The Financial Statement Audit and Transfer Pricing

February 3, 2024

In the Peruvian business context, where companies often operate in an international environment, the relationship between the financial statement audit and Transfer Pricing has become crucial. We will address the interconnection between these two practices and highlight the significance of effective coordination to ensure transparency and regulatory compliance.

Financial Statement Audit and Transfer Pricing

The financial statement audit, regulated by the International Standards on Auditing (ISA), is a process to review the financial information of a taxpayer to determine whether the transactions performed are under the accepted accounting principles, reflecting the financial results and the risks assumed. Likewise, the transactions within the Transfer Pricing cope in Peru, i.e., SUNAT, must be identified, which means an additional challenge when reporting related-party transactions. In this regard, the auditor should consider the preliminary results of the Transfer Pricing Analysis, assessing the validity and reasonableness thereof.

  1. Transfer Pricing Analysis: The auditor must have a preliminary diagnosis of the related party transactions to identify possible contingencies affecting income tax, i.e., to determine whether transactions were carried out at market value, thus complying with the Arm’s Length Principle. The thorough review of each transaction ensures the integrity of the financial statements and the proper filing of the financial position and results.
  2. Details of Related Party Transactions: The notes on the financial statements are an essential tool for reading the financial results. Regarding related party transactions, the reported transactions must be reflected clearly and in detail, providing the necessary information to understand the possible effects and related risks. The accuracy and comprehensiveness of these notes are fundamental to a complete and reliable audit.

Use of Audited Financial Statements

The Peruvian Transfer Pricing legislation, as in other countries, requires the declaration of related party transactions, whose application scope will depend on each jurisdiction. Thus, the Income Tax Law determines that taxpayers prepare the Informative Affidavit, Local Report – Transfer Pricing on their domiciled and non-domiciled related party transactions and those with entities from, to, or through non-cooperating, low, or no taxation countries or territories.

The interrelation between the financial statement audit and the Transfer Pricing Studies of SUNAT is based on the provisions of the Income Tax Law Regulations regarding the taxpayer’s financial information that prefers the use of audited financial statements, if available, as a solid basis for the reliability of the study.


The close connection between the financial statement audit and Transfer Pricing highlights the need for a comprehensive management of both practices. The use of audited financial statements in Transfer Pricing reports reinforces the reliability of the information and strengthens the position of companies in an increasingly complex business environment. Finally, effective coordination between the audit and the Transfer Pricing studies of Sunat is key to ensuring the integrity of the financial information and compliance with the current Transfer Pricing legislation.