The economic activity of an organization requires increased attention to assets, resources and cash flow. An audit is used to identify errors. What constitutes a mandatory audit for an LLC in 2019?
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For legal entities in Russia, the most popular organizational and legal form is a limited liability company. Most small and medium-sized businesses are registered as LLCs.
This requires compliance with certain requirements, one of which is conducting audits. How is a mandatory audit for an LLC carried out in 2019?
What you need to know
In addition, in this way you can ensure that reporting is completed correctly and prevent unexpected fines and increased taxes.
The audit is carried out by independent audit firms. A mandatory requirement for them is to have the ability to carry out audit activities.
Auditor services are provided on a paid basis. But these expenses are more than reasonable, since some errors in reporting can lead to very serious losses.
What is his role?
Conducting an audit involves not only checking accounting activities. Based on the results of the audit, it is possible to analyze the interaction between various departments and services and accounting.
Based on the audit findings, it is possible to assess the efficiency of the enterprise as a whole, identify the main risks and eliminate significant shortcomings in production activities.
A positive audit report becomes:
| Guarantor of the organization’s reliability as a commercial partner and compliance with legal regulations | For counterparties |
| Confirmation of the reliability of profit and its formation in accordance with accounting standards | For owners |
| Proof of operational efficiency, reliability of the internal control system, correct formation of assets and liabilities | For the executive body |
| Evidence of compliance with the Labor Code | For staff |
| Indicating a high degree of reliability of tax and accounting accounting, a low probability of identifying errors and additional tax charges | For the tax authority |
An audit report on the reliability of reporting for a certain period is issued based on the results of a mandatory audit.
Management is also presented with an inspection report indicating any violations or accounting distortions found and recommendations for correcting them.
An organization subject to mandatory audit submits an audit report to Rosstat along with its annual financial statements.
Submission of the report is carried out within ten days from the date of completion of the audit, but no later than the thirty-first of December following the reporting year.
Legal regulation
For a new organization, the first reporting year is the time interval:
Objects to be checked
An audit consists of collecting audit evidence, evaluating and analyzing it. In this case, the list of objects to be checked depends on the verification method used.
An audit may be:
| Solid | All primary accounting documents, registers of synthetic and analytical accounting, and financial statements are carefully studied |
| Selective | Accounting documents are checked selectively through a random selection of documents, with the selection of documents by numbering at equal intervals or in combination |
| Combined | Combines methods of continuous and random inspections. Small operations are checked using a continuous method, and large-volume operations are checked selectively |
| Documentary | Limited to verification of primary and consolidated accounting documents and reporting. Carried out without visiting the audited facility and without conducting an inventory |
| Actual | Occurs with a visit to the object being inspected |
Documentary and factual inspections can be carried out using a continuous, selective or combined method.
Order of conduct
The audit can be divided into three main stages:
| Planning and organization | At this stage, the audit is discussed with the client. There is an acquaintance with the financial and economic activities of the organization. The factors influencing the activity of the subject are studied. The internal control system is assessed. A general audit plan and program is drawn up and agreed upon. A letter regarding the audit is being prepared. A contract for inspection is concluded |
| Collection of audit evidence | Controls are tested. Substantive checks are being carried out |
| Completing the scan | Audit evidence is summarized and analyzed. The audit results are reported to the management of the audited LLC. An audit report is drawn up |
Accrual of fines
If a mandatory audit is not carried out, the LLC faces a fine. This is also provided for in clause 11 of article 15.23.1.
According to these standards, they can be fined in the amount of twenty to thirty thousand rubles or disqualified for up to one year.
As for legal entities, for such a violation they face a fine of five hundred to seven hundred thousand rubles.
If an audit is carried out, but the conclusion is not provided to Rosstat or is submitted late, an administrative fine is provided, defined by.
The official is fined in the amount of ten to twenty thousand rubles, and the organization - from twenty to seventy thousand rubles.
For repeated violations, fines increase - thirty to fifty thousand rubles and one hundred to one hundred and fifty thousand rubles, respectively. There is no need to submit an audit report to the tax office, since it is not included in the financial statements.
But if the audited statements of an LLC are published, then the audit report must also be published.
Is this done when re-registering a JSC into an LLC?
Notes that the transformation of a legal entity is considered a reorganization.
In accordance with the law on state registration of legal entities, the reorganization is considered completed after the official registration of the new legal entity, while the transformed legal entity is considered to have completed its activities.
Thus, when re-registering a JSC into an LLC, it turns out that one organization has ceased its activities, and the other has become a newly created legal entity.
Is the LLC subject to mandatory audit in this case? On September 1, 2014, amendments to civil legislation came into force. Most of them concern legal entities.
It follows that although a reorganization creates an LLC, which is not subject to audit in the first year of its activity, an audit is necessary for a JSC.
In addition, there is such a thing as a special-purpose audit. This is carried out at or organizations.
Its purpose is to confirm the accuracy of reporting, the value of assets and liabilities. In the process of a special audit, compliance with the legislative norms of the constituent documents is reviewed.
1) if the organization has the legal form of a joint stock company;
2) if the organization’s securities are admitted to organized trading;
(see text in the previous edition)
3) if the organization is a credit organization, a credit history bureau, an organization that is a professional participant in the securities market, an insurance organization, a clearing organization, a mutual insurance company, a trade organizer, a non-state pension or other fund, a joint-stock investment fund, a management company of a joint-stock investment fund, mutual investment fund or non-state pension fund (with the exception of state extra-budgetary funds);
(see text in the previous edition)
4) if the volume of revenue from the sale of products (sale of goods, performance of work, provision of services) of an organization (except for state authorities, local governments, state and municipal institutions, state and municipal unitary enterprises, agricultural cooperatives, unions of these cooperatives) for the previous the reporting year exceeds 400 million rubles or the amount of assets on the balance sheet as of the end of the previous reporting year exceeds 60 million rubles;
5) if an organization (with the exception of a state authority, a local government body, a state extra-budgetary fund, as well as a state and municipal institution) presents and (or) discloses annual summary (consolidated) accounting (financial) statements;
(see text in the previous edition)
(see text in the previous edition)
2. Mandatory audit is carried out annually.
3. Mandatory audit of the accounting (financial) statements of organizations whose securities are admitted to organized trading, other credit and insurance organizations, non-state pension funds, organizations in the authorized (share) capitals of which the share of state ownership is at least 25 percent, state corporations, state-owned companies, public companies, as well as accounting (financial) statements included in the securities prospectus and consolidated financial statements are carried out only by audit organizations.
(see text in the previous edition)
4. Agreement for conducting a mandatory audit of the accounting (financial) statements of an organization in the authorized (share) capital of which the share of state ownership is at least 25 percent, as well as for conducting an audit of the accounting (financial) statements of a state corporation, state company, public law company , state unitary enterprise or municipal unitary enterprise is concluded based on the results of holding an open competition at least once every five years in the manner established by the legislation of the Russian Federation on the contract system in the field of procurement, goods, works, services to meet state and municipal needs, while establishing requirements for securing applications for participation in the competition and (or) for securing the execution of a contract is not mandatory.
(see text in the previous edition)
5. In an open competition for concluding a contract to conduct an audit of the accounting (financial) statements of an organization, the volume of proceeds from the sale of products (sale of goods, performance of work, provision of services) for the previous reporting year does not exceed 1 billion rubles, the participation of audit organizations is mandatory, being subjects of small and medium-sized businesses.
6. Information on the results of a mandatory audit is subject to inclusion in the Unified Federal Register of information on the facts of the activities of legal entities by the audit customer, indicating in the message of the audited entity the data identifying the audited entity (taxpayer identification number, main state registration number for legal entities, insurance number of an individual personal account if available), the name (last name, first name, patronymic) of the auditor, identifying the data auditor (taxpayer identification number, main state registration number for legal entities, insurance number of an individual personal account if available), a list of accounting (financial) statements, in relation to in which the audit was conducted, the period for which it was compiled, the date of conclusion, the opinion of the audit organization, the individual auditor on the reliability of the accounting (financial) statements of the audited entity, indicating the circumstances that have or may have a significant impact on the reliability of such statements, except in cases where The information subject to disclosure in accordance with this part constitutes a state secret or commercial secret, as well as in other cases established by federal law.
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"New Accounting", 2007, N 12
In what cases is a mandatory audit carried out? Who carries out the statutory audit? What is reflected in the auditor's report? What does a company face for failure to provide an audit report as part of its financial statements? You will find answers to these questions in our article.
Legal basis
The legal basis for regulating auditing activities in the Russian Federation is determined by Federal Law No. 119-FZ of August 7, 2001 “On Auditing Activities” (hereinafter referred to as Law No. 119-FZ). The audit is carried out in accordance with this Law, other federal laws and other regulatory legal acts on auditing activities, issued in accordance with Law No. 119-FZ (clause 2 of Article 1 of Law No. 119-FZ).
Such acts include the Rules (standards) of auditing activities, which are approved by the Decree of the Government of the Russian Federation. They represent uniform requirements for the procedure for carrying out audit activities, design and assessment of the quality of the audit (Clause 1, Article 9 of Law No. 119-FZ). Currently, the Rules (standards) for auditing activities are in force, approved by Decree of the Government of the Russian Federation of September 23, 2002 N 696 (hereinafter referred to as the Rules (standards)). These Rules (standards) are mandatory not only for audit organizations and individual auditors, but also for audited entities, with the exception of provisions that are advisory in nature (clause 3 of Article 9 of Law No. 119-FZ).
A statutory audit is an annual mandatory inspection of the accounting and financial (accounting) statements of an organization and an individual entrepreneur (Clause 1, Article 7 of Law No. 119-FZ).
There is a contractual relationship between the audit organization and the audited firm. An agreement to conduct a mandatory audit is an agreement for the provision of services for a fee (clause 2 of Article 779 of the Civil Code of the Russian Federation). The subject of this agreement is the verification by the auditing firm (performer) of the reliability of financial (accounting) statements and the correctness of accounting of the organization (customer). Under the contract, the customer is obliged to pay for the services provided to him within the time frame and in the manner specified in the contract for the provision of paid services (in our case, audit services) (Clause 1, Article 781 of the Civil Code of the Russian Federation).
In what cases is a mandatory audit carried out?
The following are subject to mandatory audit (Clause 1, Article 7 of Law No. 119-FZ):
- credit organizations, credit history bureaus, insurance organizations, mutual insurance societies, commodity and stock exchanges, investment funds, state extra-budgetary funds, the source of funds of which are mandatory contributions from citizens and organizations, funds, the sources of education of which are voluntary contributions of citizens and organizations;
- organizations (except for agricultural cooperatives and their unions) and individual entrepreneurs (hereinafter referred to as individual entrepreneurs), whose revenue for one year exceeds 500 thousand minimum wages<*>or the amount of balance sheet assets exceeds 200 thousand minimum wage at the end of the reporting period<*>.
- state unitary enterprises, municipal unitary enterprises created with the right of economic management, if their performance indicators correspond to clause 3 of this list. For municipal unitary enterprises, by law of the constituent entity of the Russian Federation, financial indicators may be lowered;
- organizations and individual entrepreneurs whose mandatory audit is required by federal laws.
Example. Let’s assume that the annual revenue of the OJSC amounted to 60 million rubles. On which of the grounds listed in paragraph 1 of Art. 7 of Law N 119-FZ, is the organization subject to mandatory audit?
