Azərbaycan Respublikası ərazisində auditor fəaliyyəti ilə məşğul olmaq üçün lisenziya verilməsi qaydalarının təsdiq edilməsi haqqında
Relizin Tarixi: 13.01.1998
Cabinet of Ministers of the Azerbaijan Republic
On approval of Regulations on issuance of license for implementation of audit activity on the territory of the Azerbaijan Republic
Baku, 13 January, 1998
Based on Decree of the President of the Azerbaijan Republic «On approval of list of activities requiring special permit (license)« dated 4 October, 1997 № 637, Cabinet of Ministers of the Azerbaijan Republic takes decision:
1. To approve «Regulations of issuing license for implementation of audit activity on the territory of the Azerbaijan Republic» (enclosed).
2. This Decree comes into force from the date of its signing.
Prime-Minister of the Azerbaijan Republic
Became stale according to the Decree 173 as of 7 November, 2002 («LegalActs»).
by Decree of the Cabinet of Ministers
of the Azerbaijan Republic
№ 9, dated 13.01.1998
on issuance of license for implementation of audit activity
on the territory of the Azerbaijan Republic
1.1 These Regulations have been prepared based on the laws of the Azerbaijan Republic «On business activity» and «On auditor service», «Regulations on issuing special permit (license) for some kinds of business activity» approved by Decree of the President of the Azerbaijan Republic № 543 dated 27 January, 1997, Decree of the President of the Azerbaijan Republic «On approval of list of activities requiring special permit (license) № 637 dated 4 October 1997, Regulations on Auditor Board of the Azerbaijan Republic (hereinafter «Auditor Board») approved by decree of Milli Majlis of the Azerbaijan Republic № 1115 dated 19 September, 1995, and establish procedure of issuing special permit (license) for implementation of audit activity on the territory of the Azerbaijan Republic (hereinafter - «license»).
1.2 License issued by Auditor Board based on these Regulations - official document permitting legal entities, irrespective of form of property and organization-legal form, and also physical persons carrying out business activity without establishment of legal entity, subsidiaries and representations of foreign legal entities (hereinafter - «applicants») to carry out audit activity on the territory of the Azerbaijan Republic.
1.3 Applicants may carry out audit activity in an established order and in specified term only after they obtained license in compliance with these Regulations.
1.4 Subsidiaries and representations of foreign legal entities specified in the license, whenever there is no inter-state agreement providing recognition in the Azerbaijan Republic of the license for audit activity which has been granted in their respective countries, should obtain license for audit activity in accordance with these Regulations.
License for implementation of audit activity on the territory of the Azerbaijan Republic is granted to subsidiary or representation of foreign auditor organization when there are 3 auditors possessing license of Auditor Board within said subsidiary or representation.
1.5 Issued license (copy of license) may be used only by the license owner, it may not be transferred to other persons, and will not apply to legal entities whose constitutor is the owner of the license, to other persons carrying out joint activity with the owner of the license, including activity based on agreement about cooperation.
II. Procedure of issuance of license
2.1 To obtain license granting the right for auditor activity on the territory of the Azerbaijan Republic, an applicant should submit to the Auditor Board:
2.1.1 application for obtaining the license;
The application should specify:
- for legal entities - name of legal entity, its organization-legal form, legal address, account number, name of bank, kind of activity;
- for physical persons - name, middle name, surname, data of identity certificate (series, number, date of issuance and issuing body, address), kind of activity;
2.1.2 copies of constituent documents of the enterprise;
2.1.3 copy of certificate on state registration of the enterprise;
2.1.4 for subsidiaries (representations) of foreign legal entities - duly witnessed copies of the document confirming right of legal entity establishing subsidiary (representation) in the Azerbaijan Republic, to carry out audit activity in their respective countries, and copies of licenses of auditors which are going to work in subsidiary (representation);
2.1.5 copy of certificate about registration of physical person carrying out business activity, in tax inspection;
2.1.6 document confirming payment of state duty for obtaining the license;
2.1.7 the following conditions are obligatory for issuance of license to physical persons:
- citizenship of the Azerbaijan Republic;
- diploma of high school on specialities: accounting, finances, economics and legal science, and at least 3 years of working experience;
- passing the examination for an independent auditor;
- non-denial of the right for taking certain positions or implementation of certain activities in the area of financial-economic relations according to court verdict, or due implementation of the judgement.
