Doing Business in Russia

46 Doing Business in Russia Moscow statutory legislation, and that this differs from IFRS, in order to present the financial statements to foreign owners or investors it is normally a requirement that the statutory financial statements are prepared with an IFRS reconciliation included. Presenting financial statements in accordance with IFRS and, consequently, increasing their transparency, will facilitate the inflow of foreign investment into the economy's production sector and increase the possibility of more companies obtaining credit. Audit requirements The Federal Law on Audit requires that the following Russian entities have mandatory annual audits: Open joint-stock companies; - Listed companies; - Companies participating professionally in the stock market; Credit or insurance companies, clearing agencies, mutual insurance associations, currency, commodity and stock exchanges, incorporated investment funds, non-budgetary state funds, management companies of incorporated investment funds, and unit investment funds or non- state pension funds (apart from non- budgetary state funds); Companies (except for agricultural cooperatives and unions of such cooperatives) whose annual earnings from the sale of goods (or the performance of work or provision of services) for the year preceding the financial year exceed RUB400,000,000 (USD6,528,500), or for which the value of assets on the balance sheet at the end of the year preceding the financial year exceeds RUB60,000,000 (USD 979,300); Companies presenting and (or) publishing consolidated financial reports; Companies for which audits are mandatory according to other Federal laws. A mandatory audit must be carried out every financial year. Audits of listed companies, credit and insurance companies, non-state pension funds, companies in which the state owns more than 25 percent, state corporations, state companies and consolidated financial reporting can only be carried out by professional audit organisations. Because audits are subject to self-regulation, to provide audit services in the Russian Federation a professional auditing firm should be a member of an appropriate self- regulating organisation. KPMG ©2016 KPMG. All rights reserved.

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