- Sergey Minyailo
- January 18, 2023
Russian Statutory Audit: Criteria, Characteristics, and Penalties in 2022
We want to remind you that every company is required under Russian law to conduct statutory audits of 2022 in cases when:
- indicators in financial statements of the company for 2021 exceed the following limits: revenue is more than 800 million rubles, or the amount of the balance sheet assets exceeds 400 million rubles;
- the company is a public joint stock company, regardless of the indicators;
- securities of the company are issued to organized trading;
- the company is a credit, insurance or a microfinance organization;
- the company presents consolidated financial statements;
- the company is a developer that attracts funds of participants of shared construction of multi apartment buildings and (or) other real estate;
- the company is a fund and the amount of the received property and cash in 2021 exceeds 3 million rubles;
- in other cases provided by law.
The results of the statutory audit of accounting (financial) statements must be entered in the Unified Federal Register (http://www.fedresurs.ru). To log in and submit information it is necessary to obtain a certificate of electronic signature verification key, issued by an authorized certification center. An electronic signature is issued for the general director of the of the audited entity or a representative by the power of attorney.
Penalties for not conducting a statutory audit
Failure to provide an audit report
This violation will result in an administrative fine of RUB 5,000-10,000 for company officials (up to RUB 20,000 for a second violation) or disqualification for a period of 1-3 years;
Failure to submit an audit report
In this case the fine will amount to RUB 300-500 for company officials and RUB 3,000-5,000 for legal entities.
Obligatory publication of statutory audit results for joint-stock companies
If a Russian joint-stock company (ПАО or AO) fails to submit information on the audit results it will face the following penalties:
- RUB 30,000-50,000 for company officials (or disqualification for up to 2 years);
- RUB 700,000-1,000,000 for legal entities.
6 reasons to conduct a voluntary audit of your company
As an alternative, we can also offer voluntary audits for companies that are not required by Russian law to conduct a statutory audit. Here are the 6 reasons:
- To ensure the reliability of reporting, thereby increasing confidence in the information that the company provides to owners, investors, banks and business partners;
- To ensure the professionalism of employees of financial and accounting departments and verify that they are aware of the latest changes in legislation affecting accounting and tax calculations;
- To identify tax risks, receive recommendations for their elimination/reduction and assistance in adjusting tax returns and amending tax liabilities prior to inspections by supervising agencies;
- To reduce the risks in cases when Chief Accountant or materially responsible persons leave the company;
- To eliminate deficiencies in accounting, financial reporting, and document management;
- To identify weaknesses in accounting and internal control, which may affect the reliability of financial reporting and tax calculation.
Avoid the misconception that quality auditing is provided only by the Big 4. The quality of services provided by Awara is comparable to the level of the Big 4, and is much more affordable. In addition, in order to avoid currency risks Awara offers fixed prices in rubles.
During its 20+ years of history in the market of consulting services Awara has earned a reputation as a reliable partner and is currently one of the largest and most authoritative companies working in Russia in its segment.
Our goal is not just to prepare an audit report in accordance with Russian or International standards, but also to provide a report on tax risks, conduct a legal review of key documents, help our clients improve internal controls, and ensure the transparency of financial statements.
A detailed list of our audit services can be found here.
- +7 495 225-30-38 Moscow
- +7 812 244-75-49 Saint Petersburg
- +7 4822 63-00-62 Tver