2.2 It is forbidden to demand from the applicant other than those listed in these Regulations.
2.3 Auditor Board takes application for a license and documents listed in these Regulations, registers them in special book, considers and if there are no faults or reasons for refusal, not later than within 15 days from the date of registration takes decision about issuance of the license. If faults are found in submitted documents, applicant will be notified in writing, with indication of reasons for refusal. If the last day of the term specified in this clause falls on holiday, the next working day will be regarded the last day of the term.
2.4 Refusal in issuance of the license takes place in the following cases:
2.4.1 failure to submit documents envisaged in these Regulations;
2.4.2 when data contained in the documents submitted by the applicant are inaccurate or false;
2.4.3 if documents submitted for obtaining the license contradict the laws of the Azerbaijan Republic «On Auditor service» and «On business activity», «Regulations on issuance of special permit (license) for some kinds of business activity» approved by Decree of the President of the Azerbaijan Republic № 543 dated 27 January, 1997, and these Regulations;
2.4.4 on failure to provide conditions for implementation of audit activity which are required by legislation (qualification, education, working experience, etc.);
2.4.5 if two years have not yet passed after the license obtained by the applicant for implementation of audit activity was annulled on the initiative of the body which had issued said license;
2.4.6 if the applicant applied during the period of suspension of the license for auditing on the initiative of the body which had issued said license earlier;
2.4.7 in other cases envisaged by legislation.
2.5 After elimination of circumstances which became the reason for refusal in license, the applicant will have the right to apply to the Auditor Board for a license in accordance with these Regulations, and if the applicant disagrees with refusal, he will have the right to apply to law court.
2.6 On liquidation of the auditor organization, or validity of certificate on implementation of business activity granted to independent auditor, license given to auditor organization and independent auditor also becomes null and void.
In case of re-organization of legal entity, change of its name, data in identity certificate of physical person, loss of license, the applicant should apply for re-issuance of the license within 15 days.
Procedure of re-issuance of the license is same as for its issuance.
During the term of re-registration of the license, its owner acts based on the former license and, should the license be lost - based on provisional permit of the Auditor Board.
Provisional permit signed by the Head of the Auditor Board and certified by the seal is issued after all documents for re-registration of the license have been submitted.
3.1 The following is indicated in the license:
3.1.1 stamp of the Auditor Board;
3.1.2 surname, name, middle name of the independent auditor, data of identity certificate (series, number, date of issuance and issuing body, address);
3.1.3 name and legal address of auditor organization, subsidiary and representation of auditor organization;
3.1.4 term of validity of the license;
3.1.5 procedure of implementation of auditor activity;
3.1.6 registration number of the license and date of its issuance;
3.1.7 kind of activity under the license.
3.2 License is signed by the Head of Auditor Board (in his absence - by deputy Head) and certified by the seal of the Board.
IV. Term of validity of the license
4.1 License for implementation of auditor activity is issued for a period of 5 (five) years.
4.2 Extension of the term of license validity is done in same order as its issuance.
4.3 Out of date license is considered invalid.
V. Procedure of use of license and control
5.1 When carrying out auditor activity based on these Regulations independent auditors, auditor organizations, subsidiaries and representations of foreign auditor organizations must:
5.1.1 duly observe requirements of legislation of the Azerbaijan Republic in the course of audit;
5.1.2 provide high level auditor services;
5.1.3 keep confidential information obtained when carrying out audit at the client’ request (except cases when such information is required by juridical bodies);
5.1.4 observe provisions of auditor standards and normative documents developed by Auditor Board;
5.1.5 carry out auditor activity independently, or as a member of only one auditor organization;
5.1.6 when intending to continue independent auditor activity as a member of auditor organization, either begin auditor activity anew, after having left auditor organization, or joint another auditor organization after leaving the former one - notify Auditor Board as such, in writing.
