Mandatory audit in financial market to be supervised by Bank of Russia

In the meaning of the law, socially important organisations are non-financial organisations with listed securities, credit institutions, insurers, professional securities market participants, credit history bureaus, clearing houses, trade organisers, non-governmental pension funds, and management companies.

According to the new rules, to operate in the financial market, auditors must be members of a relevant self-regulatory organisation, have a record in the Federal Treasury register and submit an application to the Bank of Russia. Statutory requirements for future supervised companies are increased and centred on work record, business reputation and operational transparency. Through 1 January 2023, such a company's headcount should total at least seven auditors; from 1 January 2023 — at least 12. The company is supposed to have operated for at least three years as of the application submission date and have experience of auditing socially important organisations.

As an important innovation, the law introduces information exchange between the Bank of Russia and auditors. The regulator will be entitled to request from auditors information about facts of asset and liability overstatement (understatement), non-compliance with required ratios or financial stability / solvency requirements, the risk management system and the quality of internal control of audited financial institutions. Such interaction is intended to enhance audit efficiency and also improve banking supervision, control and supervision in financial markets.

Audit quality of Bank of Russia statements and organisations directly subordinate to the regulator will be assessed by the National Financial Board.