LAWON ACCOUNTING AND AUDITING("Official Herald of the Republic of Serbia", No. 46/2006 and 111/2009) |
1. The Scope of Regulation and Application
Article 1
The present Law shall govern the procedure for keeping books of account, recognizing and evaluating assets and commitments, revenues and expenditures, producing, presenting, delivering, disclosing and processing annual financial statements, conditions and mode of conducting financial statement audits and internal audits.
The provisions of the present Law shall apply to undertakings, cooperatives, banks and other financial organizations, insurance companies, financial leasing lessors, voluntary pension funds, voluntary pension fund management companies, investment funds and investment fund management companies, stock exchange markets and brokerage houses and other legal entities (hereinafter referred to as: legal entities).
The provisions of the present Law shall also apply to individuals who are autonomously performing economic activities for the purpose of gaining profit and who are keeping books of account according to the dual bookkeeping system (hereinafter referred to as: entrepreneurs), unless otherwise specified by separate regulations.
The provisions of the present Law shall also apply to legal entities and other organizing forms the legal entity has established abroad, providing those countries' regulations have not defined the obligation to keep books of account and to produce financial statements.
The provisions of the present Law shall also apply to branches and other organizational parts of foreign legal entities located abroad which are running their business in the Republic of Serbia, unless otherwise specified by separate regulations.
If requested so by the National Bank of Serbia, banks and other financial organizations, as well as insurance companies, which have established legal entities located abroad, shall provide data relevant for perceiving business operations of such legal entities.
The provisions of the present Law shall not apply to budgets and budget fund beneficiaries, churches and religious communities, and to mandatory social security organizations, unless otherwise specified by separate regulations.
2. Legal, Professional and Internal Regulations
Article 2
Legal entities and entrepreneurs shall keep books of account, recognize and evaluate assets and commitments, revenues and expenditures, produce, present, deliver, disclose and audit financial statements, and conduct internal audits, in compliance with legal, professional and internal regulations.
Term legal regulations shall mean all laws and bylaw regulations enacted for the purpose of implementing the law.
Term professional regulations shall mean the Framework for Preparing and Presenting Financial Statements; International Accounting Standards - IAS, i.e. International Financial Reporting Standards - IFRS, interpretations as an integral part of standards, International Standards on Auditing - ISA and Code of Ethics for Professional Accountants.
Term internal regulations shall mean general acts adopted by legal entity, i.e. entrepreneur, which have specific instructions and guidelines for keeping books of account, accounting policy for recognizing and evaluating assets and commitments, revenues and expenditures, instructions and guidelines for bringing, delivering and disclosing financial statements, and for other issues related to keeping books of account and producing financial statements the present Law prescribes to be regulated by legal entity's, i.e. entrepreneur's general act, in compliance with legal and professional regulations.
Small legal entity and entrepreneur may, and large legal entity, medium legal entity, legal entity producing consolidated financial statements in compliance with law, legal entity issuing securities by public offering or legal entity whose securities are the subject of trading at organized securities market, must apply IAS, i.e. IFRS.
Minister in charge of finance (hereinafter referred to as: the Minister of Finance) shall prescribe procedure for recognizing, measuring and evaluating assets and commitments, revenues and expenditures of small legal entities and entrepreneurs not applying IAS, i.e. IFRS, in compliance with legal and professional regulations.
3. Translating and Publishing Professional Regulations
Article 3
Translating, publishing and harmonizing IAS, IFRS and ISA, in compliance with recommendations coming from International Federation of Accountants (IFAC), International Accounting Standards Board (IASB) and International Auditing Practice Committee (IAPC), shall be performed by legal entities, i.e. bodies, the International Federation of Accountants (IFAC) has granted the right to translate and publish.
The Minister of Finance shall bring the decision on determining the translations of basic IAS and/or IFRS texts specified in paragraph 1 of the present Article, as well as interpretations and publish it in the "Official Herald of the Republic of Serbia".
The Minister of Finance shall bring the decision on determining the ISA translation specified in paragraph 1 of the present Article and publish it in the "Official Herald of the Republic of Serbia".
The basic texts of IAS or IFRS from the Paragraph 2 of the present Article are consisted of IAS or IFRS issued by the International Accounting Standards Board, as well as interpretations issued by the IFRS Interpretations Committee in the form that they were issued or adopted in, which do not include the basics for closing, illustrated examples, guidelines, comments, opposing opinions, elaborated examples and other additional explanatory material which can be adopted in relation to the standards or interpretations, unless it is expressly stated that this material is an integral part of the standard or interpretation.
4. Authorized Auditor and Authorized Internal Auditor
Article 4
For the purpose of protecting the public interest in regard with financial reporting, the present Law shall establish the Authorized Auditor and Authorized Internal Auditor professional titles.
The Authorized Auditor shall mean an independent professional person conducting audit services and being responsible for correct auditing, for producing audit statements and for expressing audit opinion in compliance with the International Standards on Auditing and with the present Law.
A person holding faculty diploma, with three year work experience in conducting external financial statement audits or internal auditing, and/or with three year work experience as an accounting manager, holding an examination for acquiring this professional title and with no conviction for crimes that would make him/her unsuitable for performing such activities, may acquire the Authorized Auditor professional title.
The Authorized Internal Auditor shall mean a person with appropriate professional title acquired in compliance with the present Law.
A person holding faculty diploma, with three year work experience in conducting external financial statement audits or internal auditing, and/or five year work experience in accounting activities, holding an examination for acquiring this professional title and with no conviction for crimes that would make him/her unsuitable for performing such activities, may acquire the Authorized Internal Auditor professional title.
Term work experience as a precondition for taking the professional title examination specified in paragraphs 3 and 5 of the present Article, as well as for acquiring the license for financial reports auditing, shall mean experience gained while performing permanent or temporary job.
The Authorized Auditors Chamber (hereinafter referred to as: the Chamber) shall issue professional title certificates specified in paragraphs 3 and 5 of the present Article, in compliance with the present Law.
5. Processing Professional Title Examinations
Article 5
The Chamber shall adopt program as a base for processing professional title examinations specified in the Article 4 paragraph 1 of the present Law.
The Minister of Finance shall give its approval on program specified in paragraph 1 of the present Article.
Approval specified in paragraph 2 of the present Article shall be published in the "Official Herald of the Republic of Serbia".
