Decree No. 63 / 1989 Coll.
Decree of the Federal Ministry of Finance on verifiers (auditors) and their activities
Valid
Effective from 01.07.1989
63
DECLARATION
Federal Ministry of Finance
of 7 June 1989
on verifiers (auditors) and their activities
The Federal Ministry of Finance provides, pursuant to § 14 (3) of Act No. 173 / 1988 Coll., on an undertaking with foreign shareholding (hereinafter referred to as "the Act"):
Preliminary provisions
This decree regulates the activities of the verifiers (auditors) in the examination of the annual accounts and the management of the holding with foreign holdings (hereinafter referred to as "the undertaking ') and their appointment.
(1) The activities of verifiers (auditors) may be carried out by Czechoslovak natural and legal persons included in the list of verifiers (auditors) pursuant to § 16 and by foreign persons.
(2) Foreign persons may carry out the activities of verifiers (auditors) under this Order if they fulfil the conditions laid down in the competent State for the performance of this function.
(3) The activity of the verifier (auditor) is irreplaceable.
(4) The activities of verifiers (auditors) are without prejudice to the right of state financial control bodies to carry out control activities in undertakings or to exercise supervision under specific legislation.
Activity of the verifier (auditor)
The activities of the verifier (auditor) shall include:
(a) the examination of the undertaking's annual accounts on a formal and substantive basis;
(b) the business management check for the year in question.
When examining the undertaking's annual accounts, it shall be established formally:
(a) whether it is presented on approved forms and contains the required particulars and whether the relationship between the data of the annual accounts is respected;
(b) the linkage between the annual accounts and the accounts of the undertaking;
(c) the linkage of the annual accounts to that of the latest audited accounts of the undertaking.
The accuracy of the annual accounts of the undertaking shall be checked in substance:
(a) the individual items of the annual accounts (the assets, liabilities, costs and revenues declared) with particular regard to compliance with the principles for the valuation of economic resources, depreciation of basic funds and items of gradual consumption in use and compliance with the principles for the temporal differentiation of costs and revenues;
(b) quantification of the production and distribution of the economic result, with a particular focus on the undertaking's obligations towards the State budget.
The examination of the undertaking's annual accounts shall also determine whether:
(a) accounting records shall be supported by accounting documents;
(b) accounting documents shall be kept under constant review and accounted for by the correct amounts in the correct accounts and their parties and in the relevant accounting year;
(c) corrections to accounting records shall be made in accordance with generally binding accounting legislation;
(d) data on stocks of economic resources shall be verified by proper inventories; the verifier (auditor) may require extraordinary inventory.
When examining the company's management, it shall be assessed whether the company complies with the provisions of the law and other generally binding legislation governing the company's tax obligations, the management of the cultural and social needs fund and the remuneration fund.
(1) The verifiers (auditors) shall determine whether, when the annual accounts of the undertaking and its management are checked, a detailed examination of the accounting documents, accounting records and annual accounts items is carried out or a random examination is carried out.
(2) Verifiers (auditors) may not correct or otherwise amend the information in the accounting documents, the accounting entries in the books, or correct and otherwise amend the entries in other accounting documents.
(3) Verifiers (auditors) are required to maintain confidentiality regarding the facts with which they come into contact in the course of their activities.
The firm must create conditions for verifiers (auditors) to carry out their activities properly and provide them with all necessary information and documents relating to economic activity, in particular accounting documents, contracts, budgets, plans, business guidelines, with the exception of classified documents.
(1) The verifiers (auditors) are chosen by the undertaking for the performance of its activities.
(2) At least one verifier (auditor) referred to in paragraph 1 must be selected from the list of verifiers (auditors); others can be foreign.
(3) If the company has not been able to select a verifier (auditor) from the list of verifiers (auditors) to carry out its activities [for rejection by the verifier (auditor)], the verifier (auditor) shall be designated by the Federal Ministry of Finance.
(4) The same Czechoslovak natural person or worker of a Czechoslovak legal person may carry out the activities of a verifier (auditor) in the same undertaking for a maximum period of four consecutive years.
(5) The verifiers (auditors) agree on the procedure for reviewing the annual accounts and the management of the undertaking and which of them is responsible for submitting the report (Section 12); the report shall be drawn up jointly and shall be jointly responsible for its substantive and formal correctness. If there is no agreement on the procedure, the firm must select new verifiers (auditors).
