Topic 2. REGULATION OF AUDITING ACTIVITIES IN THE RUSSIAN FEDERATION

2.1. Audit regulation system

Since the results of the audit are the basis of many economic decisions, the audit is quite tightly regulated in all countries. At present, the following system of regulation of audit activity is in force in Russia:

1) Law on audit activity;

2) other federal laws and other regulatory legal acts on the audit, issued in accordance with the Auditing Law and not contradicting it;

3) Federal auditing standards;

4) standards of self-regulatory audit associations;

5) internal auditing standards.

Thus, the Audit Law is the dominant document in the system of direct regulation of audit activities. It defines the concepts of audit, the auditor, the legal aspects of organization and functioning, the criteria for mandatory audits, the types of services related to the audit, the place of standards and norms of professional ethics, the rights and obligations of auditors and audited entities, the main aspects of quality control in the audit, certification issues for the right to carry out audit activities, the role of self-regulatory audit associations, etc. Compliance with it is mandatory for all auditors and audit organizations, as well as for persons subject to mandatory audit.

Federal auditing standards are mandatory for audit organizations, individual auditors, as well as for audited entities, with the exception of provisions that indicate that they are advisory in nature, they are approved by the Government of the Russian Federation. These standards have been developed in Russia in accordance with the International Standards on Auditing (ISA), in order to strengthen the practical orientation and uniformity of the audit, methods are being developed on certain issues, for example, on checking inventories or on checking income tax calculations, which, unlike standards are purely advisory in nature. The development of these standards in Russia is not yet fully completed, so at present 23 rules have been adopted.

Self-regulatory audit associations have the right to develop their own standards and methodological materials on the application of federal standards, where they may establish additional requirements for auditing, but they should not contradict federal standards and the Law on Auditing.

Auditing organizations and individual auditors have the right to establish their own rules (standards) of audit activity, which cannot contradict the federal rules (standards) of audit activity and cannot establish requirements lower than those specified in federal standards.

In addition, auditors, audit organizations, self-regulatory audit associations and their employees are required to comply with the code of professional ethics.

2.2. The concept of audit. Audit Legal

Auditing activities (audit) - entrepreneurial activities for conducting audits and providing related services. This means that all audit firms are created for the purpose of making a profit (in accordance with the Civil Code), like any other business structures.

Audit (audit check) is an independent check of the financial (accounting) statements of organizations. The independence of auditors and audit firms during the audit is a key principle for conducting an audit (the law contains a fairly detailed explanation of this concept).

The object of the audit can be not only organizations, but also individual entrepreneurs, since the law does not provide for differences between them when highlighting the criteria for mandatory audit.

An audit does not replace state control over the reliability of financial (accounting) statements, carried out in accordance with the legislation of the Russian Federation by authorized state authorities.

An auditor is an individual who has an auditor's qualification certificate. At the same time, it is necessary to have an impeccable business reputation, confirmed by the recommendations of at least three auditors, and no criminal record. He has the right to carry out audit activities as an employee of an audit organization or as a person engaged by an audit organization to work on the basis of a civil law contract, or as an entrepreneur operating without forming a legal entity (individual auditor). An individual auditor has the right to conduct an audit, in addition to a statutory audit, and to provide audit-related services.

An audit organization is a commercial organization that performs audits and provides audit-related services.

Audit organizations and individual auditors are prohibited from engaging in any other business activity, except for auditing and providing related services.

An audit organization may be created in any organizational and legal form, with the exception of an open joint stock company.

At least 50% of the personnel of the audit organization must be citizens of the Russian Federation permanently residing on the territory of the Russian Federation, and if the head of the audit organization is a foreign citizen, at least 75%. A person who is the sole executive body of a commercial organization must be an auditor.

The staff of the audit organization must consist of at least five auditors. As conceived by the legislators, this norm, together with the requirement that a mandatory audit can only be carried out by an audit organization, should serve to improve the quality of the audit. It is assumed that a greater number of qualified specialists in the audit firm will contribute to the overall improvement in the quality of its work.

