Article 5. Audit and its types The Law on Auditing

Home / RLA / Article 5. Audit and its types The Law on Auditing

1. The types of audit are:

1) mandatory;

2) proactive.

2. The following are subject to mandatory audit:

joint stock companies;

state-owned enterprises on the right of economic management with a supervisory board in the fields of education and healthcare;

insurance (reinsurance) organizations, insurance holdings and organizations in which the insurance (reinsurance) organization and (or) insurance holding company are major participants, insurance broker;

the unified accumulative pension fund and professional securities market participants created in the organizational and legal form of a joint-stock company;

major participants in the investment portfolio manager;

in cases stipulated by the Code of the Republic of Kazakhstan "On Subsoil and Subsurface Use", legal entities that have the right of subsurface use to conduct operations for the exploration and production of hydrocarbons or exploration and production of solid minerals;

banks, organizations in which the bank is a major participant, bank holdings;

civil aviation organizations, with the exception of airlines engaged in aviation operations according to the list determined by the Government of the Republic of Kazakhstan;

bread-receiving enterprises;

Insurance Benefit Guarantee Fund;

Social Health Insurance Fund;

legal entities of the Republic of Kazakhstan that have concluded an investment contract providing for investment preferences;

special financial companies in accordance with the Law of the Republic of Kazakhstan "On Project Financing and Securitization";

developers and authorized companies in accordance with the Law of the Republic of Kazakhstan "On Equity participation in Housing Construction";

settlement and financial center for support of renewable energy sources in accordance with the Law of the Republic of Kazakhstan "On support of use of renewable energy sources";

wholesale consumers of electric energy (industrial facilities) included in the list of consumers of the wholesale electric energy market who purchase electric energy at an investment tariff;

authorized economic operators in accordance with the Code of the Republic of Kazakhstan "On Customs Regulation in the Republic of Kazakhstan";

limited liability partnerships, subject to the following conditions::

1) it consists of participants (founders) who own less than ten percent of the shares in the authorized capital;

2) the average annual number of employees is more than two hundred and fifty people and (or) the average annual income is more than three million times the monthly calculation index established by the law on the republican budget and effective on January 1 of the corresponding fiscal year.

An audit of the annual financial statements for a limited liability company related to a medium-sized business entity is carried out at the request of a participant (founder) who owns less than ten percent of the shares in the authorized capital of a limited liability company.

Organizations for which an audit is mandatory and which, in accordance with the legislation of the Republic of Kazakhstan, publish annual financial statements in the media are required to publish an audit report along with the annual financial statements.

The requirements of this paragraph do not apply to joint-stock companies declared bankrupt by a court, as well as to banks, insurance (reinsurance) organizations that have been deprived of their licenses by the authorized body for regulation, control and supervision of the financial market and financial organizations and (or) are in the process of compulsory liquidation.

3. An initiative audit is conducted on the initiative of the audited entity or its participant, taking into account the specific tasks, timing and scope of the audit provided for in the audit agreement between the initiator and the audit organization.

The Law of the Republic of Kazakhstan dated November 20, 1998 No. 304.

 This Law regulates the relations that arise between government agencies, individuals and legal entities, auditors, audit organizations, professional audit organizations and the professional audit council in the process of carrying out auditing activities in the Republic of Kazakhstan.

President

Republic of Kazakhstan

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