The start and end date of the activity and submission of the report and other necessary conditions for the performance of the verifier (auditor) activities shall be determined by mutual agreement of the verifiers (auditors) with the undertaking, the examination of the selected cases in accordance with § 5 (a) and the examination in accordance with § 6 may also be carried out by the verifiers (auditors) during the evaluation year.
Report of verifiers (auditors)
(1) After reviewing the annual accounts and the management of the undertaking, verifiers (auditors) shall draw up a written report.
(2) The report must in particular contain:
(a) the name of the undertaking, the period for which the examination was carried out, the date of the production, the names of the verifiers (auditors) and, where the activity of the verifier (auditor) is carried out, the legal person's name and the names of the staff performing the activity, the name of the verifier (auditor) or the worker responsible for submitting the report;
(b) a brief description of the extent of the examination of the accounts of the undertaking and its management;
(c) the characteristics of the correctness, trueness, timeliness and evidence of the accounts and of the errors found in the accounts;
(d) the opinion of verifiers (auditors) on the accounts, the management of the undertaking, the keeping of its accounts and the effectiveness of the internal control of the undertaking as regards the accounts and the management of the undertaking;
(e) a conclusion stating whether the verifiers (auditors) have received all the information, explanations and documents required and whether, in the view of the verifiers (auditors), the financial statements are, in a formal and factual manner, correct and the management of the undertaking was carried out during the period in accordance with generally binding legislation; where deficiencies are identified in the examination of the annual accounts and the management of the undertaking, reservations should be expressed at the end and the impact of the deficiencies identified on the management and the production and distribution of the business result and the proposal for measures to address the deficiencies.
(3) The Annex to the report consists of:
(a) the accounts of the undertaking containing the balance sheet and profit and loss account (profit and loss account);
(b) an overview of the distribution of profits.
(4) The report and its annexes must bear the signatures of the two verifiers (auditors) or the stamp of the verifier (auditor), if it is a legal person.
(5) The report and its annexes are submitted to the managing authority of the undertaking.
Appointment and withdrawal of verifiers (auditors)
(1) Czechoslovak natural persons are appointed and Czechoslovak legal persons are designated by the Federal Ministry of Finance to perform the activities of the verifier (auditor).
(2) The choice of Czechoslovak natural and legal persons to perform the activities of a verifier (auditor) is made by the Federal Ministry of Finance on its own discretion, the proposal of a state body, scientific institutions, universities or other organisations.
A natural person (hereinafter referred to as the "designated verifier (auditor) ') may be appointed to perform the activities of a verifier which:
(a) is a Czechoslovak national citizen,
(b) is fair,
(c) has an economic or legal higher education;
(d) has at least 10 years of experience in the accounts of economic organisations and has reached the age of at least 35;
(e) demonstrate the necessary knowledge and experience (§ 24);
(f) it has such personal characteristics as give the presumption of proper and impartial performance of the verifier (auditor).
A Czechoslovak legal person (hereinafter referred to as the "designated verifier (auditor) ') may be designated to carry out the activities of the verifier (auditor) if it is the subject of a research, advisory or organizational activity in the field of the accounts of economic organisations, provided that the staff for carrying out the activities of the verifier (auditor) who meets the requirements set out in Section 14 and agrees to carry out that activity.
(1) The appointed and designated verifiers (auditors) are included in the list of verifiers (auditors).
(2) The list of verifiers (auditors) is maintained and published by the Federal Ministry of Finance.
The designated verifier (auditor) shall be withdrawn by the Federal Ministry of Finance if the verifier (auditor):
(a) fails to fulfil or infringes its obligations under this Order;
(b) it has demonstrably misused the information it has received in connection with the performance of its activities;
(c) has been deprived of legal capacity or where its legal capacity has been restricted;
(d) give false information on the basis of which he was appointed,
(e) request its appeal.
(1) If the designated verifier (auditor) has been withdrawn, died or lost Czechoslovak citizenship, it is removed from the list of verifiers (auditors).
(2) The Federal Ministry of Finance is required to notify the appeal verifier (auditor) in writing of the reason for the removal from the list of verifiers (auditors).
