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Who needs a statutory audit
Not every company needs a statutory audit. The criteria are set by Article 5 of Law 307-FZ. Here is where to find them and how to check your organization.
What a statutory audit is
A statutory audit is an annual audit of accounting (financial) statements that the law requires from certain organizations. The cases are listed in Article 5 of Federal Law No. 307-FZ “On Auditing”.
Types of criteria
Article 5 of the law sets out several groups of grounds:
- legal form (for example, joint-stock companies);
- type of activity and status in the financial market;
- revenue and assets according to the financial statements;
- other cases expressly named in federal laws.
Thresholds and the list of cases change. Always check the current edition of the law via the link above.
How to check your company
- Open the current edition of Article 5 of Law 307-FZ.
- Compare the criteria with your company’s legal form and activity.
- Check the figures in the previous year’s statements.
- If in doubt, ask for advice before the reporting year ends.
When a voluntary audit is useful
A voluntary audit is ordered by the owners: before a transaction, fundraising or a change of management. It provides an independent assessment of the statements.