Auditors and audit organizations must be members of one of the self-regulatory associations and be included in the Unified Register of Auditors and Audit Firms. Only after all these conditions are met, it is possible to carry out audit activities and provide related services related to the expression of an opinion, otherwise the activity is considered illegal, with all the ensuing consequences. The same rule applies to all commercial organizations that use the word "audit" and all derivatives of the word "audit" in their name.

Auditing organizations and individual auditors are required to maintain secrecy about the transactions of audited entities and individuals who were provided with services related to the audit.

Audit organizations and their heads, individual auditors, audited persons and persons subject to mandatory audit bear criminal, administrative and civil liability in accordance with the legislation of the Russian Federation.

2.3. Goals, objectives and general principles of the audit

When considering the objectives and general principles of an audit, it is necessary to be guided not only by the provisions of the Law on Auditing Activities, but also by standards.

Federal Auditing Standard No. 1 "Purpose and Basic Principles of the Audit" establishes uniform goals and basic principles for conducting an audit of financial (accounting) statements, which the audit organization and the individual auditor must comply with. The standard addresses the following main issues:

▪ purpose of the audit;

▪ general audit principles;

▪ scope of audit;

▪ reasonable assurance;

▪ responsibility for financial (accounting) reporting.

An audit of financial statements is intended to enable the auditor to express an opinion on whether the financial statements are prepared, in all material respects, in accordance with established financial reporting frameworks. When expressing its opinion, the auditor in accordance with paragraph 2 of ISA No. 200 "gives a true and fair view" or "represents objectively and in all material respects", which is equivalent.

The purpose of the audit is to express an opinion on the reliability of the financial (accounting) statements of the audited entities and the compliance of the accounting procedure with the legislation of the Russian Federation. This definition is given both in the law and in the standard, it is complete and exhaustive. Based on this, the purpose of the audit is not to find errors and expose fraudulent actions.

Although the auditor's opinion may enhance the credibility of the financial statements, the user should not take this opinion as an expression of confidence in the viability of the entity being audited in the future, nor as evidence of the effective conduct of business by the management of this entity.

At the same time, it should be recalled that reliability is understood as the degree of accuracy of financial (accounting) reporting data, which allows the user of these reporting, based on its data, to draw correct conclusions about the results of economic activity, the financial and property position of the audited entities and make informed decisions based on these conclusions.

The tasks of the auditor in the audit process are: to assess the level of organization of accounting and internal control, the qualifications of accounting personnel, the quality of processing accounting documentation, the correctness and legality of making accounting records reflecting the financial and economic activities of the enterprise and its final results; assisting the administration of the enterprise by developing recommendations for eliminating shortcomings and violations that affected the financial results and the reliability of reporting indicators; based on the study of past facts and the current state of affairs at the enterprise, orientation of its administration to those future events that can affect economic activity and final results (perspective analysis); providing meaningful and accurate information to the client on all unclear issues that arise in the process of fulfilling the contract for the provision of audit services.

In the performance of his professional duties, the auditor must be guided by ethical principles, which are considered: independence, honesty, objectivity, professional competence and integrity, confidentiality, professional behavior.

The auditor is required to conduct an audit in accordance with the Federal Auditing Standards, which contain the basic requirements, procedures and guidelines, as well as advisory provisions and examples.

The independence of the audit organization from the economic entity and its management should be considered from the point of view of both formal and actual circumstances; it is determined in accordance with the legislation of the Russian Federation and federal rules (standards) of auditing.

Honesty and objectivity in dealing with an economic entity lies in the fact that the basis for the conclusions, recommendations and conclusions of an audit organization can only be a sufficient amount of necessary information. The audit organization should not allow bias, prejudice or pressure exerted on it to affect communication with the management of an economic entity and, consequently, the objectivity of its conclusions, recommendations and conclusions.

The audit organization should not provide services, provide recommendations or proposals for assistance in their implementation, which go beyond its authority in accordance with the existing licenses to carry out auditing and related activities or professional competence.

The audit organization is obliged to keep the confidentiality of information received during communication with the management of the economic entity, without time limit and regardless of the continuation or termination of relations with him. The audit organization is obliged to ensure the safety of confidential information of the economic entity and not to disclose it without the consent of the management of the economic entity, except as otherwise provided by the legislation of the Russian Federation.