Article 6
The Chamber shall organize professional title examinations specified in the Article 4 paragraph 1 of the present Law. The Chamber shall establish the Commission to process examinations.
The Chamber, professional association or other legal entity may organize training for professional title examinations specified in paragraph 1 of the present Article, and advanced training for persons holding certificates on these professional titles, in compliance with international guidelines and professional accountants' education demands.
6. Legal Entity classification
Article 7
In terms of the present Law, legal entities shall classify to small, medium and large, depending on the average number of employees, annual income and assets value determined on the day the financial statement is produced for the financial year.
The medium legal entities shall be those legal entities who meet at least two of the following criteria on the day the financial statement is produced:
1) the average number of employees in the year the annual statement refers to is from 50 to 250;
2) the annual income is in the range from EUR 2.500.000 to EUR 10.000.000 in dinars equivalent;
3) the average business assets value (in the beginning and at the end of the financial year) is in the range from EUR 1.000.000 to EUR 5.000.000 in dinars equivalent.
Legal entities with lower than the lowest index amounts for at least two of the criteria specified in paragraph 2 of the present Article shall classify as small legal entities, and legal entities with higher than the highest index amounts for at least two of the criteria specified in paragraph 2 of the present Article shall classify as large legal entities.
If a legal entity has different index amounts under criteria stated in Paragraph 2 of the present Article, so that it does not fulfill at least two of the stated criteria for classification from the Paragraph 3 of the present Article, that legal entity shall classify as a medium legal entity.
Legal entity shall autonomously make classification in line with the mentioned criteria on the day the financial statement is produced and shall use established data for next financial year.
In terms of paragraph 2 of the present Article, newly established legal entities shall be classified on the grounds of data coming from the current year's financial statements and number of months in the business, and such determined data shall be used for current and next financial year.
The average number of employees shall be calculated by having the total number of employees at the end of every month, including employees working abroad, divided by the number of months.
In terms of the present Law, legal entity shall deliver information on its classification along with financial statement for previous financial year to the Business Registers Agency (hereinafter referred to as: the Agency) which shall than verify the delivered information on classification.
In case legal entity shall refuse to harmonize the information on classification with the request coming from the the Agency, the Agency shall define the volume of such legal entity and those data shall be used in the following financial year.
Notwithstanding the criteria mentioned in paragraph 2 of the present Article, banks and other financial organizations, insurance companies, financial leasing lessors, voluntary pension funds, voluntary pension funds' management companies, investment funds and investment funds' management companies, stock exchange markets and brokerage houses shall be considered as large legal entities, and entrepreneurs shall be considered as small legal entities.
II ACCOUNTING ORGANIZATION AND ACCOUNTING DOCUMENTS
Article 8
Legal entities and entrepreneurs shall adopt general act in which they shall define the accounting organization in order to enable comprehensive entries, and to prevent and detect faulty entered business changes, to define the internal accounting control procedures, determine the accounting policies, appoint the persons in charge of legality and validity of business changes taking place and of producing and controlling accounting documents on business changes, define the flow of accounting documents and determine deadlines to have them delivered for further processing, in compliance with the present Law.
Legal entity and entrepreneur who processes data on a computer shall use standard accounting software which enables the functioning of internal accounting control system and which incapacitates the erasure of entered business changes.
Books of account data input shall be organized in such a way to enable:
1) control over input data;
2) control over input data validity;
3) inspection of transactions and balance in the general ledger account;
4) inspection of business changes data input chronology;
5) storage and use of data.
Article 9
Entering business changes on assets, commitments and equity, revenues and expenditures shall be done through accounting documents, either in written or in electronic form.
Accounting document shall be the written evidence on a business change and it shall include all data relevant for entries into the books of account in such a way that accounting document shows base and category of a business change, and which shall be signed by persons authorized for producing and controlling accounting documents.
A copy of an accounting document is a basis for entering a business change in books, provided that the place of keeping of the original is stated therein, signed by the responsible person.
A document shall also be considered as an accounting document if delivered electronically, which includes electronic exchange of data among computers, in accordance with law.
An electronic document - an accounting document delivered electronically must be signed by electronic signature and confirmed by an electronic message between the sender and the receiver, in accordance with law.
Transmitter shall make sure the data entering the telecommunication system is based on accounting documents, and it shall store the original documents.
Data transfer service provider, i.e. mediator in execution of the appropriate transaction during the electronic exchange of data between computers shall be held responsible for transmitted messages' accuracy.
3. Responsibility for Producing Accounting Documents
Article 10
Persons responsible for producing and controlling accounting documents shall confirm by their signature, either written or electronic, that accounting document is complete, accurate, arithmetically precise and that it presents the business change.
Persons entrusted by material issues (values) the documents relate to shall not control accounting documents.
The accounting documents produced in electronic form on computer must have the electronic signature of the person that produced the document, or other authorized electronic signature.
4. Deadlines for Delivering Accounting Documents and Entering Deadlines
Article 11
Persons in charge of producing and receiving accounting documents shall deliver the signed document and other documentation related to change to accounting department as soon as they produce them, i.e. received them, and no later than after three days starting from the day the business change was made, i.e. five days starting from the reception day.
Persons in charge of bookkeeping shall, upon running a control over received accounting documents, enter those accounting documents in their books of account the day after, and no later that after five days starting from the reception day.
1. Books of Account Concept and Types
Article 12
Books of account shall be the uniformed records on status and changes on assets, commitments and equity, and on revenues and expenditures of legal entities and entrepreneurs.
Books of account shall be the journal, general ledger and subsidiary ledgers.
The journal and the general ledger shall be kept in compliance with the dual bookkeeping system.
Article 13
The journal shall be the book of account with business changes entered in the sequence of their emergence, i.e. in the sequence of accounting documents reception.
The general ledger shall be the entire set of accounts, with balancing prerogatives, used for systematic enclosure of status and changes on assets, commitments, equity, revenues and expenditures, serving as a base for producing financial statements.
Subsidiary ledgers shall be the analytical records kept for immaterial investments, real estates, installations and equipment, investment real estates, long-term financial investments, stocks, demands, cash and cash equivalents, commitments, equity and others.
The cash-book shall consist of business changes arising from cash and other values kept in the legal entity's and entrepreneur's pay desk. The cash book shall be concluded at the end of every day and it shall be delivered to the accounting department on the same day, and no later than the next day.
