Mandatory audit

Either mandatory audit carrying out or auditor's (audit firm) confirmation of financial documents are stipulated by the legislation of Ukraine. For example, by Economic Code of Ukraine, the law of Ukraine "On Economic Companies" and the law of Ukraine "On Auditing", namely:

part 3 of art. 90 "Accounting and Reporting of Economic Company" of Economic Code of Ukraine stipulates:

"Faithfulness and fullness of annual balance and reporting of economic company in occasions set by law should be confirmed by auditor (audit company)".

part 3 of art. 354 "Insurance Agreement" of Economic Code of Ukraine stipulates:

"When making an insurance agreement an insurer is entitled to demand from an insurant a certificate on his financial condition confirmed by auditor (audit company)."

part 5 of art. 397 "Guarantees of Foreign Investing" of Economic Code of Ukraine stipulates:

"Foreign investors are entitled to demand indemnification for losses incurred by illegal actions or inactivity of state authorities or local self-government authorities, their officers. Losses of foreign investors shall be indemnified at current market prices or on the basis of grounded calculations confirmed by independent auditor (audit company)".

part 4 of art. 13 "Contributions of Members and Founders of Company" of the law of Ukraine "On Economic Companies" stipulates:

"Financial condition of founders (except natural persons) of open joint stock companies regarding their ability to provide appropriate contributions to chartered (compound) capital shall be checked by auditor (audit company)."

part 2 of art. 18 "Accounting and Reporting" of the law of Ukraine "On Economic Companies" stipulates:

"Faithfulness and fullness of annual financial reporting of a company shall be confirmed by auditor (audit company). Mandatory audit examination of annual financial reporting of

companies having annual economic turnover less than two hundred fifty non-taxable minimums is carried out once per three years."

part 2 of art. 20 "Liquidation Commission" of the law of Ukraine "On Economic Companies" stipulates:

"After appointment of the liquidation commission authorities on company management are transferred to it. The liquidation commission within three days after its appointment publishes

in printed mass media, where information about state registration of a legal person to terminate is published, notice about termination of economic company and procedure and term

of creditors' demands submission to it, ensures company's property cost definition in procedure set by the legislation on property assessment, property rights and professional assessment

activity, tracks its debtors and creditors and pays to them, takes measures to pay company's debts to third persons and its members, makes liquidation balance and submits it to a superior

body of a company or a body appointed by the liquidation commission. Faithfulness and fullness of liquidation balance shall be confirmed by auditor (audit company) except companies having annual economic turnover less than two hundred fifty non-taxable minimums."

Article 8 "Mandatory Auditing" of the law of Ukraine "On Auditing" stipulates:

"Auditing is mandatory for:

1) confirmation of faithfulness and fullness of annual financial reporting and consolidated financial reporting of open joint stock companies, enterprises emitenting obligations, professional participants of securities market, financial establishments and other economic entities which reporting pursuant to the legislation of Ukraine is subject to official disclosure except establishments and organizations fully financed by state budget;

2) examinations of financial condition of founders of banks, foreign investments enterprises, open joint stock companies (except natural persons), insurance and holding companies, general investment institutes, trust companies and other financial mediators;

3) securities emitents when receiving a license on professional activity carrying out on securities market.

Auditing is obligatory in other occasions stipulated by laws of Ukraine as well."