THE ORDER OF THE MINISTRY OF ECONOMIC DEVELOPMENT OF THE RUSSIAN FEDERATION AND FEDERAL AGENCY OF THE RUSSIAN FEDERATION ON MANAGEMENT OF THE STATE-OWNED PROPERTY

of January 21, 2016 No. 12

About approval of Methodical recommendations about the organization and carrying out statutory audit of the financial (accounting) reporting

For the purpose of improvement of quality of corporate management in joint-stock companies with the state participation by standardization and regulation of procedure for the organization of interaction with the external auditor in joint-stock companies I order:

1. Approve Methodical recommendations about the organization and carrying out statutory audit of the financial (accounting) reporting according to appendix.

2. (Yu. P. Holodnyakov) together with Management of corporate technologies (V. V. Semerikov) till 05.02.2016 to provide to management of information technologies the publication of Methodical recommendations about the organization and carrying out statutory audit of the financial (accounting) reporting on the official site of Rosimushchestvo, and also placement on the Interdepartmental portal on management of state-owned property.

3. I reserve control of execution of this order.

Approved by the Order of Federal agency of the Russian Federation on management of state-owned property of January 21, 2016 No. 12

Methodical recommendations about the organization and carrying out statutory audit of the financial (accounting) reporting

Introduction

Interaction of the board of directors (supervisory board), including its committee on audit, with the external auditor providing check of reliability of accounting (financial) records is one of the important directions of the organization of effective corporate management system of society.

The main aspects of such interaction are:

- The organization and carrying out tender at the choice of auditing firm, including development or updating of procedure for holding open tender at the choice of the external auditor, its planning, forming of the contest committee, preparation of documentation, carrying out tender, the conclusion of the contract with the external auditor and

- Interaction with the external auditor in verification process by the external auditor of reliability of accounting (financial) records which shall include providing the coordinating role of committee on audit for the organization of effective working interaction, interaction at stage of preparation of the report on results of audit inspection, consideration of results of audit, regular quality evaluation of interaction and ensuring independence of the external auditor.

In Appendix 1. Approximate process of the organization and carrying out statutory audit" are offered approximate stages of interaction, their desirable terms and responsible structures / divisions / persons.

Implementation of the coordinating role under the organization and carrying out external audit by the committee on audit created by the board of directors of society is represented to the most optimum. In case of absence of committee on audit within ensuring necessary level of efficiency of activities of external audit one of board members having necessary qualification in the field of the financial reporting, internal control can undertake its role.

1. The organization and holding open tender at the choice of auditing firm

Forming of the relations with the external auditor begins with the organization and carrying out tender at the choice of the external auditor <1> who will render to society services in external audit. The auditing firm chosen during such tender then is recommended by the board of directors (within consideration of the questions prepared on the annual general shareholder meeting) to general shareholder meeting for approval as that the Federal Law of December 26, 1995 requires No. 208-FZ "About joint-stock companies" according to which general shareholder meeting shall approve annually the organization - the external auditor. Prior to tender the Board of directors, according to requirements of the Federal Law of December 26, 1995 No. 208-FZ "About joint-stock companies" prepares offers concerning the amount of fee of the external auditor. The specific cost of financial records audit is determined in the course of carrying out tender and is enshrined in the agreement.

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<1> According to item 4 of Art. 5 307-FZ of 30.12.2008 the contract for carrying out statutory audit of accounting (financial) records of the organization in which authorized (share) capital the share of state-owned property constitutes at least 25 percent and also for carrying out audit of accounting (financial) records of the state corporation, state-owned company, state unitary enterprise or municipal unitary enterprise consists with auditing organization or the individual auditor. According to item 3 of the specified law statutory audit of accounting (financial) records of the organizations which securities are admitted to organized trading of other credit and insurance companies, non-state pension funds, the organizations in which authorized (share) capital the share of state-owned property constitutes at least 25 percent, the state corporations, state-owned companies, and also the accounting (financial) records included in the avenue of securities, and consolidated financial statements is carried out only by auditing organizations.

Within this document the organizations in which authorized (share) capital the share of state-owned property constitutes at least 25 percent, and also the state corporations, state-owned companies, the state unitary enterprises or municipal unitary enterprises are considered. The procedure for preparation of documentation and carrying out tender at the choice of the external auditor for such joint-stock companies is regulated by the regulating documents specified in Appendix 2:

1.1. Development/updating of procedure for holding open tender at the choice of the external auditor

The choice of the auditor is performed by holding open tender (it is regulated by Articles 48 - 53 44-FZ), i.e. information on purchase is given by society - the organizer of tender to the unrestricted group of people by placement in unified information system of the notice on carrying out such tender, the tender documentation and single requirements are imposed to participants of tender.