Books of account may be kept in open sheets, bound or transferred to some of the electronic or magnetic media, so they can be printed or displayed on the screen, depending on the situation.
Article 14
Books of account shall be kept for the financial year equal to the calendar year, except in case specified in the Article 24 paragraph 2 of the present Law, when books of account are kept for the financial year different from the calendar year.
Opening of books of account shall be done in the beginning of the financial year on the grounds of the previous year's final statement of assets and liabilities.
Newly founded legal entities and entrepreneurs shall open books of account on the grounds of the foundation statement which is made on the grounds of the list of assets and commitments, with the balance on the foundation day at the agency, i.e. organization in charge of keeping records of undertakings.
Article 15
Legal entities and entrepreneurs shall enter business changes at accounts prescribed by the structure of accounts.
Fully respecting implementation of IAS and IFRS, the following persons shall define the structure of accounts and the content of accounts within the structure of accounts:
1) Minister of Finance - for undertakings, cooperatives, entrepreneurs, and for other legal entities;
2) Governor of the National Bank of Serbia - for the National Bank of Serbia, banks and other financial organizations, insurance companies, financial leasing lessors, voluntary pension funds and voluntary pension fund's management companies;
3) Securities Commission - for investment funds and investment funds' management companies, as well as stock exchange markets and brokerage houses.
3. Employees Entrusted with Keeping Books of Account and Producing Financial Statements
Article 16
Legal entity, i.e. entrepreneur shall in its general act define the schooling level, work experience and other conditions the person in charge of keeping the books of account and producing financial statements must meet.
Legal entity and entrepreneur shall in their general acts define the person employed at the legal entity and entrepreneur who shall be entrusted with keeping the books of account and producing financial statements.
Article 17
In terms of the present Law, legal entity, i.e. entrepreneur may sign a contract on keeping the books of account and producing financial statements with the undertaking or entrepreneur which is registered for providing accounting services and which has employees entrusted with keeping the books of account and producing financial statements, and which meet conditions specified in the general act.
Provisions specified in paragraph 1 of the present Article shall not apply to banks and other financial organizations, insurance companies, financial leasing lessors, voluntary pension funds, voluntary pension fund management companies,investment funds, investment funds' management companies and stock exchange markets and brokerage houses.
IV INVENTORY OF ASSETS AND COMMITMENTS
1. Reconciliation of Books of Account and Duty of Taking an Inventory
Article 18
Reconciliation of transactions and balance in the general ledger with the journal and subsidiary ledgers with the general ledger shall be conducted prior to taking an inventory of assets and commitments and prior to producing annual financial statements.
Legal entity, i.e. entrepreneur shall take an inventory of assets and commitments and shall reconcile book balance with inventory balance at the end of the financial year.
Legal entity, i.e. entrepreneur may define in its general act longer periods for taking an inventory of books, films, photos, archived materials and the like, providing these periods are no longer than five years.
Exceptionally from paragraph 2 of the present Article, legal entity, i.e. entrepreneur may define in its general act to take an inventory of certain assets during the year too.
Article 19
Besides taking an inventory of assets and commitments specified in the Article 18 of the present Law, legal entity, i.e. entrepreneur shall also take an inventory and reconcile balances when bookkeepers takeover each other's duty, when selling prices of products and goods change in the store, when statutory changes take place, when initiating, i.e. closing regular liquidation and bankruptcy procedure and in other cases defined by law.
The Minister of Finance shall prescribe the procedure and deadlines for taking inventories and for reconciling the bookkeeping balance with the actual balance.
2. Reconciliation of Receivables and Payables
Article 20
Before producing financial statements, legal entities and entrepreneurs shall reconcile mutual receivables and payables, and they shall prove this by presenting appropriate document.
Before producing financial statements, the creditor shall deliver the list of unsettled accounts to the debtor.
Subjects mentioned in paragraph 1 of the present Article shall respond to the Authorized Auditor's request for an independent confirmation of receivables and payables balance.
Legal entity, i.e. entrepreneur shall disclose non-reconciled receivables and payables in the Notes to the Financial Statements.
V RECOGNITION AND EVALUATION OF FINANCIAL STATEMENTS ELEMENTS
Article 21
Legal entity, i.e. entrepreneur shall apply provisions specified in the Article 2 of the present Law when making a recognition and evaluation of financial statements elements and when producing and presenting financial statements.
VI CLOSING OF BOOKS OF ACCOUNT AND FILING ACCOUNTING DOCUMENTS, BOOKS OF ACCOUNT AND FINANCIAL STATEMENTS
Article 22
Books of account shall be closed after entering all business changes and accounts at the end of the financial year, as well as in cases of statutory changes, termination of business, and in other cases in which it is necessary to close books of account.
Subsidiary ledgers used for more than a year shall be closed once they are no longer used.
Books of account shall be closed within the deadline for delivering financial reports.
2. Filing Accounting Documents, Books of Account and Financial Statements
Article 23
Legal entities and entrepreneurs shall neatly file accounting documents, books of account and financial statements, and in their general act they shall define persons in charge of filing and business premises where they shall be filed, as well as the filing procedure.
Financial statements and statements on conducted audit service shall be filed for 20 years.
Journal and general ledger shall be filed for 10 years.
Subsidiary ledgers shall be filed for five years.
In case they contain essential data on employee, payrolls or analytic records shall be filed for good.
Documents used as a base for entering data into books of account shall be filed for five years.
Documents of payment operations in the organizations authorised for payment operations shall be filed for five years
Sales books, control books, subsidiary forms and similar documents shall be filed for two years.
Deadlines for storing accounting documents and books of account specified in paragraph 1 of the present Article shall be calculated starting from the last day of the financial year they relate to.
Audit companies shall file documents used as a base for the conducted audit for five years.
Accounting documents, books of account and financial statements shall be filed as originals or by using other archiving means defined by law.
Accounting documents, books of account and financial statements shall be filed within the business premises of a legal entity, i.e. entrepreneur, and/or within legal entities or entrepreneurs who were entrusted with keeping books of account.
In case books of account are kept in the computer device, legal entity, i.e. entrepreneur shall memorize applicative software along with memorized data, in order to have such data available for control.
When initiating liquidation or bankruptcy procedure, accounting documents and books of account shall be handed over to the liquidation, i.e. bankruptcy receiver.