Professional behavior in dealing with the management of an economic entity consists in observing the priority of public interests and the reputation of the profession as a whole. The audit organization should refrain from any actions that may discredit it, undermine respect and trust in the audit profession.

From the general list of ethical principles, the concepts of independence and confidentiality of the information received are regulated by law, therefore, they can be called fundamental, and the rest of the principles - general ethical.

In the course of planning and performing an audit, professional skepticism should be exercised, as there may be circumstances that entail a material misstatement of the financial statements.

The manifestation of professional skepticism means that the auditor critically evaluates the substance of the obtained audit evidence and carefully examines those of them that contradict any documents or statements of management or call into question the reliability of such documents or statements. In particular, professional skepticism should be exercised during the audit to reduce the risk of overlooking unusual circumstances, not to make unjustified generalizations in drawing conclusions, not to use erroneous assumptions in determining the nature, timing and extent of audit procedures, and in evaluating their results.

The term “audit scope” refers to the audit procedures deemed necessary to achieve the objective and should be determined by the auditor, taking into account the requirements of relevant laws and regulations and, if necessary, the terms of the audit engagements and reporting requirements.

An audit is designed to provide reasonable assurance that the financial statements, taken as a whole, are free from material misstatement. The concept of sufficient assurance is related to the collection of audit evidence necessary for the auditor to conclude that there are no material misstatements in the financial statements, taken as a whole. The concept of sufficient assurance applies to the entire audit process.

The federal standard (in accordance with ISA) provides the following types of assurances:

▪ absolute (rarely happens - on obvious issues);

▪ reasonable (used in auditing);

▪ moderate (used for review checks);

▪ low (no confidence - applied when compiling and executing agreed upon procedures).

While the auditor is responsible for formulating and expressing an opinion on the reliability of the financial (accounting) statements, the responsibility for the preparation and presentation of financial (accounting) statements lies with the management of the entity being audited. An audit of financial (accounting) statements does not release the management of the audited entity from such responsibility.

2.4. Auditor ethics

In Russia, the Code of Ethics for Auditors was first approved by the General Meeting of the Audit Chamber of Russia on December 4, 1996. The main requirements of the Code of Ethics for Auditors are defined by the International Federation of Accountants. They serve as the basis for the development of ethical requirements, detailed rules and standards of conduct for auditors in each country where an audit is carried out, and they were the basis for the codes of ethics developed in Russia for both auditors and professional accountants. In accordance with these requirements, the auditor must have certain professional knowledge and skills, recognize the importance and profess a high standard of moral values ​​in his work, be aware of his duty and obligations to society, and comply with established rules of conduct.

Compliance with these requirements is mandatory for both the auditor and the professional accountant employed by the organization. At the same time, a number of additional ethical requirements are imposed on external auditors. These include compliance with the conditions of independence, additional requirements for professional competence, regulation of the procedure for paying for audit services, relations with accountants of audited organizations and other auditors, features of advertising and service offerings. To strengthen the emphasis on these provisions and make them binding, they are included in the text of the Law on Auditing.

The Code contains 15 articles.

Article 1. "General Provisions" summarizes the ethical standards of professional conduct of independent auditors, united by the Audit Chamber of Russia; moral, moral values ​​are determined, which the audit community asserts in its environment.

Article 2. "Generally accepted moral norms and principles" confirms the obligation of auditors to adhere to universal moral rules and moral norms in their actions and decisions, to live and work in good conscience.

Article 3. "Public interest" provides that the external auditor is obliged to act in the interests of all users of financial statements, and not just the customer of audit services; he must be convinced that the protected interests arose on legal and fair grounds, otherwise he is obliged to refuse to protect them.

Article 4. "Objectivity and attentiveness of the auditor" emphasizes that objectivity for conclusions is possible only with a sufficient amount of required information. Auditors are required to objectively consider all emerging situations and real facts. Pressure on the auditor in any form is unacceptable. Auditors must be attentive and serious about their duties, comply with approved auditing standards, adequately plan and control work, and check subordinate specialists.

