Accounting and audit http://accounting-and-audit.com Blog about learning science of finances Tue, 26 Oct 2010 08:06:30 +0000 ru hourly 1 http://wordpress.org/?v=3.0.1 Legal Bases of Bank Audit http://accounting-and-audit.com/legal-bases-of-bank-audit/ http://accounting-and-audit.com/legal-bases-of-bank-audit/#comments Tue, 26 Oct 2010 07:57:20 +0000 admin http://accounting-and-audit.com/?p=28 External audit legal regulation is performed on the basis of following these normative documents:
1. The order of the president №54-RP from 2/4/1994 «About the organization of work of the commission on auditor activity at the President».
2. The governmental order №482 from 5/6/1994 «About the statement of normative documents on auditing regulation».Also the legal bases of bank audit can be possible by the given resolution have been accepted legal bases:

  • An order of carrying out of certifications on the right of realization of auditor activity;
  • An order of issue of licenses for realization of auditor activity (this document acts only regarding the rates, a concerning order of issue of licenses for bank audit realization).

3. The governmental order of the Russian Federation №472 from 4/27/1999 «About licensing of separate kinds of auditor activity in the Russian Federation» (doesn’t extend on licensing of activity in the field of bank audit).
4. Rules (standards) of auditor activity.
5. Position of CBRF «About an order of drawing up and representation in the Central Bank of the Russian Federation of audit opinion based on the results of testing activity of the credit organization for a year».
6. Rules (standards) of auditor activity in the field of the bank audit, approved by expert committee at CBRF on bank audit.
Legal base number one of banking auditNow the first standard on bank audit «the Rule №1» – the Order of drawing up of audit opinion about reliability of accounting records of the credit organization, prepared is developed and affirms following the results of activity for a year and approved 9/8/1998, report №4.
Direct auditing regulation in bank sphere of the Russian Federation is assigned on CBRF which will organize certification carrying out on the right of carrying out and realization of banking audit and other credit organizations, gives out and withdraws licenses for the right of realization of bank audit, accepts normative documents, regulates auditor activity in bank sphere of the Russian Federation and provides the regular control of the bank audit organization.
At base level of state regulation of audit for improvement of quality of its carrying out and introduction in advanced experience practice, standardization of auditor activity will be conducted, audit standards, and also positions to which firms should follow all auditor will be developed and confirmed.
Standards of auditor activity can be presented in 4 interconnected parts:
1. The basic postulates are a conformity to standards, their availability and coordination, impartiality of judgements, responsibility of a management, means of the internal control, availability to the information, activity monitoring, improvement of technics of check etc.
2. General rules – the code of professional requirements on qualification of the auditor, independence of its point of view and due attention to all questions, concerning to work performance.
3. Working rules – standard carrying out of audit inspections. In them positions about necessities of carrying out of check, studying and an estimation of systems of the business accounting and the internal control, reception of proofs of quality control of audit etc. reveal
4. Rules of drawing up of reports – provide requirements both to the form of the reporting of the auditor, and to its maintenance.
For the purpose of provision of unity of interpretation of standards of auditor activity the list of terms and determinations on the given problem is used also as legal bases.
On the basis of the confirmed standards of auditor activity, auditing firms should develop internal standards of audit which have auxiliary character and urged to provide the uniform approach to audit inspection in the given firm.

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Bank Audit Classification http://accounting-and-audit.com/bank-audit-classification/ http://accounting-and-audit.com/bank-audit-classification/#comments Thu, 14 Oct 2010 04:26:54 +0000 admin http://accounting-and-audit.com/?p=21 This lecture is about classification of the bank audit. It can be divided by different kinds of looking, depending of the method of carrying out, the periodically of carrying out etc.Bank audit classificationThe bank audit is subdivided into two principal views:
1. External view of audit -  is a check on a contractual basis foreign independent auditors. The bank independently chooses auditing firm to check.
External departmental audit is checked by Central Bank. External audit is performed by taxing authorities, law enforcement bodies, exchequer.
2. Internal view of audit – it agree Central Bank’s requirements in each credit organization should be the internal control, i.e. creation of special organized internal structures  or the post of the representative specialist performing functions of supervision, so the control is allocated. Activity on internal audit realization legislatively isn’t regulated, and is determined by the head of bank.

Audit can be classified by a method of carrying out on:

  • Obligatory – it is conducted in the cases established by the legislation of the Russian Federation: annually, and also on the instructions of state structures (law item 40 «About banks and banking activity»);
  • Initiative – i.e. check under the decision of the most credit organization, its character and scales are determined by the client).