1. Duty to Produce Financial Reports
Article 24
Legal entity and entrepreneur shall produce and present current year financial statements with the balance as found on December 31 of the current year (hereinafter referred to as: regular annual financial statements).
Exclusive of Paragraph 1 of the present Article, a subsidiary whose parent company with headquarters located abroad has different financial year from the calendar year, as well as a branch office from the Article 1, Paragraph 5, of the present law, may, with the consent of the Minister of Finance or the Governor of the National Bank of Serbia for legal entities (except banks) from Article 26, Paragraph 2, of the present law, or Securities Commission for legal entities from Article 26, Paragraph 3 of the present law, produce and present regular annual financial statements with the balance as found on the last day of the financial year which is different from the calendar year.
Legal entity, i.e. entrepreneur facing statutory changes (merger, division and separation) shall produce financial statements on the day defined in the statutory change act.
Business changes occurring between the date of balance of accounts and the registration day shall be included in the books of account of the previous legal entity or the new legal entity, and that shall be stated in the change act.
Financial statements shall also be produced in case of initiating, i.e. closing the bankruptcy and/or liquidation procedure against a legal entity.
Financial statements from Paragraph 3 and 5 of the present Article shall be deemed as extraordinary in terms of the present law
Article 25
The financial statements include:
1) Balance sheet;
2) Income statement;
3) Cash flow statement;
4) Statement of changes in equity;
5) Notes to the financial statements;
6) Statistical annex.
Exclusive of Paragraph 1, of the present Article, financial statements of small legal entities which do not have the obligation to apply IAS/IFRS, or which do not issue securities by public offer or whose securities are not being traded on the organized securities market, as well as financial statements of entrepreneurs, include: Balance sheet, Income statement and Statistical annex.
Balance sheet shall be the review of assets, commitments and equity on a given day.
Income statement shall be the review of revenues, expenditures and results accomplished in a given period of time.
Cash flow statement shall provide information on receiving and issuing cash and cash equivalents in a given accounting period of time.
Statement of changes in equity shall provide information on legal entity's changes in equity in a given accounting period of time.
Notes to the financial statement shall contain base for producing financial statements and applied accounting policy, as well as other disclosures in compliance with IAS, i.e. IFRS or in compliance with the provisions specified in the Article 2 Paragraph 6 of the present Law.
Statistical annex shall contain specific statistic and statutory data.
Article 26
The Minister of Finance shall prescribe the content and form of financial statements in the purpose of having unique information and statistical data processing for undertakings, cooperatives, entrepreneurs and other legal entities
Governor of the National Bank of Serbia shall prescribe the content and form of financial statements for the National Bank of Serbia, banks and other financial organizations, insurance companies, financial leasing lessors, voluntary pension funds and voluntary pension fund management companies.
Securities Commission shall prescribe the content and form of financial statements for investment funds, investment fund management companies and stock exchange markets and brokerage houses.
3. Consolidated Financial Statements
Article 27
Legal entities with control (controlling, i.e. parent legal entity) over one or more legal entities (subordinated, i.e. daughter legal entity) shall produce, present, deliver and disclose consolidated financial statements in compliance with law and IAS/IFRS.
Consolidated financial statements shall be the statements of economic entirety, consisting of a parent legal entity and all daughter legal entities.
Exceptionally, in case the value of assets and revenues of a parent legal entity and daughter legal entities, not considering internal investments and receivables, i.e. revenues between a parent legal entity and daughter legal entities, in its total reach the level of a small legal entity, in terms of the Article 7 of the present Law, shall not produce, deliver and disclose consolidated financial statements.
4. Financial Statements Adoption and Liability
Article 28
Annual financial statements shall be adopted by the Assembly or some other competent body of a legal entity, i.e. by the entrepreneur.
Legal entity's management body, i.e. entrepreneur shall be liable for authentic and fair presentation of financial statements.
Financial statements shall be signed by legal entity's legal representative, i.e. by entrepreneur, and by person the general act defines as a person responsible for producing financial reports, as stipulated in the Article 16 of the present Law.
Financial statements must be signed by the electronic signature, in case they are produced and delivered in electronic form, in accordance with the law.
Article 29
Legal entity may provide, and in cases defined by law it must provide an internal auditing with the goal to inspect, evaluate and follow the adequacy and efficiency of the accounting system and internal control systems, in compliance with law.
Internal control system shall include all procedures and proceedings the legal entity management has defined for the purpose of providing legal entity's clean and efficient business operations, for holding on to defined management policy, for preserving integrity of funds, for preventing and discovering criminal behaviour and mistakes, for applying legal provisions, for having accurate and complete accounting records, and for producing prompt and reliable financial information.
IX DELIVERING, REGISTRATION, PROCESSING AND DISCLOSING FINANCIAL STATEMENTS AND DATA ON SOLVENCY OF LEGAL ENTITIES AND ENTREPRENUERS
Article 30
Legal entities or entrepreneurs shall deliver regular annual financial statements for the reporting year to the Agency no later then by the end of the February of the following year, unless otherwise specified by separate regulations.
Legal entities from the Article 24, Paragraph 6 of the present law, shall deliver the annual financial statements for the reporting year to the Agency, within the period of 60 days from the day when those statements were produced.
Legal entities producing consolidated financial statements (parent legal entities) shall deliver the consolidated financial statements for the reporting year to the Agency, not later then April 30th of the following year.
Legal entities or entrepreneurs, who produce extraordinary financial statements in compliance with the Article 24 of the present law, shall deliver them to the Agency, within the period of 60 days from the day when those statements were produced.
Article 31
The Audit obligors specified in the Article 37 of the present law, along with regular annual financial statements or consolidated financial statements form the Article 30, Paragraph 1 and 3 of the present law shall deliver to the Agency not later the September 30th:
1) Decision on adoption of regular annual financial statements or consolidated financial statements;
2) Auditors report on performed audit of regular annual or consolidated financial statements in compliance with the present law and International standards on auditing;
3) Decision on profit distribution or coverage of losses under regular annual financial statement, if it is decided that the profit shall be distributed or the losses shall be covered;
4) Corrected regular annual financial statements or corrected consolidated financial statements, adopted by the competent body if they contain corrections related to delivered financial statements referred to in Article 30 Paragraph 1 and 3 of the present law;
5) Annual business report for the legal entities prescribed by separate regulations.
