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The present law defines organisation of audit service, law beginnings of its realisation, rights and duties of auditors, stipulates the system creation of independent of financial supervision, protecting property rights of owner in Azerbaijan Republic.
Relations, connected with the audit service, is adjusted by the present Law as well as by another legislative Acts of Azerbaijan Republic, by International contracts and agreements.
Article 1. Sphere of the law application
The present Law is spread over all of enterprises, organisations and institutions ( further - "economic subjects" ) operating in the territory of Azerbaijan Republic, irrespective of type of ownership and organizally - law subordination.
Article 2: Audit concept
Audit is the independent inspection of legibility and authenticity in accounting calculation policy, accounting and financial report of economic subjects dealing with production and goods sells, rendering of services and works to be performed.
Audit inspection might be obligatory or voluntary (in own initiative of economic subject). Audit to be carried out for economic subjects, which as to the Legislation is to publish its financial account (report), as well as in the cases indirectly stipulated by legislative acts, or as to appropriate application of authorised state body, being obligatory, but in another case - by voluntary.,
Article 3. Audit service
Audit service is considered conducting on contractual basis the inspections, expertise, analyse of financial - economic activity of economic subjects and presenting of summary in written form, adjustment of accounting calculation affirming of authenticity of data accounted and rendering other services in the field of financial-economic relationships in accordance with professional activity of audit (equity purposes of audit organisation). '
Audit service does not disclude the inspection of economic subject's activity by governmental bodies in the frames of their authorisations.
Article 4. Independent Auditor
Independent auditor is physical person, obtaining the right independently to render audit services in the territory of the Republic as to licence of Chamber of Auditors of Azerbaijan Republic (further - "Chamber of Auditors").
Article 5. Audit organisation
Audit organisation - is legal person, obtaining the to render audit services in the territory of Azerbaijan Republic under licence of Chamber of Auditors, for which this kind of services in accordance with his charter is the only sphere of activity.
For creation of audit organisation is required the availability of not less than 3 (three) independent auditors.
Article 6. Conditions submitted to the independent Auditor
For obtaining right to be free auditor operating in the territory of Azerbaijan Republic is required:
a) to be citizen of Azerbaijan Republic,
b) Not to be deprived right being enforceable by the sentence of court of law to occupy certain posts in the field of financial economic relationships or to be dealt with a certain type of activity, paying off convictions in order fixed by the Legislation, connected with the similar punishment.
c) To the high education on specialities of accounting calculation, financier, economist, and lawyer to have job probation not less than three years on that speciality.
d) pass examinations on independent auditor.
By Auditor can not the person having conviction for mercenary crimes being not pay off.
Foreigner, entitling to render audit services in its own country, might form official permission Of Chamber of Auditors to use himself by mentioned right as well as in the territory of Azerbaijan Republic.
Article 7. Organisation of exams for the title of Auditor.
Examinations on the title of auditor are taken by commission appointed by the Chamber of Auditors.
Examinations are organised in accordance with the order stipulated by the Provision of Chamber of Auditors. '
Article 8. Audit conclusion
Audit conclusion is official document certified by signature and by the stamp of auditor (audit organisation), reflecting estimation made by them financial state of economic subject, the legality of its finance economic transactions, authenticity of article of annual accounting report - summary, general state of accounting calculation and having available juridical significance for all legal and physical persons, bodies of governmental authority, as well as for justice bodies.
Audit conclusion reflecting inspection results, caring out the decision of authorised governmental bodies, is equalised to the summary of expertise, appointed according to the processiorial legislation of Azerbaijan Republic.
The unite form audit summary and demand submitted to its making up, is fixed by Chamber of Auditors.
Article 9. Adjustment of the audit service
In view of organisation of governmental adjustment of the audit service, working out of projects of normative Acts in this field and sets of measures directed in the development and improvement of the audit service in Azerbaijan Republic, interests' protection of the States, managing their economy subjective and auditors (audit organisation) in its activity of requirements, arising from the present Law, other legislative and normative law Acts, the Chamber of Auditors of Azerbaijan Republic is being created. The Activity of Chamber of Auditors is defined by the Provisions on it.
The Supreme of Azerbaijan Republic ratifies the Provisions on the Chamber of Auditors and appoints its leader.
Article 10. Granting licence on the audit activity
Independent auditors and audit organisations operate on the basis of licence issued for 5 (five) years' period.
Article 11. Registration of independent auditors and audit organisation
Auditor entitles to be dealt with the audit activity from the moment the licence receipt, giving the right to be dealt with audit activity, and making registration in the register of auditors.
