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Statutory audit



The law "On Auditing activity" (№ 119-FZ) provides for mandatory annual audits for the companies whose purpose is to reveal the fact of reliability of its accounting statements and financial reporting.
Mandatory audit includes the issuance of the auditor's report, which confirms, in official form, the reliability and correctness of accounting statements.

What companies do need mandatory audit
Current legislation defines it necessary to conduct statutory audits in the following companies and organizations:
commodity and stock exchanges;
open joint stock companies;
a credit institution;
fund for voluntary contributions of individuals and legal entities;
investment funds;
state budgetary funds;
insurance fund, mutual insurance company.
Enterprises not included in this list shall be offeered to conduct mandatory audit of the organization if:
annual revenues exceeds the minimum wage more than 500 times;

balance of the accounting period shows the amount of assets 200 times over the minimum wage.
An independent and objective audit has the only purpose - to show the existing errors and avoid possible errors in reporting. Its result is correct assessment of financial and economic activity of the audited subject.
Statutory audit of financial reports has the following tasks:
to identify whether the results of the company's financial and economic activity are in conformity with the reported data;
determine how properly the accounting and economic accounting documentation is maintaind, how the internal controls and accounting skills of the staff are provided;
to give to the subject the certificate of audit with the exact reflection of the reliable information on accounting, taxation and business law compliance;
to recommend to the subject certain verification procedures which eliminate the shortcomings and violations detected during the audit.
Auditor's report
The results of the audit is a formal document - the auditor's report. The auditor expresses therein his opinion, and whether the accounts of the audited subject are true and correct. The form of arrangement thereof shall conform to "the Order of the auditor's opinion on the financial statements."