Financial audits represent a critical moment for Costa Rican companies. With the changes in the electronic invoicing version 4.4 and the implementation of the Sustainability IFRSavoiding costly mistakes is more important than ever. This guide analyzes the seven most common mistakes and presents practical solutions adapted to the business context of Costa Rica in 2025.
Content
Documentation and registration problems: The most frequent errors
Inadequate documentation is one of the main causes of qualifications in audit reports in Costa Rica. The auditors of the College of Public Accountants of Costa Rica consistently report these three critical errors:
1. Lack of formal and updated accounting policies
Many Costa Rican companies operate without documented accounting policies that comply with the IFRS adopted in Costa Rica since 2001.
Specific problem:
Without clear policies, auditors cannot verify consistency in:
- Revenue recognition under IFRS 15
- Allowance for doubtful accounts
- Depreciation methods
- Inventory valuation
Practical solution:
Develop an accounting policy manual that:
- Comply with IFRS and Ministry of Finance
- Tailored to your specific industry
- Be updated annually
- Be approved by the Board of Directors
2. Overdue or incomplete bank reconciliations
This is the most frequent mistake made by Costa Rican SMEs, especially considering the requirements of the Virtual Tax Administration (ATV).
⚠️ Alert: Outdated bank reconciliations generate immediate distrust in auditors and may indicate serious internal control problems.
Implementable solution:
- Establish mandatory monthly reconciliations
- Use certified accounting software for Costa Rica
- Implement double review (preparer and reviewer)
- Digitally archive according to the requirements of electronic invoicing
3. Insufficient or disorganized supporting documentation
With the transition to the electronic invoicing version 4.4 (mandatory as of September 2025), digital documentation is becoming more important.
✅ Checklist of essential documentation for audit 2025:
- Electronic receipts in XML format according to Ministry of Finance specifications
- Digitized current contracts
- Board and shareholder minutes
- Technical studies for accounting estimates
- Complete personnel files
- Tax returns filed with ATV
- Digitally signed monthly bank reconciliations
- Physical inventory taking with photographic evidence
Internal control failures that trigger audit alerts
4. Inadequate segregation of duties
Particularly common in Costa Rican family businesses where one person manages multiple financial responsibilities.
Real example:
A company in San Jose received a major caveat when auditors discovered that the same employee:
- Authorized payments
- Recorded transactions
- Handled cash
- Performed reconciliations
Solutions for small companies:
- Implement compensatory controls with review of family members
- Establish authorization limits according to amounts
- Hire external quarterly reviews
- Use tools such as QuickBooks Costa Rica with differentiated access levels
5. Lack of periodic reconciliations and verifications.
Many companies only "tidy up" their accounting before the audit, accumulating problems during the year.
Recommended monthly closing schedule:
| Day of the month | Activity | Responsible |
|---|---|---|
| 1-5 | Closing sales and purchases | Accounting |
| 6-10 | Bank reconciliations | Treasury |
| 11-15 | D-104 ATV Presentation | Counter |
| 16-20 | Preliminary financial statements | Accounting |
| 21-25 | Management review | Management |
6. Deficiencies in information systems
The use of obsolete or non-integrated systems generates significant audit risks.
Recommended ERP systems for Costa Rica:
- Large companies: SAP Business One (Partner: Novitec)
- Medium-sized companies: Exactus ERP (Costa Rican company)
- SMEs: QuickBooks Online or Xero with fiscal integration
7. Improper handling of the Value Added Tax (VAT)
Since the implementation of the Law 9635 in July 2019VAT has become a critical area for review.
Common VAT errors:
- Incorrect tariff application (13%, 4%, 2%, 1%, 0%)
- Lack of documentation for tax credits
- Omission in electronic invoicing
- Incorrect treatment of transactions with non-direct payees
- Errors in the statement D-104
Integral solution for VAT:
- Develop a product/service matrix with their corresponding rates according to the official catalog of the Ministry of Finance
- Implement automatic validation of electronic invoices received
- Thoroughly document exemptions applied
- Review monthly before filing the D-104
- Train staff in regulatory changes
"VAT problems generate approximately 40% of the tax contingencies identified in audits of Costa Rican SMEs. The good news is that they are relatively simple to correct with the right controls."
- Source: Analysis of local auditing firms, 2024
How to prepare your company for the 2025 audit
90-day action plan:
📅 Days 1-30: Diagnosis and organization
- Perform self-assessment with documentation checklist
- Identify gaps in accounting policies
- Update digital records
📅 Days 31-60: Implementation of improvements
- Update accounting policies manual
- Implement missing controls
- Train staff on new procedures
📅 Days 61-90: Validation and adjustments
- Perform internal pre-audit
- Correct identified findings
- Prepare documentation for auditors
Critical upgrades for 2025
1. Electronic Invoicing Version 4.4
📆 Key dates:
- Transition Period: April 1 - August 31, 2025
- Mandatory: September 1, 2025
- New validations and required fields
2. IFRS for Sustainability (IFRSS)
Implementation schedule:
- 2026: Public companies (fiscal year 2025)
- 2027: Large taxpayers (tax year 2026)
- 2028: Other obligated companies
3. Changes in VAT rates
- Materials of construction: reduction to 4%
- New exemptions for the education sector
- Updating of the catalog of goods and services
Do you need professional support for your audit?
At ICS ConsultantsWith more than 30 years of experience and as a member of Allinial Global, we offer specialized audit preparation services that minimize risk and optimize results.
Frequently asked questions about audits in Costa Rica
When is an external audit mandatory in Costa Rica?
According to the College of Public Accountantsis mandatory for: corporations, companies regulated by SUGEF/SUGEVAL/SUPEN, and companies exceeding certain income or asset thresholds.
How long does a typical audit take?
For SMEs: 2-4 weeks. For medium-sized companies: 4-8 weeks. For large companies: 2-3 months.
What is the difference between a qualification and an adverse opinion?
A qualification indicates specific exceptions, while an adverse opinion indicates that the financial statements do not fairly represent the company's position.
How does electronic invoicing affect auditing?
Facilitates transaction verification but requires additional controls on XML data integrity and compliance with technical specifications.