As of September, 2015, there are 5 self-regulated organizations (SRO) of auditors registered in Russia. According to its own data, they include a little more than 9,5 thousand organizations.

In spite of the fact the quantity of auditors is small, the importance of the auditing activity for the economy in the whole and for specific organizations cannot be overestimated.

The Federal law as of December 1st, 2014 №403-FL “On introducing amendments to legislative acts of the Russian Federation” might be confirmation to it.

In the new version the Article 42 “Accounts audit of credit organizations, banking group, banking holding” of the Federal Law “On Banks and Banking Activities” is stated fully. Editorial corrections have respect to Art. 9, para. 1, second sub-paragraph of the Federal Law as of July 24th, 2002  №111-FL  “Concerning the Investment of Resources for the Financing of the Funded Component of a Retirement Pension in the Russian Federation”.

The most significant changes which came into effect since January 1st, 2015 deal with the Federal Law as of December 30th, 2008 №307-FL “Concerning Auditing Activities”. The amendments are made to the overwhelming majority of the law articles. Briefly it might be represented in the following manner:

• the list of enterprises which accounts are subject to statutory audit is corrected. Currently these are accounts of: each and all joint stock companies, as well as all credit organizations, credit bureaus, professional securities traders, insurance and clearance companies, non-state pension and other funds, management companies of investment and pension funds, organizations, dealing with preparation of consolidated financial accounts, accounts on securities admitted to trading;
• the audit is statutory when the following economic criteria take place: revenue amounts to more than RUB 400 million or the amount of balance sheet assets exceeds RUB 60 million;
• both accounts in the whole and their parts are subject to audit; 
• at present only auditing organizations are entitled the right to carry out audit of companies which securities are admitted to trading, state corporations, as well as companies with a government stake exceeding 25%; 
• contest on selection of auditing organization might be held once every five years. The participation of the auditing organization, being a representative of the small and medium business, is compulsory, providing the revenue of the company, holding the contest, doesn’t exceed RUB 1 billion;
• requirements to audit documentation are now imposed not by the federal standards but by the international standards of auditing activity.  The documentation is to be stored within 5 years after a year of its receipt or implementation;
• the limit in the number of the members of SRO auditors is increased: from 700 to 10 000 natural entities and from 500 to 2000 organizations;
• only the authorized auditor might be a general director of the auditing organization, having no right to transfer the management to individual entrepreneur or to administrator;
• in case of the statutory audit, the absence of the audit report on the meeting of shareholders, company participants, holders of equity interests might be qualified as non-compliance of the legislation on preparatory set and holding of the corresponding meetings and is punished in the form of penalty from 500 to RUB 700 thousand.

According to experts, such significant changes in the auditing law might have positive and negative effects. On the one hand, the unification of the Russian law with the international standards of auditing activity will certainly have a positive effect on the quality and transparency of the domestic auditors. On the other – it may lead in the foreseeable future (till 2017) to essential repartition of the audit market, as well as to reduction in number of few and far between self-regulated organizations of auditors.

Industrial production in Russia in August 2015 is marked with 4,3% decrease (picture 1). Declining trend is observed during four months successively (since May till August). So, for example in July the fall of industrial production was 4,7%, in June – 4,8%, in May – 5,5%. Summarizing the results of January-August 2015, industrial production on the average was diminished up to 3,1% in comparison with the same period in 2014. 

Picture 1. Index of industrial production, % to the same period of the previous year 

Declining linear trend is foremost determined by negative trends in Russian economics that increased under the influence of external factors. 

Considerable of them are:

• The influence of sanctions imposed on Russia,
• declining oil prices, significant weakening of the rouble,
• disinvestment,
• cash outflow,
• decrease in  lending/financing,
• reduction of consumer demand and others. 

In August 2015 gain in industrial production was 0,2 percentage point in comparison with July 2015 (picture 2). Such insignificant increase can be explained with the fact that in August some productions, e.g.: automobile, machine building, steel-casting industries, have sent employees in company holidays. The period of May-August 2015 is marked with increase as compared to the previous month and in relation to the first quarter, when industrial production was in trouble after the events of December 2014.

Picture 2. Index of industrial production, % to the previous month of the current year

The index of industrial production analysis for 9 months of 2015 and its trend let us make a careful conclusion that the situation with industrial production is going to improve gradually. However, such tendency is not stable yet and is undergone to unexpected factors. Such influence was observed in August 2015, when the international oil price decreased up to 42 USD per barrel, rouble almost reached the mark in 71 rouble per dollar. As a result, the Russian Government was forced to reconsider estimated figures of 2015-2016 and temporary reject three-year development planning of economics.

According to the Ministry of Economic Development of the Russian Federation`s forecast, index of industrial production in 2015 to conservative version of development will decrease on 3,1%, to baseline version – 3%. Summarizing the results of 2016 decrease on 0,4% to conservative version and increase on 1,1% to base version is expected. Nevertheless, the Ministry of Economic Development of the Russian Federation believes that degradation of the situation with production in relation to the figures of last months is unlikely. In this case there is assurance that production renewal will start in the third or the fourth quarters of 2015, or in the first quarter of 2016.