The Importance of Audit in the Business Environment

Provides a clear understanding of the financial stability of the company.

Contributes to increasing business credibility.

Provides objective information for making decisions.

Helps businesses comply with tax and financial regulations.

Audit Objectives

Assurance – To ensure that financial statements are accurate and fair.

Compliance – To promote compliance with IFRS.

Risk Management – To detect potential financial fraud and to identify risks.

Data Reliability – To build trust in financial information for both internal and external stakeholders.

Audit: Importance and Significance

Audit is the process of independent evaluation of an organization's financial statements to verify their accuracy, completeness, and compliance with legislation. It plays an important role in ensuring the transparency, credibility, and investment attractiveness of organizations.

ON CREDIT ORGANIZATIONS

Article 16. Audit of a credit organization։

1. Each year, the activities of a credit organization shall be audited by an independent audit organization authorized to conduct audit activities, which shall be appointed by the credit organization.

2. The credit organization shall submit the conclusion of the independent audit organization to the Central Bank within six months after the end of the financial year.

Article 17. Publication of financial statements and audit opinion։

1. Credit organizations shall be obliged to publish their annual financial statements and audit opinion in the press within six months after the end of the financial year.

2. Credit organizations shall be obliged to publish their quarterly financial statements by the 15th of the month following each quarter.

3. Credit organizations shall be obliged to regularly publish information on their activities in the manner and frequency established by the Central Bank.

Statement on organizations subject to mandatory audit:

According to Article 26 of the RA Law "On Accounting" adopted on December 4, 2019, the following are subject to mandatory audit:

1. public interest organizations.

2. large organizations.

3. medium-sized organizations.

4. a group whose parent organization is a public interest organization.

5. large groups.

6. medium-sized groups.

Simultaneously, according to Part 4 of Article 27 of the Law, audited organizations and groups (the parent organization of the group) are obliged to publish annual financial statements only after they have been audited. Financial statements published without an audit opinion, as well as in incomplete form (a complete set of financial statements includes all forms of financial statements, including notes to the financial statements), are considered UNPUBLISHED, with all the consequences arising from this.

Public interest organization:

• Is an organization that is a person making a public offer of securities or a reporting issuer in the territory of the Republic of Armenia, with the exception of the person making a public offer of securities or the reporting issuer of the International Monetary Fund, the European Central Bank, the European Investment Bank, and other international organizations to which the Republic of Armenia is a member, or

• Is a bank, credit organization, payment and settlement institution, investment company, regulated market operator, central depository, insurance company, reinsurance company, insurance brokerage company or investment fund manager.

Large organization:

A large organization is that, as of the end of the reporting year (for which financial statements must be prepared), has exceeded at least two of the following three indicators: 

a. the total amount of the statement of financial position (balance sheet) - 10 billion AMD of the Republic of Armenia (hereinafter referred to as AMD),

b. revenue from operations - 20 billion AMD,

c. the average annual number of employees, calculated in accordance with the procedure established by the Statistical Committee, - 250.

Medium Organization:

A medium organization is that not a small organization or a micro organization and as of the end of the reporting year (for which the financial statements must be prepared) has not exceeded at least two of the following three indicators:

a. the total amount of the statement of financial position (balance sheet) - 10 billion AMD,

b. revenue from operations - 20 billion AMD,

c. the average annual number of employees, calculated in accordance with the procedure established by the Statistical Committee, - 250.