Auditor caring out its activity independently or, as member of audit organisation. It is forbidden for him to be dealt with another activity.
Independent auditors have in use the diary, reflecting their activity. The diary is presented by them to the Chamber of Auditors for supervision for their activity and qualified inspection of performed audit.
The registration of auditors and audit organisations in the territory of Azerbaijan Republic is caring out by the Chamber of Auditors.
Audit organisation, consisting of not less than three auditors, having the licence for their right to be dealt with the audit activity, entitles to render the audit services from the moment of their registration in the Chamber of Auditors.
Article 12. Rights of auditors
Independent auditor and auditor organisations entitle:
- independently to establish forms and methods of the audit with customers in accordance with the present Law and contract conditions;
- to be acquainted with all documents on financial economy activity of the customer (including ones being stored in the other legal person) and to receive them for inspection, to check the availability of monetary sums, securities, material values and to get another information required for the audit;
- to receive explanations in written form from managers and customer's employees;
- In rendering the audit services on applications of authorised governmental bodies to raise prior to them matters about found revealed infringes and lacks;
- to attract on the contractual basis other auditors in performing the audit;
- In case of documents not being submitted by the economic subjects required for audit, to get rid of audit inspection.
Article 13. Liabilities of Auditors
Independent auditors and audit organisations are obliged
- to observe undoubtedly the requirements of the Legislation of Azerbaijan Republic under conducting of the audit;
- qualifically to carry out audit inspections and other audit services;
- immediately to notify the customer (authorised state body about the impossibility of their participation in performing the audit in virtue of circumstances indicated in the article 18 of the present Law;
- to examine the state, the authenticity of accountant calculation and account of the customer, their conformity with the operating Law and normative Acts;
- to inform the management of the customer about all violations, found out in the course of leading the audit, about the lacks in introduction of accounting calculation and making summaries (reports);
- to keep the information in secret received in leading the audit on demands of the customer (with the exception of the cases of justice bodies demands);
- to provide the safety of documents, received or, making up in the course of inspection; '
- On demand of economic subject in detail to notify the latter about demands of the Legislation in leading the audit, rights a liability of the parties, as well as about the normative Acts, served by the ground for notes and conclusions available in the audit summary.
Article 14. Liabilities of auditors
Under unduly performance of their obligations, auditors and audit organisations might be attracted to the property liability in accordance with the Legislation of Azerbaijan Republic and terms of contract with the customer.
Article 15. Testimonial of licence entitling to be dealt with audit activity
License giving the right to auditors and audit organisations on rendering audit services in the territory of Azerbaijan Republic, might be recalled by the decision of Chamber of Auditors in the cases:
- conducting unqualified audit three times within calendar year;
- rude violation in conducting of requirements audits of the present Law and the Legislation of Azerbaijan Republic;
- entering into the legal force the sentence of court of law about independent auditor, stipulating punishment like rights deprivation to occupy certain posts in the field of financial economy relations or to carry out the certain activity, as well as the punishment for mercenary crime;
- after granting licence eliciting fact of presentation by the auditor non authentic notices for its receipt;
- transfer the data received in the course the audit to third person without manager consent (owner) of economic subject, with the exception of cases, stipulated in the Legislation;
Hiding by the audit (by audit organisation) the cases eliminating conducting audit in accordance with the article 18 of the present Law.
Article 16. Organisation of audit service on economic subjects
Audit services are appeared on the basis of contract between independent audit or audit organisations from the one party and the customer from the other party, stipulating the subject matter of inspection and its terms (period), volume of consultative services, rate and payment procedure as well as the liabilities of the parties. ,
Customer bears the responsibility for preparation of all necessary terms to the audit for full and qualifies fulfilment of his professional liabilities.
Auditor acts independently of his client, as well as of any third person interested in this deal.
Article 17. Liabilities and rights of subjects leading its economy on usage of audit services
The manager (owner) of economic subject is to submit the auditor all necessities for conducting the audit, registers and reports and is liable for their authenticity. On inquiry of the auditor, the latter is obliged to present written or oral explanations.
Economic subjects are free in selection of auditor.
The economic subjects entitle to conclude contract with independent auditor or auditor organisation in all items of finance -economy activity at any time of period. In the cases when such contracts carry tested character, the auditor makes up in fixed order the Act on results of inspection.
Article 18. Interdictions (bans) in sphere of audit services
Auditors are prohibited to conduct their audit in cases, should they have personal property interest to the enterprise to be under inspection, if they are strictly related to any one of management of the enterprise to be under inspection, if they are being the founders, owners or, stock - joint enterprise, earlier rendered their services to the enterprise, connected with their professional activity.