Article 5. "Independence of the auditor" implies that in an opinion or other document drawn up as a result of the rendered professional services, the auditor is obliged to consciously declare his independence in relation to the client both on formal and actual circumstances.

Article 6. "Professional competence of the auditor" indicates that the auditor is obliged to refrain from providing services that go beyond his professional competence, and also do not correspond to his qualification certificate. To assist the auditor in solving specific tasks, an audit firm can attract competent specialists.

Article 7 "Client Confidential Information" provides for the auditor's obligation to keep confidential information about clients' affairs obtained in the course of providing professional services, indefinitely and regardless of the continuation or termination of direct relations with them. Confidential information should not be used by the auditor for his own benefit or for the benefit of any third party, or to the detriment of the client.

Article 8. "Tax relations" states that in the provision of professional taxation services, the auditor must be guided by the interests of the client, with mandatory compliance with tax laws. The auditor should not promote falsifications in order to evade the client from paying taxes and deceive the tax service. All recommendations and advice in the field of taxation must be submitted in writing.

Article 9 "Professional fees" provides that the auditor's professional fees must comply with professional ethics and be paid depending on the volume and quality of professional services. The auditor is obliged to discuss in advance with the client and fix in writing the conditions and procedure for such payment.

Article 10. "Relations between auditors" suggests that auditors should treat other auditors kindly, refrain from unreasonable criticism of their activities and other conscious actions that cause damage to colleagues in the profession.

Article 11. "Relations of employees with an audit firm" calls on employees to be loyal to their audit firm, they must contribute to its authority and further development with all their activities, maintain friendly business relations with both the firm's employees and the client.

Article 12 "Public information and advertising" specifies that advertising must be informative, direct and honest, excluding the possibility of deceiving and misleading potential customers.

Article 13 "Auditor's inconsistent actions" notes that engaging in any activity prohibited by practicing auditors in accordance with the law is considered as incompatible actions of the auditor, violating the law and professional ethical standards.

Article 14. "Audit services in other states" emphasizes that when conducting an audit, the auditor is obliged to know and apply in his work the international auditing standards and standards in force in the state in which he carries out his professional activities.

Article 15. "Compliance of this Code with international standards" says that the standards of professional conduct determined by the Code of Ethics are based on international ethical standards developed by the International Federation of Accountants.

Professional ethics in communication with the management of an economic entity is defined by the Federal Auditing Standard "Communication with the management of an economic entity", the tasks of which are:

1) determination of the basic requirements for communication between the audit organization and the management of the economic entity;

2) determination of the features of communication of the audit organization with the management of the economic entity at various stages of the audit;

3) determination of the features of communication between the audit organization and the management of the economic entity on accounting and internal control issues.

The Institute of Professional Accountants and Auditors of Russia by the decision of the Presidential Council on September 24, 2003 approved the Code of Ethics for members of the IPA of Russia, which entered into force in January 2004. This Code was prepared on the basis of and taking into account all the requirements of the IFAC Code of Ethics with the maximum preservation of its conceptual approaches and sections.

The Code recognizes that the main goal of the accounting and auditing profession is the activity of specialists at the highest professional level, ensuring the quality of the performance of tasks and the satisfaction of public interests. Achieving this goal requires four basic requirements:

1) reliability - society needs reliable information and information systems;

2) professionalism - clients, employers and other stakeholders are in need of specialists who are professionals in the field of accounting and auditing;

3) high quality of services - all services provided by a professional accountant (auditor) must meet the highest quality standards;

4) confidence - persons using the services of professional accountants (auditors) must be sure that the services are provided in accordance with the professional ethical standards governing them.

The objectives and fundamental principles of the Code are of a general nature and are not aimed at solving ethical problems that arise before a professional accountant (auditor) in each specific case. However, the Code contains some recommendations for the practical achievement of goals and compliance with fundamental principles in a number of typical situations encountered in accounting and auditing practice, for example, the Appendix to this Code contains 24 articles on recommendations for applying the principle of independence to specific situations.

At the present stage of development, the IPA of Russia and the Audit Chamber of Russia are undoubted leaders in the development of the audit system and public regulation of the norms of this activity.

Authors: Erofeeva V.A., Piskunov V.A., Bityukova T.A.

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