RESOLUTION OF THE CABINET OF MINISTERS OF THE KYRGYZ REPUBLIC

of April 8, 2022 No. 195

About approval of the Regulations on committee on audit

For the purpose of implementation of the paragraph of the sixth Item 2 of article 1 of the Law of the Kyrgyz Republic "About financial accounting", according to articles 13, of the 17th constitutional Law of the Kyrgyz Republic "About the Cabinet of Ministers of the Kyrgyz Republic" the Cabinet of Ministers of the Kyrgyz Republic decides:

1. Approve Regulations on committee on audit according to appendix.

2. This resolution becomes effective after seven days from the date of official publication.

Appendix

to the Resolution of the Cabinet of Ministers of the Kyrgyz Republic of April 8, 2022 No. 195

Regulations on committee on audit

1. General provisions

1. This Provision establishes procedure for creation and work of the committee on audit created by the subject of public interest or the subject of big business (further - the subject) according to the legislation of the Kyrgyz Republic on financial accounting.

2. Purposes and tasks of committee on audit

2. The purpose of committee on audit (further - committee) is assistance to effective implementation of functions of the Board of directors of the subject regarding preliminary consideration of the questions connected with audit and control of financial and economic activities of the subject.

3. The main objectives of committee are:

1) supervision of forming of accounting (financial) records of the subject;

2) control of reliability and efficiency of functioning of internal control systems, risk management and corporate management;

3) ensuring independence and objectivity of implementation of internal audit function;

4) interaction with the external auditor and participation in the choice of auditing organization;

5) performance monitoring of functioning of system of counteraction to unfair actions of workers of the subject and third parties.

3. Procedure for creation and activities of committee

4. The committee is created for three years by the Board of directors of the subject which part at least three members are.

5. The committee shall consist in most of independent board members. Members of the committee cannot be elected more than for two terms in a row.

6. Members of the committee shall have the corresponding work experience in the field of accounting and/or audit, one member of the committee shall have necessary competence of the sphere of economic activity of the subject. Members of executive or supervisory authority of the subject cannot be members of the committee. Members of the committee cannot book audit of the subject.

The auditor cannot be the member of the committee of the pro-audited subject within three years after carrying out audit.

7. The chairman of committee is elected from among his members and shall be the independent board member of the subject.

8. The committee performs activities according to this Provision and provision approved by subject.

9. The committee shall establish the procedures providing confidentiality and anonymity of receipt of information, the recommendations and wishes concerning the financial reporting and internal control.

10. Committee meetings are held regularly, at least once a quarter. The committee shall be convoked by the body performing the common directorship of the subject or two members of the committee.

11. Each member of the committee participating in decision making shall:

1) to be informed on essence of case in point and independent in judgment (capable to be effective independently, irrespective of someone's influence on results of its conclusions, conclusions and in the conditions excluding any foreign impact on opinion expression);

2) to estimate possibility of risks and consequences of the decisions made by it.

12. The opinion of the member of the committee having notes and offers on case in point and not concordant with the made decision shall be expressed during the vote and is reflected in the protocol. The protocol shall be signed by all members of the committee who were present at meeting and the secretary of committee. The members of the committee who were not participating in meeting shall be informed of the protocol and the made decisions under list.

4. Functions of committee

13. The committee performs the activities within the legislation of the Kyrgyz Republic, performing the following main functions:

1) development of recommendations to general meeting of participants/founders of the subject concerning appointment of auditing organization, if necessary, the direction of the recommendation to the Board of directors of the subject of initiation of audit inspections, involvement of experts for rendering assistance to committee;

2) implementation of supervision of accomplishment of the legislation in the sphere of financial accounting and audit, submission of the report on the matter to the body performing the common directorship of the subject;

3) control of financial accounting and financial reporting preparation of the subject, including:

- control of correctness and sequence of application of accounting policy of the subject;

- control of observance of requirements to disclosure by the subject of information;

- control of integrity, objectivity and balance of the reporting of the subject;

4) control of risk management systems and internal control, including:

- efficiency evaluation of risk management systems and internal control and offer of measures for their enhancement;

- analysis and assessment of execution of risk management policy and internal control;

- analysis and assessment of execution of policy of management of conflict of interest;

- control of the procedures providing observance by the subject of requirements of the legislation and internal documents;

5) control of independence, effectiveness and efficiency of functioning of division (service) of internal audit, including:

- consideration of the Regulations on internal audit (about division (service) of internal audit) in which its purposes, tasks, functions and organizational structure are determined;

- approval of the plan of activities and budget of division (service) of internal audit;

- consideration of information on the course of accomplishment of the plan, about results of checks;

- consideration of questions of appointment (dismissal) of the division manager (service) of internal audit and the amount of its remuneration taking into account skill level;

- acquaintance with recommendations of division (service) of internal audit and monitoring of implementation of recommendations;

- assessment of effectiveness and efficiency of activities of division (service) of internal audit;

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