Exclusive of Paragraph 1 of the present Article, the legal entities from the Article 24 Paragraph 2 of the present law, along with regular annual financial statements, shall deliver the documents referred to in the Paragraph 1 of the present Article not later the period of 90 days after the day of the delivery of the regular annual financial statement form Article 30, Paragraph 2 of the present law.
Article 32
The Agency registers the received financial statements in the Register of financial statements and date on solvency of legal entities entrepreneurs (here in after referred to as: the Register of financial statements).
The register of financial statements shall be kept by the Agency through the Registrar appointed in accordance with the law that regulates the registration of undertakings.
Register of financial statements is a central, public, unique electronic data base of financial statements form the Article 30 and 31 of the present law, as well as data on solvency of legal entities and entrepreneurs, based on which the business results and financial state of legal; entities and entrepreneurs, as well as, business trends in the Republic of Serbia are assessed.
The Agency shall keep records of financial statements form the Paragraph 1 of the present article for 10 years.
Article 33
The agency shall process and publish data from the received financial statements, based on which the business results and financial state of legal entities and entrepreneurs is assessed.
For the purpose of keeping the Register of financial statements, the Agency is authorized to gather and use the data from competent state bodies and institutions.
Based on data from the Paragraph 2 of the present article, data from other registers and records that the Agency keeps, as well as data supplied by other competent bodies and interested service users, the Agency shall keep the solvency data base within the Register of financial statements, shall give opinion on solvency of legal entities and entrepreneurs and provide other services in accordance wit the law and other regulations.
The Register of financial statements shares the financial statements of legal entities and entrepreneurs with competent registers of the Agency that register their status data.
The Agency provides, in accordance with the law and the other regulations, the electronic connection of the Register of financial statements with other registers or data bases that are kept in the republic of Serbia and out side of Republic of Serbia as well as with other users through telecommunication network, or by computer media.
Article 34
The Agency shall publish registered regular annual financial statements and consolidated financial statements of the audit obligors from the Article 37 of the present law on the web page of the register of financial statement not later the June the 13th, or the documents from the Article 31 of the present law not later then October the 31st, respectively, unless otherwise specified by separate regulation.
Exceptionally, the agency shall publish the regular annual financial statements of audit obligors that are produced in compliance with the Article 24, Paragraph 2 of the present law or documents form Article 21 of the present law, respectively, on the web page within the period of 30 days after the day of the delivery.
The Agency shall enable the users' insight on the web page of the Register of financial statements, without compensation, into financial statements from Paragraph 1 and 2 of the present Article, for the period last three reporting years.
Article 35
The Minister of finance, acting on a suggestion by the Agency, shall prescribe in detail the conditions of procedure for receiving, controlling, registering, processing and publishing of financial statements, manner of keeping and contents of the register of financial statements, as well as providing data form those statements.
The Minister of finance, acting on a suggestion by the Agency, shall prescribe in detail the conditions and manner of collecting data supplied to the Agency by other competent bodies and providing data and opinions on solvency of legal entities and entrepreneurs, as well as other services which the Agency provides in the process of keeping the Register of financial statements.
Article 36
The Government of the Republic of Serbia, acting on a suggestion by the Board of the Directors of the Agency shall determine the fees for registration of financial statements, providing data from the register of financial statements, as well as fees for other services that the Agency provide in the process of keeping the Register of financial statements.
X AUDITING OF FINANCIAL STATEMENTS
1. Auditing of Financial Statements
Article 37
Auditing of regular annual financial statements shall be mandatory for large and medium legal entities as well as for small legal entities which issue securities public offer, or whose securities are being traded on the organized securities market.
Auditing of consolidated financial statements shall be mandatory for parent legal entities which produce consolidated financial statements in compliance with Article 21 of the present law.
Newly established legal entities shall not be audit obligors in the year of their establishment, unless otherwise specified by separate regulation.
Small legal entities and entrepreneurs may decide to audit financial statements, in compliance with the present Law.
Legal entities issuing securities and other financial instruments through public tender shall obtain the report on conducted auditing for the year preceding the year in which they are issuing securities, i.e. other financial instruments.
Separately agreed auditing of legal entities' and entrepreneurs' financial statements shall not be considered as auditing of annual financial statements, in terms of the present Law.
Article 38
Auditing of regular annual financial statements and consolidated financial statements shall be preformed in accordance with the present law, other laws that prescribe financial statements audit of some legal entities, International standards on auditing (ISA) and Code of ethics for professional accountants.
Auditing of financial statements shall be conducted by persons holding a professional title in terms of the present Law, i.e. authorized auditors holding a licence for conducting auditing of financial statements (hereinafter referred to as: licensed authorized auditors), audit company employees and the Chamber members.
Auditing of financial statements may also be conducted by authorized auditors specified in the Article 73 paragraphs 2 and 3 of the present Law not holding a licence for conducting auditing of financial statements, no later than the expiration day of a deadline specified in the Article 73 paragraph 4 of the present Law.
Licensed authorized auditors may delegate some tasks in the process of auditing to other persons employed by the auditing company, who do not have professional title in compliance with the present law, provided that their work is planed and supervised by the licensed authorized auditor.
Licensed authorized auditor shall audit financial statements and in a report on conducted auditing he/she shall unambiguously express an opinion whether financial statements accurately and objectively, and including all significant issues, present financial balance, business results and cash flows and whether they have been made in compliance with IAS, i.e. IFRS, i.e. in compliance with regulations specified in the Article 2 of the present Law.
Authorized auditor's opinion shall be expressed in compliance with International Standards on Auditing and it may be positive, it may be a reserved opinion, it may be negative or auditor may restrain from expressing an opinion.
Audit company specified in paragraph 2 of the present Article may conduct auditing of legal entities specified in the Article 37 of the present Law, providing it employs minimum three licensed authorized auditors. Audit company may conduct audit of medium legal entities, providing it employs minimum one licensed authorized auditor.
The same auditing company may conduct auditing of financial statements of one legal entity no more than five times in a row, unless otherwise specified by other law.
Exceptionally, auditing company may conduct auditing of one legal entity maximally for another five years, unless otherwise specified by other law, providing auditing is conducted by different authorized auditors of that audit company (rotation of auditors).
