ITALY Law and Practice Contributed by: Francesco Di Carlo and Flavio Acerbi, FIVERS Studio Legale e Tributario
to be unauthentic or filed by a person void of relevant powers. A more substantive legal review is carried out by the notary with respect to deeds in notarial form (eg, deed of incorporation, amendments to the by-laws, minutes of shareholders’ extraordinary resolutions). 7. Audit, Risk and Internal Controls 7.1 Appointment of External Auditors An external auditor is an official auditor or audit firm, included in a special registry held by the Ministry of Economy and Finance, appointed by a company to conduct the financial audit of the financial statement of a company. This external auditor is separate from the board of statutory auditors, which is a control body required in each SPA with the so-called traditional govern - ance model. In an SPA with the so-called traditional gov - ernance model, the board of statutory auditors is required to conduct the audit of the finan - cial statements, unless an external auditor is appointed. An SPA appoints an external auditor voluntarily or when required to do so pursuant to applicable law (eg, the company (i) has issued instruments listed on a regulated market; (ii) is required to prepare consolidated financial statements, (iii) is a regulated entity, (iv) is controlled by, controlling or jointly controlled by, an entity indicated under previous letters (i)-(iii)). The relationship between the company and the external auditor is governed by a set of statu - tory, contractual and professional rules, which contemplates for instance:
• the appointment by the shareholder meeting based on a proposal of the board of statutory auditors; • the maximum length of each appointment, different for non-listed and listed companies and companies operating in specific sectors); • cases in which the appointment of an external • relations with the board of statutory auditors. Considering the limitations applicable to an SRL’s ability to access the trading venues and to conduct regulated business, most often an SRL appoints an external auditor if it is controlled by or controls a company that is required to appoint an external auditor. 7.2 Requirements for Directors Concerning Management Risk and Internal Controls auditor may be revoked for cause; • duties of diligence and care; and As indicated in 4.6 Legal Duties of Directors/ Officers , each director is required to “evaluate, on the basis of the information received, the adequacy of the organisational, administrative and accounting structure of the company” (Arti - cle 2381, paragraph 3, of the Civil Code), ensur - ing adherence to general business rationality, as well as to contribute to the implementation of an adequate organisational, administrative and accounting structure. Consistently with this general duty, each director is required to ensure that the company has in place a system of risk management and internal controls, that are adequate and reasonably pro - portioned to the specific business activity and dimensions of the company. This obligation is more stringent in a listed SPA, for which the Code of Corporate Governance recommends that the board of directors should
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