The Importance of Financial Statement Auditing for Sports Societies

In Brazilian football, the transition to the Public Limited Company (SAF) model has revolutionized club management, promoting greater professionalism and attracting investment. However, this transformation entails an imperative need for financial transparency, where the audit of financial statements emerges as a fundamental pillar. With Law No. 14,193/2021 regulating SAFs, auditing is not only a legal obligation but an essential tool to ensure the sustainability, credibility, and governance of sports entities. In a context of recent crises and emblematic examples, such as Botafogo and Vasco, understanding this importance is crucial for managers, investors, and fans.

Legislation Regulating SAFs and Audit Requirements

Law No. 14,193/2021, known as the SAF Law, establishes a regulatory framework for the formation and operation of public limited companies in the football sector, seeking to modernize management and attract capital. Its key provisions emphasize transparency and governance. SAFs with annual gross revenues of up to R$78 million can publish their financial statements electronically, keeping them available on their website for 10 years. Additionally, they must disclose monthly information such as their bylaws, minutes of meetings, board composition, and management reports, including the Educational and Social Development Program.

In the area of auditing, the law requires auditing debt estimates, especially in judicial recovery proceedings or under the Centralized Enforcement Regime. Directors are personally liable for failure to comply with transparency obligations. Governance is strengthened by the mandatory permanent board of directors and fiscal committees, with restrictions on controlling shareholders to avoid conflicts of interest—for example, a controlling shareholder cannot hold a stake in another SAF.

Complementing the law, the Securities and Exchange Commission (CVM) issued guidance opinions on SAFs and the capital market, emphasizing the disclosure of relevant information, such as financial statements and independent audit reports. Federal Accounting Council (CFC) standards, such as the NBCTA, guide the independent audit of accounting information, ensuring clarity and relevance in the opinions. These standards apply to investment funds and sports entities, promoting standardization and confidence in reporting.

Why is Auditing Essential for Sports Societies?

The audit of financial statements goes beyond legal compliance; it is vital to the operational health of sports organizations. In a sector historically marked by chronic debt and poor management, the audit provides:

• Transparency and Credibility : Reveals the true financial situation, allowing investors to assess risks and opportunities. For SAFs, this is crucial for raising funds in the capital market.

• Corporate Governance : Identifies fraud, errors, or inefficiencies, strengthening internal controls. Mandatory fiscal councils in SAFs rely on audits to oversee management.

• Attracting Investment : Audited clubs demonstrate professionalism, facilitating international partnerships and financing. Studies indicate that entities with independent audits attract up to 30% more investment in regulated sectors.

• Crisis Prevention : Regular audits mitigate risks, such as those in the Specific Football Taxation Regime (TEF), which unifies taxes and requires tax compliance.

Without an audit, sports clubs risk sanctions, loss of trust, and even judicial repossession, as seen in recent cases.

Recent Examples Illustrating the Importance of Auditing

In recent years, several clubs have adopted the SAF model, highlighting both successes and audit-related challenges. Botafogo, one of the pioneers, sold 90% of its shares to John Textor in 2022. In 2024, it settled a multi-million-dollar debt with the FGTS, demonstrating fiscal commitment under the TEF. However, concerns regarding the discussed tax reform—which could increase the burden on SAFs—highlight the need for ongoing audits to adapt financial strategies. Botafogo's audited financial statements reveal more sustainable management but warn of regulatory vulnerabilities.

In contrast, Vasco da Gama faced a severe crisis in 2025, culminating in the approval of judicial recovery for the club and its SAF by the 4th Business Court of Rio de Janeiro. The sale of 70% of the SAF to 777 Partners in 2022 sought to settle debts amounting to hundreds of millions, but governance failures—such as loans without prior deliberation and the lack of independent audit committees—led to operational opacity. The absence of transparency mechanisms and rigorous auditing allowed for questionable decisions, resulting in delayed contributions and reputational damage. This case highlights how auditing could have prevented the escalation of the crisis, emphasizing the need for KYP (know-your-partner) and contracts with accountability clauses.

Other examples include Coritiba SAF and Santos FC, which published audited financial statements for 2024, revealing balance sheets and cash flows that helped attract investors. Reports such as "Convocados 2024" and its 2025 edition analyze the finances of SAFs, showing that audited clubs, such as Atlético Goianiense, are more economically resilient.

Challenges and Recommendations for Implementation

Despite the benefits, challenges remain: high audit costs for smaller clubs, regulatory complexity, and cultural resistance to transparency. To overcome these, I recommend:

1. Adopt annual independent audits, aligned with the NBCTA.

2. Integrate technology for continuous monitoring of financial statements.

3. Train tax councils with sports accounting specialists.

4. Monitor legislative updates, such as the impact of tax reform on SAFs.

Conclusion

The audit of financial statements is essential to the success of sports associations in Brazil, ensuring not only compliance with the SAF Law but also the longevity and growth of the sector. Examples such as Botafogo and Vasco illustrate that, without it, risks multiply, while compliance promotes a virtuous cycle of investment and professionalism. In 2025, with Brazilian football expanding, prioritizing auditing means investing in the sustainable future of the sport.

Gustavo Souza

Lead Partner of the Audit Division in Brazil