24.10.08

 
The State Duma received a draft revision of the law “On Auditing,” which proposes to cancel licensing regulations starting July 1, 2009 and allows greater self-regulation, according to the newspaper “Kommersant.” There should be at least 700 auditors in self-regulatory organizations by the first half year, and no less than 2,000 starting from January 1, 2010. The “Big Four” companies will aim to create larger self-regulatory organizations. Russian auditors hope that the establishment of domestic self-regulatory organizations will allow them to compete with international companies.

The project, which was coordinated with various agencies last week, was sent to legal experts. Formally, there are draft amendments to the law, which were adopted as of the first reading on May 18, 2005. The agencies are now prepared for the second reading. However, the draft text from the “On Auditing” law may not be reflected in the new edition.

According to the bill, the audit market should move from being state-licensed to self-regulation on July 1, 2009. Canceling licensing was planned to start from July 1, 2008, but the project was delayed, and licensing extended. There was long a dispute between the State Duma Committee on Property Rights and the Ministry of Finance over how many members self-regulatory organizations should have and how many self-regulatory organizations there must be. The Ministry of Finance wanted the minimum membership for self-regulatory organizations should be 2,000 auditors, but the State Duma Committee on Property Rights argued for 300, which they said would allow some 15 self-regulatory audit organizations in Russia, preventing several companies from monopolizing the market.

Now, the draft suggests a compromise: during the first one and a half years, the minimum membership will be set at 700 auditors or 500 audit firms (firms must be composed at least three auditors). Beginning in 2010, the standard will be increased to 2,000 auditors or 1,000 audit organizations.

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Source: Российский налоговый портал