(function(w, d, n, s, t) (w[n] = w[n] || ;w[n].push(function() (Ya.Context.AdvManager.render((blockId: "R-A -260713-2",renderTo: "yandex_rtb_R-A-260713-2",async: true));));t = d.getElementsByTagName("script");s = d.createElement("script");s .type = "text/javascript";s.src = "//an.yandex.ru/system/context.js";s.async = true;t.parentNode.insertBefore(s, t);))(this , this.document, "yandexContextAsyncCallbacks");From the conditions of the example it follows that the organization is subject to mandatory audit on two grounds. Firstly, the organizational and legal form is JSC; secondly, the volume of revenue for the year exceeds the minimum wage by 500 thousand times.
The fact that the organization is an OJSC obliges it to conduct a mandatory audit regardless of the volume of revenue. Therefore, in this case, compare revenue with the limit value according to paragraphs. 3 p. 1 art. 7 of Law N 119-FZ is not necessary.
Let us dwell in more detail on point 3 of the above list. In order to compare revenue with the maximum value, you need to take the indicator reflected in the line “Revenue (net) from the sale of goods, products, works, services (minus value added tax, excise taxes and similar payments)” of form No. 2 “Report on profit and loss."
Regarding balance sheet assets, the indicator reflected in line 300 of Form No. 1 “Balance Sheet” is used.
Forms No. 1 and 2 were approved by Order of the Ministry of Finance of Russia dated July 22, 2003 No. 67n.
What other organizations, besides those directly listed in Law N 119-FZ, are subject to mandatory audit?
For example, non-state pension funds are subject to mandatory audit. This is provided for in Art. 22 of the Federal Law of 05/07/1998 N 75-FZ "On Non-State Pension Funds". Issuers of securities are also subject to mandatory auditing (Clause 9, Article 22 of Federal Law No. 39-FZ of April 22, 1996 “On the Securities Market”).
(function(w, d, n, s, t) (w[n] = w[n] || ;w[n].push(function() (Ya.Context.AdvManager.render((blockId: "R-A -260713-3",renderTo: "yandex_rtb_R-A-260713-3",async: true));));t = d.getElementsByTagName("script");s = d.createElement("script");s .type = "text/javascript";s.src = "//an.yandex.ru/system/context.js";s.async = true;t.parentNode.insertBefore(s, t);))(this , this.document, "yandexContextAsyncCallbacks");Conducting a mandatory audit also applies to developer organizations. Norm pp. 6 paragraph 2 art. 20 of the Federal Law of December 30, 2004 N 214-FZ “On participation in shared construction of apartment buildings and other real estate objects and on amendments to certain legislative acts of the Russian Federation” obliges the developer to provide an audit report to any applicant for review.
It follows: the developer must conduct an annual audit, which, within the meaning of the law, is mandatory for him.
Agricultural cooperatives stand apart. There is no direct indication that they must conduct a mandatory audit from Law No. 119-FZ. Therefore, you need to be guided by Federal Law No. 193-FZ of December 8, 1995 “On Agricultural Cooperation” (hereinafter referred to as Law No. 193-FZ). Law No. 193-FZ does not contain a norm that would oblige agricultural cooperatives to carry out mandatory inspections.
The law provides for an audit carried out by consultant auditors who are employees of the audit union or are engaged under civil contracts (Article 32 of Law No. 193-FZ). Conducting an audit for agricultural cooperatives is a mandatory condition.
This conclusion is based on the fact that the financial statements must include the conclusion of the audit union of agricultural cooperatives (subclause “d”, paragraph 2, article 13 of the Federal Law of November 21, 1966 N 129-FZ “On Accounting”).
Who conducts the statutory audit?
As mentioned above, mandatory audits must be carried out by audit firms (Clause 2, Article 7 of Law No. 119-FZ). They carry out audits on the basis of a license to provide audit services. This requirement is established in paragraph 2 of Art. 4 of Law No. 119-FZ. It is worth noting that from July 1, 2008, licensing of auditing activities ceases. These amendments were introduced by Federal Law No. 135-FZ of July 19, 2007 into Federal Law No. 128-FZ of August 8, 2001 “On licensing of certain types of activities.”
(function(w, d, n, s, t) (w[n] = w[n] || ;w[n].push(function() (Ya.Context.AdvManager.render((blockId: "R-A -260713-4",renderTo: "yandex_rtb_R-A-260713-4",async: true));));t = d.getElementsByTagName("script");s = d.createElement("script");s .type = "text/javascript";s.src = "//an.yandex.ru/system/context.js";s.async = true;t.parentNode.insertBefore(s, t);))(this , this.document, "yandexContextAsyncCallbacks");As for individual auditors, they do not have the right to carry out mandatory audits. Considering the complaint of an individual auditor licensed to conduct a general audit about a violation of constitutional rights due to the fact that mandatory audits are carried out only by audit organizations, the Constitutional Court of the Russian Federation established the following. Provision of paragraph 2 of Art. 7 of Law No. 119-FZ, according to which mandatory audits are carried out by audit organizations, do not infringe on the rights of individual auditors and do not contradict the Constitution of the Russian Federation.
When choosing an audit organization, a company should pay attention to several points. When conducting an audit in an organization whose authorized capital is at least 25% owned by the state or municipal entity, the audit organization is selected based on the results of an open competition (clause 2 of Article 7 of Law No. 119-FZ).
An important role when choosing an audit firm is played by the independence of auditors (Article 12 of Law No. 119-FZ). An audit cannot be carried out by auditors (audit organizations) who (whose heads) are the founders (participants) of the entities being audited, officials responsible for accounting and reporting, or who are closely related to the listed category of citizens.
Audit firms and individual auditors do not have the right to conduct an audit of an organization to which they provided restoration, accounting and reporting services during the three years preceding the audit. These rules are provided for in paragraphs. 1 clause 1 art. 12 of Law No. 119-FZ.
Audit report
Based on the results of the audit, an auditor's report on the financial (accounting) statements (hereinafter referred to as the report) is drawn up. It is an official document intended for users of financial (accounting) statements of audited entities. The conclusion contains the opinion of the audit organization on the reliability of financial (accounting) statements and on the compliance of the accounting procedure with the legislation of the Russian Federation (clause 1 of Article 10 of Law No. 119-FZ).
The auditor's report (or the conclusion of the audit union, if the organization is an agricultural cooperative) is included in the financial statements (clause "d" clause 2 of Article 13 of the Law "On Accounting").
(function(w, d, n, s, t) (w[n] = w[n] || ;w[n].push(function() (Ya.Context.AdvManager.render((blockId: "R-A -260713-8",renderTo: "yandex_rtb_R-A-260713-8",async: true));));t = d.getElementsByTagName("script");s = d.createElement("script");s .type = "text/javascript";s.src = "//an.yandex.ru/system/context.js";s.async = true;t.parentNode.insertBefore(s, t);))(this , this.document, "yandexContextAsyncCallbacks");The conclusion indicates: addressee; information about the auditor and the audited entity. This is followed by an introductory part; part describing the scope of the audit; part containing the auditor's opinion; date of the auditor's report; signature of the auditor (clause 4 of Rule (standard) No. 6). The conclusion must contain a list of audited statements indicating the reporting period and the composition of the statements (clause 7 of Rule (standard) No. 6).
The auditor must date the audit report to the date when the audit was completed (clause 20 of Rule (standard) No. 6). The report must be signed by the head or authorized person of the audit firm. In this case, the number and validity period of his qualification certificate must be indicated. The signature must be sealed.
Due to the fact that the Auditing Rules (Standards) are mandatory for both audit organizations and audited entities, the audit report must be presented to users in accordance with the requirements established by Rule (Standard) No. 6.
Accounting for audit costs
In accounting, the organization’s costs for conducting an audit are taken into account as expenses for ordinary activities (clause 5 of PBU 10/99). They are reflected in an amount equal to the amount of payment or the amount of accounts payable (clause 6 of PBU 10/99). Expenses are recognized in the reporting period in which they were incurred, regardless of the time of actual payment of funds (clause 18 of PBU 10/99). When accounting for audit services, the company has the right to deduct the submitted VAT (clause 1, clause 2, article 171, clause 1, article 172 of the Tax Code of the Russian Federation). The right to deduction is granted, in particular, if transactions subject to VAT are carried out.
Example. Alpha LLC entered into an agreement with an auditing firm to conduct a mandatory audit. The cost of audit services amounted to 118,000 rubles. (VAT - 18,000 rubles).
In accounting, the accountant of Alpha LLC needs to make the following entries:
Debit 26 - Credit 60
- 100,000 rub. - the cost of audit services is reflected;
Debit 19 - Credit 60
- 18,000 rub. - VAT presented by the auditing firm is taken into account;
Debit 68/"VAT calculations" - Credit 19
- 18,000 rub. - “input” VAT is accepted for deduction;
Debit 51 - Credit 60
- 118,000 rub. - payment is reflected on the basis of an agreement for the provision of audit services.
* * *
For profit tax purposes, expenses for audit services are classified as other expenses associated with production and sales (clause 17, paragraph 1, article 264 of the Tax Code of the Russian Federation). These expenses must be economically justified and documented and are incurred to carry out activities aimed at generating income (clause 1 of Article 252 of the Tax Code of the Russian Federation).
The procedure for determining the date of recognition of expenses for audit services depends on the method adopted for calculating income tax (accrual method or cash method).
Under the accrual method, expenses for audit services are taken into account for profit tax purposes in the reporting (tax) period to which they relate, regardless of the time of actual payment. Expenses are recognized in the period in which they arise based on the terms of the transaction (in paragraph 1 of Article 272 of the Tax Code of the Russian Federation).
(function(w, d, n, s, t) (w[n] = w[n] || ;w[n].push(function() (Ya.Context.AdvManager.render((blockId: "R-A -260713-10",renderTo: "yandex_rtb_R-A-260713-10",async: true));));t = d.getElementsByTagName("script");s = d.createElement("script");s .type = "text/javascript";s.src = "//an.yandex.ru/system/context.js";s.async = true;t.parentNode.insertBefore(s, t);))(this , this.document, "yandexContextAsyncCallbacks");The date of incurring expenses for audit services may be considered:
- date of settlements in accordance with the terms of the agreement;
- date of presentation of documents serving as the basis for settlements (for example, an act of provision of services);
- the last day of the reporting (tax) period to which the expenses relate.
Such rules are established in paragraphs. 3 paragraph 7 art. 272 of the Tax Code of the Russian Federation.
One of the three above dates must be reflected in the organization’s accounting policies. The Ministry of Finance of Russia adheres to a similar point of view in Letter dated August 29, 2005 N 03-03-04/1/183.
Under the cash method, expenses for audit services are recognized for profit tax purposes after their actual payment (clause 3 of Article 273 of the Tax Code of the Russian Federation).
Responsibility for the absence of an auditor's report in the financial statements
Audit firms may bear criminal, administrative, and civil liability in accordance with the legislation of the Russian Federation (Clause 1, Article 21 of Law No. 119-FZ).
Currently, the legislation establishes tax and administrative liability for failure to submit an audit report to the tax inspectorate.
The auditor's report is a component of the financial statements for organizations that are subject to mandatory audit (subclause “d”, paragraph 2 of Article 13 of the Law “On Accounting”).
