Audit means evaluation of accounting data and indices contained in the financial statements of an economic entity, with the view of expressing an independent auditor’s opinion about plausibility of data and their conformity with accounting regulations (standards) and other requirements set forth in the legislation of Ukraine.

There are two types of audit – mandatory and voluntary.

A list of legal persons obliged to carry out a mandatory audit is specified in the Law of Ukraine On Auditing as well as other legislative acts. Enterprises and organizations which annual financial reports will be made public come within the purview of the said regulations:

• public joint-stock companies;
• enterprises – bond issuers;
• banks;
• trusts;
• currency markets and stock exchanges;
• investment funds and companies;
• credit unions;
• non-governmental pension funds;
• insurance companies;
• other financial institutions.

Voluntary audit is undertaken upon a decision of founders and/or senior officers of a company, its business partners (for example, banks, prospective investors), and can cover any period. This audit is called “voluntary” inasmuch nature and scope of checks is generally determined by a customer.  

Voluntary audit is a review made by an independent auditing company that includes assessing both appropriateness of accounting taken as a whole and its separate components, passing judgment on whether the data shown in the financial statements fairly represents actual financial position and performance of an enterprise, availability of assets and liabilities.

Upon outcome of mandatory or voluntary audit a client is given the formal audit conclusions stating the opinion on accuracy of data in the financial statements given by an auditee.

IFRS reporting ensures obtaining reliable information that can be matched by the investors, creditors and prospective partners and help them evaluate the financial standing and performance indices of an enterprise, as well as make economically viable decisions.   

The Law of Ukraine dd. 12.05.2011, № 3332-VI, stipulates obligatory embedding of the International Financial Reporting Standards into practice by private joint-stock companies, banks and insurance agencies, provided that their provisions do not contravene the Law on Accounting. The same is applied to the enterprises engaged in certain (approved by the Cabinet of Ministers of Ukraine) economic activities (rendering of financial services, non-governmental pension funds).

Unlike the said above companies, a decision on cogency of sufficient reasons for drafting financial reports in line with the international standards is passed by other companies independently (agreed with an owner or competent body).

Our company offers the following services to make client’s reporting IFRS-compliant:

• elaboration of accounting policy in line with IFRS, in view of specificity of business, and procedure for IFRS adjustment;
• transformation of the financial statements prepared pursuant to the Ukrainian standards into IFRS-compliant, and all associated works;
• arrangements to embed the accounting procedure in accordance with IFRS;
• audit of financial statements drafted according to IFRS;
• advices on IFRS usage, including the issue of consolidation and certain standards and elucidations.

Review engagement (express-) implies examination of the financial statements without exploring the company’s system of internal controls and accounting in detail, without evaluating accuracy of primary records. Unlike audits, the interim financial statements can be also audited besides annual reports, and the findings show the correctness of the methodology (principles) for preparing such reporting rather than represent an opinion on reliability of the information reflected in the financial statements.

Review engagement is undertaken in the event an owner or senior management wants to get an unbiased opinion and make an impartial analysis of the company’s financial performance within a short time.

The outcomes received after carrying out the review engagement can be used as follows:

• to make managerial decisions;
• to determine what issues require more focused attention;
• to decide on the necessity of making a special audit to evaluate particular operations, tax or accounting  records.

Special audit assignment is an audit undertaken to investigate accuracy of accounting records and fair reflection of distinct aspects of business, for example: entirety of registered capital, availability of equity capital and current assets, inventory records, accounts receivable or accounts payable, and material assets.

This audit is generally undertaken:

• in case of necessity of exploring of whether the financial reporting component meets the needs of certain users;
• if correctness of accounting records or appropriateness of taxes imposed on certain operations causes  concern  of a client.

In this case, there is no necessity to have comprehensive audit of all record keeping system of a company.

The audit conclusion issued sums up the auditor’s findings.

Agreed-upon procedures denote the audit procedures decided on by an auditor, economic entity and concerned third parties. These procedures can be applied to assess certain financial information (for example, accounts payable or accounts receivable, acquisitions from affiliated persons, volume of sales and amount of income), to evaluate one or a few elements of financial statements (for example, balance sheet) or financial reporting in general, different business trends of a company, or any other pieces of financial and non-financial information, or simply data the client is interested in.

Following the audit the client is provided with a report stating whether there have been revealed material misstatements or discrepancies per agreed procedure by an auditor. However, the auditor does not express any opinion about accuracy of the financial data shown in this report.

The preparation of financial information implies drafting financial reports along with collection, classification, and colligation of other financial data reported by a client.

The outcomes report, issued to a client, states precisely what financial information has been prepared by an auditor, for what period, and defines the applicable conceptual framework. However, the auditor does not evaluate reliability and accuracy of the information examined. 

The consolidation of financial information is one of the ways of preparing financial information, which implies aggregation of data contained in the financial statements provided by both the head-office and its units.

The transformation of financial information stands for adjustment of the financial (accounting records) statements, prepared according to the requirements of the National Accounting Standards to financial (accounting) reporting that meets the International Financial Reporting Standards (IFRS).

