Accounting and Audit of Financial Results

Publication date/update: 04.12.2024

If a company prepares financial statements, it must conduct an audit of the financial results. This is crucial to ensure the accuracy of report formation. This type of audit has specific features and differences from other financial inspections. Let's examine the key points to consider.

Financial results are the natural outcome of the activities of a business entity, reflecting all income and expenses over a specific period. Essentially, the financial result is the net profit (or loss), which must be presented in Forms 1 and 2. Documentation is maintained within the framework of accounting records, distinguishing two primary forms of financial reporting. These forms must correlate in their results.

Financial results are sequentially formed and reflected in a comprehensive report. Small and medium-sized businesses may use a simplified format. Notably, the rules for filling out these forms were updated on June 1, 2019. The changes include:

This last rule applies to companies subject to mandatory annual audits. Failure to undergo an audit may result in a penalty from the tax authorities for non-compliance. To obtain auditor data, the Federal Tax Service (FTS) can request information under Article 93 of the Russian Tax Code.

Gross financial results and sales outcomes are recorded in Account 90, sourced from expense accounts and accounts for finished goods and merchandise. Other income and expenses are recorded as part of Account 91 operations.

This involves preliminary planning, drafting a general work plan, and preparing the audit program.

The auditor must first understand the overall scope of the company's operations and assess industry-specific nuances requiring attention. Data should be updated annually. The planning phase is critical for selecting methodologies to complete the tasks within the specified timeframe.

Includes testing internal controls, examining homogeneous transactions, performing analytical procedures, testing balance sheet items, and other tasks.

We recommend ensuring the accuracy of data reflected in Accounts 90 and 91 during the reporting process. Key points to check include:

It is advisable to calculate income tax after verifying all accounting data that form the financial results. During this process, ensure that all types of income and expenses are correctly considered for taxation.

If the tax is calculated before verifying accounting data and errors are subsequently found, the tax must be recalculated. Control involves not only adhering to the company's tax accounting policies but also verifying the logic of differences between pre-tax accounting profit and the taxable base.

Companies operating outside PBU 18/02 may find the audit process less complex, even with special accounting rules. However, those adhering to PBU 18/02 must ensure proper calculation of deferred tax assets (DTAs), deferred tax liabilities (DTLs), current tax expenses (CTE), and current tax income (CTI). These elements reflect the company's turnover and are evaluated as part of verifying the consistency of tax base formation and accuracy of income tax calculation.

The financial results and accounting data must align in the following lines:

The conclusion of any audit, including financial results, should involve issuing an auditor’s report. This document relates directly to the company's operations, reflecting the true state of its financial affairs. The financial results report is a tool for thoroughly verifying all data linked to the company's financial outcomes.