A company can have technically sound accounting and still perform badly in audit. The reason is almost always preparation, not substance. Audit readiness services exist to close the gap between where a company's financial governance currently sits and where it needs to be for an efficient, unqualified audit opinion.
This article describes what BMC delivers in each service line, how engagements are structured, and what they cost. For an overview of the underlying audit framework and legal thresholds, see the complete audit readiness guide.
Service Lines
1. Gap Assessment
The gap assessment is the entry point for all audit readiness work. It is a structured examination of the company’s current state across the seven areas covered in the audit readiness checklist: accounting policy documentation, GL quality, related-party transactions, ICFR, tax provisioning, disclosures, and IFRS (where applicable).
What we deliver:
- Full gap register — all identified deficiencies, rated Red/Amber/Green
- Prioritised remediation plan with estimated effort per item
- Resource plan (which items require specialist input vs. internal execution)
- Readiness timeline — realistic date by which the company can be audit-ready
Scope: Single-entity Spanish SME, no consolidation. Add-ons for groups with subsidiaries or IFRS requirements.
Duration: 2–4 weeks.
Fee range: €2,000 – €5,000 fixed fee. Group assessments from €5,000.
2. ICFR Documentation
Internal Control over Financial Reporting documentation is the most frequently absent element in Spanish SME audit readiness. Under NIA-ES 315, auditors must assess control risk as part of planning, and undocumented controls result in a larger substantive testing programme — more hours, more disruption, higher audit cost.
What we deliver:
- Process narratives for the four core cycles: order-to-cash, purchase-to-pay, payroll, financial close
- Control matrix: one control per identified risk, with test procedure
- Segregation of duties matrix and gap analysis
- Compensating controls documentation (for SMEs where full segregation is not feasible)
- Walk-through testing: at least one transaction traced per cycle to verify controls operate as documented
Scope options:
- Core four cycles only (most SMEs)
- Extended: includes IT general controls, treasury, fixed assets, inventory
Duration: 4–8 weeks, depending on complexity.
Fee range: €4,500 – €9,000 for core four cycles. Extended scope from €9,000.
3. Accounting Policy Memoranda
Most Spanish SMEs apply PGC accounting policies without ever writing them down. The policies exist implicitly in the work of the finance team or external accountant, but are not formally documented. This creates two problems: the auditor cannot evaluate whether the policies are compliant and consistently applied, and the company cannot demonstrate continuity when staff change.
What we deliver:
- Accounting policy manual covering all material balance sheet and P&L items
- Policy notes formatted for direct insertion into the annual accounts (PGC notes section)
- Review of consistency between applied policy and prior-year accounts
- Recommendations on any policy changes required for PGC compliance
Duration: 3–5 weeks.
Fee range: €3,000 – €6,500.
4. IFRS Conversion Package (for Foreign-Owned Subsidiaries)
Spanish subsidiaries of foreign groups are frequently required to submit an IFRS reporting package to the parent alongside the statutory PGC accounts. The main areas of difference — IFRS 16 lease capitalisation, IFRS 15 revenue recognition, IFRS 9 financial instruments, and hyperinflationary accounting where relevant — require a formal bridge reconciliation from PGC to IFRS.
What we deliver:
- PGC-to-IFRS difference register for the entity
- IFRS 16 lease schedule: lease liability and right-of-use asset calculation under IFRS 16 for all material leases
- IFRS 15 revenue adjustment analysis
- Opening balance sheet adjustment for IFRS 9 items (if material)
- Bridge reconciliation: PGC net profit and equity to IFRS equivalents
- IFRS reporting pack formatted to the parent’s requirements
Duration: 4–8 weeks for initial conversion; 2–3 weeks for annual updates.
Fee range: Initial conversion €5,000 – €14,000. Annual update from €2,500.
5. Dry-Run Audit
The dry-run is a rehearsal for the real audit. BMC takes the perspective of the statutory auditor — without issuing an opinion — to test the company’s readiness under realistic conditions.
What we deliver:
- Simulated PBC (Provided by Client) list — the same document requests the auditor will make
- Sample testing of key controls (one to two transactions per control)
- Analytical review of accounts (flux analysis, trend review, comparison to prior year)
- Review points schedule: items that would generate an auditor query
- Post-dry-run debrief and prioritised resolution list
Timing: Should conclude at least 4 weeks before real audit fieldwork begins.
Duration: 2–3 weeks.
Fee range: €3,500 – €8,000 depending on company size.
6. Ongoing Controller Support (Retainer)
After completing the initial audit readiness programme, companies can maintain their audit posture with a monthly controller support retainer. This is particularly relevant for companies without a full-time financial controller (common in Spanish SMEs below €15M turnover).
What the retainer includes:
- Monthly close review: review of trial balance and key accounts
- Quarterly management accounts review
- Annual readiness refresh: reassessment against the seven-area checklist before year-end
- Audit support: response to auditor queries during fieldwork, coordination of PBC list
- Ad hoc technical accounting queries (PGC, tax provisioning, new transactions)
Engagement terms: 12-month initial commitment, renewable annually.
Fee range: €800 – €2,500 per month, depending on scope and company size.
Case Example: Manufacturing SME, First Statutory Audit
A Spanish manufacturing company with €8.2M turnover and 62 employees crossed the LSC audit thresholds in 2024 and required its first statutory audit for the 2025 financial year.
Starting position:
- No documented accounting policies
- Related-party intercompany loans to three group companies with no formal agreements
- No ICFR documentation
- Deferred tax not calculated
- Prior accountant had left; books handed to new provider in Q3 2024
BMC engagement:
- Phase 1 (Gap Assessment): 3 weeks — 47 gaps identified, 12 rated Red
- Phase 2 (Remediation): 4.5 months — accounting policies drafted, related-party agreements executed, ICFR documented for four cycles, deferred tax calculated and booked, books brought current
- Phase 3 (Dry-Run): 2.5 weeks — three minor findings surfaced and resolved
- Phase 4 (Go-Live): auditor fieldwork completed in 8 days; one proposed adjustment (immaterial, accepted)
Outcome: Unqualified audit opinion. No qualifications or emphasis of matter paragraphs. Audit fieldwork 40% shorter than the auditor estimated at engagement.
For the full four-phase process, see audit readiness process phases.
Why SME Focus Matters
Big-4 audit readiness services are designed for companies preparing for IPO, regulatory listing, or major group reorganisations. Their frameworks are global, their staffing is junior-heavy, and their pricing reflects enterprise complexity.
BMC’s audit readiness practice is designed for Spanish SMEs: companies below €50M turnover operating under PGC, regulated by the LSC and Ley 22/2015, and interfacing with the AEAT, ICAC, and Mercantile Registry. We do not adapt an international framework — we work directly in the Spanish regulatory environment.
See also: EBITDA multiples by sector in Spain — understanding how audit quality affects the valuation of your business in an M&A context. Companies with unqualified, clean audit histories attract higher multiples and lower due diligence risk in acquisition processes. Our due diligence team works closely with the audit readiness team for precisely this reason.
External references:
- ICAC — Instituto de Contabilidad y Auditoría de Cuentas — PGC guidance and ICAC circulars
- BOE — Ley 22/2015 de Auditoría de Cuentas — statutory framework for audit services
- IFRS Foundation — IFRS 16, IFRS 15, IFRS 9 — IFRS standards for subsidiary reporting
