Criteria for mandatory audit for LLC. Audit of financial statements Ministry of Finance of the Russian Federation

The regulation of Russian business activities is increasingly approaching, which is associated with both the influx of foreign investment and the entry of Russian companies into foreign capital markets.

For effective interaction with Russian and foreign partners in Russia for 2020 international auditing standards were introduced, which seriously influenced the current practice of conducting inspections.

The audit requirements for limited liability companies do not apply to all companies, but only to legal entities, falling under certain criteria. This is due to the fact that most LLCs belonging to small and medium-sized businesses have small financial turnover, do not list their shares or bonds on the securities market by publishing a prospectus, and do not attract money from individuals. Consequently, there is no need for additional verification of the reliability of their reporting.

Main criteria for verification

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 audit legislation and are sometimes changed in terms of increasing the thresholds for revenue and.

The requirements for an LLC 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.

Subjects

The law establishes the following groups of limited liability companies for which an audit of annual reporting 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. According to financial indicators These requirements apply to enterprises with revenue exceeding 400 million rubles, as well as if the currency of the balance sheet asset 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.

According to the new goals and objectives of the mandatory audit in 2020, there will be not only standard verification of the accuracy of financial statements and identification of errors arising 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 completed as correct and balanced as possible, one should not allow an incorrect interpretation of certain facts of economic life.

Legislation

In addition to basic laws, mandatory auditing is regulated by the Order of the Ministry of Finance No. 192n, issued on October 24, 2016. They put it into force 30 international auditing standards.

Also, a little later, Order No. 203n was adopted, which approved 18 more standards. Among 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 work of auditors was seriously influenced by repeal of audit secrecy provisions. According to it, employees of audit companies are 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 for 30-40% , the price for these services should have increased proportionally.

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.

Check procedure

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 for business analysis forces the management of the enterprise to take part in the inspection, from which comments will be required on certain risks in the activity. 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 on the auditor will be for March– for financial statements, for June- for the tax office.

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.

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 check will be drawing up a conclusion, seriously 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.

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.

It may also be established that there has been a gross violation of the rules for maintaining accounting records, which will lead to an administrative fine in the amount 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 be grounds for administrative liability; the manager may be disqualified or subject to a fine. up to 50,000 rubles(Clause 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 in the end analysis of documentation under the new rules should benefit the business.

Why is an audit needed? Details are in this video.

Our state strives for European indicators in terms of financial reporting. Therefore, another step towards increasing its publicity and transparency was the introduction of international auditing standards (ISAs) in the Russian Federation on January 1, 2017 (Orders of the Ministry of Finance of Russia dated October 24, 2016 N 192n, dated November 9, 2016 No. 207n).

For audit companies this means the following changes:

1. increase in the number of audit procedures
2. increase in the volume of data required to analyze the activities of audited companies
3. new quality standards for mandatory audits
4. new standards of information in the auditor's report
5. introduction of a modified opinion in the conclusion

For audited companies this means:

Pros:	Minuses:
improving quality in business risk assessment a conclusion that will contain not only an assessment of the company’s financial statements, but also pay attention to significant risks for the business, etc. expanded report information for accounting and for external and internal interested users: shareholders, board of directors, etc.	increase in the cost of mandatory audit since 2017. Extending the deadline for providing an audit report increase in the cost of bank loans for companies (due to an increase in the level of transparency of the company’s activities and reflection of all identified business risks in the audit report)

Information on taxes, fines, income and expenses, and headcount will appear on the Federal Tax Service website

Information about economic entities is becoming more open. From June 1, 2016, tax secrets are no longer (amendments to Article 102 of the Tax Code of the Russian Federation were introduced by Federal Law No. 134-FZ dated May 1, 2016):

• information on the average number of employees of the organization;
• the amount of taxes and fees paid by the organization, with the exception of taxes paid when importing goods into the EAEU and by tax agents;
• amounts of income and expenses according to financial statements.

