Credit institutions and their groups are currently governed by two sets of regulations:
- First, the Ministry of Economic Affairs and Finance is empowered under Law 10/2014 of 26 June 2014, through implementation of the Spanish Commercial Code, to set the accounting standards for institutions and groups that have not issued securities admitted for official listing. It delegated this function to the Banco de España pursuant to Ministerial Order dated 31 March 1989.
- Second, there are the accounting standards for groups that have issued securities admitted for official listing on a European market, which are established under European Union Regulations.
In this connection, Banco de España Circular 4/2004
on public and confidential financial information rules and formats was approved in order to modify the accounting regime for Spanish credit institutions, adapting it to the new accounting arrangements arising from the EU adopting International Financial Reporting Standards (IFRS-EU). Currently, Circular 4/2017 has replaced Circular 4/2004, furthering the Banco de España's strategy to keep Spanish credit institutions’ accounting regime compatible with the principles and criteria established by IFRS-EU. Therefore, insofar as Circular 4/2017 aligns the Spanish accounting framework with IFRS, it needs to be kept up to date as this global framework evolves.
Furthermore, the Banco de España has been designated to establish and change the accounting standards and formats of public and confidential financial statements for specialised lending institutions. Accordingly, it adopted Circular 4/2019 of November 26 2019, addressed to specialised lending institutions, on public and confidential financial information rules and formats in order to maintain, also for specialised lending institutions, a regime compatible with IFRS-EU. This circular takes as a reference the accounting standards for credit institutions, either setting similar criteria or referring directly to the rules of Circular 4/2017.
Lastly, in keeping with First Additional Provision of Law 22/2015 of 20 July 2015 on the Auditing of Accounts, the financial statements of Spanish credit institutions and specialised lending institutions must be externally audited. According to the Third Additional Provision of this law, it is mandatory for credit institutions and specialised lending institutions to have an audit committee.