D.Zhumakhanova

Kazakh National University named Al-Farabi, Almaty

 

The regulation of auditing in the Republic of Kazakhstan.

 

 

The paper dwells on the role of the audit as a form of financial control also belonging to entrepreneurship, and some questions of qualification of «the audit». Based on the analysis of theorize and on current Kazakh legislation it make recommendations and suggestions in order to improve of the auditing.

        

         Key words: The audit, the auditing, qualifying requirements, professional training, financial control, certification of candidate for auditors.

 

         Due to a transfer of our economic to a market economy also the occurrence of private property and the new organizational and legal forms of economics activities has soared meaning of audit activities. There is a form of financial control as an audit in the course of these changes. Difference of an audit from other forms of financial control is the audit a form of independent financial control. Although authors compare an audit with inspection however despite of similarities the significant difference between of them is the audit carried out by independent audit organization in the form of checks to express the opinion on the financial statements relating to the financial statements in accordance wit the legislation of Kazakhstan.

         Whereas, the inspection is system of control activities accomplishment by the inspection group or by the inspector where has set lawfulness, adequacy and economic practicality of business transaction as well as acts propriety get in the implementation.

         In audit activities relationship between the party are based on across where in inspection are vertically.

         Therefore the question arises on correlation between «The audits» and «An auditing activity». In accordance with the Law of the Republic of Kazakhstan «An auditing activity» means is entrepreneurship of inquire financial statement and other information relating to financial statement and rendering of services for business type.

         At present time both in theory and practice have questions of auditing activity offers elaborate study.                

           The paper dwells on some questions of auditing activity requiring legal regulation.

         There has been discussion on the ownership of the auditing activity for the entrepreneurship, the types and limits of formal legal capacity of the auditing activity, peculiarities of the auditing activity, and the legal nature of the contract as in the private law of the audit and the auditing activity.

         Considering the peculiarities of the audit and the auditing activity it is clear that the audit refers to a variety of entrepreneurship.

         The definition of entrepreneurship is reflected Art.10 of the Civil Code of the Republic of Kazakhstan. Therefore, the entrepreneurship is the action teams of citizens and legal entities regardless of private property turn to get net income how best to respond the demand for goods (works, services) based on private property (private entrepreneurship) or on the right to run state enterprise (state entrepreneurship).

         According to para 5 para 1 of the Law «On private property» the private property is the actions teams’ party of private property turn to get income based on property their party of private property and carried out in the name of private property party for risk and under property accountability.

         According to mentioned above entrepreneurship has the following peculiarities:

1.     Independence. There are two types of independence: proprietary independence and institutional independence. The proprietary independence is defined from entrepreneur of private property as economic activity. The institutional independence it is ability of making decision of choosing form of entrepreneurship, organizational and juridical entity and the circle of founders, etc.

2.     The Risk. In order to cut the costs should conclude of a contract of insurance entrepreneurial risk. There is the risk of costs in entrepreneurial activity due to violations of other party or changing the conditions of it because the attitude of entrepreneur circumstances including of non-receipt expected income.

3.     Deriving of profit. The main purpose of entrepreneur is profit earning. If the company is not put on first place the purpose it is considered that the company is not commercial. Qualified characteristic of entrepreneurial activity is regulatory of deriving of profit. Unfortunately, a clear criteria of regulatory legislation has not worked out. Though, it suggests in definition of entrepreneurial activity include additional qualified circumstances such as profit share in total income from it, «significance» profit etc.

4.     Profit extract by demand for goods (works, services).

5.     Independent property accountability.

I.Ershyova considers the legitimacy as a characteristic of entrepreneurial activity. However, it is consider the state registration is a formal sign as without the state registration quality of entrepreneurial activity is lost.

         Also in legal literature peculiarity of entrepreneurial activity as professionalism is remains disputable. While the author considers professionalism as necessary peculiarities of all types of entrepreneurial activity for others it necessary only for certain types of entrepreneurial activity.

According to the legislation of Kazakhstan professionalism is the main peculiarities of auditing activity. So in order to conduct of auditing activity requires following:

1.     Auditor certificate of competence;

2.     License.

In order to conduct the audit is necessary have to appropriate on qualification requirements provide for the legislation of Kazakhstan.

In the Republic of Kazakhstan only an auditing organizations that hold a license to provide auditing service can carry out auditing activity.

Thus, all auditors that have certificate of competence should be a participant of auditing organizations.

Nowadays relevant issue is awarding of a qualification «an auditor»because examinations for auditors are carry out the Qualification Commission.

In accordance with para 1 para14 the Law «On auditing activity» the Qualification Commission created of professional organization is a founder with ten audit firms at least.

There are two professional organizations in the Kazakhstan: «Chamber of auditors» and «Auditor Association».

According to para 7 of the paper the Qualification Commission is develop and approve the Programme of certification candidates for auditors which shall comply with IAS Reporting Unit establishes of the Committee of IAS Reporting Unit and the legislation of the Republic of Kazakhstan.  

By order of Minister of Finance of the Kazakhstan dated 26.07.2006 No.273 «On approval of the certification» there are the procedure and general statute of the certification of candidates to auditors. The Programme is establishes by the Qualification Commission.

