Appendix No. 5

to the Order of the Ministry of Finance of the Russian Federation of November 9, 2016 No. 207n

The international standard of audit 510 "The audit engagements which are carried out for the first time: remaining balance at the beginning of the period"

MCA 510 "The audit engagements performed for the first time: remaining balance at the beginning of the period" should be considered together with MCA 200 "Main objectives of the independent auditor and carrying out audit according to International standards of audit".

Introduction

Scope of this standard

1. This International Standard of Audit (ISA) establishes the auditor's obligations concerning remaining balance at the beginning of the period when carrying out the audit engagements performed for the first time. In addition to the amounts specified in the financial reporting, remaining balance at the beginning of the period includes number of the line items which were existing at the beginning of the period and subject to disclosure such as, for example, contingent and contractual commitments. If the financial reporting contains comparative financial information, then the requirements and instructions provided by MCA 710 <1> are also applied. Additional requirements and instructions concerning actions which the auditor prior to the beginning of the audit engagements performed for the first time shall undertake contain in MCA 300 <2>.

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<1> MCA 710 "Comparative information - comparable indicators and the comparative financial reporting".

<2> MCA 300 "Planning of financial records audit".

The effective date

2. This standard becomes effective concerning financial records audit for the periods beginning on December 15, 2009 or after this date.

Purpose

3. When carrying out the audit engagements performed for the first time the auditor's purpose regarding the analysis of remaining balance at the beginning of the period is receipt of sufficient competent auditor evidences:

(a) availability or lack of misstatements in the remaining balance at the beginning of the period essentially influencing the financial reporting for current period;

(b) the fact that the corresponding accounting policies regulating remaining balance at the beginning of the period are consistently applied in the financial reporting for current period, or the changes made to them are properly considered, provided and opened according to the applicable concept of preparation of the financial reporting.

Determinations

4. For the purposes of International standards of audit the following terms have the stated below values:

(a) the audit engagement performed for the first time - task which provides that

(i) or financial records audit for previous period was not booked;

(ii) or it was carried out by the prior auditor;

(b) remaining balance at the beginning of the period - account balances at the beginning of the period. Remaining balance is at the beginning of the period created on the basis of remaining balance for the end of preceding period and reflects influence of transactions and events of preceding periods, and also accounting policy which was applied in preceding period. Remaining balance at the beginning of the period also includes the information which was existing at the beginning of the period and subject to disclosure such, for example, as contingent and actual obligations;

(c) the prior auditor - the auditor of other auditing organization who booked financial records audit of the organization for previous period and was replaced by the acting auditor.

Requirements

Audit procedures

Remaining balance at the beginning of the period

5. The auditor shall study the latest financial reporting of the organization if that is available, and also with the conclusion of the prior auditor on it if it is, for studying of information concerning remaining balance at the beginning of the period including disclosure of information.

6. The auditor shall collect sufficient competent auditor evidences of availability (or absence) misstatements of the remaining balance at the beginning of the period essentially influencing the financial reporting for current period, way (see the Items A1 - A 2):

(a) establishments whether remaining balance for the end of previous period was correctly postponed for current period or, if necessary, are counted;

(b) estimates of whether reflect remaining balance at the beginning of the period the corresponding accounting policies,

(c) accomplishment of one or several of the procedures below (see the Items A3 - A 7):

(i) the analysis of working documentation of the prior auditor for receipt of proofs concerning remaining balance at the beginning of the period if financial records audit for previous year was booked;

(ii) estimates whether give audit procedures which are performed in current period, the proofs concerning remaining balance at the beginning of the period;

(iii) carrying out the specific audit procedures directed to receipt of proofs on remaining balance at the beginning of the period.

7. If the auditor obtained the auditor evidence that remaining balance at the beginning of the period contains the misstatements capable essentially to influence the financial reporting for current period, the auditor will shall carry out the additional and ought in specific circumstances audit procedures for determination of influence of misstatements on the financial reporting for current period. If the auditor concludes that the financial reporting for current period contains such misstatements, he will shall bring this information to the attention of management of the organization of appropriate level and persons who are responsible for corporate management according to MCA 450 <1>.

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<1> MCA 450 "Assessment of the misstatements revealed during audit", Items 8 and 12.

Consecutive application of accounting policies

8. The auditor shall obtain sufficient competent auditor evidences of the fact that the corresponding accounting policies regulating remaining balance at the beginning of the period are consistently applied in the financial reporting for current period, and the changes made to accounting policy are properly considered, provided and opened according to the applicable concept of preparation of the financial reporting.

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