Starting on 01.01.2021, the long-awaited changes regarding the mandatory audit criteria came into force. They are aimed at significantly reducing the burden for small and medium-sized businesses in terms of passing audits.
From 01.01.2021 audit is compulsory for companies:
- with income for the year exceeding RUB 800 million or with the total assets on the balance sheet exceeding RUB 400 million, except for a number of companies with state participation. The decision to undergo a mandatory audit is made on the basis of the reporting data for the previous year.
- holders of securities admitted to on-exchange trading
- professional securities traders or credit bureaus
- with the organizational and legal form of a fund and the receipt of property (including money) worth more than RUB 3 million for the year preceding the reporting year. This does not apply to government off-budget funds, specialized endowment management organizations, and international funds.
- joint stock companies
The new threshold values are higher than in 2020. For example, to trigger a mandatory audit, the amount of income for the previous year had to be RUB 400 million, or the amount of assets on the balance sheet was RUB 60 million.
Federal Law N 476-FZ of 29.12.2020 was adopted at the end of 2020, and, despite the positive changes, not all companies will be able to take advantage of the exemptions.
If your indicators for revenue or balance sheet currency are below the new threshold values, but the auditors have already started checking your company’s activities, then you will not be able to withdraw from the audit.
This also applies to the situations when auditors:
- conducted a preliminary audit of financial statements for 9 months of 2020
- sent inquiries to counterparties/banks with the request to confirm the status of settlements
- got access to the accounting database and began to analyze transactions
In the above cases, the ongoing 2020 audit will need to be completed and the new rules will apply for 2021 reporting.
To clarify the status of the audit, you should contact the auditors, as well as study the terms of the agreement in terms of penalties associated with early termination. We also recommend you to look through our materials, which will help you thoroughly prepare for the audit.
How can SCHNEIDER GROUP help?
Based on our many years of experience in interacting with auditing companies and methodological knowledge of recommendations to auditors, we will be happy to advise you on the correct reflection of disputed transactions in the accounting.
During the audit of the financial statements for 2020, special attention will be paid to the effectiveness of the company’s internal controls system because of the uncertainty and changes in processes due to the pandemic. We will help you assess your internal controls system and prepare recommendations for its improvement, taking into account the aspects of most interest to auditors.