(function(w, d, n, s, t) (w[n] = w[n] || ;w[n].push(function() (Ya.Context.AdvManager.render((blockId: "R-A -260713-11",renderTo: "yandex_rtb_R-A-260713-11",async: true));));t = d.getElementsByTagName("script");s = d.createElement("script");s .type = "text/javascript";s.src = "//an.yandex.ru/system/context.js";s.async = true;t.parentNode.insertBefore(s, t);))(this , this.document, "yandexContextAsyncCallbacks");Organizations must submit their financial statements to the tax authorities (clause 5, clause 1, article 23 of the Tax Code of the Russian Federation). The deadline for submitting annual reports is 90 days after the end of the year. For a number of reasons, an organization may fail to provide an audit report. In this regard, the organization may be fined in accordance with paragraph 1 of Art. 126 of the Tax Code of the Russian Federation. For each document not submitted, a fine of 50 rubles is collected.
In addition, the management of the organization can also be fined for “failure to provide information necessary for tax control” (Article 15.6 of the Code of Administrative Offenses of the Russian Federation). The size of the sanction ranges from 300 to 500 rubles.
Payment of the fine does not relieve the company from the obligation to submit an audit report (Part 4 of Article 4.1 of the Code of Administrative Offenses of the Russian Federation).
The maximum fine can be 550 rubles.
"Economy and Life"
(function(w, d, n, s, t) (w[n] = w[n] || ;w[n].push(function() (Ya.Context.AdvManager.render((blockId: "R-A -260713-12",renderTo: "yandex_rtb_R-A-260713-12",async: true));));t = d.getElementsByTagName("script");s = d.createElement("script");s .type = "text/javascript";s.src = "//an.yandex.ru/system/context.js";s.async = true;t.parentNode.insertBefore(s, t);))(this , this.document, "yandexContextAsyncCallbacks");Auditing— in what cases may this be necessary and how to choose suitable auditors?
About mandatory and initiative audit and some practical aspects
choosing an audit company
In a series of our articles, we will look at the issues that arise when ordering audit services, and describe in detail what this means in practice - conduct an audit. We will also tell you when an audit may be necessary for your company, and how to choose a suitable audit company. And with examples from our practice, we will show what your company will receive as a result of the audit.
In this article we will briefly outline in what cases audit may be necessary for your company and how to choose the right auditors.
As is known, in some cases provided for by law, an audit of the accounting records and financial statements of organizations may be mandatory.
Features of the audit in 2018
In Part 1 of Art. 5 of the Federal Law of December 30, 2008 No. 307-FZ “On Auditing Activities” specifies such cases. So, it is necessary to conduct an audit:
joint-stock companies (clause 1, part 1, article 5 of Law No. 307-FZ);
if the organization’s securities are admitted to organized trading (clause 2, part 1, article 5 of Law No. 307-FZ);
if the volume of revenue of the organization (with the exception of state and municipal unitary enterprises, agricultural cooperatives) for the previous reporting year exceeds 400 million rubles. or the amount of assets on the balance sheet as of the end of the previous reporting year exceeds 60 million rubles. (clause 4, part 1, article 5 of Law No. 307-FZ);
if the organization is an insurance company, fund, credit organization and in some other, not common cases.
In addition, an audit is often carried out when it is not required by law, but when the owner of the company and/or its management wants to make sure that the company’s accounting is maintained correctly, the company does not have significant tax risks during a tax audit or when selling/ There will be no unpleasant surprises when purchasing a company.
How to choose a suitable audit company?
So, your company has decided to conduct an audit. What should you pay attention to when choosing an audit company?
In some cases, an audit report on your financial statements will then be provided to a foreign parent company, foreign investors or lenders, foreign partners - then the audit is usually ordered to be carried out by the largest world-famous audit firms, such as Deloitte Touche Tohmatsu, Ernst & Young , KPMG, PricewaterhouseCoopers or smaller companies, but which are also known abroad. The cost of an audit is usually very high, since you pay not only for the audit, but also for confirmation of your financial statements by companies with a global brand, which is significant in the eyes of your counterparties.
If there is no need to receive such significant confirmation, then it is much cheaper to order an audit from medium and small Russian audit firms.
In this case, it is necessary to check that they are members of an existing self-regulatory audit organization (SRO). You can simply request a certificate from such a company about its membership in an SRO and look at the list of its members on the website of the corresponding SRO.
Also, if your organization is a credit, insurance company, joint-stock company, whose shares are admitted to organized trading, or if the share of state ownership in the authorized capital of your organization is at least 25%, then you need to check whether the auditors who will conduct the audit have audit certificates issued after January 1, 2011. At a minimum, the head of the audit team must have such a certificate.
It is also advisable to look reviews from other clients of this audit firm, usually such reviews are posted on her website. You can try to contact the management, chief accountants of companies that are or were clients of this audit firm in order to obtain more detailed reviews about working with this company. A list of such clients can be requested from the company itself.
You can also focus on various ratings of auditing companies compiled by agencies and the media. However, it is worth considering that some small firms that do not fall into this rating because of their small revenue/number of employees can actually provide very high-quality audit services at a low price. Typically, such firms have two or three strong auditors on staff and a constant volume of orders that these auditors serve. But such firms do not see the need for increased growth, since this almost always leads to a decrease in the quality of inspections and often profitability does not increase due to increased overhead costs.
In general, it is not even the company with which the audit agreement is concluded that is of great importance, but qualifications and talent auditors directly conducting the audit.
Yes exactly talent. Because when analyzing a large amount of information in a short time (and this is what auditors do when conducting an audit), it is very difficult without certain innate abilities to notice inconsistencies, errors and inconsistencies in documents, the wording of contracts, accounting, and reporting.
Also important is professional competence inspectors. This includes, first of all, excellent knowledge of accounting, tax, civil, currency, and labor legislation. Sometimes inspections even require knowledge of the Family and Land Codes. It is also necessary for auditors to be well versed in the current practice of considering various issues by representatives of the Ministry of Finance, the Federal Tax Service, and arbitration courts.
The third important parameter is how well auditors express their thoughts on paper, since the final report with the results of the inspection will be in written form. And the description of errors, tax risks, recommendations must be presented in understandable language, without unnecessary fluff, so that it is then easy to use the auditors’ findings in the activities of your company.
How to check for professional competence, analytical talent and good ability to express your thoughts in writing?
The easiest way before concluding an audit contract is to ask auditors to provide consulting services on a particular issue in writing. This will allow you to check everything described above for a small fee. Also, at the same time, it will be possible to see how obliging the auditors are, how much they try to adapt to the client, understand his needs - all this can also then make the audit more comfortable. It is better to immediately agree that the head of the audit team or senior auditor, who will subsequently take part in the audit, should provide consulting services.
In this way, you can select several suitable audit firms and then hold a competition between them on the cost of their services. If the difference in cost is small, preference should still be given to a company with stronger auditors. Since a small increase in audit costs (associated with the difference in wages between very good and simply good auditors) will most likely be paid off by reducing timely detected tax risks, detecting unjustified non-application of tax benefits and ways to legally reduce taxes and contributions, timely detection of insufficient qualifications of accountants in some questions. In general, it is unlikely that anyone will dispute the truth that higher quality usually costs more.
Also, before concluding an agreement with an audit firm, it is necessary to decide whether it is necessary step-by-step conducting an audit (for example, quarterly) or it is sufficient to conduct it after the end of the reporting year and the formation of annual reports. Phased implementation is more expensive as the verification time increases. For example, with a quarterly audit, the inspection time increases at least three times. However, a phased audit will make it possible to more quickly identify and correct mistakes made by accountants, and identify and reduce tax risks.
Before concluding an agreement with auditors, check whether the agreement stipulates confidentiality conditions for employees of the audit firm.
We hope that the information described in the article will help you decide whether you need an audit and choose a good audit company.
Karpova Margarita Vladimirovna,
General Director of AuditHelp LLC, auditor
Online cash registers for online stores since July 2017
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Home — Articles
Who must undergo mandatory audit
One of the components of the annual financial statements in accordance with clause 2 of Art. 13 of the Federal Law of November 21, 1996 N 129-FZ “On Accounting” is audit report, confirming the reliability of the organization’s financial statements. Moreover, if the organization is subject to mandatory audit, this component of reporting also becomes mandatory.
The circle of persons subject to mandatory audit is established by Art. 5 of the Federal Law of December 30, 2008 N 307-FZ “On Auditing Activities”.
At the end of December last year, this article was amended due to the adoption of Federal Law dated December 28, 2010 N 400-FZ. Moreover, in Art. 2 of Law N 400-FZ specifies that it comes into force on January 1, 2011, but the provisions of the new version of Art. 5 of Law N 307-FZ apply to relations that arise during an audit of the financial statements of organizations starting from the reporting for 2010.
Simply put, the new list of persons subject to mandatory audit must be followed right now, when audits of financial statements for 2010 are in full swing. And since this list has changed, in practice it turns out that some organizations that were not previously subject to mandatory audit will now have to urgently invite auditors, while others who may have already entered into an agreement to conduct a mandatory audit may not carry out such an audit.
New “responsibilities”…
In addition to those organizations that were supposed to undergo a mandatory audit and earlier - such as credit organizations, commodity and stock exchanges, insurance organizations and others - the following were added to the list of “obligations”:
— currency exchanges;
— clearing organizations;
— management companies of a joint-stock investment fund, mutual investment fund or non-state pension fund;
— organizations that are professional participants in the securities market;
— as well as organizations that present and (or) publish summary (consolidated) accounting (financial) statements (with the exception of state authorities, local governments, state extra-budgetary funds, as well as state and municipal institutions).
All these organizations must also submit an auditor's report as part of their annual financial statements for 2010. And if they have not yet concluded an agreement to conduct a statutory audit, they need to immediately choose an auditor and enter into such an agreement.
…and no longer “obliged”
But there are also organizations for which audit became optional.
The fact is that in the new edition of clause 4, part 1, art. 5 of Law N 307-FZ have been significantly increased limit values of sales revenue and balance sheet currency, in which the organization becomes obliged to undergo a mandatory audit.
Let us remember that previously these limits were 50 million rubles. for revenue and 20 million rubles. for the amount of balance sheet assets at the end of the year preceding the reporting year.
The new limits look like this:
- the volume of revenue from the sale of products, the sale of goods, the performance of work, the provision of services (with the exception of state authorities, local governments, state and municipal institutions, state and municipal unitary enterprises, agricultural cooperatives, unions of these cooperatives) for the year preceding the reporting year, — over 400 million rubles;
— the amount of assets on the balance sheet as of the end of the year preceding the reporting year is more than 60 million rubles.
Pay special attention to the fact that these two limits are connected by the conjunction “or”. This means that to establish the obligation of an audit, it is sufficient that only one of the criteria occurs. In other words, it is not at all necessary that there should be an excess of both revenue and assets at the same time. For example, a company may have a balance sheet currency of 5 million rubles, but annual revenue of 550 million rubles.
How a mandatory audit is carried out for an LLC in 2018
— and then it will definitely be subject to mandatory audit.
The verification of compliance with limits must be carried out on the basis of reporting data for the year preceding the reporting year. As explained in paragraph 8 of Information Message of the Ministry of Finance of Russia No. 3 in connection with the entry into force of Federal Law No. 307-FZ (published in November 2009), based on the interrelated norms of the Civil Code of the Russian Federation, Federal Laws “On Joint-Stock Companies”, “ On limited liability companies", "On state and municipal unitary enterprises", "On accounting" and "On auditing activities", the decision to conduct a mandatory audit is made on the basis of financial indicators for the year preceding the year for which the mandatory audit is to be carried out.
