting standards.
• Dealing with fraud allegations, embezzlement, or suspected criminal activity in an organization.
• Clarifying the treatment of international revenues or cross-border activities, especially for expatriates or companies dealing with foreign clients and suppliers.

Local Laws Overview

Accounting law in Faro falls under national Portuguese legislation, primarily the Plano de Contas (Chart of Accounts) and the National Accounting System (Sistema de Normalização Contabilística, SNC). Portuguese companies must keep accurate books and accounting records, usually for a minimum period of 10 years. Rules cover obligations such as:

• Preparation and submission of annual financial statements and corporate income tax returns.
• Mandatory use of certified accountants, officially registered with the Ordem dos Contabilistas Certificados (OCC).
• Requirement for statutory audits for larger entities, non-profit organizations above certain thresholds, and public interest entities, carried out by Revisores Oficiais de Contas (ROC).
• Strict anti-money laundering measures and internal control procedures.
• Filing of financial information with the Commercial Registry and the Central Balance Sheet Database.
• Compliance with both national and EU directives, which impact the format and disclosure of accounts.

Failure to comply with these legal requirements can result in fines, changed tax status, or criminal prosecution in severe cases.

Frequently Asked Questions

What is the purpose of statutory audits in Faro, Portugal?

Statutory audits are required to independently verify the accuracy of a company’s financial statements, ensure compliance with laws, and detect potential fraud or mismanagement. They are usually mandatory for medium and large companies, as well as public-interest entities.

Who is qualified to perform audits in Faro?

Audits must be conducted by licensed auditors known as Revisores Oficiais de Contas (ROC), registered with the Portuguese professional body for auditors (Ordem dos Revisores Oficiais de Contas).

Is it compulsory to hire a certified accountant for my business in Faro?

Yes, most businesses must engage a certified accountant registered with the Ordem dos Contabilistas Certificados (OCC) to ensure accurate records and compliance with Portuguese accounting standards.

What are the consequences of failing to submit annual accounts on time?

Delays or failures in submitting annual accounts can result in administrative fines, restrictions on business activities, and potential legal proceedings brought by tax authorities or creditors.

Which entities are exempt from statutory audits?

Micro and small companies, according to size thresholds stipulated by Portuguese law, may be exempt from statutory audits. However, sector-specific rules or special circumstances may still require an audit.

How long should accounting records be kept?

Accounting records must be kept for at least 10 years, as per national regulations, to enable inspection by authorities if required.

What is the SNC in Portugal?

SNC stands for Sistema de Normalização Contabilística, the national accounting standardization system, which aligns Portuguese accounting rules with international best practices and the EU legal framework.

Are there specific rules for non-profit organizations?

Yes, non-profit organizations must also keep proper accounting records and may be required to undergo an audit if they exceed certain size or revenue thresholds.

How are cross-border transactions treated in accounting and tax terms?

Cross-border transactions are subject to both Portuguese and EU accounting and tax rules, which influence VAT treatment, transfer pricing policies, and consolidation of group accounts.

Can legal action be taken for accounting irregularities?

Yes, legal action can be initiated for fraudulent or negligent accounting practices, including criminal prosecution, civil claims, and regulatory penalties against responsible individuals or organizations.

Additional Resources

• Ordem dos Contabilistas Certificados (OCC): The official body for certified accountants in Portugal, offering guidance, resources, and a registry of qualified professionals.
• Ordem dos Revisores Oficiais de Contas (OROC): The professional body overseeing auditors and statutory audit standards in Portugal.
• Autoridade Tributária e Aduaneira (AT): The Portuguese Tax and Customs Authority, providing information about accounting, tax obligations, and compliance.
• Instituto dos Registos e do Notariado (IRN): For company registrations and legal filing of financial information.
• Serviço de Empresas do Portal da Justiça: Government resource for business-related legal requirements including accounting obligations.

Next Steps

If you believe you require legal assistance related to accounting and auditing matters in Faro, you should:

• Identify the nature of your issue and gather any supporting documents, such as contracts, correspondence, or official notices.
• Seek a consultation with a lawyer experienced in Portuguese accounting and commercial law or an OCC-certified accountant for practical guidance.
• Ensure the professional you engage is properly registered with the relevant Portuguese regulatory body (OCC for accountants, OROC for auditors).
• Discuss any deadlines or potential risks with your legal advisor to avoid unnecessary fines or sanctions.
• Follow your advisor’s recommendations for rectifying or reporting any non-compliance, and maintain ongoing records to support future compliance efforts.

Experienced legal and accounting professionals in Faro can offer tailored advice that takes into account your specific business circumstances and the latest regulatory developments.