Ministry of Justice
Republic of Uzbekistan
On April 12, 2007 No. 1673
of December 29, 2006 No. 108
About approval of the National standard of auditor activities of the Republic of Uzbekistan (NSAD No. 12) "Assessment of systems of financial accounting and internal control during audit inspection"
According to the Law of the Republic of Uzbekistan "About auditor activities" and the resolution of the Cabinet of Ministers of the Republic of Uzbekistan of September 22, 2000 to No. 365 "About enhancement of auditor activities and increase in role of audit inspections", I order:
1. Approve the enclosed National standard of auditor activities of the Republic of Uzbekistan (NSAD N12) "Assessment of systems of financial accounting and internal control during audit inspection".
Approved by the Order of the Ministry of Finance of the Republic of Uzbekistan of December 29, 2006, No. 108
This National standard of auditor activities (NSAD N12) (further - the Standard), according to the Law of the Republic of Uzbekistan "About auditor activities" (Sheets of Oliy Majlis of the Republic of Uzbekistan, 2000, Art. N5-6, 149) and the resolution of the Cabinet of Ministers of the Republic of Uzbekistan of September 22, 2000 N365 "About Enhancement of Auditor Activities and Increase in Role of Audit Inspections" (the joint venture of the Republic of Uzbekistan, 2000, N 9, the Art. 62), is element of system of normative auditing regulation in the Republic of Uzbekistan.
1. The purpose of this Standard is determination of actions of auditing organization according to system of financial accounting and internal control system during audit inspection of business entity.
2. Tasks of this Standard are:
a) development of the main requirements imposed to assessment by the auditor (auditors) of system of financial accounting and internal control system during audit inspection of business entity;
b) the description of evaluation procedure of system of financial accounting during audit inspection of business entity;
c) the description of evaluation procedure of internal control system during audit inspection of business entity.
3. Requirements of this Standard are obligatory for all auditing organizations when implementing the audit inspection providing preparation of official audit opinion.
4. In this standard the following basic concepts are used:
system of financial accounting - the ordered system of collection, registration and generalization of accounting information by continuous, continuous, documentary accounting of all economic activities, and also creation on its basis of financial and other reporting;
internal control system - the system of measures organized on the basis of the accepted accounting policy by the head of the subject of financial accounting for the purpose of law enforcement, economic feasibility of implementation of economic activities, safety of assets, prevention and identification of cases of plunder and mistakes in case of financial accounting, creation of financial and other reporting.
5. During audit inspection the auditor(s) shall (y) check system of financial accounting which is applied on the business entity checked by it, and at the same time to study and estimate those control facilities on the basis of which will be determined essence, amount and time expenditure of expected audit procedures.
6. The internal control system shall correspond to amount and features of activities of business entity. The auditor during audit inspection shall receive sufficient conviction that the system of financial accounting authentically reflects economic activity of the checked business entity.
7. If the auditor is convinced that he can rely on appropriate means of control, it has opportunity to carry out audit procedures less in details and (or) more selectively, than it would do otherwise, and also can make changes to essence of the applied audit procedures and to expected costs of time for their implementation.
8. In case of efficiency evaluation and reliability of internal control system in general and separately the auditing organization uses the following degrees:
9. The auditing organization can make the decision on application in the activities of bigger quantity of degrees in case of efficiency evaluation and reliability.
10. Studying and assessment of system of financial accounting and internal control system shall be without fail reflected in working documentation of auditing organization. At the same time it is recommended to use:
a) specially developed test procedures;
b) lists of standard questions for clarification of opinion of managing personnel and employees of accounts department;
c) special forms and checking sheets;
d) lists of comments, protocols or acts.
11. Taking into account requirements of the present and other national standards of auditor activities the auditing organization independently develops technique and procedure for studying and assessment of system of financial accounting and internal control, and also plans procedures of audit inspection depending on results of studying and assessment. The decrease in amount and detail of separate audit procedures made as a result of assessment of control facilities of business entity shall be properly reasoned in all such cases.
12. The opinion of the auditor on the organization of system of financial accounting and system effectiveness of internal control is the basis for planning of carrying out audit procedures. Lack of documentation or inadequate documentation of features of system of financial accounting of the checked business entity, and also results of studying and assessment of internal control system of this business entity can serve as the proof of inadequate carrying out audit inspection.
13. The shortcomings of system of financial accounting and internal control system found during audit inspection, and also the recommendation about their elimination need to be reflected in the audit report.
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