Mandatory, Statutory & Legal Audit - ОсОО Бухгалтерия Аудит Инновации

Mandatory, Statutory & Legal Audit

Mandatory audit services are an integral part of financial audit and today belong to the category of the most popular audit services. This is not surprising, because there are a lot of companies that are subject to mandatory audit.

For which companies

In accordance with the legislation, the following organizations are subject to mandatory audit:

  • having the legal form of a joint stock company;
  • issuing securities that are admitted to trading on the stock exchange;
  • presenting and (or) disclosing the annual consolidated (consolidated) accounting (financial) statements;
  • banks and other organizations licensed by the Bank of Kyrgyzstan;
  • insurance organizations;
  • – public companies that have carried out a public offer of securities;
  • – investment funds;
  • – non-state pension funds.

The following are subject to mandatory audit:

  • accounting (financial) statements included in the securities prospectus;
  • consolidated financial statements

If your organization meets at least one of the above criteria, then our company will be glad to provide you with the necessary services. We guarantee individual support for each client at all stages of the provision of services. We will perform the work efficiently, in a timely manner, identify significant risks, provide relevant recommendations and advice.

How often

With regard to the frequency and timing of the mandatory financial audit service, the law establishes that it must be carried out annually. At the same time, the final date for the receipt of the audit report by the enterprise has not been established, except for the cases determined by the supervisory authorities, therefore the date of the audit and the date of the audit report can be determined by the organization independently.

How to audit annual reporting

If your company meets the criteria for a mandatory audit, we recommend that you consider the possibility of conducting an audit of annual reporting (financial audit) in two or even three stages – after the preparation of interim financial statements for 6 and 9 months. Our experience shows that a multi-stage audit allows you to identify deficiencies in the organization’s activities before preparing the annual reports, accordingly, it gives time to make appropriate corrections, get advice, simplify and speed up the audit process of annual reports, reduce the burden on the organization’s employees in the annual reporting period.

What is the purpose

The main objective of the audit is to increase the confidence of users of the accounting (financial) statements that the statements are prepared in all material respects in accordance with the rules for the preparation of financial statements established in the Kyrgyz Republic. This task is accomplished by formulating an opinion by the auditor on the relevant financial statements.

During the audit, the auditor is responsible for ensuring reasonable assurance that the financial statements as a whole do not contain material misstatement, either due to fraud or error.

The result of the audit service is an audit report – an official document intended for users of the financial statements of the audited entity, containing the opinion of the audit organization on the reliability of the financial statements of the audited entity expressed in the established form.

An unmodified or modified opinion on the reliability of the financial statements may be expressed in the audit report. A modified opinion may be expressed in the form of an opinion with reservation, negative opinion, refusal to express an opinion.

The form, content, criteria for issuing an audit opinion, the grounds for including reservations, expressing a negative opinion or refusing to express an opinion are clearly regulated by the law on auditing and audit standards.

If an enterprise receives an unmodified audit report based on the results of the audit, then in specific circumstances it may affect the attractiveness of the organization in the field of business and partnership, as it will provide its users with the opportunity to conclude that the audited entity is in good faith and solvency. For business owners, the presence of an unmodified opinion is a sign that the financial statements are prepared without material irregularities.

The auditor checks the quality of accounting and tax accounting, the correctness of the preparation and preparation of reports, checks for compliance with regulatory enactments the essential operations of the organization’s economic life, taking into account the applicable regulatory framework. According to the results of the audit, the auditor records the identified comments and signals illegal actions in the report. The report also notes significant distortions in the accounting (financial) statements that arose as a result of non-compliance by the company with laws and regulations.

During the audit service, you can count on receiving quality explanations on issues arising during its implementation. The result is:

  • an audit report that you will provide to the relevant supervisory structures and other users;
  • a letter to the management, which is intended for internal use and, we hope, will be useful to the manager, financiers, accountants and other interested parties with the aim of introducing relevant amendments and corrections.

We recommend that you monitor the performance of your company in order to contact the auditors in a timely manner. We urge you to select proven and reliable companies when concluding contracts for the mandatory audit service. Our organization has been engaged in auditing for more than 10 years, we have positive feedback from our customers, many of whom have been cooperating with us for quite some time, because they value the quality, efficiency, individual approach and professionalism of our specialists.

How is an audit conducted

An audit is carried out in accordance with the provisions of the Law on Auditing Activities and in accordance with international audit standards.

Our company has developed, approved and successfully applied audit instructions and regulations. Each audit assignment from the moment of its appearance to the moment of delivery of its result to the customer is supervised and controlled by the assignment manager, the results of the audit assignment are checked by quality controllers. A personal manager is appointed for each task, which solves all organizational issues related to the audit service in the current mode.

In preparation for the audit, we calculate the level of materiality based on the indicators of the audited accounting (financial) statements, taking into account the assessment of the client’s business and the risks identified. We determine the size of the sample in relation to which we will conduct audit procedures, based on the requirements of the legislation on audit activities and taking into account the specifics of the client and the audit engagement.

During the audit, our experts will evaluate the most significant and risky operations of the organization’s economic life, conduct interviews with managers and key employees, analyze the existence of related parties and relations with them, analyze events after the reporting date that may further affect the financial statements.