Auditing of financial statements specified in the Article 37 of the present Law shall be conducted every year, on the grounds of data for classification of legal entities from the preceding year.
Legal entity's competent body shall choose audit company, in compliance with law.
Authorized auditor of a chosen audit company is entitled to attend the session of Assembly, i.e. other body, when adopting annual financial statements is on agenda and to receive all necessary information and documents the management body members are receiving for that session.
Authorized auditor is entitled to inspect all documents, books of account and accounts and to request and obtain from legal entity's management body all additional explanations necessary for conducting auditing.
Employees of the Auditing company shall use obtained data and information exclusively for auditing needs, shall not communicate them to third parties, except in case of doubt on existence of a criminal act, in other cases provided by the law which regulates prevention of money laundry and financing the terrorism, as well as other laws and in accordance with IAS and Code of ethics for professional accountants.
Auditing shall be conducted on the grounds of a contract the audit obligor and audit company shall sign, no later than by the end of the calendar, i.e. financial year, and exceptionally a new contract may be concluded even after the expiry of this deadline, if a previously concluded contract terminated, pursuant to Paragraph 19 of the present Article, and Article 46 Paragraph 2 of the present law.
Each year, the audit company shall provide the independence certificate in written form in line with Article 40 and 45 of the present law by which it shall confirm its independence, independence of licensed and authorized auditors and persons form Paragraph 4 of the present Article, from the audit obligor.
The audit company shall inform the management body of the legal entity wherein it performs audit of financial statements, or other competent body (audit committee) about important issues that appear during audit, especially about important malfunctions of internal control systems in the process of financial reporting and to include its conclusions into the mandatory content of the letter to the management.
The audit company shall not assign contracted audit tasks to other audit companies.
Audit contract may be terminated when justified causes for that exist. Different opinions on accounting treatment or audit procedures shall not be deemed as a justified cause for termination.
3. Issuing and Revoking Audit Licence
Article 39
The Chamber shall issue, extend and revoke the audit licences to authorized auditors and it shall keep a file of issued audit licences.
The Chamber shall prescribe conditions for acquiring, extending and revoking audit licences specified in paragraph 1 of the present Article, subject to prior approval of the Minister of Finance.
Article 40
Audit company shall be founded in compliance with law governing undertakings, unless otherwise specified by the present Law.
Audit company shall meet the following additional conditions:
1) authorized auditors or audit companies, being the founders of an audit company, shall have the majority management right;
2) it shall have the audit licence;
3) authorized auditors as founders of an audit company and authorized auditors as employees of an audit company shall not be under control of any person or any interest groups, in compliance with the Ethic Codex for Professional Accountants;
4) it shall employ a defined number of authorized auditors holding a licence specified in the Article 38 of the present Law;
5) it shall be the Chamber member.
Audit company shall insure itself against the liability risk for damage caused by a false audit opinion of a licensed authorized auditor, as well as against not applying International Standards on Auditing and Ethic Codex for Professional Accountants.
Besides auditing financial statements, audit company may provide bookkeeping and producing financial statements services, and it may conduct evaluation of assets and equity.
Audit company may not conduct auditing of a legal entity it provides services specified in paragraph 4 of the present Article.
Audit company may provide advisory services to the legal entity it conducts auditing of, in compliance with the Ethic Codex for Professional Accountants.
Article 41
The Ministry shall issue a licence for conducting auditing and that licence shall be used as a base to register the audit company.
Legal entity which does not have the license to perform the business of auditing in line with the present law, may not use the name "audit" in legal transactions
Article 42
The founder of the audit company shall submit the request to the Ministry to have the audit licence issued.
As an addition to the request specified in paragraph 1 of the present Article, the founder shall submit:
1) statute or foundation act, in compliance with law governing undertakings;
2) internal act governing auditing methodology;
3) data on persons conducting auditing with proofs on their permanent employment and with proof they have the professional title and licence for conducting financial statements auditing, in compliance with the present Law;
4) data on founders.
Article 43
The Ministry shall decide on the request specified in the Article 42 of the present Law within 30 days starting from the day the request was submitted.
If conditions specified in the present Law have not been met, the Ministry shall refuse the request mentioned in paragraph 1 of the present Article.
Decision specified in paragraph 2 of the present Article shall be final, and one may initiate administrative dispute proceedings against it.
Article 44
Audit company shall submit the request for membership in the Chamber within period of 30 days from the when its license to perform auditing has been granted.
Auditing company shall submit the request for inscription in to the Register of auditing companies (here and after referred to as: the Register) within the period of 30 days from the day of the inscription in to the records of the Chamber membership.
The Register is kept by the Minister of Finance, and the data from the Register shall available on the web presentation of the Ministry of Finance.
The Register of audit companies contains:
1) Business name, address, registration number, tax identification number and legal form;
2) Contact information and internet address;
3) Address of each office of subsidiary in the country or abroad;
4) Name and registration number of all licensed authorized auditors employed by the audit company;
5) Data on founders;
6) Data about general manager, or members of the management board;
7) Data on network membership;
8) Supervision measures.
More detailed conditions and manner of audit company register keeping shall be regulated by the Minister of Finance.
Article 45
Auditing shall not be conducted by:
1) audit company which is shareholder, investor or founder of audited legal entity;
2) audit company - when audited legal entity is shareholder, investor or founder of that audit company;
3) authorized auditor who does not hold audit licence;
4) licensed authorized auditor who is shareholder, investor or founder of audited legal entity;
5) licensed authorized auditor who is direct relative up to any degree of relationship, spouse or relative-in-law up to the second degree of in-law relationship, regardless whether marriage has terminated, adopter, i.e. adoptee of a founder or director of audited legal entity and guardian, i.e. foster-parent of a founder of audited legal entity;
6) The audit company and the licensed authorized auditor if having indirect ownership share of the legal entity where the audit is performed.
Article 46
Audit company where number of licensed authorized auditors is reduced under the number specified by the present Law shall inform the Ministry about that change within eight days starting from the day the change took place.
Audit company which during the auditing procedure is left without one single licensed authorized auditor shall discontinue the auditing procedure and inform the audited legal entity and the Ministry about it within eight days starting from the day the change took place, and audited legal entity shall entrust the started auditing procedure to some other audit company.
In cases specified in paragraphs 1 and 2 of the present Article, audit company may not sign new audit contracts until it again meets conditions specified in the Article 38 paragraph 7 of the present Law and informs the Ministry about it.
