Most companies attract independent auditors from time to time, because this is required by law. The cost of audit services is quite high, and it needs to be carried out through accounting, properly taken into account in the balance sheet.
According to the laws of the Russian Federation, specialized companies and individual specialists who are included in the register of one of the self-regulating specialized organizations can be engaged in auditing. Accounting of audit services assumes that the company invites independent specialists from outside. Even if there are qualified auditors in the company’s staff, you cannot attract them, because you will not be able to observe the principle of independence and impartiality.
Mandatory and voluntary audit
The law provides for a number of situations when a company is required to undergo a mandatory audit. Joint-stock companies, as well as enterprises whose securities are admitted to trading, are checked annually. Also, a regular audit is prescribed for credit and clearing organizations, professional participants in the securities market, and a clearing organization. In addition, if the volume from the sale of the company’s products exceeds 400 million rubles, the company must also order an independent audit.
The inspections provided for by the law are carried out annually, independent specialists from outside are invited for it. Moreover, the regulatory authorities are not interested in the fact of passing the audit itself, but in the company’s documentation that confirms it, that is, the auditors’ conclusions. The company’s primary documentation is independently verified.
There is also a voluntary audit, it is carried out as necessary and by the decision of the owners of the enterprise. This may be required when the chief accountant changes, the company wants to attract investors or carry out financial optimization.
Accounting of mandatory audit services
According to the Tax Code, the cost of independent reporting audits is included in other expenses. Therefore, organizations that are required by law to conduct an annual audit have the right to take into account the costs of it when calculating income tax, reducing the tax base. The basis is Article 264 of the Tax Code. The tax related to the costs of mandatory inspections is deducted in the usual manner. Please note that the inspection company or specialist must sign the invoice. You will also need documents confirming expenses so that you can properly arrange expenses.
Enterprises and sole proprietors operating under the simplified taxation system can deduct the cost of auditors’ services from their income. Of course, provided that they chose a calculation based on the principle of “income minus childbirth”. Thus, the costs of mandatory verification of primary reporting can be included in the company’s expenses and pay less taxes – legally.
Companies and entrepreneurs of the simplified taxation system do not pay VAT. Therefore, they cannot deduct the tax presented by the controllers and spend its amount as expenses.
Accounting of audit services during voluntary audit
The Company can independently invite auditors at any time when the management decides to analyze the primary documentation. Verification may be required to attract investors, it is ordered when the leading specialists of the financial department change. It will not hurt if there is doubt about the economic efficiency of the existing system of work or when there is a need to optimize economic schemes.
If you order a voluntary, unscheduled audit, you can attach the auditors’ report to the annual reports. In other words, the company has the right to take into account the costs of independent verification when calculating taxes. The Tax Code does not restrict recognition for the purposes of taxation of expenses for auditors. The Tax Code does not distinguish between voluntary and mandatory procedures, therefore, it is possible to document the verification procedure according to the same scheme as the mandatory audit of primary documentation.
When taxing profits, the company takes into account the costs of a voluntary audit of financial statements. But please note that expenses must comply with the requirements of Article 252 of the Tax Code. In other words, they must be economically sound and aimed at generating income. In addition, you will have to document all expenses. Therefore, be sure to conclude a contract with the auditors, and then an act on the implementation of the audit. All these papers will be needed to conduct an audit through the accounting department.
Independent verification requires costs that go beyond paying for the work of specialists. This may be an overview study of economic reporting, painstaking work with information: analysis of economic data, recalculation, comparison and other procedures aimed at determining the accuracy of records. Also, related services include the collection, ordering of financial information, and, if necessary, the transformation of reporting forms.
All these procedures can be included in the list of auditors’ tasks. To reduce the taxable profit of the company, be sure to document all these procedures. If you can confirm the fact of receiving the service, as well as its necessity as part of the audit, the costs of additional procedures will be carried out together with other audit work.
VALEN specialists have many years of experience in the field of tax and accounting audit services. We cooperate with small and large businesses, provide legal support to individual entrepreneurs and international corporations. To get advice, leave a request on the website or dial: +7 (495) 7-888-096! We are also waiting for you in our office in Moscow.