Mandatory audit is regulated by the state, in particular, the Law of Ukraine «On the Audit of Financial Statements and Audit Activity» (hereinafter Law 2258) establishes the legal principles of the audit of financial statements, the conduct of audit activity and regulates the relations that arise during its conduct. Based on the results of the audit, an audit report is drawn up.
audit report — a document prepared by the subject of audit activity based on the results of the audit of financial statements (consolidated financial statements) in accordance with international auditing standards and the requirements of Law 2258;
The purpose of the audit is to increase the degree of trust of the specified users in the financial statements. Possible users of financial reporting: investors, lenders, labor groups, suppliers, clients, government institutions (the National Commission for State Regulation of Financial Services Markets, the National Commission for the Stock Market and Securities, the National Bank of Ukraine and others), the public.
Mandatory audit of financial statements — audit of financial statements (consolidated financial statements) of economic entities, which in accordance with the law are required to publish or provide financial statements (consolidated financial statements) to users of financial statements together with an audit report prepared by entities audit activity on the grounds and in the manner provided by Law 2258;
The task of mandatory audit of financial statements — the task of providing reasonable assurance, which is accepted and performed by the subject of audit activity in accordance with the requirements of Law 2258 and international auditing standards by checking financial statements or consolidated financial statements with the aim of expressing an independent opinion of the auditor about its compliance in all essential aspects and compliance with the requirements of international standards of financial reporting or national provisions (standards) of accounting and laws of Ukraine;
The Law of Ukraine On Accounting and Financial Reporting in Ukraine N 996-XIV defines the obligation to conduct an audit for:
enterprises that are of public interest (except for large enterprises that are not issuers of securities), public joint-stock companies, subjects of natural monopolies on the national market, and economic entities that carry out activities in the extractive industries are obliged no later than by April 30 of the year following the reporting period, publish the annual financial statements and annual consolidated financial statements together with the auditor’s report on its website (in full) and in another way in cases specified by law.
Large enterprises that are not issuers of securities and medium-sized enterprises are required to publish the annual financial statements together with the auditor’s report on their website (in full) no later than June 1 of the year following the reporting period.
Other financial institutions belonging to micro-enterprises and small enterprises are obliged to publish the annual financial statements together with the audit opinion on their own web page (in full) no later than June 1 of the year following the reporting period.
Microenterprises are enterprises whose indicators, as of the date of drawing up the annual financial statements for the year preceding the reporting year, meet at least two of the following criteria:
book value of assets — up to 350 thousand euros;
net income from the sale of products (goods, works, services) — up to 700 thousand euros;
the average number of employees is up to 10 people.
Small enterprises are those that do not meet the criteria for micro-enterprises and whose indicators, as of the date of drawing up the annual financial statements for the year preceding the reporting year, meet at least two of the following criteria:
book value of assets — up to 4 million euros;
net income from the sale of products (goods, works, services) — up to 8 million euros;
the average number of employees is up to 50 people.
Medium enterprises are enterprises that do not meet the criteria for small enterprises and whose indicators, as of the date of drawing up the annual financial statements for the year preceding the reporting year, meet at least two of the following criteria:
book value of assets — up to 20 million euros;
net income from the sale of products (goods, works, services) — up to 40 million euros;
the average number of employees is up to 250 people.
Large enterprises are those that do not meet the criteria for medium-sized enterprises and whose indicators, as of the date of drawing up the annual financial statements for the year preceding the reporting year, meet at least two of the following criteria:
book value of assets — more than 20 million euros;
net income from the sale of products (goods, works, services) — more than 40 million euros;
the average number of employees is more than 250 people.
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