Article 19. Disputes settlements
All disputes of property character between auditors (audit organisations) and between their customers, if it is found impossible to settle them in the Chamber of Auditors, are to be settled by court of law (arbitrage court of justice).
Auditor (audit organisation) might in fixed order to appeal against the court of law (arbitrage court) the judgement of the Chamber of Auditors not to grant licence or its reference, and also about non-acceptance on governmental registration of audit organisation in the capacity of juridical person.
Article 20. Inspection of audit organisations
Chamber of Auditors examines correspondence of financial-economic activity of audit organisations with the provisions of the present Law and supervises their work.
The President of Azerbaijan Republic
Geidar Aliev
Baku, September 16, 1994
N 882
RESOLUTION OF NATIONAL ASSEMBLY OF AZERBAIJAN REPUBLIC
National Assembly of Azerbaijan Republic decrees:
1 ) To put into action the Law of Azerbaijan Republic "On Audit service" from the date of its publication.
2) Hence-forth prior to bringing the Legislation of Azerbaijan Republic up to the accordance with the Law of Azerbaijan Republic "On audit service" appropriate Legislation of Azerbaijan Republic is to be applied in the part, which does not contradict the Law.
3) To Cabinet of Ministers of Azerbaijan Republic:
in month period to present to the Supreme Council of Azerbaijan Republic the projects of legislative Acts on bringing the Legislation of Azerbaijan Republic into the accordance with the Law of Azerbaijan Republic "On Audit service";
to bring the resolution of the Government of Azerbaijan Republic in accordance with the Law of Azerbaijan Republic "On Audit service";
to work out and within 15 days period to present to the Supreme Council of Azerbaijan Republic the project of the Provision "On Chamber of Auditors of Azerbaijan Republic"; '
to provide the bringing normative acts of Central bodies of governmental management and department of Azerbaijan Republic in accordance with the indicated Law;
4) To charge to Committees of National Assembly of Azerbaijan Republic on economy policy, as to the matter's state construction and defence together with the Secretary of the Supreme Council to prepare proposals on creation of Chamber of Auditors.
The Chairman of the Supreme Council
of Azerbaijan Republic
R. Guliev
Baku, September 16, 1994
N 883
RATIFIED by the resolution of National Council
of Azerbaijan Republic Baku,
September 19, 1995
N 1115
P R O V I S I O N S
Chamber of Auditors of Azerbaijan Republic
1. Chamber of Auditors of Azerbaijan Republic (further "Chamber") is an independent financial body, carrying out the organisation of the state policy and development of audit services, protection of the properties of the owners, State interests, subjects leading their economy and auditors, supervision of the observance of requirements by independent auditors and audit organisations in their activity; any such requirements arising from the legislative Acts of the Republic.
2. In its own activity the Chamber is governed by the Law of Azerbaijan Republic "On audit service", by the present provisions, and also by other normative Acts. ·
3. The Chamber is legal person, with settling, currency and special accounts in the bank. It has round stamp with the picture of State Emblem of Azerbaijan Republic on it and with its name, and also corner and other stamps.
4. Audit services are paid on the basis of contracts concluded between independent auditors and audit organisations passed the registration, and between the enterprises and organisations, but under attraction of auditors by legal and other bodies for conducting of revisions and inspections on the enterprises and in the organisations - by mentioned bodies in the according order
5. Place of the Chamber location - Baku
6. The principal item of the Chamber is the organisation of work of audit service in the Republic and carrying out the measures on development and improvement of its activity according with the acting Legislation for ensuring precise and authentic policy of financing and accounting and calculation in all the subjects leading their economy irrespective of forms of the ownership.
7. The Chamber fulfill the following functions:
organises and adjusts the work of audit service in Azerbaijan Republic; grants in the territory of Azerbaijan Republic the Licence to the independent auditors and audit organisations, carrying out supervision at their work and in the accordance the Charters of audit organisations to the Law of Azerbaijan Republic "On audit service";
carries out the registration, account of the independent auditors and audit organisations and grants the certificates to them on registration;
works out and ratifies the rules of exams on granting of licences, giving rights to be dealing with the audit activity in the territory of Azerbaijan Republic;
prepares and ratifies composition and provision of examination commission on granting of licences, giving right to deal with audit activity, fixes the payment for examination;
prepares and ratifies forms of audit conclusions on financial and accountant reports of subjects leading their economy, various forms reports about the independent auditors and audit organisations;
consults the independent auditors and audit organisations on matters of audit experience summery and application of acting legislative acts, prepares proposals on development and improvement of audit service and carries out the supervision for their realisation;
prepares instructions, recommendations and methodical indications on conducting the audit;
makes up normative documents about forms and methods of rendering services, prepares proper recommendations on the basis permanent study of national and international experience;
provides the consideration according with the legislative acts of the republic, the claims of customers to the independent auditors and audit organisations for non-fulfilment of their professional duties properly;
Caries proper measures on protection of rights and legal interests of the independent auditors and audit organisations;
Verifies that financial-economic activities of independent foreign Auditor and subsidiary and/or agencies of foreign audit organisations conform with the Law on "Audit service in the Azerbaijan Republic" and controls their work;
Carries the repeated audit;
Makes audit conclusions on authenticity of economic subjects' property evaluation with respect to privatisation of the state enterprises and other purposes. (Supplemented by the decree of the National Assembly of the Azerbaijan Republic dated March 12, 1996 with changes and supplements in Regulations of the Chamber of Auditors of the Azerbaijan Republic).
