Courts to Fine Entities Deviating from Independent Audit

The Chamber of Auditors of Azerbaijan has prepared and submitted to the government proposals on the application of the mechanism to identify deviation from the mandatory independent audit subjects and bringing them to administrative responsibility.

Amendments to the Code of Administrative Offences on the responsibility for avoiding an independent audit took effect on April 13, 2011. But so far none of entities violating the requirement of the law has ever been subject to administrative proceedings. Correspondence within the government to determine the mechanism of penalties has been going on for fifteen years.

The Chamber of Auditors has entrusted to the Ministry of Taxes joint drafting year end list of organizations subject to the passage of an independent audit. At the next stage, the Chamber will reveal the final date when the financial statements (June 30 for organizations preparing the consolidated financial statements, on April 30 for other commercial and other organizations, and April 1 - tax records, organizations, evading external audit). Under the legislation, the financial statements must be accompanied by an independent audit report.

In the Chamber of Auditors they told Turan that the Chamber proposes to determine the administrative liability for failure to provide independent audit.

Recall that independent audit shall be liable to the banks and insurance companies, joint stock companies and limited liability companies, holding companies and financial-industrial groups, natural monopolies, foundations, non-governmental organizations, municipalities and other structures.

The penalty for failure to arrange independent audit for officials of business entities ranges from 300 to 600 manat, and for legal entities - from 1,500 to 2,500 manat. According to the Chamber of Auditors, the independent audit level in the country is 15%. - 08B -