This means that the question of whether it is necessary to conduct a mandatory audit of the annual financial statements for 2010 must be decided based on the reporting indicators for 2009, that is, taking into account the amount of revenue reflected in line 010 of Form No. 2 for 2009, and balance sheet currency (amount of assets) as of the end of 2009 (line 300 of Form No. 1 for 2009).
Taking into account the change in limits, it turns out that, for example, an organization that, according to reporting data for 2009, had revenue in the amount of 300 million rubles. and the amount of assets on the balance sheet is 35 million rubles, is no longer required to undergo a mandatory audit and include an audit report in the reporting for 2010.
Of course, if an agreement to conduct an audit has already been concluded, including before the adoption of Law N 400-FZ, it is not necessary to refuse to fulfill it. You can undergo an audit, receive an audit report within the deadlines established by the contract and provide it to interested users as part of the reporting, as well as use the recommendations and conclusions of auditors to improve the quality of reporting and improve the accounting process in the organization.
On the other hand, especially in cases where the auditors have not yet begun the audit or if the audit has just begun, it is also possible to terminate the contract for the provision of audit services in the manner prescribed by civil law and the specific terms of the contract with an audit firm or individual auditor. However, as a rule, upon termination of the contract, you will have to pay for that part of the auditors’ work that had already been completed at the time of refusal of their services.
For your information. Recommendations for conducting an audit of annual financial statements
On the eve of the submission of annual reports, the Ministry of Finance of Russia issued Recommendations to audit organizations, individual auditors and auditors on conducting an audit of annual financial statements for 2010. The recommendations contained in Letter dated January 24, 2011 N 07-02-18/01 are aimed at improving the quality of accounting audits reporting of organizations.
Mandatory audit in 2018: who is required to undergo it, how it goes
| Who is required to undergo an audit? | Where is it written |
| Developers raising funds from participants in shared construction | Clause 1 Art. 5 of Law No. 307-FZ, subp. 6 paragraph 2 art. 20 Federal Law of December 30, 2004 No. 214-FZ |
| Construction holdings that present or disclose summary (consolidated) accounting (financial) statements | Clause 1 Art. 5 of Law No. 307-FZ |
| Companies whose sales revenue for 2015 exceeds RUB 400 million. or the amount of assets on the balance sheet as of December 31, 2015 exceeds RUB 60 million. | Clause 1 Art. 5 of Law No. 307-FZ |
| Joint-stock companies, regardless of the volume of revenue (amount of assets) | P. |
Mandatory audit criteria
1 tbsp. 5 of Law No. 307-FZ
The organization itself selects the auditor. But not always. For example, for companies with state participation (at least 25% of the authorized capital), the audit organization is selected based on the results of an open competition (clause 4 of article 5 of Law No. 307-FZ).
In some cases, only audit organizations have the right to conduct mandatory audits. And only those whose staff includes an auditor with a qualification certificate issued after January 1, 2011.
Advice
Ask the audit organization (individual auditor) for documents confirming that she (he) is a member of the SRO of auditors. Or look for yourself on the Ministry of Finance website in the “Audit Activities” section
In particular for:
– developers who attract money from participants in shared construction;
– joint-stock companies – from July 1, 2015 (clause 3 of Article 88 of the Federal Law of December 26, 1995 No. 208-FZ);
– organizations whose securities are admitted to organized trading;
– organizations with state participation of at least 25 percent;
– organizations with consolidated reporting.
The auditor (audit organization, individual auditor) must be independent in relation to the organization being audited.
For example, a company does not have the right to invite an auditing firm with which it has successfully collaborated for the last three years and which has provided it with services for restoration and accounting. The auditor cannot be a close relative of the director or chief accountant of the organization being audited, etc. (Article 8 of Law No. 307-FZ).
When to conduct a mandatory audit
The audit is carried out after the company has fully prepared its annual financial statements - before submitting it to the owners for approval.
The annual report is approved by the participants (shareholders) at their next annual general meeting.
Such meetings are held:
– limited liability companies (LLC) in March–April after the reporting year (Article 34 of the Federal Law of February 8, 1998 No. 14-FZ);
– joint-stock companies (JSC) – from March to June (Article 34 of the Federal Law of December 26, 1995 No. 208-FZ).
What will the construction company check?
Document
Explanations regarding the audit of annual statements are in the Recommendations (attachment to the letter of the Ministry of Finance dated January 22, 2016 No. 07-04-09/2355)
The audit of construction companies has its own specifics.
– the degree of completion of works, services, products with a long production cycle is determined (for construction contracts, the procedure is established in PBU 2/2008);
– contributions to the compensation fund are taken into account;
– materials are written off, etc.
Where to submit the audit report
Based on the results of the audit, the audit company issues an audit report to the organization on the reliability of the accounting records. It is intended for users of the organization's accounting (financial) statements.
The company must submit its annual accounting report to the tax office no later than March 31 of the following year (clause 2, article 18 of the Federal Law of December 6, 2011 No. 402-FZ, subclause 5, clause 1, article 23 of the Tax Code of the Russian Federation). The auditor's report is not included in it. Therefore, there is no need to submit it to the tax office. However, it needs to be submitted to statistics:
– either together with a mandatory copy of the annual accounting report;
– or no later than 10 business days after signing the audit report, but no later than December 31 of the year following the reporting year.
The deadlines for submitting the audit report to statistics are in paragraphs 1, 2 of Article 18 of Law No. 402-FZ, paragraph 2 of the Procedure (approved by order of Rosstat dated March 31, 2014 No. 220).
During shared-equity construction, developers also submit an audit report to the supervisory authority. This requirement is established in the Rules approved by Decree of the Government of the Russian Federation of October 27, 2005 No. 645 (clauses 2, 8, 9). Each region has its own supervisory authority - it is determined by regional authorities.
In addition, the developer is obliged to let any applicant review the audit report for the last year (Article 20 of Law No. 214-FZ).
From October 1, 2016, companies for which an audit is mandatory are required to enter information about its results into the Unified Federal Register of Legally Significant Information on the Facts of the Activities of Legal Entities (EFRSFYUL). This requirement is established in the new part 6 of Article 5 of Law No. 307-FZ (information message of the Ministry of Finance of Russia dated July 6, 2016 No. IS-audit-4). This must be done within three working days.
Advice
For more information on how to enter information about a mandatory audit into the register, read the article “Since October 1, SRO participants have had more work”
Public joint stock companies, as well as non-public ones with more than 50 shareholders, when publicly offering bonds or other securities, are required to publish a mandatory audit report on the Internet. This must be done on a special website of an information distributor, for example Interfax.
The period is three calendar days from the date of signing the audit report (Article 92 of Law No. 208-FZ, Chapter 71 of the Regulations, approved by the Bank of Russia dated December 30, 2014 No. 454-P).
How to account for expenses
Audit costs are included in expenses for ordinary activities (as management expenses).
They are recognized in the amount of the contract price (excluding VAT) on the date when the acceptance certificate for the services provided was signed:
It is important to know
A simplified organization with the object “income minus expenses” has the right to take into account the cost of audit services in expenses (subclause 15, clause 1, article 346.16 of the Tax Code of the Russian Federation)
In tax accounting, classify costs as other expenses - these are indirect expenses (subclause 17, clause 1, article 264, clause 1, article 318 of the Tax Code of the Russian Federation).
Recognize them on one of the dates of your choice in accordance with the accounting policy (subclause 3, clause 7, article 272, article 313 of the Tax Code of the Russian Federation):
– on the day established for payment of audit services under the terms of the contract;
– on the last day of the reporting (tax) period;
– on the date when the parties signed the act of provision of services.
An audit is a process of independent assessment of the activities of an enterprise or individual entrepreneur.Its purpose is to determine the reliability of reporting (accounting and financial).
The concept of “audit” is much broader than just a control function and audit.
Auditors, in addition to verification work, perform tasks to optimize the tax and economic activities of the enterprise, aimed at increasing profits and more rational use of funds.
Audit can exist on an ongoing basis within an enterprise.
This is an internal audit, which is exclusively voluntary, that is, carried out on the initiative of the business entity itself (founder, owner, director).
In turn, it is divided into mandatory and initiative audits (conducted in organizations of any form of ownership by order of management - owner, founders).
External auditors or audit companies are invited to conduct an audit. The main stages, tasks and goals of the audit are formulated by the initiator of the audit and are reflected in the audit contract for the provision of services.
Most often, proactive audits are carried out by:
1. to obtain an expert opinion on the maintenance of tax and accounting records at the enterprise;
2. if the owner (founder) doubts the competence of the chief accountant;
3. during the reporting period, changes occurred in the legislation regulating the activities of enterprises;
4. The audit is ordered by the bank before lending to the enterprise.
In our country, the procedure for carrying out the mandatory audit procedure is regulated by Federal Law No. 307FZ “On Auditing Activities”.
This legislative act specifies a number of enterprises that are subject to mandatory audit. These include:
1. Companies with the legal form of JSC;
2. Organizations issuing securities that are traded on stock exchanges or carrying out transactions with securities;
3. Banks, credit institutions;
4. insurance and clearing companies;
5. extra-budgetary funds (except for state ones);
6. stock, commodity and currency exchanges;
7. non-state pension fund, joint-stock fund, mutual investment funds;
8. firms operating professionally in the securities market;
9. Enterprises (with the exception of government bodies, agricultural cooperatives, local governments, unitary enterprises) that have revenue from activities (sales of goods, services, work) exceeding 400 million rubles, or the amount of balance sheet assets at the end of the reporting period period – 60 million rubles;
10. Organizations publishing their reports in the media;
11. Other cases.
In the above organizations, a mandatory audit is carried out every year. To carry it out, qualified private auditors and certified audit organizations are involved.
Organizations in whose authorized capital the share of state participation is at least 25% are subject to mandatory audit.
The audit organization to conduct the audit is selected on a competitive basis.
The rules and regulations of the competition are established by the Government of the Russian Federation.
Conducting a statutory audit imposes certain obligations on the audit organization - the criteria for a statutory audit.
These include:
1. When carrying out a mandatory audit, the audit is carried out in full:
all economic activities of the organization are analyzed,
all its sectors, property, liabilities,
inventories of goods and materials,
analysis of settlements with the budget and funds, founders,
balance sheet assets and liabilities, their breakdown,
representative enterprises, branches;
2. The auditor’s conclusions must be unambiguous, and the reliability of the information presented must be either confirmed or not;
3. During a mandatory audit, auditors must comply with all audit standards (rules) that determine the actions of the auditor in a specific situation.
Subjects of a mandatory audit who evade a mandatory audit or impede its implementation are subject to penalties by court decision.
Penalty may be in the form of a fine:
From an economic entity – 100–500 times the minimum wage,
from the manager - 50–100 times.
The collected amounts are sent to the federal budget revenues.
An audit company is a commercial organization whose purpose is to make a profit from the provision of accounting, legal, and auditing services, which is part of self-regulatory organizations of auditors.
A company can begin its commercial activities from the moment information about its existence is placed in a specialized register of auditors.
The audit is carried out in accordance with the laws and regulations governing auditing activities.
The activities of auditors are regulated by Law No. 315FZ “On Self-Regulatory Organizations”.
To provide highly qualified services, audit company personnel must have a qualification certificate, which is issued by a self-regulatory audit organization after passing the appropriate exam.
This document confirms the high level of knowledge of the auditor and has no validity period (it can only be canceled by a court decision).
Auditors and audit organizations that carry out statutory audits must follow the auditors' code in their work and be guided by the following priorities:
1. evaluate the facts objectively and professionally;
2. treat work honestly and conscientiously;
3. maintain strict confidentiality and independence is a prerequisite.