However, according to this general statute does not improve the quality of auditing activity because in order to carry out a quality certification the assignment of «auditor» is necessary the qualification requirements established not the professional organizations but  the state.

For instance, in Russia the procedure of certification defined assessment of candidates which established by the Government of the Russian Federation dated 06.05.1994 No. 482 «On approval of the regulations on management of the auditing activity in the Russian Federation».

A temporary regulation of the auditing activity is providing procedure for the assessment of auditors in following:

1.     Bank auditing.

2.     Insurance auditing.

3.     Audit of exchange, non-budgetary funds and investment institutions.

4.     The general audit (other economic entities).

Case herein had made been that the assessment of candidates entrust Central Bank of Russian (bank auditing and credit agency) and the Ministry of Finance of Russia (other types of audit). In these agencies were established the assessment and license of auditors centre.

The assessment was carried out on the basis of science and methodical centre and retraining of auditors which are created at university and approved by the Commission under the President of the Russian Federation.

A science and methodical centre has given an exam paper to the assessment and license of auditors centre. After that, they approved of it and makes a decision gave the certification of competence or not.

         A science and methodical centre approved the procedure for qualification examinations also the examination as agreed with the Commission of auditing activity under the President of the Russian Federation.

         The Procedure gives a possibility to provide auditing activity by auditor entrepreneur without legal education.

         However, in 2009 in the auditing activity of the Russian Federation has significantly changed. One of the innovations of the reforms was a new certification for already certified auditors which the Federal Law «On auditing activity» refers.

         Each citizen has the rights to take exams or not. However, there is another side if you are no take the exams the Law restricted the auditing activity.

         In October 2009 the Minister of Finance of the Russian Federation has the right to approve the procedure of qualification examination to obtain qualification certificate of auditors.

         The qualification examinations are with the Commission established with the Federal Law date 30.12.2008 No.307 «On auditing activity».

         The Commission prepares questions for qualification examination.

         The regulation defines the procedure for the conduct of the certification of competence.

         Not that the regulation was successful. There have been discussions on the Russian auditing activity.

         However, considering advantages and disadvantages of the regulation in Russia as well as the situation in Kazakhstan it is necessary to note the possibility of creating the qualification commission wherein will include the representatives of all professional organizations and the notified body. We believe that this measure allows improving the quality and transparence when making the assessment for auditors.

         It is also necessary to strengthen co-operation between the professional organizations because in the Republic of Kazakhstan is not the issue that requires government regulations.

         In view of above it, in our country there are two professional organizations. There are six professional organizations in Moscow: Chamber of audit, Institute of professional auditors, Moscow Chamber of audit, Guild of auditors of regional institutes of the accountants, Russian Collegiums of auditors, Unity of auditors associations.

         In the countries with market economy the professional organizations of auditors are an integral part of the society.

         Most of the organization of auditors leading hand in regulation of the audit methodical. So, in Germany, France, USA, Japan are the one auditor’s organizations, but in United Kingdom there are the three organizations which distinguishes with territorial belonging.

         However, in the Republic of Kazakhstan important factor is the quality of auditing activity and it is necessary to use successful practice of development countries.

 

 

REFERENCES

 

1.     The Law of the Republic of Kazakhstan «On auditing activity» dated 20.11.1998 No.304-I (as on 01.02.13);

2.     Podolsky V., Polyak G., Ssavin A., Audit. Course book, 2-d issue – Moscow, ÞÍÈÒÈ, 2007, p.31;

3.     The Civil Code of the Republic of Kazakhstan (general part) was adopted by Supreme Council of the Republic of Kazakhstan dated 27.12.1994 (as amended ass on 26.12.2012);

4.     The Law of the Republic of Kazakhstan «On private enterprise» was adopted 31.01.2006 (as amended as on 08.01.2013);

5.     Ershyova I. «The peculiarities of business activity», http://www.inventech.ru/lib/pravo/pravo-0003/;

6.     Abdullayeva R. «The issues of legal regulation of the auditing activity in the Republic Tajikistan», Dushanbe – 2010, author’s abstract;

7.     The Minister Finance Order of the Republic of Kazakhstan dated 26.07.2006 No.273 «On approval the assessment for the auditor». Registered in the Ministry of Justice of the Republic of Kazakhstan dated 23.08.2006 No.4354 «Law daily» dated 15.10.2006 No.166 (1146) as amended as on 2010.

8.     The audit. Tutorial/edited by A. Karakova – Moscow, Press Russian Academy of Economic, 2005, p.42;

9.     The Federal Law «On auditing activity» dated 30.12.2008 No.307;

10. The Minister Finance Order of the Republic of Kazakhstan «On approval the assessment for certification of competence» dated 17.11.2010 No.153;

11. «What’s happening in the audit in Russia» author M. Ignashenko, General Director Audit agency «The case» CJSC, Moscow http://www.auditit.ru/articles/audit/a105/382321.html;

12. http://www.audit-it.ru/sro/; 

13. I. Fedosseikina «The profession organization of an audit in Russia and abroad» http://sisupr.mrsu.ru/2008-2/pdf/45-Fedoseikina.pdf.