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competitiveness also affects the economic development of the country. Thus, the increase in productivity affects the reduction of costs, the development of innovation, the increase of product quality and volume, and therefore the development of the country's economy. For this reason, increasing competitiveness directly affects the development of economy, standard of living, innovation and technology and infrastructure in the country. Due to its important economic and social importance, increasing competitiveness has become the most important strategy of countries.
References
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5. UN, (2005) "Directions of increasing the competitiveness of the regional economy (on the example of Lankaran economic region)", 114 p.
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9. Bienkowski, W. (2008), How much are studies of competitiveness worth? Some critical theoretical reflections on the issue. Poland.
10. Buckley P.J. and Prescott K. "The Meaning of Competitiveness. Servicing International Markets: Competitive Strategy of Firms". Blackwell Publishers, Cambridge .2008.
Гасымова Ильхама Валех
Аспирант
Азербайджанский Университет Кооперации DOI: 10.24412/2520-6990-2022-21144-31-34 ОРГАНИЗАЦИЯ АУДИТА В УСЛОВИЯХ РЫНОЧНОЙ ЭКОНОМИКИ
Gasimova Ilhama Valeh
Ph.D - student Azerbaijan Cooperation University
ORGANIZATION OF AUDIT IN A MARKET ECONOMY
Аннотация.
Переход экономики Азербайджана к рыночным отношениям потребовал стремительного развития предпринимательства, появления новых организационно-правовых форм предприятий и различных видов собственности, интеграции страны в мировое сообщество, кардинальных изменений в управлении, перестройки методологии и реализации контроля. Учредители и акционеры, владельцы соответствующих эмитентов, ценных бумаг и кредиторы были заинтересованы в получении достоверной информации о финансовом состоянии и платежеспособности организаций, а также аргументированных заключений о текущем и перспективном состоянии. В связи с этим возникает необходимость развития независимого аудита как одного из неотъемлемых элементов инфраструктуры рыночной экономики, являющегося альтернативой государственному контролю. Аудит включает выполнение процедур для получения аудиторских доказательств в отношении сумм и раскрытия информации в финансовой отчетности. В основе аудита лежит взаимный интерес государства, руководства предприятия и его собственников (вкладчиков, акционеров).
Abstract.
The transition of the Azerbaijani economy to market relations required the rapid development of entrepre-neurship, the emergence of new organizational and legal forms of enterprises and various types ofproperty, the country's integration into the world community, fundamental changes in governance, restructuring the methodology and implementation of control. The founders and shareholders, owners of the relevant issuers, securities and creditors were interested in obtaining accurate information about the financial condition and solvency of the organizations, as well as reasoned opinions for the current and future state. In this context, there is a great need to develop an independent audit as one of the integral elements of the infrastructure of a market economy, which is an alternative to state control. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The basis of the audit is the mutual interest of the state, the management of the enterprise and its owners (depositors, shareholders).
Ключевые слова: аудит, учредители, акционеры.
Keywords: audit, founders, shareholders.
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INTRODUCTION
Auditing has a long history, and in various translations it means "he listens" or "listener." The emergence of an audit is directly related to the separation of interests of those who manage companies (management, managers) and those who invest in their activities (owners, shareholders, investors). The latter cannot and do not want to trust the financial information provided only by the heads of their organizations and their subordinate accountants. Frequent bankruptcies of various companies and fraud by management significantly increase the risk of financial investments. The shareholders would like to make sure that they are not deceived, and the report submitted by the management fully reflects the real financial condition of the company. Auditors are invited to verify the accuracy of the financial information and approve the financial statements, which shareholders believe can be trusted. Verification of the accuracy of the report of the enterprise, compliance with applicable law and the preparation of the auditor's opinion on this issue is carried out by an independent auditor. The following rules apply to the activities of independent auditors:
- free choice of the auditor (audit organization) of the business entity;
- contractual relations between the auditor (audit organization) and the customer; these relationships allow the auditor to choose his or her client and to rely on the instructions of any public authority;
- impossibility to conduct an audit in the presence of a relationship or business relationship with the customer that exceeds the contractual relationship on auditing activities;
- Prohibition of auditors and audit firms from engaging in economic, commercial and financial activities not related to the provision of audit, consulting services and other services permitted by law.