Stages of a mandatory audit
For an organization that conducts a mandatory audit every year, experts recommend a phased audit.
Depending on the volume of work, the inspection is carried out at the end of the first quarter, half a year or 9 months.
The final stage is carried out at the end of the reporting year.
With this scheme in the current mode:
Detected errors and shortcomings are eliminated,
tax payments are optimized,
reporting for the period is completed as accurately as possible,
The activities of the enterprise are compared with the norms of current legislation.
When performing the mandatory audit procedure, the following work is performed:
1. Checking the accounting records of the enterprise;
2. Work on organizing the audit process, approval by the customer and coordination with the internal structures of the enterprise of the audit plan;
3. Assessing the reliability of the processing of accounting information, assessing the correctness and compliance with the law of all operations and performance results;
4. Formation and analysis of recommendations for eliminating shortcomings that had an impact on the final result and were reflected in the organization’s reporting;
5. Providing information to the customer about identified shortcomings and errors. The information must be supported by documents;
6. Drawing up an audit report and reference information arising in the process of providing services.
The audit report is the final stage of the auditor’s activity within the framework of the contract at the audited enterprise.
This is an official document that is provided to users of all types of reporting of the audited enterprise.
The audit report contains the subjective opinion of the auditor or audit organization about the reliability of the financial, management or accounting reporting at all levels.
All information reflected in the report is an audit secret and is not subject to disclosure.
A copy is provided to the initiator of the audit - the person who signed the agreement with the auditor. The form of completion, the procedure for signing the conclusion and its content are reflected in the relevant regulatory document.
Mandatory audit criteria
Mandatory audit is carried out in cases specified in the Federal Law “On Auditing Activities” 307-FZ. The mandatory audit criteria are in effect (previous editions: and Law 119-FZ).A mandatory audit is carried out in cases where:
1. The organization has the legal form of an open joint stock company;
2. The organization’s securities are admitted to trading at stock exchanges and (or) other organizers of trading on the securities market;
3. The organization is a credit organization, a credit history bureau, an organization that is a professional participant in the securities market, an insurance organization, a clearing organization, a mutual insurance company, a commodity, currency or stock exchange, a non-state pension or other fund, a joint-stock investment fund, a management company of a joint-stock company. investment fund, mutual investment fund or non-state pension fund (except for state off-budget funds);
4. The volume of revenue from the sale of products (sale of goods, performance of work, provision of services) of an organization (except for state authorities, local governments, state and municipal institutions, state and municipal unitary enterprises, agricultural cooperatives, unions of these cooperatives) for the previous reporting period year exceeds 400 million rubles or the amount of assets on the balance sheet as of the end of the previous reporting year exceeds 60 million rubles;
5. An organization (with the exception of a government body, a local government body, a state extra-budgetary fund, as well as a state and municipal institution) submits and (or) publishes summary (consolidated) accounting (financial) statements;
6. In other cases established by federal laws.
The criteria specified in the Law clearly answer the question in which cases a mandatory audit is carried out. However, certain difficulties in interpretation are caused by the phrases: “... as of the end of the year preceding the reporting year... for the preceding reporting year...”. This provision causes debate in the professional community, since there is still no explanation from tax and financial authorities on how to understand the period for which an enterprise is obliged to conduct an audit. If the official “Audit's report on financial (accounting) statements” in accordance with Federal Rule (Standard) of Auditing No. 6 must be attached to the balance sheet for the reporting period - for example, to the balance sheet, then the Law can be interpreted so that the mandatory audit must be carried out for the year . In this case, there is a contradiction with the spirit of the Law. Let’s imagine that the enterprise created during this period had a turnover of 1000 rubles. In 2009, the business “got back on its feet” and turnover exceeded 50 million rubles. Then it turns out that operations for a year when there was practically no turnover must be subjected to a mandatory audit!
In practice, interacting with the Federal Tax Service of our audit organization, we can say that most likely it will be necessary to conduct an audit of the year in which the conditions of the Law were met, and not the previous one. However, our recommendation regarding the mandatory audit criteria is to ask your inspector in advance about the period for which the audit must be completed.
An audit is an independent verification of these statements carried out to express an opinion on the reliability of the financial statements of a business entity (Part 3 of Article 1 of Federal Law No. 307-FZ). The audit can be carried out either voluntarily or compulsorily. In the first case, we are talking about an initiative audit, in the second – about a mandatory audit. The obligation to conduct an audit is imposed on the organization by law. We will discuss the criteria for conducting a mandatory audit below.
When conducting an audit is a duty
The criteria for mandatory audit are contained in Art. 5 of Federal Law No. 307-FZ “On Auditing Activities”.
The main criteria for mandatory audit are legal and cost criteria. In the first case, the obligation to audit arises if the organization belongs to a certain organizational and legal form (for example, the company is a joint-stock company) or if it conducts certain types of activities, and in the second - if the revenue or value of assets exceeds certain restrictions.
We present in the table for mandatory audit the criteria for LLCs and organizations of other forms. If at least one of the listed conditions is present, an audit is mandatory.
Mandatory audit criteria:
|
Criterion |
Condition |
|---|---|
|
Or-ga-ni-za-tsi-on-no-right-form or type of de-ya-tel-no-sti |
- Joint-Stock Company; - credit organisation; — credit bureau; — professional participant of the RCB; - insurance organization; - clear-rin-go-vaya or-ga-ni-za-tion; - mutual insurance society; - or-ga-ni-for-tor of trade; - non-sovereign pension or other fund; — joint-stock investment fund; - management company of the joint-stock company, in-ve-sti-ci-on-no fund, sti-tsi-on-no-go fund or no-go-su-dar-no-go pen-si-on-no-go fund (with the exception of the state-su-dar-stven off-budget funds) |
|
Circulation of securities |
to the or-ga-ni-zo-van-nyh trades |
|
You get help from the sale of production (you complete the work, provide services) |
pre-you-sha-et 400 million-li-o-new rubles |
|
The amount of ak-ti-vov or-ga-ni-za-tion according to the accounting data of the ba-lan-sa |
pre-you-sha-et 60 million-li-o-new rubles |
|
Presentation (opening) of the or-ga-ni-za-qi-ey of the year's consolidated (con-so-li-di-ro-van-noy) from- parity |
presents or reveals the annual consolidated (con-so-li-di-ro-van-nuyu) accounting (fi-nan- co-reporting) |
With the exception of state authorities, local governments, state and municipal institutions, state and municipal unitary enterprises, agricultural cooperatives, and unions of these cooperatives.
With the exception of state authorities, local governments, state extra-budgetary funds, as well as state and municipal institutions.
Other mandatory audit criteria
Let us present some other cases of mandatory auditing, not mentioned above and provided for by separate Federal laws.
Thus, audits are required to be carried out, in particular:
Developers (Part 4, Article 18 of Federal Law No. 214-FZ);
state-owned companies (clause 8, article 7.2 of Federal Law No. 7-FZ);
state corporations (clause 2 of article 7.1 of Federal Law No. 7-FZ);
self-regulatory organizations (Part 4 of Article 12 of Federal Law No. 315-FZ).
Mandatory reporting audit
Some organizations are required to conduct an annual audit (verification) of accounting (financial) statements (Part 2 of Article 5 of Law No. 307-FZ).In particular, a mandatory audit is carried out if the organization is:
Joint stock company;
a professional participant in the securities market or the organization’s securities are admitted to organized trading;
insurance company;
non-state pension fund (or its management company); credit institution.
For all other organizations (except for government bodies, as well as state (municipal) institutions), an audit is mandatory if, for example:
The organization provides (publishes) consolidated accounting (financial) statements (except for the state extra-budgetary fund);
the volume of revenue from sales of products (goods, works, services) for the previous reporting year exceeds RUB 400,000,000. (except for agricultural cooperatives and their unions, as well as state (municipal) unitary enterprises);
the amount of assets on the balance sheet at the end of the previous reporting year exceeds 60,000,000 rubles. (except for agricultural cooperatives and their unions, as well as state (municipal) unitary enterprises);
such an obligation is established by other federal laws (for example, for issuers of securities, the obligation to conduct an audit is established by paragraph 9 of Article 22 of Law No. 39-FZ, and for organizers of gambling, part 12 of Article 6 of Law No. 244-FZ).
A complete list of cases when it is necessary to conduct a mandatory audit is given in Part 1 of Article 5 of Law No. 307-FZ. A summary table containing a complete list of cases of mandatory audit of financial statements for the year, indicating the type of audited statements and possible auditors, is given in the information message of the Ministry of Finance of Russia.
Situation: is it necessary to conduct a mandatory audit for the first year of operation of an LLC? Financial indicators (revenue, total assets) exceeded acceptable limits. No no need.
The fact is that in order to resolve the issue of a mandatory audit, the indicators of revenue and assets are assessed not for the reporting year, but for the previous one.
Thus, for organizations created in the form of an LLC, an audit is required if:
The volume of revenue from sales of products (goods, works, services) for the year preceding the reporting year exceeds 400,000,000 rubles;
the amount of assets on the balance sheet at the end of the year preceding the reporting year exceeds 60,000,000 rubles.
This is stated in paragraph 4 of part 1 of article 5 of Law No. 307-FZ. A complete list of cases when it is necessary to conduct a mandatory audit is given in Part 1 of Article 5 of Law No. 307-FZ.
In this case, the organization operates only for the first year. Accordingly, in the previous year it did not have any financial indicators, since the organization itself did not yet exist. Therefore, a mandatory audit of financial statements is not necessary.
A statutory audit may have to be carried out next year if assets or revenue exceed established limits. But this will also depend on exactly when the organization was registered.
The fact is that for newly created organizations there are special rules for determining the reporting period.
Namely, the first reporting year for a newly created organization is the period:
From the date of state registration to December 31 of the same year inclusive, if the organization was created before September 30;
from the date of state registration to December 31 of the following year inclusive, if the organization was created after September 30.
Internal control
If the financial statements of an organization are subject to mandatory audit, it is obliged to organize and exercise internal control over accounting and preparation of financial statements. An exception to this procedure is the case when the head of the organization has taken over the accounting.
This is stated in Part 2 of Article 19 of Law No. 402-FZ.
Statutory audits can be carried out by both audit organizations and individual auditors (Part 2, Article 1, Articles 3, 4 of Law No. 307-FZ).
An exception is provided only for:
Organizations whose securities are admitted to organized trading and (or) other organizers of trading on the securities market;
non-state pension funds;
organizations in whose authorized (share) capital the share of state ownership is at least 25 percent;
state corporations and companies;
organizations that prepare consolidated statements.
Only audit organizations have the right to conduct mandatory audits.
These rules are provided for in Part 3 of Article 5 of Law No. 307-FZ.
When choosing an audit organization (individual auditor):
Make sure she is a member of a self-regulatory organization of auditors. Otherwise, the audit organization (individual auditor) does not have the right to conduct an audit or provide services related to the audit (Part 2 of Article 23 of Law No. 307-FZ);
make sure of its independence (Part 1, Article 8 of Law No. 307-FZ).
Advice: to make sure that the audit organization is a member of a self-regulatory organization, you can request from it documents indicating membership in one of them. The state register of self-regulatory organizations of auditors can be found on the official website of the Ministry of Finance of Russia (Part 7, Article 23 of Law No. 307-FZ).
In addition, the legislation provides for the features of mandatory audit in:
State and municipal unitary enterprises;
state corporations and companies;
organizations in whose authorized (share) capital the share of state ownership is at least 25 percent.