From July 1, 2017, it is planned to begin posting this information in the public domain on the official website of the Federal Tax Service on the Internet.

In addition, information on the amounts of arrears, arrears of penalties and fines, applied special regimes and the participation of taxpayers in consolidated groups will be published on the Federal Tax Service website.

Thanks to the appearance of additional information about legal entities in the public domain, taxpayers have an additional opportunity to assess the risks when choosing a counterparty, and there will also be an additional argument to prove to the Federal Tax Service in the event of claims that due diligence was exercised when concluding a transaction.

Mandatory audit - A complex approach

Information about mandatory audit is posted on Fedresurs

From October 1, 2016 in Russia, the results of the mandatory audit of accounting (financial) statements become public. Corresponding amendments were made to the Federal Law “On Auditing Activities”. Organizations subject to mandatory audit must now enter information about the audit results into the Unified Federal Register of Information on the Facts of Activities of Legal Entities (hereinafter referred to as the EFRS www.fedresurs.ru) within 3 business days after receiving the audit report. Such information includes:

• name, INN, OGRN, SNILS of the audited entity;
• name (full name), INN, OGRN (OGRNIP), SNILS of the auditing organization (individual auditor);
• a list of accounting (financial) statements that were audited;
• the period of preparation of the accounting (financial) statements in respect of which the audit was carried out;
• date of the auditor's report;
• the opinion of the auditing organization (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.

Violation by an official of the audited organization of the obligation to disclose such information may entail an administrative fine provided for in parts 6-8 of Article 14.25 of the Code of Administrative Offenses of the Russian Federation, up to 50 thousand rubles or disqualification for a period of one to three years.

MANDATORY AUDIT - A COMPLEX APPROACH

In addition to standard mandatory audit procedures aimed at confirming accounting (financial) statements, we check taxes, the correctness of calculation of the taxable base and the correct completion of declarations.

Calculate the cost

From 2018, audit secrecy will likely be abolished

The corresponding Draft Law No. 96436-7 on amendments to Articles 82 and 93.1 of the Tax Code of the Russian Federation has already been submitted to the State Duma.

We would like to remind you that, according to the current version of Article 82 of the Tax Code of the Russian Federation, when exercising tax control, the collection, storage, use and dissemination of information about a taxpayer obtained in violation of the requirement to ensure the confidentiality of information that constitutes the professional secret of other persons, in particular attorney-client secret, audit secret, is not allowed.

However, from January 1, 2018, it is proposed to exclude audit secrecy from this article. In addition, it is proposed to establish the right of officials of the Federal Tax Service to request from auditors documents (information) received by them about the taxpayer during audit activities and in the provision of other audit-related services. The requested documents must be related to the calculation and payment (withholding, transfer) of tax (fee) and can be requested from auditors if the taxpayer has not submitted them to the Federal Tax Service on his own.

So, the area of ​​accounting and reporting, as well as tax obligations of companies, is becoming more transparent.

To avoid ending up with an audit report containing numerous caveats by March 2018 when closing the 2017 financial year, we advise companies to:

1. Order an audit at the beginning of the year (in the first, second quarter).

   This way, you can eliminate the repetition of errors in your reports in subsequent quarters and reduce the burden on accounting at the end of the year.

2. Break down the audit into quarters.

   Its cost will be evenly distributed throughout the year and will not require a one-time diversion of funds from the company’s economic activities.

3. Do not treat the audit as a formal procedure only for submitting financial statements.

   Why deprive yourself of the opportunity to receive quality feedback on the state of affairs of the company.

4. Take the choice of an audit company seriously.

   The market is saturated with many offers, both from individuals and from various companies. Read here what you need to pay attention to.

5. Do not forget that for the absence of an audit report or failure to enter the relevant information into the Unified Federal Reserve System, you can receive a large fine.