An analysis of the nature, significance and objectives of the audit shows that it is not just a "sword of punishment" in the hands of the "new revolution", but a particularly complex, socially neutral economic tool. The objective reasons for the rapid development of modern audit are explained by the fact that in the new conditions, the system of relations between property and its management has undergone significant, fundamental changes. That is, the differentiation of the population by property, as well as the development of counterfeit capital has led to a fundamental improvement in the composition of investors; Making economic decisions based on biased information has often led to negative economic consequences and even the bankruptcy of some economic entities; special knowledge is required for people who are able to make professional judgments about the accuracy of reports; due to a significant increase in the number of owners, there was a significant separation of the management (executive management) of enterprises from their direct owners; as a modern form of capital movement, the formation and development of the stock market has begun.
The current legislation of the Republic of Azerbaijan provides a specific definition of audit and audit service. Article 2 of the Law of the Republic of Azerbaijan
"On Auditor Services" states that an audit is an independent audit of the accuracy and correctness of accounting, accounting and financial statements in economic entities engaged in the production and sale of goods, services and work. Article 3 of the same law defines the audit service as inspection, expertise, analysis, written opinion, establishment of accounting records, verification of accuracy of reporting indicators, provision of other services in the field of financial and economic relations in the field of financial and economic activities. The main purpose of the auditor's activity is to determine the accuracy of the accounting (financial) statements of the business entity and the compliance of their financial and economic operations with regulations. So the appointment of an audit means the examination of financial statements for the following purposes:
- confirmation of the accuracy of the reports or determination of their inaccuracy;
- checking the completeness, accuracy and precision of the accounting and reporting of expenses, income and financial results of the enterprise during the audited period;
- control over compliance with the legislation and regulations governing the rules of accounting and reporting, the methodology for valuing assets, liabilities and private capital;
- identify opportunities for better use of fixed and special working capital, financial resources and debt sources.
The main purpose of the audit may be added- contract with the customer, identify opportunities for better use of financial resources, analyze the correct calculation of taxes, develop measures to improve the financial condition of enterprises, optimize costs and performance, revenues and expenses. The auditor determines the accuracy of the balance sheet, profit and loss statement, the accuracy of the information in the explanatory note. It examines the profit and loss statement to determine the accuracy of the calculation of the balance sheet profit and taxable profit. In order to achieve the main goal and give an opinion, the auditor prepares an opinion on the following issues: General acceptability of the report; - compliance of the report with the requirements; Reasonability - validity of inclusion of amounts indicated in the report; Evaluation - it was evaluated correctly?; Classification - Is there a reason to attribute the amount to the account on which it is written? Separation; Neatness.
Auditor services are usually ordered by the management of business entities. However, there are more people who use this feature. These include: employees, tax authorities, banks and other financial institutions; potential investors, trading partners, etc.
There are the following types of audits:
- Mandatory and initiative (voluntary) audit;
- Internal and external audit;
- Audit of economic activity;
- Compliance audit;
- Audit of financial statements and special audit;
- Operational audit;
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- Mandatory (obligatory) audit on behalf of state bodies;
- Other types of audit services.
The Law of the Republic of Azerbaijan "On Auditor" states that audits can be mandatory or voluntary (on the initiative of business entities). For businesses that are required by law to publish their financial statements, as well as in cases directly provided by legislative acts or on the basis of relevant decisions of the competent state bodies an audit (primarily on their behalf) is mandatory, but in other cases it is voluntary. Mandatory audits are carried out directly in cases specified by law or on behalf of government agencies. The scope and procedure for conducting a mandatory audit are regulated by law.
Voluntary audit is carried out on the basis of an agreement with the auditor (audit firm) on the economic subjective decision. The nature and scope of such inspection shall be determined by the customer.
Internal audit is an integral and important element of management control. The top management does not have day-to-day control over the activities of the organization and the lower management structures. The internal audit provides information about this activity and confirms the accuracy of managers' reports. Internal audit is mainly necessary to prevent the loss of resources and to make the necessary changes within the enterprise.
External audit is carried out on a contractual basis by forms of auditors and independent auditors in order to assess the accuracy of accounting and financial statements of economic entities. The independence of an independent auditor is determined by both legislation and ethical norms. Internal and external audits complement each other and at the same time differ significantly from each other.
An audit of economic activity involves a regular analysis of the economic activity of the enterprise for certain purposes. An audit of business entities is sometimes referred to as an audit of performance or administrative efficiency. The audit of economic activity involves an objective study of certain types of activities, a comprehensive analysis.
A compliance audit is an analysis of an entity's financial or economic activities in order to determine their compliance with certain conditions, rules and laws. Audit of compliance with the requirements established by state acts shall be carried out by inspectors working in the state body supervising the implementation of these acts or by external auditors to whom such control is assigned.
Special audit is an examination of specific issues of compliance with certain procedures, norms and rules in the activities of economic entities and usually aims to confirm the legitimacy, accuracy and efficiency of the activities of managers, the accuracy of tax reporting, the use of social funds, and so on.
