A mandatory audit is conducted to verify the accounting, financial and tax reporting, as well as relevant documentation of organizations and individual entrepreneurs. Enterprises that received more than 50 million rubles in revenues in a calendar year, and organizations whose balance is registered with a currency exceeding 20 million rubles, are subject to mandatory audit.
The essence of audit
According to the Federal Law of the Russian Federation, audit activity (abbreviated audit) is defined as entrepreneurial, implying verification of reports and documentation of organizations and individual entrepreneurs. In addition, audit organizations offer customers a number of additional services.
The main purpose of this check is to confirm the veracity and reliability of the data specified by the employees of the organization in the reporting documentation. To achieve this goal, employees of the audited entity must provide sufficient evidence to convince the auditor that the accounting is in full compliance with all requirements and standards of Russian law.
Organizations conducting a statutory audit and its other types are commercial. The positive conclusion of their employees about the audited company is an additional recommendation for persons interested in cooperating with him. In a word, a mandatory audit of an organization helps minimize entrepreneurial risk. It is one of the ways to reduce information risk to an acceptable level for individuals based on financial and other types of reporting.
Types of Audit
To date, the classification of audit activity into external and internal audit is the most common in Russian economic theory and practice.
The first is carried out after the conclusion of the contract by audit organizations or individual entrepreneurs to assess the reliability of accounting and financial documentation. An internal audit is conducted by decision of the organization’s management in order to increase the efficiency and productivity of its employees directly by the employees of the enterprise.
External audit, in turn, is divided into 3 groups:
- obligatory audit - its conduct is regulated by federal laws of the Russian Federation;
- initiative - its implementation is based on a decision of the management or founders of the organization;
- audit on special tasks is carried out in separate cases provided for by Russian law.
In addition, audits are classified by their frequency.
Initial - an audit conducted at this enterprise by an audit organization or an independent entrepreneur for the first time.
Periodic - an audit that is repeated for several years in a row, usually annually.
Goals and objectives of the statutory audit
The main goal of the statutory audit is to assess the reliability and legality of the data presented in the accounting records. Based on the main purpose of the statutory audit, its fundamental tasks include:
- assessment of the overall level of accounting;
- assessment of the reliability and legality of the data specified in the documents;
- Assistance to the organization’s management through specific recommendations based on shortcomings and violations;
- checking compliance of tax payments with current state legislation;
- assessment of the growth prospects of the financial reserves of the organization (the so-called forward-looking analysis).
Thus, when conducting the audit, the auditor should form an opinion on the audited company according to such criteria as the general acceptability of the documentation, its validity and completeness, the correctness of the estimates, classifications and divisions, as well as the accuracy in the process of compiling the report and the degree of its disclosure.
Reasons for the mandatory audit
1. The audit as a whole (both mandatory and proactive) is an integral element of the market system.
2. Financial statements - this is an official document, which, if necessary, is addressed by a wide range of people: the organization’s management, its founders and investors (both current and potential), employees, suppliers, customers, etc.
3. The financial statements are not a priori reliable, since the persons making it up can be not only biased, but also interested in its inaccuracy. In addition, the so-called “human” factor can cause the content of erroneous information in it.
4. An independent assessment of the reliability of financial statements in most cases is not possible for a wide range of people. The reason for this is the closed access to certain information and the complexity of the numerous business operations reflected in it.
Features of the mandatory audit
The compulsory audit is entitled to be carried out exclusively by audit organizations, but not by independent entrepreneurs and persons without a legal education.
A mandatory audit in an organization whose authorized capital is more than 25% state owned can be carried out only after placing the relevant order in the manner determined by the Federal Law of the Russian Federation.
An audit of organizations whose reporting documentation contains information that is a state secret is carried out only after obtaining permission to work with such information.
All criteria of a mandatory audit are subject to liability risk insurance in case of violation of clauses of a contract concluded with the audited organization.
Responsibility for failure to conduct a statutory audit
According to Russian law, in the event that a statutory audit has not been performed within the established time frame, the organization bears administrative, civil, and in some cases criminal liability.
For evading the mandatory audit or preventing it from being conducted, the violator is fined equal to the minimum wage of five hundred or a thousandfold!
