After the collapse of the USSR, a market system began to develop rapidly in Russia, so audit gradually began to be used as an aspect of economic control. With its help, it is possible to achieve independent verification of financial statements and accounting for a variety of enterprises and individual entrepreneurs, using completely different methods and techniques. However, in order to prevent the knowledge gained from falling into the wrong hands, an institute of audit secrecy appeared, which does not allow auditors to disclose to anyone the information obtained as a result of the audit.
History reference
Before proceeding to consider the question of what constitutes an audit secret, one should first understand what led to its appearance in the historical aspect.
By themselves, auditors in the modern sense of the word first appeared only in England in the 19th century. The date of the appearance of this institute is considered to be precisely 1844, although people used to check the financial activities of enterprises even earlier. But it was precisely this year that a law on joint-stock companies was issued, which for the first time in history legally enshrined the fact that annually a report should be submitted to the board of the enterprise, which was checked by an independent specialist, namely, an auditor.
Gradually, the institute of auditing began to grow, so now there are several thousand small firms providing such services in Russia. All of them must act, relying primarily on secrecy. Audit confidentiality is the duty of auditors not to divulge information obtained during the audit, except when it is required to do so by law.
The activities of the auditor
As mentioned above, one of the features of the activities of auditors is a ban on violation of audit secrets. However, in order to better understand what exactly can be included in the list of information received, it is necessary to understand what kind of services an auditor can provide to an enterprise. First of all, auditors conduct an independent audit of the financial statements of the person who ordered the audit in order to get an idea of whether the documents are really reliable. But in addition to this, the auditor can also provide related services that are directly related to his occupation. These include:
- Consulting on accounting, accounting, preparation of financial statements.
- Tax advice, preparation of tax returns and other functions in the field of taxation.
- Analysis of the enterprise, and not only its financial and economic side, but also managerial.
Of course, this is far from all aspects of the activities of auditors, but the main thing in this matter can be understood - they can be involved in any situation that is directly related to finances and enterprise management. That is why in the event of disclosure of information constituting an audit secret, the punishment of the guilty person will be very serious, because such information can seriously damage the organization.
The legislative framework
There is a special law to resolve legal issues related to auditing, or more precisely, audit secrecy. It was adopted on December 30, 2008 under number No. 307-FZ "On Auditing Activities". Particular attention to understanding the issue should be paid precisely to Section 9 of the Law - it is there that it is explained in detail what exactly is meant by auditory secrecy, and it is listed what exactly is included in it.It also spelled out the possibility of claiming damages from an auditor who violated a secret by divulging the information in the order that is directly specified in the legislation of Russia.
The concept
Now let's move on to the notion of audit secrecy. It is directly enshrined in law and implies any information and documents that were either received or independently compiled by auditors working with the organization under a labor agreement. And this does not mean at all that they should not verbally transmit any information - employees also undertake to prevent the transfer of any securities to third parties from their own hands, unless there is written permission from the IP or the organization that provided the audit service.
What is included in audit secrecy?
As mentioned earlier, the concept of secrecy includes any information that was obtained by the verifier as a result of the implementation of their activities. Usually, all information received is displayed in the following documents:
- The audit program, as well as documents that contain the audit plan. It is also impossible to divulge any notes that contain the nature and scope of the audit activities.
- Any information on research of accounting systems.
- Copies of constituent and other legal documents that the company has.
- Studies of the economic nature of the operations performed, as well as the trends of the company.
- Correspondence with experts who needed to be involved for a full audit.
In addition, the prohibition of the disclosure of any documents that contain information about the current economic condition of the company.
An exception
At first glance, it might seem that absolutely all the information owned by the audit company falls under the concept. But in fact, this is not so, since the law expressly states that there is information that does not constitute an audit secret. These include:
- Any information that was previously disclosed by the company itself or that which was made public with its direct consent.
- Information that an audit contract was directly concluded with the organization, as well as information about payment for audit services.
As you can see, there is not so much open information, most fall under the definition of secrecy, since falling into the wrong hands of such important information can bring huge losses to the organization being audited.
Punishment
Preserving audit secrets is a mandatory requirement for any reviewer, therefore, if there really was a leak of information due to disclosure, then on the basis of Section 9, Section 6 of the Federal Law "On Auditing Activities", the injured party may demand from the auditors who provided services to it to compensate losses in the manner prescribed by the laws of the Russian Federation.
Types of Responsibility
Violation of audit secrecy is punishable, however, the types of liability for such an offense may be completely different:
- Civil liability is imposed when it comes to causing harm - often materially. In order to impose this type of liability, the injured person will need to apply to the arbitration court. If the judge makes a positive decision, then the entire amount of the damage caused will be recovered from the auditor, and in addition to this a fine. Almost always, this responsibility is considered when accounting registers have been disclosed.
- Administrative liability may also be imposed on the perpetrator. Quite often, in the form of punishment, a fine is imposed, a warrant or withdrawal from the organization of auditors for a period of 180 days. When an auditor is expelled from a self-regulatory company, he simply cannot carry out his activities in the Russian Federation.
- The most severe punishment is criminal liability.She is appointed under article 202 of the Criminal Code. Usually, a fine of 100 to 500 thousand rubles is imposed as a punishment, and as an alternative measure, imprisonment for up to 3 years. An auditor who has exceeded his authority in order to obtain personal gain is punished with this type of responsibility as standard, and his actions caused great harm to the company.
Information output
As you know, in some cases, tax authorities may indeed require auditors to divulge the secret of their activities. However, it should be remembered that they can receive far from all the information, moreover, this requires a preliminary court decision. Only after that, documents can be transferred to the state authorities of the country in cases where this is directly stated in the legislation of the Russian Federation.
Cancellation of secrecy
In 2016, the authorities seriously started talking about introducing a bill to the State Duma on the abolition of audit secrets. In fact, it is assumed that as a result of this cancellation, auditors will be required to transfer to the Federal Tax Service all the data that they received as a result of the audit. It’s immediately clear that such an initiative will seriously undermine the trust of organizations in audit services, since in some way they will become freelance employees of the Central Bank, the Federal Tax Service and law enforcement agencies immediately. By the way, such actions are completely contrary to the current world practice of the described institution, since the auditors will no longer be fully independent, and therefore will not be able to guarantee the appropriate level of verification, which is required by existing standards.
Result of the initiative
When in 2017 the bill on the cancellation of secrets was held in the State Duma in the first reading, the financial world of Russia stood still. It was believed that it would finally become operational from January 1, 2018, however, the RF Ministry of Finance expressed its word here. They directly pointed out that the law can cause serious risks in the economic sector, which subsequently simply lead to a collapse, as businessmen, especially those engaged in small and medium-sized businesses, simply refuse to accept the services of auditors, because the information will become open. Now the bill is in a frozen state, while the authorities are trying to seriously modify it.
Conclusion
Audit secrecy is one of the fundamental activities of auditors, as it provides enterprises with confidentiality and the absence of leakage of personal information. Any attempts to destroy it will only lead to further lack of demand for auditors, since organizations will not be able to trust the auditors. An independent assessment, which is given by inspectors, will also be called into question, since in some way they can be influenced by state bodies. So audit secrecy is a very powerful argument for businessmen who want to check their firms.