LEGAL ORDER OF THE GOVERNMENT OF THE REPUBLIC OF ARMENIA

of December 28, 2017 No. 54

About approval of the Concept of reforms in spheres of financial accounting and auditor activities

1. Approve the Concept of reforms in spheres of financial accounting and auditor activities according to Appendix.

2. To the Minister of Finance of the Republic of Armenia: in a month after approval of the Concept to provide the list of the means providing application of the concept to the Government of the Republic of Armenia.

Appendix

to the Legal Order of the Government of the Republic of Armenia of December 28, 2017 No. 54

Ministry of Finance of the Republic of Armenia

The concept of reforms in spheres of financial accounting and auditor activities

Yerevan-2017

1. Summary summary

1. The concept of reforms in spheres of financial accounting and auditor activities is developed by the Ministry of Finance of RA.

2. In the document the main directions of the reforms necessary in spheres of financial accounting and auditor activities are stated, the current situation in spheres, and also results of studying of the best international experience in this sphere is provided. In particular, the adjustment policy performed now in spheres of financial accounting and auditor activities, processes of licensing of auditing organizations, qualifications of specialists and quality control concerning auditing organizations is provided.

3. In the document the offered directions of reforms taking into account the best international experience accepted now are specified, the new model of regulation of spheres and control of them is offered: specialized structure - council on public control.

4. The concept also offers to specify circle of the companies which are subject to statutory audit, making transition from the formal requirement existing now to involvement of the companies concerning which there is real public requirement to subject to audit. Now under the different laws 1174 companies most of which part (about 54%) - the open joint stock companies which are not performing any activities are subject to statutory audit. The purpose of reforms also in specifying circle of the specified organizations for distribution of the requirement about audit of the companies with real public accountability, but not on the organizations meeting requirements of the law formally.

2. Introduction

6. In this conceptual document the basic principles, the directions, the purposes of reforms of financial accounting and auditor activities in RA and the expected results are stated.

7. The document is developed for the purpose of to provide natural process of works on public informing on reforms of financial accounting and auditor activities and mutually advantageous discussions with the interested bodies. This conceptual document is provided in this plan as day of state bodies in the sphere, the international partner organizations, professional and public organizations, and for the citizens performing activities in spheres of financial accounting and auditor activities and who are interested in them.

8. The concept is developed by the Ministry of Finance of RA.

3. Background

I. The current situation in the sphere of financial accounting

9. Now regulation in the sphere of financial accounting in the Republic of Armenia is performed by the state by means of authorized body of public administration (The Ministries of Finance of RA) that means that in spheres of financial accounting and auditor activities the state develops adjustment policy, and also mechanisms of implementation of this policy.

10. It should be noted that from the point of view of implementation of effective regulation in the sphere of financial accounting, in general, as first-priority functions are considered:

1) establishment of methodological basis or bases of financial accounting and preparation of the financial reporting;

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