Auditors are slow with transparency

Mandatory disclosure of a wide range of information by audit companies, introduced since the beginning of September, has not been implemented by all market participants. Transparency is positive for clients choosing a quality auditor. But for companies, information can be sensitive, it concerns beneficiaries, customers and financial indicators, increasing, among other things, sanctions risks.

As Kommersant found out, audit organizations are in no hurry to comply with the requirements of the order of the Ministry of Finance for expanded disclosure of information about their activities. From the beginning of September, they are required to disclose not only the name, address, name of the head and other technical data, but also the shares and names of the beneficiaries of the companies, the number of employees, the names of the largest customers, and revenue in various areas. Information should be updated annually or as changes occur.

Meanwhile, only a little more than half of the top 20 audit companies disclosed data, while information is not available on the website of a third of organizations.

Some disclose information partially or according to the old audit board rules.

Market participants do not argue that the disclosure of information on the official website will help make their activities more transparent for those who really need an audit. Svetlana Romanova, President of Pacioli Auditing Company, says that disclosures in terms of scope, resources, number of employees and clients can help companies assess whether an audit firm is capable of performing a quality and complete audit. Including, she explains, if a company works consistently and for a long time with large clients, this may indicate the high quality of its services. For clients who choose an auditor through a competition, the disclosure will provide an opportunity to match the competition documentation with the information provided on the site, which is controlled by the regulator, adds Ms. Romanova.

It is not difficult to disclose information, since audit companies already submit it to SROs, and this is an ongoing business process that does not require serious labor costs. At the same time, the requirements to expand the transparency of the audit business contradict certain requirements and recommendations of the authorities to close sensitive information from other Russian organizations, especially beneficiaries or clients.

Svetlana Romanova believes that the disclosure of all information creates a risk for auditors to fall under secondary US sanctions. However, Dmitry Kletochkin, a partner at the Rustam Kurmaev & Partners law firm, argues that the risks in this case are minimal, since most of the companies “have already managed to correct the corporate structure in order to minimize the consequences of information disclosure.” Companies that do not disclose the necessary information proceed from the logic that for most clients who require a mandatory audit, this is a mere formality, for show, and only the price is important, says Vladislav Karastelin, managing partner of Dokar Consulting.

Punishment for non-compliance with the requirements of the Ministry of Finance can be serious, lawyers say.

Depending on the clients to whom the company provides services, the Treasury of the Russian Federation, the Central Bank or the SRO will conduct inspections, including paying attention to the disclosure of information on the site. If violations are detected, the company will receive a comment from the inspector, which will reduce its assessment. A low score creates the risk of exclusion from the SRO, explains Svetlana Romanova. Sergei Uchitel, a partner at the Pen & Paper Bar Association, adds that, as a measure of liability, Art. 12 of the Law “On Auditing” provides for the possibility of canceling the auditor’s qualification certificate in the event of a systematic violation by the auditor of mandatory requirements.

At the same time, the general director of Rusaudit, Yevgeny Samoilov, draws attention to the fact that so far information disclosure is poorly controlled, and the lack of a real practice of punishment “relaxes the company.” According to Dmitry Limarenko, CEO of the auditing company Univers-Audit, Dmitry Limarenko raises questions about the possibility of control, since it is not clear how the Ministry of Finance (there was no answer to Kommersant’s request) will monitor the websites of about 2 thousand companies, when it would be much easier to control auditors through the SRO, where they already hand over this data.

Julia Poslavskaya