Article 47
If activities with crime elements are uncovered, audit company shall in line with ISA inform the management of legal entity and competent state agency about it, in accordance with law.
Article 47a
Audit company shall inform the Ministry about the changes of all facts and circumstances based on which it was inscribed into the register within the period of 8 days from the day when the change appeared, and shall at least once a year until the end of march of the current year submit data on:
1) Stock and share holders of the audit company, and acquiring or change of stock and share holders;
2) Investments by which the audit company directly or indirectly acquired share in other legal entity;
3) Changes of articles of association and memorandum association;
4) Basis for determination of insurance premium;
5) Employees;
6) list of all contracts on financial statements audit, by type of audit, that the audit company has concluded with audit obligors in the previous accounting period of time, and list of all contracts on financial statement audit that have been terminated with a proper explanation, regardless of which party terminated the contract;
7) Number of audit statements signed by each licensed authorized auditor.
Annual report from Paragraph 1, Item 1 to 7 of the present Article includes all data within the period from December the 31st of the previous year until the December the 31st of the current year.
Requested by the Ministry, the audit companies shall also submit data on number of planed and completed hours for each member of the audit team and for each audit of financial statements.
The manner of reporting and the content of reports from the Paragraph 1 of the present Article shall be regulated in more detail by Minister of Finance.
Article 48
The Ministry shall revoke the audit licence to audit company in the following cases:
1) if the founder renders the decision to cease performing the business of financial statements audit as well as in cases of cessation of a company in line with the law that governs companies;
2) if audit licence was granted on the grounds of false data provided by founders;
3) if it shall not submit the request to file at the Audit Companies Register;
4) if number of licensed authorized auditors is reduced under the specified number, and audit company, within three months staring from the day the change took place, does not increase the number of licensed authorized auditors up to the number specified by the present Law and does not inform the Ministry about it;
5) The audit company ceases to fulfill one of the conditions of the Article 40 Paragraph 2 of the present law or performs audit contrary to provisions of the present law and does not remove those irregularities, or does not conduct additional measures within the time frame specified by the competent body.
Decision specified in paragraph 1 of the present Article is final, and one may initiate administrative dispute against it.
Article 49
Once the decision on revoking audit licence specified in the Article 48 of the present Law becomes executive, the Ministry shall distribute the copy of the decision to the competent body, i.e. organization in charge of running the register of undertakings and the Chamber for erasure from membership.
XI THE CHAMBER OF AUTHORIZED AUDITORS
Article 50
The Chamber of Authorized Auditors shall be established for the purpose of improving and developing accounting and auditing professions, implementing international accounting and auditing regulations and harmonizing with such regulations, protecting general and individual interests when conducting accounting and auditing, organizing services in this field, processing examinations for acquiring professional titles, issuing and revoking audit licences, and for other purposes.
The Chamber members shall be authorized auditors employed at audit companies and authorized internal auditors, as well as audit companies.
The Chamber shall have the status of a legal entity and it shall be located in Belgrade.
Article 51
The Chamber shall perform the following activities:
1) it shall follow the implementation of International Accounting Standards, i.e. International Financial Reporting Standards, International Standards on Auditing, International Standards on Quality Control and Code of Ethics for Professional Accountants;
2) it shall follow the process of harmonizing accounting and auditing regulations with international professional regulations;
3) it shall adopt program, conduct candidates' training, organize examinations and issue professional title certificates, and rules for continuing professional advanced training, in compliance with international professional training demands and with the present Law;
4) it shall prescribe conditions for acquiring, extending and revoking audit licences to authorized auditors for conducting financial statements audits, in compliance with the present Law;
5) it shall issue, extend and revoke audit licences to authorized auditors for conducting financial statements audits and run register on issued audit licences to authorized auditors for conducting financial statements audits;
6) it shall run registers on issued professional title certificates;
7) it shall define criteria and validate professional titles acquired abroad;
8) it shall at least once a year inform the Ministry about implementation of international standards in accounting and auditing and Code of Ethics for Professional Accountants among legal entities and audit companies;
8a) conducts quality trial of performed audits in line with the Code of ethics for professional accountants and in line with the methodology determined by the Chamber;
9) it shall define criteria in forming prices for auditing services among audit companies;
10) it shall cooperate with international professional organizations;
11) it shall deliver annual financial statement and work report to the Ministry;
12) it shall perform activities the International Federation of Accountants and other international professional organizations have vested in it;
13) it shall perform other activities defined by the Chamber's foundation act.
The Chamber shall perform activities specified in paragraph 1, items 3)-7) as entrusted activities.
Acts specified in paragraph 1, items 5) and 7) shall be final and one may initiate administrative dispute against it.
The Chamber shall establish the operational department for performing professional and administrative activities. Regulations linked with state administration shall apply to the operational department in terms of official language and writing, professional qualifications and competence of employees dealing with entrusted state administration affairs and in terms of desk work.
The Chamber shall adopt the Statute and general acts which shall closely govern the organization and work mode for activities specified in paragraph 1 of the present Article.
The Ministry shall give its consent on the Chamber's Statute and other general acts within 30 days starting from the day these acts have been adopted by the Chamber's bodies.
The consent given on the Chamber's Statute shall be published in the "Official Herald of the Republic of Serbia".
Article 52
The Chamber shall be authorized to become the International Federation of Accountants member (IFAC), in compliance with that Federation's Statute.
Article 53
The Chamber shall have its Assembly, Council, Supervising Committee and Disciplinary Commission.
Article 54
The Assembly shall be the Chamber's top body.
The Assembly shall appoint the President of the Assembly from authorized auditors Chamber members.
A person who is a member of political party and an official in terms of the law governing the prevention of conflict of interests when performing public services, or union official, shall not be appointed for the President of the Assembly post.
The Minister of Finance shall give his/her consent on the appointment of the President of the Assembly.
The President of the Assembly shall be appointed for a five year term and same person shall not be reappointed for that post.
