Russian business banned from the auditing from foreign companies

Russian business banned from the auditing from foreign companies
Russian business banned from the auditing from foreign companies
28 April 2021, 10:37EconomyPhoto: праводействие.рф
According to the government decree, which comes into force on April 29, a ban on the services of foreign audit companies is being introduced for banks, depositories, insurance companies, non-state pension funds and management companies investing pension savings.

The Russian government has decided to restrict access to information of domestic companies not only for foreign auditors, but also for their Russian subsidiaries, the Vedomosti newspaper reports.

Foreign audit is also prohibited for retail chains, microfinance companies and clearing firms, enterprises of the military-industrial complex, companies that have come under foreign sanctions and legal entities that may be under them. The publication believes that in this way the Russian authorities continue to lower the "iron curtain" over the economy, step by step returning it to the Soviet model of self-sufficiency and closeness.

In fact, we are talking about restricting access to services for such large foreign audit companies as Deloitte, KPMG, PwC and EY. According to the associate professor of the Department of Financial Management of the PRUE named after G.V. Plekhanov Ayaz Aliyev for Russian clients of foreign auditors, the new government decree means additional problems with access to international capital markets: without a "visa" of well-known audit companies, it is almost impossible to take loans on Western markets.

However, you can also order the so-called independent business review, which is not inferior in quality to an audit. Such a report will give creditors an idea of the situation in the company, but it usually costs more than an audit report. But in connection with the adoption of the resolution, a certain part of clients of foreign auditors will now be forced to switch to Russian ones.

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