8. The Chamber has the following authorisations:
to examine quality of audit, holding by the independent auditors and audit organisations, and if violation of the law is taken place in conducting of licence, to revoke the licence for the right to be dealing with the audit activity;
to receive out from the independent auditors and audit organisations reports in fixed form;
within their authorisations to give to the auditors and audit organisations instructions and methodical indications obligatory to fulfilment;
to consider disputes of various characters between the independent auditors and audit organisations and between the customers;
to consider and settle complaints on acts of the auditor;
in view of change by the experience and preparation of specialists, to adjust business ties with international organisations, dealing with audit activity, and to present in foreign countries the interests of Azerbaijan Republic on audit items;
to prepare and improve audit employees;
to settle another matters of audit service, entering into the competency of the Chamber;
to renders services to physical and legal persons with respect to audit activity and financial-economic relations;
to renders audit services on the basis of contract with economic subjects;
to setup audit organisations. (Supplemented by the decree of the National Assembly of the Azerbaijan Republic dated March 12, 1996 with changes and supplements in Regulations of the Chamber of Auditors of the Azerbaijan Republic).
9. The Chairman of Chamber and his deputy are appointed by the Supreme Council of Azerbaijan Republic. They provided by authorisations of leaders of central state executive bodies fixed by the Legislation of Azerbaijan Republic.
10. By the Chamber manage its chairman. He bears personal responsibility for the execution of tasks and liabilities lay upon the Chamber and realisation of its functions.
11. Structure, staffs, earned salary of employees and estimates of Chambers expenditures within its own means are ratified by the Chamber Chairman. The Chairman of the Chamber in accordance with the acting legislative labour takes for work and dissmises their employees, encourages them and imposes upon them penalties.
12. For fulfilment current work and conducting practical service functions there is management body as Council is set up in the Chamber. In the composition of the Council comprise the Chairman of the Chamber, its deputy, leaders of two leading departments, on one of representative from audit organisations, independent auditors and Minister of finances of Azerbaijan Republic.
13. The Chairman of the Chamber declares the Members of Council.
14. The conferences of the Council are held not less than one time per quartile.
15. Examination on reception of auditor title is taken by exam commission appointed by the Chamber (further - "commission").
16. The composition of commission comprises three representatives of Chamber of Auditors, on one of representative from Minister of finances, Head state tax inspection, National Bank, scientist-economists, independent auditors and audit organisations. At the beginning of each year the Composition of commission is declared by the Chairman of the Chamber.
17. The member of Commission is to have great experience in the field of audit service and not than ten years of length of period of practical work on one of specialities of accountant calculation, finances, economy and law.
18. Labour of commission members is paid in fixed order.
19. Property of the Chamber is formed at the expense of: payments for passing the exams and granting licences; sums of incomes from registration of audit organisations;
members fees of independent auditors and audit organisations (including foreign legal and physical persons);
sums have been paid for rendering of audit services on contracts with the subjects leading their economy (economic subjects);
other resources not prohibited by the Legislation,
Receipts out from sales issued on the matters of audit instructions and methodical indications, books, newspapers and magazines and incomes from any unforbidden activity.
20. It is available in disposal of the Chamber capital and circulated means that are considered to be its property.
21. Pure income, remaining in disposal of the Chamber after payment of duties stipulated by the Legislation, is directed on creation of according funds.
22. The procedure of formation and utilisation of funds is ratified by the Council of the Chamber.
23. Independent auditors and audit organisations are considered the Members of the Chamber.
24. Members of the Chamber are to pay member fees in fixed order.
25. Amount of fee is established by the Council and refers on the account of expenditures of the payers.
26. The Chamber in fixed order presents to the tax and statistical bodies in the territory of their allocation accountant and statistical account on summaries of their own activity.
