Companies shy away from audit because of government"s fault (UPDATED)

2014 March 03 (Monday) 16:50:32

For the fourth year, the government has not decided to whom to entrust power to offenses for evading compulsory audit. Meanwhile, the majority of subjects of compulsory audit without any problems can be avoided external audit.

In February 2011, Parliament defined the measure of administrative penalties for similar offenses in relation to legal persons (from 1,500 to 2,500 manat) and their officials (from 300 to 600 manat). The Head of State in April of the same year instructed the Cabinet within two months submit to it proposals for the authority which will the imposition of these penalties. Since then, three years have passed.

Proposals to account resolution of this protracted issue repeatedly prepared and presented to the government experts of the Chamber of Auditors (COA) of the Azerbaijan Republic. First, the PA asked to determine the administrative responsibility for avoiding an independent audit of the city (district) courts to provide the Court of Auditors. The Ministry of Taxes with PA to the end of each year was to make a list of entities subject to the passage of an independent audit. And the next stage Chamber planned to identify commercial entities that evaded independent audit. However, in the Cabinet, the proposal was rejected.

In April 2013, the PA in coordination with other government agencies submitted to the Cabinet is another suggestion . At this time in the Court of Auditors claimed responsibility: the power to impose administrative sanctions for failure to pass the proposed mandatory audit of PA officials . "While there is no any response from the government and it is not known whether the proposals referred to approve the head of state," the Chief of Staff of the Chamber of Auditors of the Republic of Azerbaijan Gasham Bayramov told Turan.

According to estimates of the PA, compulsory audit avoid about 90 % of businesses, mainly joint stock companies and limited liability companies. Additions to the Code of Administrative Offences "On the responsibility for avoiding an independent audit" entered into force on 13 April 2011. But so far none of violating this requirement of the law is not subject to administrative proceedings.

According to the Cabinet of Ministers decree No 97 on May 27, 2010 "On the provision and publication of the annual financial statements and consolidated annual financial statements of commercial organizations ' annual financial reports shall be submitted for approval by the founders until April 30. Organizations that prepare consolidated financial statements , must approve them until June 30. However, these same organizations must publish in print annual financial statements with accompanying auditor's report.

Passage subject to independent audit banks and insurance companies, JSC and LLC, holdings and financial-industrial groups , natural monopolies , foundations, non-governmental organizations , municipalities and other structures .

The audit of the annual financial statements of objects "medium caliber" costs an average of 500 manat. However, self-respecting companies do not spare a few thousand manats for this service. - 08B-