What should business prepare for once the moratorium on audit is lifted?
2018 promises to bring the era of change to Ukraine: The Road Fund will start to operate, the historic maximum of ₴32 bn. will be allocated for road repairing activities, the National Health Insurance will start working… And the business audit moratorium expires in 2018 as well. This means that the government agencies will audit companies more often. Much more often.
Why are they lifting it?
In August 2014, the erstwhile Prime Minister Arsenii Yatseniuk banned the regularly scheduled audits of business by the government agencies first time in history. The proponents pointed out that there were too many of them, while the benefits were few. That is why it was decided to finalise the system, which took the government 3 years. Audits will resume in early 2018 when the moratorium expires but under slightly different rules.
At the last year’s end, Verkhovna Rada has adopted the Law “On Liberalization of the State Supervision”. It spells out the audit timelines, as well as the restrictions imposed on their duration. However, the limitations cover only the activity certain state authorities are responsible for, including the State Fiscal Service of Ukraine. That said, if a company is added to the audit plan of multiple regulators, then the latter shall work together simultaneously and complete all their audit activities at the same time.
The law also provides for development of a special service, which will allow stakeholders to familiarise themselves with the audit progress and its findings. The government thus seeks to ensure the transparency in supervising authorities.
Moreover, a new state online portal was launched as early as the end of October. It will publish the schedules of audits conducted by the state supervisory authorities. Any enterprise can learn whether it was included in the audit plan beforehand. All it needs to do is entering the EDRPOU code. However, it does not mean that the information on every audit will be in the system. The point is that the law does not require some state agencies, such as SFS, to disclose these data.
Over time, this website promises to publish other useful information, such as the lists of specific questions comptrollers will put to the entrepreneur.
Should we expect the worst?
An increasing number of scheduled audits at the beginning of the next year is the fact we will have to accept. Whereas now such control is conducted only by some government agencies (State Fiscal Service, State Service of Ukraine On Food Safety, State Service of Export Control, State Aviation Service), the State Labour Service, State Ecological Inspection, State Emergency Service, State Architecture and Building Service and some other organizations will be added to that list in 2018. One has to make quite an effort in order to report to each of those.
On the other hand, the law “On LIberalization of the State Supervision” brings the operation of state comptrollers to a new level making it transparent and agiler. Now, the business will be able to learn of many scheduled audits, which will not be extended for an unreasonably long period. At least, that is the way it’s supposed to be, yet there is a risk these changes will not be shaped up well enough.
This post is also available in: Russian