Published 23 November 2022. Some rules have changed since; ask us for the current position.
In 2014 the Audit Chamber of Ukraine (Audytorska palata Ukrainy) adopted a decision under which mandatory audits could be carried out only by specialised audit firms that had passed the Chamber’s quality control and were included in its Register of Audit Firms. Only these firms had the right to carry out such audits.
Which organisations are subject to a mandatory audit?
There are many types of business entities today. Those required to publish their annual report include:
- public interest entities;
- public joint-stock companies;
- natural monopolies on the national market;
- businesses in the extractive industries.
These organisations must publish their annual report together with the auditor’s report by 30 April of the following year on their official website.
Article 14 of the Law of Ukraine «On Accounting and Financial Reporting in Ukraine» adds to the list:
- large enterprises that are not securities issuers;
- medium-sized enterprises;
- financial institutions that are micro- and small enterprises.
Why is reporting so important?
A few years ago, audits of annual financial statements were carried out only at the request of stock market participants, and nobody else took much interest in them.
Since 2017 the financial statements have been filed as part of the corporate income tax return, and in recent years tax calculations have been based on this document. Practice shows that audited statements earn the most trust from partners, creditors and investors.
Timing
Every manager would like the audit to go quickly and smoothly. However, an audit of annual financial statements is a thorough and lengthy process: the auditor reviews all the documents, including information on how the company was set up.
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