Audit support services covers the examination of whether all data contained in the source documents related to economic activities are reflected properly in the accounting/tax records and financial reporting, as well as giving regular advice to a client company on all issues pertaining to accounting and tax reporting along with recommendations on how to update and facilitate the process.

Considering the scope of work to be done, the check of financial and economic activities of a company can be carried out monthly or quarterly, as agreed with a client.

In providing audit support services, regularly audit checks are focused on how tax records are drawn up and tax amounts are calculated. Through this process, errors in the financial and tax reporting are revealed at the early stage and can be adjusted before submitting the reports to the tax authorities.

Following the outcomes an auditor draws up special reports on company’s current performance explicating significant violations and errors, and recommends a client how to correct them.

Due Diligence is a process of researching to get a fair view of the investee through making diligent  investigation of the company’s operation and businesses to receive an evidence that the information revealed is free from any inaccuracy, is not regarded to be ambiguous, does not contain misrepresentation or omissions.

Carrying out this procedure envisages making research of a company and the composition of its managerial staff, analysis of agreements and contracts concluded, examination of financial reports, devising of various scenarios for the company’s future development, investigation of an industry and market the company operates on.

The primary goal of Due Diligence is obtaining an independent formal opinion:

• about actual financial standing of an investee;
• about all risks that can seriously affect the financial position of an investee;
• about market value of an investee’s company.

Both parties – an investor (buyer) and a party attracting the funds (seller), are interested in obtaining impartial assessments while carrying out this check made by competent specialists. Therefore, either party can initiate an audit check.

Types of Due diligence

• Operational Due Diligence means operational analysis that describes the business history, including principles of its development with commentaries regarding markets, peers, customers, products (services, production methods), services, suppliers and systems of running business in general. The data about the governance structure, senior managers, and main characteristics of man power is reported in brief; strengths, shortcomings and bottlenecks are elucidated, too. Mainly, the analysis covers and verifies operating history of a company, its organizational structure, administration, composition of staff, volume of sales, acquisitions.
• Financial Due Diligence is financial analysis that evaluates the company’s profitability. It is expedient to carry out financial analysis simultaneously with making an audit of a company, which helps assess the accuracy of accounting records, validity of data disclosed in the reporting and other documentation as well as their conformity with regulations. Financial analysis is used to evaluate the company’s assets, its receipts, financial indices as well as systems of financial planning and controls. 
• Tax Due Diligence is tax-related analysis with ensuing conclusions on tax burden of a company. Concurrently, assessment of likelihood of risks arisen due to claims initiated by the tax authorities can be also done. If setting a tax-optimization task, the likelihood of tax relief can be scrutinized.
• Legal Due Diligence is legal expertise that assesses compliance with the requirements set out in the regulations, civil and labor laws, enactments in the area of law. Setting such a task envisages giving recommendations on how to amend and review the company’s documentation in line with the current legislation.

The findings of Due Diligence are detailed in the report evaluating a company as investment opportunity (or otherwise), and reliability (or otherwise) of a company undergoing the due diligence check.

Analysis of financial standing is appraisal of the financial standing of a company with the view of examining its competitiveness, financial resources and capital, fulfillment of commitments.  The core purpose of this evaluation is to obtain data on key indices that can give a fair view of the financial position of a company, its profitability and capital.  

Investigating the financial position allows revealing weaknesses and strengths of a company, choosing the best way to facilitate its development and achieve substantial increase in profits. The company can also decide on evaluation of appropriateness of the financial policy and make adjustments in case of necessity. In this case, the data contained in the financial (accounting) reporting is checked.  

The services embracing evaluation of the financial position and company’s performance are as follows:

• analysis of the financial position;
• examination of current business processes;
• evaluation of the management system;
• assessment of the efficiency of material and financial resources;
• assessment of the prime cost of products, other expenses and expenditure;
• consulting on reorganization, split-up of a company into separately run companies;
• advice on production optimization, aid in making efficient shopfloor layout of an enterprise, splitting up incidental services and auxiliary units.

Arrangements associated with management accounting are services related to setting up and maintaining management accounting, collecting, registering and summarizing operational and reliable data to appraise efficiency of the company’s performance, to evaluate controls, to make appropriate and well-timed managerial decisions.

Management accounting is a constituent component of the governance system of a company and has much broader meaning than financial accounting (both accounting and tax accounts).

Employing diverse types of management reporting that reflects various job specifics enables to regular assess the company’s performance efficiency and obtain tangible results.

Management services we offer are as follows:

• reconstruction of financial accounts and keeping management accounting records;
• optimization and automation of the management accounting process;
• adjustment of accounting to the company’s structure;
• preparation and elaboration of the governance reporting.

Consulting services are consultations and advice given to enterprises having different legal structures of businesses on keeping track of income and expenses, taxation, running business, other issues of adherence to the legislative norms of Ukraine.

Our experts will provide you with comprehensive information on best possible ways of addressing tax issues and solving other problems with minimum risks. Consulting services can be given in writing, as a verbal advice or a single one-time engagement, or be retained.

Types of consultations:

• formal response given in writing and via e-mail;
• consulting through telephone hotline;
• consultations rendered at our company’s office;
• visit of an auditor to a client’s office.