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If an audit is not necessary, what is the use of it?

If an audit is not necessary, what is the use of it?
In the market of audit services, such a form of audit as proactive or voluntary audit has become widespread. As the name implies, the obligation to conduct this audit is not provided for by applicable law.

Voluntary audit is able to initiate the owners and management of the organization. At the same time, customers can pursue a wide variety of goals, such as:

obtaining an objective picture of the financial condition and financial position of an economic entity;

identification of “weaknesses” in the organization’s accounting, establishing the causes of errors in reporting;

assessment of the competence of the chief accountant and the effectiveness of the accounting service;

verification of the overall reliability of the data indicated in accounting and reporting;

transfer of the audit report to third parties in order to confirm the accuracy of the accounting (financial) statements in partnerships (usually to credit institutions, foreign partners).

As part of a voluntary audit, other additional tasks that are not usually considered in the framework of a standard audit engagement can be implemented. Such tasks may include preparation for a tax audit and identification of tax risks, preparation of recommendations for optimizing the accounting process, confirmation of special reports (for example, management or combined) or certain articles of accounting (financial) statements, etc. This can be realized in the course of conducting either a classic or special audit, or a review. Therefore, do not underestimate the usefulness of proactive auditing. Initiative audit becomes particularly relevant in the case of requirements for independent confirmation of reporting information by counterparties, as well as when the manager or owners themselves do not have sufficient competencies in the field of accounting and need to confirm the reliability of information about the real financial condition of the organization.

It is worth adding that the procedure for conducting a voluntary audit is not tied to any specific dates or dates and can be initiated at any necessary time and in any necessary volume.

What problems can an organization have in the absence of an audit report?
According to paragraph 1, the absence of an auditor’s opinion on the accounting (financial) statements during the storage period of documents (at least 10 years) if the audit of the accounting (financial) statements is mandatory constitutes a gross violation of the requirements for accounting, incl. to financial statements. The following sanctions may be applied to officials of an organization:

administrative fine in the amount of 5,000 to 10,000 rubles (for the first violation);

administrative fine in the amount of 10,000 to 20,000 thousand rubles or disqualification for a period of 1 year to 2 years (in case of repeated violation).

In addition, in accordance with paragraphs. 1-2 tbsp. 18 of the Law “On Accounting” to economic entities, when submitting annual accounting (financial) statements subject to mandatory audit to the state statistics body, it is also necessary to provide an audit report together with such reports or no later than 10 business days from the day following the date of the audit report, but no later than December 31 of the year following the reporting year.
In this case, the appointment of administrative punishment does not relieve a person from the obligation to provide an audit report.

Particular attention should be paid to the consequences of the lack of a mandatory audit opinion established by the Bank of Russia in the Regulation on Disclosure of Information by Issuers of Equity Securities.
So, according to clause 2.13, the absence of information mandatory for disclosure is the basis for holding the issuer liable until the introduction of restrictions on the circulation of securities. Publication of the reporting of a joint-stock company is a mandatory procedure in accordance with and, as you know, involves the inclusion in the audit report.

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