Audit classification could be by a periodicity of carrying out on:

  • Initial – it is conducted by auditing firm for the first time for the given client (bank) that essentially raises risk and labor input of audit.
  • Agreed (repeated) – it is performed repeatedly or regularly, based on knowledge of specificity of the client, its positive and negative sides, qualification of a management that with other things being equal reduces risk of audit.

In development’s point of view the audit can divide on:

  • Confirming – check and confirmation of reliability of accounting records of the credit organization.
  • System-focused – gives the chance supervision of systems, supervises the certain client. Here audit inspection is based on the analysis of an internal control system of the credit organization. At an effective internal control system the probability of errors in activity of the client is insignificant and consequently for auditors necessity of carrying out of detailed check of the given client disappears. In the presence of an inefficient internal control system, the in due time not revealed and not eliminated lacks of activity “emerge” and consequently to the client recommendations about its improvement are made.
  • The Audit which is based on risks – means check carrying out selectively with concentration of auditor work on mainstreams of activity of the client, i.e. in areas with the highest audit risk.
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The Purposes and Tasks of Bank Audit http://accounting-and-audit.com/the-purposes-and-tasks-of-bank-audit/ http://accounting-and-audit.com/the-purposes-and-tasks-of-bank-audit/#comments Thu, 23 Sep 2010 10:37:59 +0000 admin http://accounting-and-audit.com/?p=16 This post tells about main objectivities and tasks of the bank audit. Actually the purposes and tasks are not so different, but every meaning has its own truth. For example, one of the biggest roles of bank audit is to defense the bank system stability. But if you remember (you should, it was not so late) financial crisis in 2008, the bank systems had epic fail, especially in the USA, and then by all over the world. So, we should study audit science to protect our business and bank system in future.Main objectivities of the bank audit:

  • An establishment of reliability accounting both the financial reporting of the credit organization and conformity of operations made by it to the current legislation and to the regulations of the Central Bank;
  • Provision of stability of bank system;
  • Protection of interests of investors and creditors.

Exploring the audit

Tasks of the banking audit

Bank audit tasks are including:
1. Carrying out of the analysis of financial and economic activity, an estimation of assets and liabilities.
2. Forecasting of results of financial and economic activity and development of recommendations about financial soundness and liquidity increase.
3. Statement, restoration and business accounting conducting.
4. Consultation concerning financial, tax, bank and other legislation of the Russian Federation.
5. Training of employees.
6. Confirmation of the data of the prospectus of paper issue.
7. Rendering of other services in a profile of activity of auditing firm.

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Concept and Essence Of The Audit http://accounting-and-audit.com/concept-and-essence-of-the-audit/ http://accounting-and-audit.com/concept-and-essence-of-the-audit/#comments Wed, 22 Sep 2010 12:07:11 +0000 admin http://accounting-and-audit.com/?p=4 The profession of the auditor is known from an extreme antiquity. In 200 BC questors (they are also known as financial  actors of proceeding in Roman empire) performed the control of the state accountants on places. Questors’ reports went to Rome and were heard by examiners. Similar practice also became a basis of the term “auditor”.The legislative native land of audit Great Britain where the laws entering compulsion of audit inspection and establishing the quality requirements of its carrying out for the first time have been passed is considered.
Auditors in England named jury accountants. They combined separate obligations of the public prosecutor, the filing clerk and the secretary.

What is audit?

Thinking about auditIn modern foreign and domestic practice essense of audit is treated variously:

  • The American association under the business accounting determines the audit as system process of reception and an estimation of the objective data about economic actions and the events, establishing level of their conformity to certain criteria and representing results to interested users;
  • The European specialists treat the concept of audit as process of decrease to certain level of information risk, i.e. probability of that in company financial statements false or inexact data for users are contained by reports;
  • According to the Russian standards of auditor activity audit is an entrepreneurial activity of the auditor on realization of independent checks of accounting records, platezhno-settlement documents, tax declarations and other financial liabilities and requirements of economic actors.

What does the auditor do?

Directions of auditor activity:

  • Bank audit
  • Audit of the insurance organizations and mutual insurance societies
  • Audit of stock exchanges
  • Audit of off-budget funds
  • Audit of investment companies
  • General audit.

In each direction separate certification and licensing on the right of realization of audit is conducted.

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