The conclusion of contracts for conducting an audit for them is possible only based on the results of placing an order for the provision of these services at auction in the form of an open competition (in the manner prescribed by Law No. 44-FZ). This rule is established in Part 4 of Article 5 of Law No. 307-FZ.
Submission of the audit report to Rosstat and the tax inspectorate
If an organization is required to conduct an audit, then it must submit an audit report along with financial statements to the territorial division of Rosstat.
You need to do this:
Either simultaneously with the submission of financial statements;
or separately, but no later than 10 business days from the day following the date of the auditor’s report, and no later than December 31 of the year following the reporting year.
This is stated in Part 2 of Article 18 of Law No. 402-FZ.
Attention: if you do not submit the audit report to Rosstat (submit it late), an administrative fine will be charged.
For the fact that statistical information is not submitted to Rosstat (or submitted with violations, including not on time), a fine of 10,000 to 20,000 rubles is provided. for an official of the organization (manager). The organization can be fined from 20,000 to 70,000 rubles.
A repeated violation will cost more: the official will be fined in the amount of 30,000 to 50,000 rubles, the organization faces a fine of 100,000 to 150,000 rubles.
There is no need to submit an audit report to the tax office, since the audit report is not part of the financial statements required to be submitted to the inspectorate. Similar explanations are contained in letters of the Ministry of Finance of Russia No. 03-02-07/1/1724 and the Federal Tax Service of Russia for Moscow No. 13-11/030545, No. 16-15/003855.
If financial statements subject to mandatory audit are published, then an auditor’s report must be published along with it (Part 10, Article 13 of Law No. 402-FZ).
Conducting a mandatory audit
Agreement for conducting a mandatory audit of the accounting (financial) statements of an organization in the authorized (share) capital of which the share of state ownership is at least 25 percent, as well as for conducting the accounting (financial) statements of a state corporation, state company, state unitary enterprise or municipal unitary enterprise is concluded based on the results of placing an order through bidding in the form of an open competition.Thus, the Rules were approved, which regulate the procedure for holding a competition for the selection of audit organizations to carry out the mandatory annual audit of organizations in the authorized (share) capital of which the share of state ownership is at least 25 percent (hereinafter referred to as the competition).
The Ministry of Finance of the Russian Federation develops and, in agreement with the Ministry of Property Relations of the Russian Federation, approves a standard regulation on the competitive commission for the selection of audit organizations to carry out mandatory annual audits.
The Ministry of Property Relations of the Russian Federation develops and, in agreement with the Ministry of Finance of the Russian Federation, approves a standard technical specification for conducting a mandatory audit of organizations in the authorized (share) capitals of which the share of state ownership is at least 25 percent, and federal state unitary enterprises.
The agreement on conducting a mandatory audit of federal state unitary enterprises necessarily provides for the obligation of the audit organization to submit to the Ministry of Property Relations of the Russian Federation no later than April 30 of the year following the reporting year, 1 copy of the auditor’s report prepared for the management (property owners) of the enterprise based on the results of the audit.
Federal executive authorities, within the limits of their competence, submit annually, before August 1, to the Ministry of Finance of the Russian Federation information on violations of the requirements of the legislation of the Russian Federation on conducting a mandatory audit.
The share of state ownership in the authorized (share) capital of organizations is determined as of January 1 of the year following the reporting year.
The competition is held annually and is open.
The organizer of the competition is the governing body of the organization subject to mandatory audit.
Organizer of the competition:
Notifies at least 45 days before the competition through the media about the time, place, form, subject and procedure for holding the competition, including the procedure for registering participation in the competition, requirements regarding the experience of the audit organization in the field of audit, the procedure for determining the audit organization that won the competition, as well as the period for concluding an agreement with it;
within 15 days from the date of notification of the competition, applications for participation in it from interested audit organizations are collected.
If less than 2 applications for participation in the competition are received, the organizer of the competition declares it invalid and notifies of a new competition.
The organizer of the competition, no later than 10 days after receiving an application from an audit organization to participate in the competition, sends it an invitation, which must contain:
Terms of reference for conducting an audit, developed in accordance with the standard terms of reference for conducting a mandatory audit of organizations in whose authorized (share) capital the share of state ownership is at least 25 percent;
sample agreement for the provision of audit services.
Within 15 days from the date of sending the invitation, audit organizations submit proposals to the competition organizer in separate envelopes regarding technical indicators and the price of the audit (hereinafter referred to as technical and financial proposals).
All proposals received after the specified period are not considered and are returned to the audit organizations unopened.
The evaluation of technical and financial proposals submitted by audit organizations is carried out by a competition commission created by the competition organizer.
The composition of the competition commission includes representatives of the competition organizer, the Ministry of Finance of the Russian Federation, the Ministry of Property Relations of the Russian Federation or state property management bodies of the constituent entities of the Russian Federation, which, in accordance with the established procedure, are entrusted with fulfilling the powers of the territorial bodies of the Ministry of Property Relations of the Russian Federation.
Based on the standard regulations, the Regulations on the competition commission are developed, which are approved by the competition organizer.
After the organizer of the competition receives technical and financial proposals from audit organizations, the envelopes with technical proposals are opened by members of the competition commission.
Envelopes with financial proposals are kept by the competition organizer and are opened after the technical proposals have been evaluated.
The competition commission evaluates technical and financial proposals of audit organizations in two stages.
At the first stage, the technical proposal is assessed on a 100-point scale, with the maximum score for each criterion being:
60 points - assessment of a sample audit report on a previously conducted audit of an organization (without indicating its name and other identification features), which necessarily contains indicators and economic calculations that are most consistent with the standard terms of reference for conducting a mandatory audit of organizations in whose authorized (share) capital the share of state ownership is at least 25 percent, as well as information about the practical benefits that the audited organization received as a result of the audit by the tender participant;
20 points - assessment of the audit methodology, including its plan, duration and recommendations based on the results of the audit;
20 points - assessment of the qualifications of specialists proposed to conduct an audit, confirmed by the relevant qualification certificates of the auditor, taking into account the experience of conducting at least 5 audits by type of activity of the organization.
Based on the results of the first stage, no more than 5 audit organizations that received the highest number of points are selected and admitted to the second stage.
At the second stage, the financial proposals of the selected audit organizations are assessed.
Financial proposals containing the lowest audit price receive 100 points, and the assessment of the audit organization's proposal containing a higher price is calculated as the ratio of the lowest price to the higher price multiplied by 100 points.
After completing the assessment of the technical and financial proposals of the audit organization, the competition commission summarizes both results taking into account the following coefficients: technical proposal assessment - 0.6, financial proposal assessment - 0.4.
Based on the results of evaluating these proposals, the competition commission gives a conclusion, which is submitted to the relevant body authorized to manage state property.
The winner of the competition is the audit organization that, according to the conclusion of the competition commission, has scored the highest number of points.
In case of equality of proposals, the winner is the audit organization whose application was submitted earlier.
The winner of the competition and the organizer of the competition sign a protocol on its results on the day of the competition, which is the basis for the further procedure for approving the auditor of the audited organization in accordance with the legislation of the Russian Federation.
The selection rules also apply when holding a competition to select audit organizations to carry out mandatory audits of federal state unitary enterprises, but are exemplary.
To conduct competitions for the selection of audit organizations to carry out the mandatory annual audit of organizations in the authorized (share) capital of which the share of federal property and (or) property of a constituent entity of the Russian Federation is at least 25%, the management body of the organization subject to mandatory audit, which is the organizer of the competition, creates a competition commission of at least six people with voting rights, including the secretary of the commission (for federal state unitary enterprises (FSUE) - six people), and approves its personal composition.
The organizer of the competition for the selection of an audit organization to carry out a mandatory annual audit of an organization in the authorized (share) capital of which the share of federal property and (or) property of a constituent entity of the Russian Federation is at least 25 percent is the board of directors (supervisory board) of the organization.
The organizer of the competition for the selection of an audit organization to carry out the mandatory annual audit of the FSUE is the head of the FSUE.
The chairman of the commission with the right of casting vote is the head or deputy head of the management body of the organization subject to mandatory audit. The chairman of the commission manages the activities of the commission, approves the rules of its work, determines the dates and agenda of meetings, and organizes the work of the commission. The deputy chairman of the commission with a casting vote is a representative of the Ministry of Finance of the Russian Federation, and the secretary of the commission with a casting vote is a representative of the competition organizer.
The commission with the right of casting vote also includes a representative of the Ministry of Property Relations of the Russian Federation (or the body for managing state property of the constituent entity of the Russian Federation, in which the organization subject to mandatory audit is registered as a legal entity, which in the prescribed manner is entrusted with fulfilling the powers of the territorial bodies of the Ministry property relations of the Russian Federation), a representative of the federal executive body responsible for coordinating and regulating activities in the relevant branch (sphere) of management, and a representative of one of the professional audit associations accredited by the Ministry of Finance of the Russian Federation.
If audit organizations are being selected to carry out an audit of a credit organization, a representative of the Central Bank of the Russian Federation (by agreement) is included in the competition commission with a casting vote and the commission consists of seven people with a casting vote. The competition commission may also include no more than two people with advisory voting rights.
A meeting of the commission is valid if at least two-thirds of the total number of its members with voting rights participate in it.
Interim decisions of the commission, which are of an internal organizational nature, are adopted by a simple majority of votes from the number of voting members of the commission participating in the meeting. In case of equality of votes, the vote of the chairperson at the meeting of the commission is decisive.
The conclusion of the commission to determine the winner of the competition is adopted by a simple majority of votes from the number of voting members of the commission participating in the meeting. In case of equality of votes, the vote of the chairperson at the meeting of the commission becomes decisive.
Interim decisions and the conclusion of the commission to determine the winner of the competition are documented in a protocol, which is signed by all members of the commission with voting rights. The minutes are sent to the members of the commission within three days from the date of the commission meeting.
The commission's conclusion in the form of an extract from the protocol is submitted to the relevant body authorized to manage state property.
Organizational and technical support for the activities of the commission is provided by the organizer of the competition.
Mandatory audit of the organization
In accordance with paragraph 2 of Art. 13 of Federal Law No. 129-FZ “On Accounting”, the auditor’s report in some cases is included in the financial statements. Thus, some companies, along with other forms of reporting, must also provide this document to the tax office.In accordance with current legislation, the audit can be voluntary or mandatory. A voluntary audit is carried out on the initiative of the organization itself. But there are companies for which conducting an audit once a year is an indispensable condition for the legitimacy of their activities.
Mandatory audit is carried out in the following cases:
The organization has the legal form of an open joint stock company;
the organization is a credit organization, a credit history bureau, an insurance organization, a mutual insurance company, a commodity/stock exchange, an investment fund, a state extra-budgetary fund, a fund whose source of funds is voluntary contributions from individuals and legal entities;
the volume of revenue from sales (except for agricultural cooperatives and unions of these cooperatives) for the previous reporting year exceeds 400 million rubles;
the amount of assets on the balance sheet as of the end of the year preceding the reporting year exceeds 60 million rubles; for municipal unitary enterprises, financial indicators may be reduced by regional law.
Mandatory audit for certain categories of organizations may be provided for by other regulations.