What will you get when collaborating with Pravovest Audit:

1. As part of the audit agreement, clients receive bonuses in the form of useful services during the reporting year
2. assistance from tax lawyers and attorneys as additional guarantees - within 3 years after the audit.
3. when selecting auditors for 2017 in advance, the company fixes the price offer in rubles at the current cost, with services provided until the end of March 2018.

Additional bonuses:

1. from the moment the agreement is concluded, it is possible to directly consult with auditors and tax lawyers throughout the year and until March 31, 2018;
2. VIP-seminars in the “Round table” format. Practice of application of legislation, discussion of recent changes. Professional accountants receive a 10 hour IPB certificate for each visit;
3. notes on the results of the seminars;
4. at the Customer's option, additional legal examination of standard contracts, constituent and other documents can be carried out; an assessment of the prospects for litigation is given; other necessary actions have been taken to eliminate economic risks in the organization’s activities;
5. analysis of the tax burden and the likelihood of a tax audit using the methods of the Federal Tax Service, determining the size of possible tax risks, reserves and ways to reduce costs;
6. 1C database audit.

The Financial Department presented a list of conditions for mandatory audit and a list of organizations in its Information Notice

01.02.2018

2017 has ended, accountants are preparing annual reports. As we know, many organizations will be required to conduct a mandatory audit of their financial statements and consolidated statements.

The Russian Ministry of Finance has put together information about which companies must conduct a mandatory audit of their accounting (financial) statements for 2017. All information is collected and presented in a form that clearly indicates: the type of company, its activities, type of reporting and regulations.

Are ordinary LLCs required to conduct an audit? Yes, under certain conditions:

1) Volume of revenue from product sales(sales of goods, performance of work, provision of services) of organizations (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 year exceeds 400 million rubles.

2) The amount of assets on the balance sheet as of the end of the previous reporting year exceeds 60 million rubles.

If your company meets one of the conditions presented above, then you need to conduct a mandatory audit. The annual financial statements will be subject to audit. Reason: Federal Law of December 30, 2008 No. 307-FZ, Art. 5, part 1, clause 4. Either an audit organization or an individual auditor has the right to conduct an audit.

A mandatory audit is carried out by the company every year. Independent audit firms with the appropriate license act as auditors. The result of the audit is the inspector’s conclusion about the correctness of the reflection of the facts of economic and financial activities. Not all companies are required to undergo mandatory audits. So, the following should be checked annually:

1. joint stock companies;
2. credit institutions;
3. insurance companies;
4. investment funds;
5. companies whose securities are traded on the stock exchange and others.

Other enterprises must also undergo mandatory inspection if their activities exceed established financial indicators. Criteria for mandatory audit in 2018:

• revenue more than 400 million rubles, excluding VAT;
• The company's assets at the end of the year exceed 60 million rubles.

The criteria obliging companies to carry out inspections are established in paragraph 1 of Art. 5 of Law No. 307-FZ. If, based on the company's performance, at least one of these requirements is met, it must conduct an audit. Information is taken for the previous year, i.e. If, after the end of the year, the company’s activities met one of the requirements, it must undergo a mandatory audit next year.

As you can see, there are no special requirements regulating mandatory audit for LLCs. If a company's assets or revenue exceed established standards, LLCs must be audited annually. The obligation of an annual audit for an LLC may be established by the charter or by a decision of the company's participants. But in both cases we are talking about an initiative audit.

There are also requirements for how the audit should be carried out. The audit must meet the following criteria:

• The audit is carried out across all activities of the organization. All assets, liabilities, and inventories of the company are assessed. Accounting and tax reporting are analyzed. The authenticity of settlements with founders, regulatory authorities, and budgetary funds is checked.
• The conclusion of the inspection company must be definite. At the end of the audit, the auditor must make a clear verdict on whether the information presented in the financial statements is reliable or not.
• The audit is carried out in compliance with all standards. Previously, audit rules were regulated by Russian legislation. However, since 2017, everything has changed and the activities of audit firms must already meet international standards.

