Thursday, October 3 2019 10:57

ArmInfo. The institute of mandatory audit is introduced in Armenia. Amendments to the Laws "On  Accounting", "On Auditing Activities" and the package of related  documents were introduced at the next meeting of the RA National  Assembly on October 3 in the first reading.

Presenting the package of amendments, RA Deputy Minister of Finance  Arman Poghosyan emphasized that the bills are part of the reforms in  the field of corporate financial reporting. Their adoption will lead  to increased transparency, the formation of trust between business  entities. It is envisaged that the requirement of mandatory audit  will be extended to large and medium-sized companies, whose  performance over the previous three years will comply with the  provisions of the law. In particular, we are talking about companies  with assets of over 2 billion drams, an annual profit of over 4  billion drams and the number of employees over 100 people. The deputy  minister noted that these requirements comply with the directive of  the European Union, according to which a mandatory audit is carried  out in companies with more than 50 employees. In Armenia, this  indicator is increased to 100 and higher. Thus, Arman Poghosyan  continued, out of 1,200 business entities falling under these  indicators, a mandatory audit will be applied to 600.  The package  also introduces requirements for audit companies, which by their  status should be commercial, but not open joint stock companies. Each  company must have at least three auditors, two of which must be  independent and not present company data. Moreover, preference will  be given to those companies in which 50 or more percent of the shares  belong to the auditors themselves, who have the appropriate  qualifications, in other words, all those who are registered in the  register, which involves replacing the institution of licensing of  auditors.

The regulator will be involved in the regulation of the created  regulator represented by the Public Control Council, which will  operate autonomously, but within the structure of the Ministry of  Finance. The council will consist of 7 independent members, which  will be proposed by the Ministry of Finance, the Ministry of Economy,  the Central Bank and the State Revenue Committee. The Council will  implement policies in the field of accounting and auditing, control  the quality of activities.