The Ministry of Finance of Ukraine has received letters from the European Commission, Financial Reporting Council of Great Britain and the German Financial Supervision Commission approving the draft Law of Ukraine «On financial reports audit and audit activity» which was elaborated by the Ministry of Finance of Ukraine to implement the Directive 2006/43/EC of the European Parliament and the Council of Europe dated May 17, 2006, on the mandatory audit of annual reports and consolidated reports as well as Regulation (EU) 537/2014 of the European Parliament and the EU Council dated April 16, 2014, on specific requirements regarding statutory audit of public-interest entities.
According to the received conclusions, the draft Law of Ukraine in its current edition basically complies with the spirit and requirements of the Directive 2006/43/EC in the edition of the Directive 2014/56/EC and Regulation 537/2014. It especially concerns the proposed structure of public supervision of audit activity which must operate independently from audit entities in accordance with the EU legislation.
The general principles regulating audit activity and audit performance which are stated in the draft Law of Ukraine are mostly in line with European practices: requirements to the independence of auditors as well as to their impartiality and work organization are enhanced, application of international audit standards is mandatory, unified requirements to audit reports are set up, a clear system for the registration of auditors is established, requirements to public-interest entities are upgraded.
The above mentioned EU institutions are convinced that the elaboration of well-founded and compliant legislation is the first and very important step to build up an efficient system regulating audit activities which must improve the quality of financial audit in line with public interest. The efficient system for audit supervision also requires accountability and resolution in decision making by persons managing the supervisory body as well as by inspectors checking the system of audit quality control.
The Ministry of Finance of Ukraine is willing to improve the quality of audit services up to the European level, which must contribute to the stability of the Ukrainian economy, improvement of the environment for investors, better access of Ukrainian companies to international capital markets as well as access of Ukrainian auditors to the European market.