The audit will affect the significant and significant areas of the enterprise, its internal and external relations, relations with contractors. The auditor will draw his conclusions, including on the basis of inspection of primary documents, information submitted to the tax authorities, accounting reports, financiers and other organizations.

Our company, observing the requirements of the law and clearly following the standards (rules) of the audit, will provide you with a high-quality result of work that will be recognized by all interested parties, useful to management and contractors. We practice an individual approach to customer needs, conducts audit procedures in a high-quality and qualified manner. As a result of the audit, you will receive an official opinion drawn up in accordance with the international audit standards.

What is included in the audit report

Auditor’s report is an official document intended for users of the accounting (financial) statements of audited entities, containing the opinion of the audit organization on the reliability of the financial statements of the audited entity expressed in the established form.

The form, content, procedure for signing and presenting the audit report are strictly regulated and established by the international audit standards.

Voluntary audit

A voluntary audit is a type of audit that is not carried out as required by law or regulation, but solely at the request of the business owner or executive body of the organization. With the development of the level of management and financial literacy, the voluntary audit service is becoming more and more relevant, as its result meets the expectations of the customer, makes it possible to make the right and profitable management decisions. Today, such a service is in demand by organizations of any form of ownership, with any turnover and assets operating in various fields of activity.

In what cases do you need a voluntary audit service?

An voluntary audit service is necessary if your company is undergoing a period of restructuring, a change in top management, a reorganization of the accounting or tax departments, and serious personnel changes. It can be carried out by order of investors or creditors of the organization in order to obtain from an independent person reasonable data on the current state and position of the organization, business prospects. Many organizations conduct it on a regular basis to obtain consistent and relevant information about the processes taking place in their economic and financial life.

What is included in the initiative audit service

We propose to use the voluntary audit service, since at the same time you identify the risks associated with the activities of your organization, you will receive:

  • analysis of the timeliness, qualification and correctness of reflection in the registers of accounting and tax accounting of the operations of the economic life of your organization and their documentation;
  • an assessment of the significant financial and tax risks that already exist or may be awaiting your organization;
  • verification and evaluation of procedures that affect internal quality and efficiency control;
  • a description of the identified accidental/malicious violations, cases of fraud, theft or preconditions for their commission, weaknesses of the organization, business processes;
  • real and reliable information about the economic life of the organization.

What is it for?

An audit allows a sober and unbiased look at the financial activities of the company. The result of an voluntary audit will provide an opportunity to make more productive decisions on the reorganization of the company, making changes to its structure, and changing key managers. The professional opinion of an independent expert will allow the business owner or his executive body to obtain information on the activities of the organization in figures and facts.

Voluntary audit allows you to keep and control the organization’s business in an operational and tonic mode. The real prospect of a regular and independent review is a good motivator for the organization’s employees.

The result of the voluntary audit carried out by our company is not just a set of numbers and indicators, but also a detailed, detailed report with a statement of the violations identified, a description of the situation in the organization, and detailed and reasonable recommendations. Thus, you can use our report as a kind of guide to action and a plan for overcoming problematic situations.

The results of an independent and relevant audit of the organization are now becoming increasingly important conditions for the conclusion of key and important agreements.

Qualitative and timely analysis not only allows you to maintain the current relationship of the business owner with the current state of the business itself, but also provides the organization with a number of new opportunities.

For our part, we are pleased to offer you extensive experience in conducting an voluntary audit, the highest qualifications of our specialists, knowledge of the specifics of individual industries, an up-to-date understanding of current trends and verification technologies, the utmost correctness and fairness of estimates.

Tax risks analysis

If your organization is preparing for a tax audit, if you doubt the correctness of the chosen tax accounting policy, are considering a new project with the attraction of investments or expanding your business, then we are ready to offer you a tax audit, which includes a comprehensive examination of tax risks.

In the process of identifying and assessing tax risks, the specialists of our company:

  • conduct a preliminary assessment of the taxation system existing in the organization;
  • make a general analysis with consideration of individual elements of the taxation system;
  • identify the main factors affecting the tax burden;
  • check the methods of calculating tax bases and payments;
  • conduct legal and tax examination (audit) of the existing system of economic relations;
  • evaluate document flow, examine the functions and powers of the services responsible for calculating and paying taxes, and provide relevant recommendations;
  • make a preliminary calculation of the tax indicators of the company;
  • check the correctness of the calculation and payment of taxes and fees.

As a result of our examination (audit) of tax risks, we will provide you with written information (expert report), which without fail will include:

  • a description of the tax accounting areas we have analyzed;
  • conclusions on compliance of the tax code with the procedure for calculating tax bases, calculating the amounts of taxes and fees payable in accordance with the norms established by law;
  • a list of revealed violations of tax legislation and risk situations (risks associated with operations and facilities, the taxation of which is ambiguously interpreted by the legislation, for which there has been a contradictory judicial practice or dual explanations of authorized bodies have been issued);
  • recommendations on correcting identified errors and preventing possible claims and penalties, including in relation to risk situations and violations of the legislation on taxes and fees;
  • recommendations on minimizing tax risks, provided that the provisions of tax legislation are strictly observed.