An operational audit is an examination of any part of the operating procedures and methods of an economic system in order to assess productivity and efficiency. In addition to conducting audits, auditors (audit organizations) may provide services to businesses, entrepreneurs and individuals in the form of advice on a
wide range of issues. The practice of conducting consultations shows that most of the issues addressed to the auditor are related to tax legislation. Legal advice is a special type of audit service.
The Law on the Auditor defines the organization of the audit service in the Republic of Azerbaijan, the legal basis for its implementation, the functions, rights and responsibilities of the auditor. This Law shall apply to all enterprises, organizations and departments operating in the territory of the Republic of Azerbaijan. Audit services in the Republic of Azerbaijan are provided by independent auditors and audit organizations in accordance with the legislation. Independent auditors are individuals who have obtained the right to provide independent auditing services in the territory of the Republic under a license issued by the Chamber of Auditors of the Republic of Azerbaijan. The following are required to obtain the right of independent auditor in the Republic of Azerbaijan:
a) to be a citizen of the Republic of Azerbaijan;
b) not to be deprived of the right to hold certain positions or engage in certain activities in the field of financial and economic relations by a court decision that has entered into force, or to be sentenced to such a sentence in accordance with the law;
c) to have higher education in accounting, finance, economics and law and at least 3 years of work experience in the specialty;
d) to take independent audits. An auditor may not be a person convicted of a crime of greed and who has not served his sentence.
An audit organization is a legal entity that has obtained the right to provide auditing services in the territory of the Republic of Azerbaijan on the basis of a license issued by the Chamber of Auditors, and according to its charter, the only field of activity is this type of service. There must be at least 3 independent auditors to establish this organization. According to the legislation on auditing, independent auditors and audit organizations operate on the basis of a license issued for a period of 5 years after state registration. The independent auditor and the audit organization have the following rights:
a) freely determine the forms and methods of the audit in accordance with the law and the terms of the contract with the customer;
b) to get acquainted with all documents on the financial and economic activities of the customer and receive them for inspection, to check the availability of cash, tangible assets and other information necessary for the audit;
c) receive written explanations from the customer's management and employees;
d) to raise the issue of violations and shortcomings identified by the authorized state bodies in the provision of audit services by order of the competent state bodies;
d) engage other auditors in the audit on a contractual basis; e) to refuse to conduct an audit on the nonsubmission of documents required for the audit by the audited entity.
The legislation defines the responsibilities of independent auditors and audit organizations as follows: a)
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to comply with the laws of the Republic of Azerbaijan in conducting the audit; b) quality audits and other audit services; c) check the status and accuracy of the customer's accounting and reporting, compliance with applicable laws and regulations; d) to keep confidential the information obtained during the audit conducted at the request of the customer; d) to ensure the preservation of documents obtained or compiled during the inspection; e) at the request of the business entity to provide him with detailed information on the requirements of the legislation on the audit, the rights and obligations of the parties, as well as regulations that are the basis for the comments and conclusions of the auditor. In case of improper performance of their duties, auditors and audit organizations may be held liable in accordance with the legislation of the Republic of Azerbaijan and the terms of the contracts concluded with the customer. The license granting the auditor and audit organizations the right to conduct auditing services in the territory of the Republic of Azerbaijan may be revoked by the decision of the Chamber of Auditors. The Chamber of Auditors inspects audit organizations for compliance with the provisions of the law on financial and economic activities and monitors their work.
Auditors and audit organizations may be held liable in accordance with the law if they do not perform their duties properly. The auditor's liability can be viewed from two perspectives:
a) for violation of the requirements of the adopted legal and normative acts;
b) due to inadequate professionalism in conducting the audit in accordance with audit standards.
Liability to the state is determined by the fines established by law, and liability to the customer is determined by the terms of the contract. The disciplinary responsibility of the auditor is determined by the Chamber of Auditors, and the civil and criminal liability is determined by the judicial authorities in accordance with the relevant legislation and regulations of the Re-
public of Azerbaijan. The following should be considered when determining the auditor's responsibilities: whether the customer has been harmed; whether the auditor has committed incompetence, carelessness or negligence in the performance of his duties.
CONCLUSION
These fundamental issues, mentioned above, constitute the main content of the audit activity and appear as an objective necessity. Currently, audit is included in the management system as an economic category. However, it must be acknowledged that although audit has deep historical roots, its theoretical foundations, subject, object, directions, and organizational forms have not been fully developed scientifically. There are different views on clarifying the goals and objectives of the audit. In a market economy, audit has a broader content and scope.
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