Earlier in Russia, the auditor was a person who was in the military service, or a civil servant. This term was also called the inquirer, the prosecutor. Today, the auditor is a person engaged in auditing (verification), consulting activities in various fields: from accounting to the audit of documents. A legal entity or an individual entrepreneur may act as an auditor.
The concepts
In order to understand the rights and obligations of the auditor, that is, to determine the term itself, it must be understood that the auditor does not conduct checks that are carried out by regulatory bodies. Its activities are clearly regulated by law No. 307-FZ.
In a general sense, audit activity is an entrepreneurial activity that is associated with the organization of non-departmental audits. Such audits are conducted in order to independently evaluate the accuracy of documents.
Kinds
The main types of audit activity include:
- Financial audit. An audit aimed at identifying development prospects, verifying the reliability of financial activities and determining the real economic condition of the enterprise.
- Industrial. Simultaneous verification of the technical and economic components of the enterprise.
- Investment. Checking the activities of professional participants in the securities market.
- Managerial. Verification of management activities, performance evaluation.
There are many more narrow-profile audits: checking tax reporting, operating and pricing policies, environmental audits, and so on.
What can a reviewer do?
The basic rights and obligations of auditors and audit organizations are regulated by law No. 307-FZ and a number of by-laws. In general, the following rights can be distinguished:
- independently choose the methods and forms of inspections;
- reconcile the actual availability of property with accounting records;
- receive clarifications from officials of the audited entity;
- refuse to conduct an audit;
- carry out verification of documents that were seized as part of the investigation;
- advise clients on the provisions of applicable law;
- evaluate financial and economic activities;
- implement measures aimed at restoring accounting.
In addition, audit companies, including IPs, are entitled to contract other specialized audit companies on a contractual basis.
What should a reviewer do?
All the same rights and obligations of the auditor, prescribed by law No. 307-FZ, require auditors to strictly adhere to the above law. In addition, the following responsibilities are assigned to auditors:
- within the terms prescribed in the contract, provide the agreed services;
- during the audit, do not disclose the information received without the consent of the client;
- at the first request of the customer to provide all the information in accordance with the requirements of applicable law;
- substantiate their conclusions and comments with references to regulatory acts;
- obtain permission to engage in audit activities;
- refuse to provide services in cases provided for by applicable law;
- inform the management of the audited organization about the involvement of relevant specialists in the process.
Naturally, the rights and obligations of the auditor require him to comply with the agreements that were reached with the client and recorded in the agreement between them.
Features of the activity
In addition to the obligations described above, auditors must undergo certification, and on an annual basis, upgrade their qualifications.
The auditor is obliged to inform his client that he is forced to refuse to provide services if there is a conflict of interest or a real danger to the inspector himself, his family, or the independence of the audit is threatened.
When external experts are involved in the audit, the rights and obligations of the auditor include not only the obligation to notify the subject of the audit, but also to obtain consent from the latter.
The auditor has the right to review the documents of the auditee before verification. If this is not done, then the auditor unreasonably increases risks in terms of labor intensity and volume of forthcoming work, since it is not known in advance how many violations the customer has in bookkeeping, in other areas of activity.
The inspector has the right to rely on a decent reward, on reimbursement of transport and other expenses.
Auditing involves obtaining a license and membership in a self-regulatory organization.
The right to refuse to provide services
The Civil Code considers audit activity as contractual, paid and carried out on a trust basis. Nevertheless, in practice, a situation may arise when it is not possible to conclude an agreement or continue further cooperation. In the light of this, the auditor is entitled to refuse the subject of inspection in the following cases:
- if the audited entity refuses to provide all the necessary documents;
- if during the audit it turns out that there are circumstances that do not allow to maintain the independence of the auditor, or he will not be able to draw up a reliable report.
In the latter case, it is understood that the audited entity has revealed obvious misstatements in the financial, accounting and other statements. Distortions may occur against the background of ordinary errors, the inexperience of the accountant or other specialist, or may result from deliberate distortion of the information available due to dishonesty and intentional actions of the administration or accounting of the enterprise. That is, the refusal in the latter case will be regarded as lawful and permissible.
Standards
The rights and obligations of individual auditors and legal entities are no different. In addition to the requirements put forward at the legislative level, auditors are provided with standards by which they should be guided in their activities. Today, four levels of standards are provided:
- Intercompany These are the basic principles of business that are developed internally or at the IP level on the basis of national ones.
- Internal They are formed at the level of auditor associations.
- National Almost every country has its own audit standards, which are mandatory for use in the practical activities of each specialist. To date, 34 Federal Standards have been developed and approved in Russia.
- International Developed by the International Audit Practice Committee. Within each country, they are advisory in nature. However, when performing work in a multinational company, these rules are mandatory.
Responsibility
The rights and obligations of the auditor and the audited entity regulate who is responsible for possible violations. Today, auditors are subject to three types of sanctions:
- Civil law. It is provided for in article 15 of the Civil Code and is expressed as compensation for losses. Reimbursable are the expenses that have arisen at the customer due to the need for rechecking, the costs of litigation. In case of violation of obligations under the contract for the auditor sanctions are provided in the form of covering lost profits.
- Administrative The Code of Administrative Offenses is provided for and implies liability for violation of the rules provided for by the license, and for its absence.
- Criminal The responsibility for abuse of authority in the form of a fine or imprisonment of up to 3 years is provided. Or, a decision may be made to prohibit engaging in audit activities.
What should the testee count on?
Rights, obligations and responsibilities of auditors and audited entities are prescribed in Law No. 307-FZ, Civil Code. According to the provisions of these regulations, the customer of audit services has the right:
- to receive an informed opinion and conclusions from the contractor;
- to obtain an opinion within the time period specified by the contract;
- to exercise other rights stipulated by the contract.
Along with the rights, the audited entity has obligations, namely:
- to assist the auditor in every possible way, to provide all the necessary documents, information;
- provide written and oral explanations regarding controversial issues;
- not to hide information and documents that may adversely affect the reliability of the data in the report;
- timely pay for the services of the contractor;
- adhere to the agreements set forth in the agreement.
The rights and obligations of the audit organization, individual auditor and customer services are largely overlapping and interconnected. For example, the auditor should identify inaccuracies, errors in accounting, point to them, and the customer, in turn, promptly correct and correct them.
If the audited entity is subject to mandatory annual inspection, then for the deviation from this rule he is liable.
Finally
The rights, duties and responsibilities of the auditor are prescribed in the law in order to guarantee a certain level of reliability of the whole process, the independence of the auditor, the adequacy of conclusions and recommendations. In turn, the auditee must remember that the provision of false or false information, the concealment of documents from the auditor may be a reason for refusing to cooperate. Even if it continues, then you should not count on receiving really valuable recommendations from the inspector, which can be put into practice.