Under certain conditions, the following are subject to mandatory audit:
Credit cooperative (Part 1, Article 31, Part 10, Article 33 of Federal Law No. 190-FZ “On Credit Cooperation”);
self-regulatory organization (Part 4 of Article 12 of Federal Law No. 315-FZ “On Self-Regulatory Organizations”);
recipient of income from the endowment capital of a non-profit organization (Part 2 of Article 7 of Federal Law No. 275-FZ “On the procedure for the formation and use of endowment capital of non-profit organizations”);
autonomous institution (clause 9, part 13, article 2 of Federal Law No. 174-FZ “On Autonomous Institutions”);
housing savings cooperative (Part 1, Article 54 of Federal Law No. 215-FZ “On Housing Savings Cooperatives”);
developer (Clause 6, Part 2, Article 20 of Federal Law No. 214-FZ “On participation in shared-equity construction of apartment buildings and other real estate and on amendments to certain legislative acts of the Russian Federation”);
an organization participating in the savings-mortgage system (Part 1, Article 29 of Federal Law No. 117-FZ “On the savings-mortgage system of housing for military personnel”);
organizer and operator of the lottery (Article 23 of Federal Law No. 138-FZ “On Lotteries”);
state and municipal unitary enterprise (clause 1, article 26 of Federal Law No. 161-FZ “On state and municipal unitary enterprises”);
a specialized depository and management company in the field of investing pension savings (Clause 1, Article 9 of Federal Law No. 111-FZ “On investing funds to finance the funded part of a labor pension in the Russian Federation”);
association of insurers (OSAGO) (clause 6 of article 28 of Federal Law No. 40-FZ “On compulsory insurance of civil liability of vehicle owners”);
joint-stock investment fund, management company of a mutual investment fund (Clause 3, Article 50 of Federal Law No. 156-FZ “On Investment Funds”);
an enterprise as a property complex with a mortgage (Clause 3, Article 70 of Federal Law No. 102-FZ “On Mortgage (Pledge of Real Estate)”);
non-state pension fund (Article 22 of Federal Law No. 75-FZ “On Non-State Pension Funds”);
credit organization and association of banks (Article 42 of Federal Law No. 395-1 “On Banks and Banking Activities”).
Any organization for which an audit is mandatory must annually submit an audit report to the tax office as part of its annual financial statements.
In accordance with paragraph 2 of Art. 15 of Law No. 129-FZ “On Accounting”, clause 86 of the Regulations, approved. By Order of the Ministry of Finance of Russia No. 34n, annual financial statements are submitted to the inspectorate within ninety days after the end of the year.
For failure to provide an audit report, the Tax Code of the Russian Federation and the Code of Administrative Offenses provide for a fine. Its amount is insignificant - 50 rubles (Tax Code of the Russian Federation) and 300-500 rubles (Administrative Code of the Russian Federation). Thus, in the most extreme case, the company will pay 550 rubles. This amount is small compared to the cost of auditing companies' services. However, this does not mean that you can ignore the requirements of the law on mandatory audit.
The fact is that paying a fine does not mean releasing the organization from the obligation to conduct an audit (Clause 4, Article 4.1 of the Code of Administrative Offenses of the Russian Federation), and the absence of an audit report can lead to other troubles in addition to the fine. Companies may, for example, refuse a loan or lease. In addition, the absence of an audit report can seriously affect the company's reputation in the eyes of counterparties.
Thus, any organization that decides to save on conducting a mandatory audit must be aware that this can result in serious problems for it.
In accordance with current legislation, independent auditors and audit organizations are vested with the right to carry out auditing activities.
An auditor may be an individual who has received an auditor qualification certificate in the prescribed manner and who is a member of one of the self-regulatory organizations of auditors.
As for audit organizations, these can be commercial firms that are members of one of the self-regulatory organizations.
Only audit organizations can conduct mandatory audits of the accounting (financial) statements of the following companies:
Organizations whose securities are admitted to trading on stock exchanges and (or) other organizers of trading on the securities market;
credit and insurance organizations;
non-state pension funds.
Mandatory accounting audit
Mandatory audit - carried out in accordance with legislative acts. It is comprehensive and can be carried out on behalf of government bodies determined by the Temporary Rules. Evasion of the mandatory audit leads to penalties or fines; the amounts go to the republican budget. The purpose of a statutory audit is to confirm the accuracy of financial statements. If an audit firm has previously provided services to a given enterprise, then it cannot conduct a statutory audit.According to the Federal Law “On Auditing Activities” N 307-FZ, according to the degree of obligation, an audit is divided into:
Required.
Initiative.
Statutory audit is carried out on the basis of the requirements of legislative and regulatory acts of the Russian Federation, establishing the mandatory verification of annual financial statements for certain categories of economic entities.
Mandatory audit is carried out in the following cases:
1) if the organization has the organizational and legal form of an open joint stock company;
2) if the organization’s securities are admitted to trading at stock exchanges and (or) other organizers of trading on the securities market;
3) if the organization is a credit organization, a credit history bureau, an organization that is a professional participant in the securities market, an insurance organization, a clearing organization, a mutual insurance company, a commodity, currency or stock exchange, a non-state pension or other fund, a joint-stock investment fund, a management company joint-stock investment fund, mutual investment fund or non-state pension fund (except for state extra-budgetary funds);
4) if the volume of revenue from the sale of products (sale of goods, performance of work, provision of services) of an organization (except for state authorities, local governments, state and municipal institutions, state and municipal unitary enterprises, agricultural cooperatives, unions of these cooperatives) for the previous the reporting year exceeds 400 million rubles or the amount of assets on the balance sheet as of the end of the previous reporting year exceeds 60 million rubles;
5) if an organization (except for a government body, local government body, state extra-budgetary fund, as well as state and municipal institutions) submits and (or) publishes consolidated accounting (financial) statements;
6) in other cases established by federal laws.
With the entry into force of the Federal Law “On Consolidated Financial Statements”, the consolidated financial statements of financial and industrial groups and holdings (enterprises with subsidiaries and dependent companies) will be subject to mandatory audit.
Mandatory inspection is also carried out on behalf of government bodies:
Investigation bodies;
investigator (if there is a prosecutor’s sanction);
prosecutor;
arbitration court.
Conducting a mandatory audit does not depend on the will and desire of an economic entity. Evasion and obstruction of a mandatory audit are punishable administratively.
The contract for conducting a mandatory audit refers to contracts for the provision of services for a fee (clause 2 of Article 779 of the Civil Code of the Russian Federation). The essential terms of the contract for an audit, without which the contract is not considered concluded, are its subject and term.
The subject of the contract for a statutory audit is the audit firm's verification of the accounting and financial (accounting) statements of the customer organization, as well as the creation and transfer to it of the result of the audit (audit report).
The term of the contract is the period of time during which the audit firm must fulfill its obligations.
A company that needs to undergo a mandatory audit must submit an audit report as part of its financial statements (Clause 2, Article 13 of Federal Law No. 129-FZ, PBU 4/99).
Mandatory audit for LLC
Companies whose activities affect the interests of many third parties or those that have sufficiently high financial performance must undergo a mandatory audit. These criteria are established by legislation on auditing activities and are sometimes changed in terms of increasing the threshold values of revenue and balance sheet currency.Requirements for LLCs are divided into two groups: by type of activity and other similar characteristics and by financial indicators. Based on these characteristics, LLCs can be identified that are subject to mandatory audit. Joint stock companies in the form of PJSC, whose shares are distributed by public subscription, are checked in any case, regardless of compliance with other criteria.
The law establishes the following groups of limited liability companies for which an audit of annual reports is mandatory:
1. By type of activity - audits are required to be carried out by banks, insurance companies, pension funds, holding companies that prepare consolidated statements for the holding and publish them, companies whose bonds are traded on the organized securities market.
2. In terms of financial indicators, these requirements apply to enterprises with a revenue volume exceeding 400 million rubles, as well as if the balance sheet asset currency exceeds 60 million rubles.
If a limited liability company falls under these criteria, the requirements for conducting an audit of its annual financial statements become mandatory. Compared to last year, nothing has changed in these criteria; no new subjects or requirements have appeared.
Goals and objectives
According to the new standards, the goals and objectives of the mandatory audit will be not only standard verification of the reliability of financial statements and identification of errors that arise during accounting, but also business analysis. The first two tasks remain in full and are somewhat expanded, so the responsibility to check the work of internal auditors also falls on the shoulders of external auditors.
The task of business analysis is to identify risks, factors that cause obstacles to the development of the company’s activities, and develop recommendations for such changes in financial and economic activities that will help eliminate these risks.
Despite the fact that the conclusion is subject to mandatory publication starting this year, its business part must be carried out as correctly and balanced as possible; incorrect interpretation of certain facts of economic life must not be allowed.
The legislation has changed somewhat, taking into account the introduction of international rules and standards for conducting audits. In addition to the basic laws, mandatory audit according to new standards is regulated by Order of the Ministry of Finance No. 192n. He introduced 30 international auditing standards into force.
Also, a little later, Order No. 203n was adopted, which approved 18 more standards.
Among the most significant changes:
Introduction of phased audit principles;
introduction of the concept of audit evidence;
changing the form of the conclusion, instead of a standard report, an extended document is offered with an analysis of the organization’s activities, business risks and other issues;
preparation of a modified report;
The audit report performed for organizations for which a statutory audit is required must be published.
With the introduction of new standards, the responsibility of audit organizations has increased, and competition will also increase, since the publication of reports will give everyone the opportunity to become familiar with the quality of the work of auditors before concluding contracts.
The repeal of audit secrecy provisions will also have a major impact on the work of auditors. So far this law has only been adopted in the first reading. According to it, employees of audit companies will be required to report so-called “strange” client transactions to financial monitoring authorities.
Changes in cost
The new standards have significantly increased the labor intensity of the work of reporting specialists. Seriously changed requirements and the need to fill out additional tables increased the labor costs of specialists by 30-40%, and the price for these services should have increased proportionally.
But if an agreement to conduct an inspection is concluded, it can be carried out according to the old rules, which means its cost will not increase. But the audit of financial and economic activities will be carried out according to new rules.
In any case, the cost of the auditor’s services must be approved by the company’s participants, therefore, when the issue of a mandatory audit is brought to a meeting of participants, the price must be determined.
Examination
The audit and its essence have not undergone any changes. As a standard, the correctness of accounting is checked on the basis of documents from a certain sample; a complete audit is not carried out. But the volume of information provided has increased significantly, and hence the workload on the accountant.
In addition, the need to analyze the business forces the management of the enterprise to take part in the audit, from which comments on certain risks in the activity will be required. The standards impose on the auditors themselves the responsibility to inform management about shortcomings in the operation of internal audit systems.
The auditor must be determined at a meeting of participants. He begins checking as soon as the reports are ready, but before they are submitted. Thus, the main work for the auditor will be in March – for financial reporting, and in June – for tax reporting.
Taking into account the significant complexity of the requirements, it is better not to take risks and start checking as early as possible; there is a high risk of not having time to prepare a report, which can lead to various sanctions. Therefore, taking into account the rules on the phasing of the audit, the audit can be carried out quarterly, thus, there will be no need to rush through complex work.
In addition, conducting a phased audit will give accountants and financiers the opportunity to benefit from consultations with auditors on controversial issues of tax legislation and accounting throughout the year.
The result of the audit will be the drawing up of a conclusion that is significantly different from previously accepted forms. A collection of recommended forms of opinions has been approved by the Ministry of Finance; it contains recommendations for ordinary and special opinions that are formed based on the results of an audit of consolidated statements.
Sanctions and fines
Can an organization be punished for failing to conduct a mandatory audit? Yes, but sanctions will not follow directly. First of all, she will be denied acceptance of the annual financial statements. Such failure leads to the imposition of administrative responsibility on her.