​An audit is a very labor-intensive process, so a detailed plan is drawn up immediately before the inspection. First, information about the enterprise where it will take place is studied. Based on this information, strategy and tactics are determined, an audit program is developed, a schedule and plan are drawn up. Everything is agreed upon with the client.

Then the verification itself is carried out. All financial, accounting and statutory documents are studied. The data obtained is analyzed and assessed for their compliance with Russian legislation. Identified deficiencies are recorded, and the auditor proposes measures to eliminate them.

The final conclusions are presented to the founders of the organization in the form of an audit report. There are two types of conclusion: unconditionally positive, such a decision is made if no violations are found during the inspection, and modified. The latter in turn is divided into three subtypes:

1. positive with reservations;
2. negative;
3. refusal to express an opinion is issued if documents are incompletely submitted for verification.

Basically, in practice, positive conclusions or opinions with reservations are issued. The other two options account for less than 1% of conclusions.

After receiving the document, the enterprise must submit it to Rosstat. The conclusion is submitted along with the annual balance sheet and other reporting. This must be done within 10 days from the date of its submission to the legal entity, but before the end of the year following the reporting year.

The transition to international requirements has made adjustments to the audit procedure. First of all, this affected the presentation of the auditor’s opinion on the results of the audit. The form of the conclusion has changed, now it has become more informative. In addition to assessing the financial performance of the company, it includes an analysis of the main points that interested the auditor and a listing of possible risks for further activities.

Since 2018, audit secrecy has actually been abolished. Now the Federal Tax Service can receive any documents related to the audit conducted from the audit company. Moreover, according to the new amendments, tax authorities are allowed to disclose the information received.

No checks have been carried out, what will happen?

Ignoring the law entails the imposition of penalties. Both the organization itself and its leader can be fined. Supervisory authorities can issue both fines.

In the case of a mandatory audit, the following is considered a violation:

• Failure to provide information to statistical authorities. There is no need to submit a conclusion to the tax office. The fine for the manager will be from 300 to 500 rubles. The company will pay 3,000 - 5,000 rubles;
• Absence or untimely entry of information into the state register about the activities of organizations. The company may be subject to sanctions in the amount of 5,000 to 50,000 rubles;
• Violation of the storage period for audit results. An on-site tax audit may request audit documents for the past 5 years. This is the period established for storing audit reports by law. If there are no documents, the organization will be fined 5,000 - 10,000 rubles.

All LLCs subject to legal requirements must undergo mandatory verification, otherwise they will have to pay large fines. It is also important to monitor the deadlines for submitting audit reports to statistical authorities; violation of them will also entail the imposition of penalties.

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 of December 30, 2008). The audit can be carried out either voluntary or mandatory. 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 tell you about the criteria for conducting a mandatory audit in 2017 in our consultation.

When is an audit an obligation?

The criteria for mandatory audit in 2017 are contained in Art. 5 of the Federal Law of December 30, 2008 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 2017 criteria for LLCs and organizations of other forms. If at least one of the listed conditions is present, an audit is mandatory.

Statutory audit for 2017: criteria

Criterion	Condition
Organizational and legal form or type of activity	- Joint-Stock Company; - credit organisation; — credit history bureau; — professional participant of the RCB; — insurance organization; — clearing organization; — mutual insurance company; — trade organizer; — non-state pension or other fund; — joint-stock investment fund; - management company of a joint-stock investment fund, mutual investment fund or non-state pension fund (except for state extra-budgetary funds)
Circulation of securities	admitted to organized trading
Revenue from sales of products (performance of work, provision of services) for 2016*	exceeds 400 million rubles
The amount of assets of the organization as of December 31, 2016 according to the balance sheet*	exceeds 60 million rubles
Presentation (disclosure) of annual summary (consolidated) statements by the organization**	presents or discloses annual summary (consolidated) accounting (financial) statements

* 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.