LAW OF THE REPUBLIC OF KAZAKHSTAN

of November 12, 2015 No. 392-V ZRK

About the state audit and financial control

This Law governs the public relations connected with the state audit and financial control, determines powers and the organization of activities of bodies of the state audit and financial control.

Chapter 1. Basic provisions of the state audit and financial control

Article 1. The basic concepts used in this Law

In this Law the following basic concepts are used:

1) violations - acts (actions or failure to act) contradicting regulations of the legislation of the Republic of Kazakhstan and also to acts of objects of the state audit adopted for their realization;

2) the qualifier of violations - the document containing list of types of the violations revealed during the state audit with indication of the violated rules of law and the types of responsibility established by the laws of the Republic of Kazakhstan, and also methods of elimination of these violations corresponding to them;

3) subjects of the quasi-public sector - the state companies, limited liability partnerships, joint-stock companies, including National welfare fund, national managing holdings, national holdings, the national companies, founder, the participant or the shareholder of which is the state, and also the affiliated, dependent and other legal entities who are affiliated with them according to legal acts of the Republic of Kazakhstan, fund of social medical insurance, the State Social Insurance Fund, the non-profit organization providing conditions for activities of bodies, their organizations and members of the International financial center "Astana";

4) shortcomings - acts (actions or failure to act) creating conditions for possible assumption of violations (risk of emergence of violations);

5) financial control - the activities directed to elimination of the violations revealed during the state audit;

6) the state audit - the analysis, assessment and check of management efficiency and use of budgetary funds, assets of the state, objects of the state audit, the connected grants, the state and guaranteed by the state loans, and also loans attracted under the guarantee of the state, including another, connected with budget implementation activities based on risk management system;

7) objects of the state audit and financial control (further - objects of the state audit) - state bodies, public institutions, subjects of the quasi-public sector, and also receivers of budgetary funds;

8) the statutory auditor - the government employee performing the state audit and (or) financial control having the certificate of the statutory auditor;

8-1) assistant to the statutory auditor - the government employee having professional knowledge in the field of financial accounting, the financial reporting and auditor activities and the specialist in other area (field of activity) within competence of state body having the right to participate in the state audit;

9) rules of professional ethics of statutory auditors (further - rules of professional ethics) - the single code of ethical rules of conduct of statutory auditors developed and approved jointly by the Highest auditor chamber of the Republic of Kazakhstan and authorized body on internal state audit;

10) electronic state audit - the state audit performed remotely by means of use of information technologies.

Article 2. Legislation of the Republic of Kazakhstan on the state audit and financial control

1. The legislation of the Republic of Kazakhstan on the state audit and financial control is based on the Constitution of the Republic of Kazakhstan, consists of this Law and other regulatory legal acts of the Republic of Kazakhstan.

2. Operation of the legislation of the Republic of Kazakhstan on the state audit and financial control extends to the objects of the state audit located in the territory of the Republic of Kazakhstan, and also operating beyond its limits.

3. The state audit and financial control in special state bodies of the Republic of Kazakhstan is exercised in the procedures determined by the first heads of data of bodies in coordination with the Highest auditor chamber of the Republic of Kazakhstan and authorized body by internal state audit.

4. If the international treaty ratified by the Republic of Kazakhstan establishes other rules, than those which contain in this Law then are applied rules of the international treaty.

Article 3. State audit

1. The purpose of the state audit is increase in management efficiency and use of budgetary funds, assets of the state and subjects of the quasi-public sector.

2. Depending on the subject the state audit is subdivided into the following types:

1) external state audit which tasks are the analysis, assessment and check of effective and legal management of national resource (financial, natural, production, personnel, information) for ensuring dynamic growth of quality of vital conditions of the population and homeland security of the country;

2) internal state audit which tasks are the analysis, assessment and check of achievement object of the state audit of the resulting effects provided in documents of System of state planning of the Republic of Kazakhstan, reliability and reliability of financial and management information, efficiency of internal processes of the organization of activities of objects of the state audit, quality of the rendered state services, safety of assets of the state and subjects of the quasi-public sector.

3. The state audit is subdivided into the following types:

1) financial records audit - assessment of reliability, justification of the financial reporting, financial accounting and financial condition of object of the state audit;

2) efficiency audit - assessment and the analysis of activities of object of the state audit regarding efficiency, profitability, productivity and effectiveness;

3) compliance audit - assessment, observance check by object of the state audit of regulations of the legislation of the Republic of Kazakhstan, and also acts of the subjects of the quasi-public sector adopted for their realization.