A gross violation of accounting rules may also be established, which will lead to an administrative fine of up to 20,000 rubles. Small fines may be imposed for failure to provide a conclusion along with reporting and statistical authorities. Compared to previous periods, almost nothing has changed, with the exception of the requirements for the inclusion of data on the mandatory audit in the Unified State Register in accordance with Law 129-FZ and the requirements for the mandatory publication of audit results.
Failure to comply with this requirement may become the basis for administrative liability; the manager may be disqualified or subject to a fine of up to 50,000 rubles (clauses 6, 7, 8 of Article 14.2 of the Administrative Code).
The sanctions imposed on the auditors themselves have become more stringent. For unreliable conclusions, they may be subject to sanctions in accordance with the Code of Administrative Offenses, and it is also expected to introduce criminal liability if the preparation of a poor-quality report led to significant losses. The law on criminal liability is still under consideration.
Changes in the inspection procedure, on the one hand, are positive, increasing the transparency of enterprises and the trust of investors and partners in them, on the other hand, the disclosure of additional information, which is no longer a tax secret, can lead to an increase in the cost of bank loans due to the publicity of some risks. But ultimately, analyzing documentation under the new rules should benefit business.
Mandatory audit of the enterprise
A statutory audit of an organization is a procedure for confirming the reliability of annual financial statements, which must be carried out by a number of organizations or enterprises without fail by force of law. The list of those organizations that are subject to mandatory audit is set out in Article 5 of Federal Law N 307-FZ “On Auditing Activities” (hereinafter referred to as Law 307-FZ).The criteria for classifying an organization as subject to mandatory audit depend either on the organizational and legal form, or on the type or characteristics of the activity, or on financial indicators. Moreover, in the first two cases, financial indicators such as revenue or balance sheet currency do not matter.
Based on their organizational and legal form, any joint stock companies, as well as state or municipal enterprises, are subject to mandatory audit. At the same time, state-owned enterprises take into account the specific financial indicators that are described below.
Based on the type of activity, insurance companies, clearing companies, professional participants in the securities market, credit organizations, credit history bureaus, both commodity and stock exchanges, mutual insurance companies, non-state pension funds, investment funds and their management companies are subject to mandatory audit of the organization.
Due to the nature of their activities, organizations are subject to mandatory auditing of securities that are admitted to trading on the organized securities market, as well as those that publish and/or provide summary (consolidated) statements.
As for financial indicators, the current version of Law 307-FZ establishes criteria according to which any enterprises (organizations) are subject to mandatory audit. Organizations whose revenue exceeds 400 million rubles or whose balance sheet exceeds 60 million rubles are subject to mandatory audit. Both the volume of revenue and the balance sheet currency are determined according to the financial statements. Accordingly, the revenue indicator is the value calculated minus VAT.
In addition, you should pay attention to the fact that, in accordance with the current edition, determining whether an organization should be subject to a mandatory audit should be based on reporting data for the year preceding the audit. In other words, if in the previous year the organization met the above criteria, then it is subject to audit in the current year, regardless of the current year’s indicators (even if the current year’s revenue is less than 400 million rubles, and the balance sheet currency is less than 60 million rubles), and the indicators of the current year will affect the decision on the audit in the next year (subparagraph 4 of paragraph 1 of Article 5 of Law No. 307-FZ).
In addition, an audit is mandatory in other cases provided for by law. For example, organizers and operators of lotteries (this is indicated in Law No. 138-FZ), organizers of gambling (Law No. 244-FZ), self-regulatory organizations (Law No. 315-FZ); legal entities participating in the savings-mortgage system (Law No. 117-FZ), non-profit organizations whose value of property constituting the endowment capital exceeds 20 million rubles at the end of the reporting year (Law No. 275-FZ), the organization is the recipient of income from endowment capital in the amount of more than 5 million rubles (Law No. 275-FZ), structural divisions of foreign non-profit organizations (Law No. 7-FZ), developer organizations raising funds from participants in shared construction for the construction of apartment buildings and (or) other real estate (Law No. 214-FZ).
A feature of the mandatory audit of municipal and state unitary enterprises, as well as enterprises whose share of state ownership in the authorized capital is at least 25 percent, or state-owned companies and corporations, is that the audit of these enterprises is carried out by decision of the owner through an open competition.
It should also be noted that the mandatory audit of unitary enterprises is specified in Article 26 of Federal Law No. 161-FZ “On State and Municipal Unitary Enterprises”. Which determines that the reporting of such enterprises is subject to mandatory annual audits in cases established by the owner.
Cases of mandatory audit
A mandatory audit of financial statements is necessary for many organizations that:The volume of revenue from the mandatory audit of the company is more than 400 million rubles;
a mandatory audit is carried out if the amount of assets on the balance sheet as of the end of the year preceding the reporting year exceeds 60 million rubles;
if there is an organizational, legal form of JSC, PJSC, CJSC (joint stock company);
A statutory audit is carried out in cases where it is mandatory in accordance with Law No. 307-FZ “On Auditing Activities” and Law No. 208-FZ “On Consolidated Financial Reporting”, which specify all other criteria.
According to the requirements of the new international auditing standards, the number of audit procedures will increase, and new working documents, forms and tables will need to be filled out. It is clear that all this will increase the labor intensity of the audit by 40-50%, and the cost of audit contracts will increase accordingly.
Instead of the usual form of an auditor's report with standard text, for all new statutory audit contracts a more cumbersome audit report will be drawn up in accordance with ISAs.
At the same time, the new form of the auditor's report will contain an assessment of the company's financial statements and will provide expanded information for accounting, for external and internal interested users: the board of directors, shareholders, and others, that is, for a wider range of people making decisions about business development.
The new ISA requirements will have a serious impact on the companies being audited. The volume of data required to analyze the activities of audited companies will increase sharply, and the degree of publicity of audit results will also increase.
It is reasonable to expect improvements in audit quality and business risk assessment, but a significant increase in audit costs is also expected.
An audit organization has the right to conduct an audit and draw up an audit report in accordance with auditing standards according to the old rules that were in force before the entry into force of the ISA, approved by Order of the Ministry of Finance No. 207n).
Audit contracts already apply the new ISA standards when auditing for any audit period.
With the introduction of new ISAs, it is important to take the determination of the deadlines for auditing the financial statements of organizations seriously. It is better not to schedule an audit for the last days in March and July before submitting accounting or tax reports, when the accounting department is already very busy.
A statutory audit of a company for the year will be more effective if it is carried out in two or more stages during the year, while the costs of the statutory audit will be uniform throughout the reporting year.
Conducting a mandatory audit of annual reporting by auditors will help to timely identify and eliminate inconsistencies and correct errors in tax (accounting) accounting.
A mandatory audit of an organization or enterprise helps the chief accountant avoid gross accounting errors. This is especially important in view of the recent strengthening of administrative liability for violations in the field of accounting and presentation of financial statements.
Subjects of mandatory audit
Subjects of mandatory audit must enter into contracts and not take any actions (in our opinion, simple inaction is also included here) in order to evade the mandatory audit (clause 5.1). The range of subjects of the annual mandatory audit is determined by Decree of the Government of the Russian Federation N 1355; in essence, these are all enterprises and organizations of high economic or social significance.Reasons for the need for a mandatory audit:
1. Subjects of mandatory audit, as a rule, work with funds of individuals and/or legal entities - these are banks, insurance organizations, non-state pension funds, open joint-stock companies. Employees of these organizations do not always know how to competently read financial statements, analyze financial indicators, and draw adequate conclusions. In the case of an audit of such economic entities, the auditor acts as an intermediary between the economic entity being audited and someone interested in the activities of the economic entity, but not a fully qualified user of the financial statements;
2. By establishing the obligation to confirm the reporting of enterprises that have a large volume of revenue from sales and the size of their property, the state thus organizes control over the activities of these enterprises as large taxpayers.
In accordance with Art. 7 “Mandatory audit” of the Law “On Auditing Activities” No. 119-FZ, the accounting (financial) statements of economic entities are subject to mandatory audit according to the following criteria (system of indicators) of activity:
1. Organizational and legal form of an economic entity. Economic entities that have the organizational and legal form of an open joint stock company are subject to mandatory annual audits.
2. Type of activity of the economic entity.
By type of activity, the following are subject to mandatory annual audit:
Banks and other credit institutions;
insurance organizations and mutual insurance societies;
commodity and stock exchanges;
investment institutions (investment and check investment funds, holding companies);
extra-budgetary funds, the sources of funds of which are mandatory contributions provided for by the legislation of the Russian Federation, made by legal entities and individuals;
charitable and other (non-investment) funds, the sources of which are voluntary contributions from legal entities and individuals;
other economic entities whose mandatory annual audit by type of activity is provided for by federal laws, decrees of the President of the Russian Federation and decrees of the Government of the Russian Federation.
3. Financial performance indicators of an economic entity. Economic entities (with the exception of those wholly in state or municipal ownership) are subject to mandatory annual audits if they have at least one of the following financial indicators of their activities:
The volume of revenue from the sale of products (works, services) for the year exceeds the minimum wage established by the legislation of the Russian Federation by 500 thousand times;
the amount of balance sheet assets exceeding at the end of the reporting year 200 thousand times the minimum wage established by the legislation of the Russian Federation.
If the organization is a state unitary enterprise, a municipal unitary enterprise based on the right of economic management, then financial indicators may be lowered by the law of the subject of the Russian Federation.
To determine these financial indicators, the minimum wage established by the legislation of the Russian Federation is taken on an average annual basis for the reporting year.
Statutory audits are carried out exclusively by audit organizations.
When conducting a mandatory audit in organizations in whose authorized (share) capital the share of state property or property of a constituent entity of the Russian Federation is at least 25 percent, the conclusion of contracts for the provision of audit services must be carried out based on the results of an open competition. The procedure for holding such competitions is approved by the Government of the Russian Federation, unless otherwise established by federal law.
An audit of audited entities whose financial (accounting) documentation contains information constituting a state secret is carried out in accordance with the legislation of the Russian Federation.
In addition, mandatory audits can be carried out on behalf of investigative bodies, investigators, prosecutors, courts and arbitration courts.
Subjects subject to mandatory audit:
– opening joint stock companies;
– investment funds;
– insurance organizations and mutual insurance societies;
– off-budget funds;
– commodity and stock exchanges;
– banks and other credit organizations;
– charitable and other (non-investment) funds;
– other economic entities (except for those in state or municipal ownership) with at least one of the following financial indicators.
Currently, the legislation contains only two types of liability to which enterprises and organizations can be held for the absence of an audit report as part of the annual financial statements.
Administrative liability (in accordance with Article 15.6 of the Code of Administrative Offences).
Tax liability (Article 126 of the Tax Code of the Russian Federation) - for failure to submit documents provided for by the Tax Code of the Russian Federation and other legislative acts on taxes and fees within the prescribed period - in the amount of 50 rubles. for each unrepresented. document.
According to Part 2 of Art. 7 of the Federal Law “On Auditing Activities”, mandatory audits are carried out by audit organizations. When conducting a mandatory audit in organizations in whose authorized (share) capital the share of state property or property of a constituent entity of the Russian Federation is at least 25 percent, the conclusion of contracts for the provision of audit services must be carried out based on the results of an open competition. The procedure for holding such competitions is approved by the Government of the Russian Federation, unless otherwise established by federal law.
Thus, an individual auditor is not entitled to conduct a statutory audit.