(1) The designated verifier (auditor) will be removed by the Federal Ministry of Finance from the list of verifiers (auditors) in the event that it infringes the obligations arising under this Decree, it will request the removal itself, the organisation will be terminated, or there will be circumstances where a Czechoslovak legal person does not fulfil the conditions under Paragraph 15.
(2) The Federal Ministry of Finance must notify the designated verifier (auditor) in writing of the reason for the removal from the list of verifiers (auditors).
Remuneration and valuation of the activities of the verifier (auditor) and reimbursement of expenses
The undertaking shall conclude a work agreement with the designated verifier (auditor), selected from the list of verifiers (auditors), for the duration of its activities in the undertaking, including the time for drawing up the report. 1) The remuneration shall be negotiated in accordance with the labour laws. 2)
The enterprise is obliged to provide travel compensation to the designated verifier (auditor) as in the working journey under the special Regulation (3) and to cover other expenses incurred by the designated verifier (auditor) on a reasonable basis in relation to the performance of its activities in the enterprise (e.g. postal charges, telephone charges, reprogrammatic work payments, expert expenses).
The Czechoslovak legal person or foreign person shall account for the performance related to the activities of the verifier (auditor) according to the price regulations .4)
(1) The remuneration, travel compensation, other expenses and invoices for the performance performed pursuant to § 20 to 22 shall be borne by the undertaking.
(2) The designated verifier (auditor) is required to charge the undertaking at the same time as the report is submitted for the reimbursement of the expenditure referred to in Section 21. The designated verifier (auditor) shall be obliged to invoice the performance referred to in Section 22 in accordance with the provisions of generally binding legislation. 5)
(3) The designated verifier (auditor) shall be entitled to an advance payment for the reimbursement of the expenditure referred to in Article 21 to be settled when the reimbursement of the expenditure referred to in paragraph 2 is charged.
Assessment of the ability to perform the activities of the verifier (auditor)
The knowledge and experience needed to perform the activities of the verifier (auditor) is demonstrated by the Czechoslovak natural person and worker of the Czechoslovak legal person before the commission.
(1) The President and the other members of the Commission are appointed and dismissed by the Finance Minister of the Czechoslovak Socialist Republic.
(2) The activities of a member of the Commission shall be irreplaceable.
A record shall be kept of the outcome of the assessment of the candidate's ability to perform the activities of the verifier (auditor) before the commission, showing whether the candidate has succeeded; in this case, the tenderer shall receive a certificate.
(1) The Czechoslovak natural person appointed by the verifier (auditor) will receive an appointment decree from the Federal Ministry of Finance.
(2) The Czechoslovak legal person designated to perform the activities of the verifier (auditor) will receive a mandate from the Federal Ministry of Finance.
Final provision
All documents relating to the appointment, designation, assessment of the ability to perform the activities of the verifier (auditor) and removal from the list of verifiers (auditors) shall be kept by the Federal Ministry of Finance.
(1) This Decree takes effect on 1 July 1989.
(2) According to this decree, for the first time the accounts and business management for 1989 are examined.
Minister:
Ing. Stejskal v. r.
1) Part Four of the Labour Code.
2) § 3 of the Decree of the Ministry of Labour and Social Affairs of the Czech Republic No. 118 / 1981 Coll., on the remuneration of certain work done outside employment. Section 3 of the Order of the Ministry of Labour and Social Affairs of the SSR No. 120 / 1981 Coll., on the remuneration of certain work done outside employment.
3) Decree No. 33 / 1984 Coll., on Travel Refunds, as amended by Decree No. 81 / 1988 Coll. and Decree No. 241 / 1988 Coll.
4) FCI, ČU and SCÚ No V-6 / 88 on prices negotiated by the Agreement, item 154.
5) Decree of the Federal Ministry of Finance No. 154 / 1975 Coll., on invoicing and payment of supplies of a non-investment nature.
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Regulation Information
| Citation | Decree of the Federal Ministry of Finance No. 63 / 1989 Coll., on verifiers (auditors) and their activities |
|---|---|
| Regulation Type | - |
| Author | - |
| Collection | Code of Laws |
| Date of Promulgation | 23.06.1989 |
|---|---|
| Effective from | 01.07.1989 |
| Effective until | - |
| Status | Valid |
The regulation text is for informational purposes only.
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