Article 3-1. Regulation tasks in the sphere of the state audit and financial control

Regulation tasks in the sphere of the state audit and financial control are:

1) establishment of the legal basis of activities of bodies of the state audit and financial control;

2) determination of the basic principles and directions of implementation of the state audit and financial control.

Article 4. Indicators of the state audit

Depending on type of the state audit the following indicators are considered:

1) efficiency - ratio of the received results to planned taking into account the resources used for their achievement;

2) profitability - minimization of cost of the resources allocated for achievement of the estimated results of activities with preserving the corresponding quality of these results;

3) productivity - receipt of the most useful result for economy or the certain sphere of management with use of the allocated resources taking into account quantity, quality and terms;

4) effectiveness - extent of realization of the tasks planned on each activities and ratio of planned (final) and actual results of the related activity;

5) materiality - variation when making by object of the state audit of financial and economic activities from requirements of regulations of the legislation of the Republic of Kazakhstan, acts of the subjects of the quasi-public sector adopted for their realization and also other mistakes exerting impact on the made decisions most of which admissible size is determined according to the legislation of the Republic of Kazakhstan on the state audit and financial control depending on specifics of activities of object of the state audit and measure category;

6) prospects - compliance of the made expenses to the purposes and tasks set on the designated expected period.

Article 5. Financial control

1. Financial control is exercised by bodies of the state audit and financial control within the competence established by this Law, other laws of the Republic of Kazakhstan, acts of the President of the Republic of Kazakhstan and the Government of the Republic of Kazakhstan by means of ensuring compensation in the budget, recoveries by performance of works, rendering services, delivery of goods and (or) reflection on accounting of the revealed amounts of violations, execution of instructions and accountability of perpetrators.

2. Response measures of financial control are:

1) removal obligatory for execution by all state bodies, organizations and officials of the instruction about elimination of the revealed violations and about consideration of responsibility of persons which allowed them;

2) initiation of administrative production within competence, the stipulated by the legislation Republic of Kazakhstan about administrative offenses;

3) in case of identification of signs of administrative offenses in actions of officials of object of the state audit transfer of materials with the corresponding auditor proofs in bodies, authorized to initiate and consider cases on administrative offenses;

3-1) in case of non-execution or improper execution of the instruction object of the state audit transfer of materials with signs of criminal offense with the corresponding auditor proofs of body of the state audit and financial control for adoption of the proceeding decision in criminal prosecution authorities is performed through bodies of prosecutor's office.

In case of appeal of results of the state audit and financial control by object of the state audit, subjects of entrepreneurship and other persons whose interests are infringed by auditor actions transfer of materials with signs of criminal offense with the corresponding auditor proofs for adoption of the proceeding decision in criminal prosecution authorities is performed through bodies of prosecutor's office after observance appeal and (or) legal process of dispute settlement;

4) presentation of the claim in court according to the legislation of the Republic of Kazakhstan, including for the purpose of ensuring compensation in the budget, recoveries by performance of works, rendering services, delivery of goods and (or) reflection on accounting of the revealed amounts of the violations which are not compensated (not recovered) in voluntary procedure and execution of the instruction.

3. Services of internal audit in case of identification of signs of criminal or administrative offenses in actions of officials of object of the state audit perform response measures on transfer of materials with the corresponding auditor proofs in criminal prosecution authorities or bodies, authorized to initiate and consider cases on administrative offenses.

Article 6. Basic principles of the state audit and financial control

Basic principles of the state audit and financial control:

1) independence - non-admission of the intervention encroaching on independence of bodies of the state audit and financial control when carrying out the state audit and financial control;

2) objectivity - carrying out the state audit and financial control according to the legislation of the Republic of Kazakhstan, standards of the state audit and financial control, application by bodies of the state audit and financial control of objective approach and exception of conflict of interest when carrying out the state audit and financial control;

3) professional competence - availability at statutory auditors of necessary amount of knowledge and skills allowing to provide carrying out qualified and high-quality state audit and financial control, observance of standards of the state audit and financial control, rules of professional ethics, and also accomplishment of professional duty;

4) confidentiality - the obligation of bodies of the state audit and financial control on safety of the documents received or constituted by them during the state audit and financial control, without right of disposal to their third parties or oral disclosure of the data containing in them, except as specified, stipulated by the legislation the Republic of Kazakhstan;

5) reliability - confirmation of results of the state audit by auditor proofs;

6) transparency - clarity of statement of results of the state audit and financial control;

7) publicity - the publication in mass media of results of the state audit and financial control taking into account providing the mode of privacy, the office, commercial or protected by the law other secret;

8) mutual recognition of results of the state audit - recognition by bodies of the state audit and financial control of results of the state audit of data of bodies on condition of observance of standards of the state audit and financial control.

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