Monday, May 19 2014 16:49
Head of Armenian Central Bank comes out for mandatory audit for business entities
ArmInfo. To cancel the regulatory requirement of mandatory audit means to remove the opportunity to create a favorable environment for conscientious business conduct in Armenia, one of the Armenian parliamentarians said on Monday when asking questions to Head of the Central Bank of Armenia (CBA) Artur Javadyan.
Javadyan, in turn, said, "I advocate mandatory audit, because I think that enterprises make a mistake by evading it. The developing markets experience a situation when a business entity is not ready to present the real state of affairs to the audit, whereas the audit reveals the strong and weak sides and discloses the real state of affairs. The business environment in Armenia should be transparent, without double standards and oligopolistic agreements".
Earlier, when commenting on ArmInfo's question about the Armenian Government's recent decision to relieve the large business of the need to undergo mandatory external audit, Armenian Finance Minister Gagik Khachatryan said, "Let business decide itself whether to conduct financial audit or not". The minister pointed out that the enforcement measures are unpleasant to business. He stressed that the idea of mandatory audit is to make businesses declare their revenues independently but it has failed to give the expected results. "Let's give business an opportunity to decide itself whether to conduct financial audit or not. For our part, we should do our best to ease their financial burden, to facilitate the tax administration and reduce their expenses", he stressed.
A few days ago Armenian Prime Minister Hovik Abrahamyan obliged large companies to go out of shadow by July 1 and start acting on equal conditions with other business entities. During a meeting with large businessmen and bankers Abrahamyan said: "I give you time till July 1, otherwise, we will be forced to apply administrative measures."
ArmInfo's financial analysts believe that compulsory audit is a way to make large companies more transparent and potential foreign investors more active, so, its abolishment will hardly be good for investment climate in Armenia. In 2010 external audit was made compulsory in Armenia for large companies with earnings or assets exceeding 1bn AMD. It was then that the Government obliged such companies to publish their annual financial reports. But in fact only 120 of almost 300 larges companies have done it so far. In July 2013 the Government was even going to create a black list of companies who had failed to undergo audit and to publish financial reports. One of the first decisions of Hovik Abrahamyan's new government was the one on abolishment of mandatory audit.
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