5.2 Auditor Board carries out control over procedure of implementation of the license.
5.3 The following falls under the competence of the Auditor Board when carrying out control:
5.3.1 getting reports from independent auditors, auditor organizations, subsidiaries and representations of foreign auditor organizations;
5.3.2 checking compliance of financial-economic activity of independent auditors auditor organizations, subsidiaries and representations of foreign auditor organizations with provisions of the Law of the Azerbaijan Republic «On auditor service» and quality of the audit, carrying out control over the work of said auditors, organizations, subsidiaries and representations;
5.3.3 writing act on results of check, with indication of faults and term for their elimination;
5.3.4 consideration of an issue of suspension or annulment of the license.
5.4 During the inspection independent auditors, auditor organizations, subsidiaries and representations of foreign auditor organizations must provide normal working conditions for representatives of the Auditor Board and present required documents.
5.5 Act in two copies is issued based on results of inspection. Act is signed by representatives of the Auditor Board and independent auditor (head of the auditor organization). In case of refusal to sign the act, it is noted in the act. Explanation of the independent auditor (auditor organization) is enclosed with the act.
VI. Suspension or annulment of the license
6.1 Auditor Board stops the license in the following cases:
6.1.1 when the owner of the license submits relevant application;
6.1.2 if the owner of the license fails to observe normative acts or activity of the applicant is stopped by relevant state bodies based on legislation of the Azerbaijan Republic;
6.1.3 insolvency of the owner of license has been confirmed by legislation of the Azerbaijan Republic;
6.1.4 for auditor organizations, subsidiaries and representations of foreign auditor organizations with less than 3 auditors in their staff - failure to provide 3 auditors within 1 month after beginning of activity of said organization, subsidiary or representation;
6.1.5 repeated, after warning, failure to present reports in accordance with specified form;
6.1.6 in other cases envisaged by legislation of the Azerbaijan Republic.
6.2 Within 5 days from the date when decision about suspension of the license has been taken, Auditor Board notifies in writing the owner of the license and state tax inspection bodies about this decision.
Should circumstances which resulted in suspension of the license change, the license might again become valid after application of the owner.
License shall be regarded restored after relevant decision of the Auditor Board has been taken, whereas the owner of the license and state tax inspection bodies are notified about such decision in writing, within 5-day term.
6.3 The license is annulled by the Auditor Board in the following cases:
6.3.1 when the owner of the license submits such application;
6.3.2 unreliable data are found in documents submitted for obtaining the license;
6.3.3 owner of the license has violated procedures of use of the license;
6.3.4 there is such decision of the law court;
6.3.5 on liquidation of legal entity and termination of validity of state registration certificate;
6.3.6 if 3 low-quality audits have been carried out within one calendar year;
6.3.7 rough violation of provisions of the Law of the Azerbaijan Republic «On auditor service» and other legislative acts in the course of audit;
6.3.8 decision of the law court concerning independent auditor comes into force, said decision forbids said auditor to occupy certain positions, or to carry out certain kind of activity in the area of financial-economic relations, and also envisages penalty for deliberate crime with the purpose of gain;
6.3.9 transfer by independent auditor (auditor organization) of data obtained in the course of audit, to the third party, without consent of the director (owner) of economic subject;
6.3.10 concealment by the auditor of personal property interest at the enterprise being audited, direct relationship with any of high officials at the audited enterprise, the fact that the auditor is constitutor, owner or shareholder of the enterprise, rendered professional auditor services to this enterprise earlier, etc.;
6.3.11 failure to pay membership fee established for the members of the Auditor Board;
6.3.12 in other cases envisaged by legislation of the Azerbaijan Republic.
6.4 Within 5 days from the date when decision about annulment of the license is taken Auditor Board notifies the owner of the license and state tax inspection bodies in writing.
6.5 Auditor Board keeps register of issued, registered, suspended, restored and annulled licenses.
7.1 Directors and officials of the Auditor Board are responsible, in accordance with current legislation, for violation or improper observance of legislation of the Azerbaijan Republic concerning licensing.
7.2 Decisions and actions of the Auditor Board may be appealed against in the law court in accordance with established order.
7.3 Persons (entities) carrying out auditor activity without license are responsible in line with existing legislation.