It is recommended to develop and approve according to provisions of the regulatory legal acts specified in item 1 of these Recommendations the internal document establishing procedure for holding open tender on right to contract on statutory audit of financial accounting and accounting (financial) records. The relevant internal document (further - the Procedure) shall be approved by authorized body of management of society - the organizer of tender. It is recommended to approve the Procedure by the board of directors of society, at the same time the document, in particular, shall regulate the following questions:

- tender planning;

- forming of the contest committee;

- preparation of the tender documentation;

- rules of registration and submission of requests for tender;

- holding open tender;

- conclusion of the contract with the external auditor.

The initiative of development/updating and approval of the specified Procedure shall proceed from committee on audit of society. Also, in case of absence of committee on audit, the initiative can proceed from one of board members having necessary qualification in the field of the financial reporting, internal control which the chairman of the board of directors nominated. When the committee on audit is not created also the board member responsible for implementation of the coordinating role, is not determined by the chairman of the board of directors, the initiative of development/updating and approval of the Procedure for holding open tender on right to contract on statutory audit of financial accounting and accounting (financial) records can proceed from structural division of society to which competence the corresponding functionality is referred.

It is reasonable that the document was developed/is staticized and approved by the relevant authorized body of society - the organizer of tender until forming of the contest committee and the beginning of preparation of the tender documentation.

Short comments on possible contents of the main Sections of the Procedure are below included (pct 1.2 - 1. 6).

1.2. Tender planning

Since January 1, 2016 implementation of procurement planning by societies, including planning of acquisition of auditor services is provided.

According to Article 16 44-FZ expenses on carrying out statutory audit shall join in the procurement plan created by society - the organizer of tender for operation of the budget, i.e. for at least 3 years.

Article 5 307-FZ provides holding open tender at the choice of the external auditor at least once in five years <1>. Many companies consider to hold expedient competition with the conclusion of the agreement for several years. With respect thereto the organizer of tender shall provide control of correct inclusion of necessary information in procurement plan.

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<1> "The contract for carrying out statutory audit of accounting (financial) records of the organization in which authorized (share) capital the share of state-owned property constitutes at least 25 percent and also for carrying out audit of accounting (financial) records of the state corporation, state-owned company, state unitary enterprise or municipal unitary enterprise consists with the auditing organization or the individual auditor determined by carrying out at least once in five years of open tender according to the procedure, established by the legislation of the Russian Federation on contractual system in the sphere of purchases, goods, works, services for ensuring the state and municipal needs, at the same time establishment of the requirement to providing bids and (or) to ensuring agreement performance is not obligatory".

Forming/change of procurement plan is performed by society according to the procedure operating in society and in the terms established in society.

Placement in unified information system <1> of the approved procurement plan is made within 3 working days from the date of approval or change of such plan.

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<1> Unified information system in the sphere of purchases (unified information system) - set of information containing in databases, the information technologies and technical means providing forming, processing, storage of such information, and also its provision with use of the official site of unified information system on the information and telecommunication Internet (official site). According to part 2 of article 112 of the Federal Law No. 44-FZ before input of EIS in operation information is subject to placement on the official site of the Russian Federation on the information and telecommunication Internet for placement of information on orders for deliveries of goods, performance of works, rendering the services goszakupki.ru.

1.3. Forming of the contest committee

According to Article 39 44-FZ forming of society by authorized body - the organizer of purchases of the contest committee which will organize is provided and carries out competition at the choice of the external auditor.

Because results of the choice of the external auditor according to the legislation shall be approved by general shareholder meeting, it is recommended that the committee on audit of society acted as authorized body (in case of its absence - the board of directors).

The chairman of committee on audit or other board member can head the contest committee. Members of the committee on audit, and also the division manager of internal audit can enter it (in case of availability of this division in structure of society).

It agrees 44-FZ (Article 39) persons which underwent occupational retraining or advanced training in the sphere of purchases and also the faces having the special knowledge relating to audit area of the financial reporting mainly shall constitute the contest committee.

The structure of the contest committee can include the authorized representative of Rosimushchestvo. According to the order of Rosimushchestvo of February 22, 2011 No. 48 (item 2. 2) when obtaining from the organizer of tender of the address about inclusion of the representative of Rosimushchestvo in number of members of the contest committee Rosimushchestvo in time no later than 5 working days prepares the relevant decision.

Also at the request of society - the organizer of tender the structure of the contest committee can include members of SROs (self-regulatory organizations) of auditing organizations.

Physical persons cannot be members of the commission:

- which were involved as the experts to carrying out expert evaluation of the tender documentation and requests performed during prequalification selection, assessment of conformity of participants of tender to additional requirements;

- chief accountant;

- the submitted applications or which are on the staff of the organizations which submitted applications;

- on whom participants of tender are capable to exert impact (including the physical persons who are members (shareholders) of these organizations, members of their governing bodies, creditors);

- married or the close related relations with the head of society - the organizer of tender;

- directly exercising control in the sphere of purchases, officials of regulatory authority in the sphere of purchases.

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