The Assembly shall perform the following activities:
1) it shall adopt the Chamber's Statute and Rules of Procedure, it shall define rules for Code of Ethics for Professional Accountants implementation, it shall adopt the Rulebook on Disciplinary Proceedings and professional rules;
2) it shall appoint and recall members of the Chamber's bodies and organs in compliance with the present Law and Statute, except for members who are in terms of the present Law representatives of specific bodies and organizations, appointed by those bodies and organizations;
3) it shall adopt a program for acquiring professional titles specified in the Article 4 of the present Law, in compliance with international guidelines and professional training demands, and in compliance with the present Law;
4) it shall establish Commission to process examinations specified in the Article 6 paragraph 1 of the present Law;
5) it shall prescribe conditions for acquiring, extending and revoking audit licences to authorized auditors for conducting financial statements audits;
6) it shall decide on a membership fee for covering the Chamber's activities, and on examination and registration fees;
7) it shall consider and adopt report on other bodies activities and it shall approve the Chamber's financial plan;
8) it shall adopt annual report on the Chamber's work and the Chamber's annual financial statements, and it shall deliver it to the Ministry along with auditor's opinion;
9) it shall perform other activities prescribed by the Chamber's Statute, in compliance with the present Law.
The representative of the Ministry shall be the Assembly member.
Article 55
The Council shall be the Chamber's executive body.
The Council shall consist of: the President, the Vice-President, the Ministry representative, the National Bank of Serbia representative, the Association of Banks of Serbia representative, the Securities Commission representative, the University professor and four authorized auditors employed at audit companies.
The Chamber members shall propose the President and the Vice-President, from the Chamber members.
A person who is member of political party and an official in terms of law governing the prevention of conflict of interests when performing public functions, or union official, shall not be appointed for the Council President and Vice-President posts.
The Minister of Finance shall give his/her consent on appointing the Council President and Vice-President.
The Council President and Vice-President shall be appointed for a five year term and same persons shall not be reappointed for those posts.
The Council shall perform the following activities:
1) it shall prepare the Statute draft and other general acts drafts to be adopted by the Assembly;
2) it shall prepare the program for acquiring professional titles specified in the Article 4 of the present Law, in compliance with international guidelines and professional training demands, in accordance with the present Law;
3) it shall propose members of the Commission to process examinations specified in the Article 6 paragraph 1 of the present Law;
3a) exclusive of item 3) of the present Paragraph, it can appoint not more then one third of the members of the Commission to process examinations from Article 6, Paragraph 1 of the present law;
4) it shall propose conditions for acquiring, extending and revoking audit licences to authorized auditors for conducting financial statements audits;
5) it shall decide on issuing, extending and revoking audit licences to authorized auditors for conducting financial statements audits;
6) it shall decide on filing and erasing members from registers run by the Chamber;
7) it shall define procedures for supervising the international audit standards implementation and the Codex of Ethics for Professional Accountants provisions among audit companies;
8) it shall define guidelines for conducting internal audits, in compliance with internationally accepted principles for conducting internal audits;
9) it shall perform other activities on the grounds of law and the Chamber's Statute.
Article 56
The Supervising Committee shall consist of five members.
The Supervising Committee shall consist of: the President, the Vice-President, the Ministry representative and two audit companies' representatives.
The Chamber's Assembly members shall propose the President and Vice-President, from the Chamber members.
A person who is member of a political party and an official in terms of law governing the prevention of conflict of interests when performing public functions, or union official, shall not be appointed for the Supervising Committee President and Vice-President posts.
The Minister of Finance shall give his/her consent on appointing the Supervising Committee President and Vice-President.
The Supervising Committee President and Vice-President shall be appointed for a five year term and same persons shall not be reappointed for those posts.
The Supervising Committee shall perform the following activities:
1) it shall supervise the Chamber's work in terms of its legality;
2) it shall examine the annual work report and financial statements, and other Chamber's acts;
3) it shall perform other activities on the grounds of the present Law and the Chamber's Statute.
Article 57
The Disciplinary Commission shall be the Chamber's body performing tasks defined by the Statute and the Rulebook on Disciplinary Proceedings in terms of processing disciplinary and other measures, in compliance with the present Law.
The Disciplinary Commission shall consist of: three Chamber members, the Ministry of Finance representative and the Ministry of Justice representative.
Article 58
The Chamber's Statute shall closely prescribe the scope of work, the appointment mode, and the number and composition of specific bodies specified in the Articles 53-57 of the present Law.
Article 59
The Chamber shall collect its work funds by collecting membership fee, examination and certificate fees, licence fees, registration fees, fees for providing data from registers it runs, donations, sponsorships, presents and other sources, in compliance with law.
Funds necessary for commencing the Chamber's work may be provided from the Budget of the Republic of Serbia.
Providing it obtains prior approval from the Minister, the Chamber shall determine the amount of a membership fee, examination, certificate and licence fees, registration fee and fees for providing data from registers it runs.
Approval specified in paragraph 3 of the present Article shall be published in the "Official Herald of the Republic of Serbia".
XII NATIONAL ACCOUNTING COMMISSION
Article 60
Upon the Ministry's proposal, the Government shall establish the National Accounting Commission (hereinafter referred to as: the Commission) with the following assignments:
1) to follow the process of implementation of European Union directives related to accounting and auditing fields and to propose appropriate solutions for the national legislation;
2) to follow the process of implementation of international accounting standards (IAS, i.e. IFRS) and to propose to the Ministry solutions for possible problems that may occur in the process of implementation of these standards;
3) to follow changes related to international accounting and auditing regulations (IAS/IFRS, i.e. ISA) and to inform the Ministry about it;
4) to propose strategy, guidelines and action plan for improving the quality of financial reporting and to initiate adoption of new or amendments of existing accounting regulations;
5) to accomplish cooperation with the Ministry and the Chamber, with faculties teaching accounting and auditing and with domestic and foreign professional organizations.
Article 61
The Commission shall deliver its work report to the Ministry at least once a month.
Article 62
Upon the Minister's of Finance proposal, the Government shall appoint the president and six members of the Commission from the experts who possess knowledge and practice in the area of finance, accounting and auditing, while two of the members shall be appointed on a proposition by the Securities commission and National bank of Serbia.
The Ministry shall perform professional and administrative tasks for the Commission.
Reimbursements for the work of the President of the Commission and its members shall be provided from the Budget of the Republic of Serbia.
Upon the Ministry's proposal, the Government shall determine the amount of the reimbursements for the President of the Commission and its members.
1. Supervision over Audit Companies' Work
Article 63
Supervision of the auditing companies work shall be conducted by the Ministry through authorized persons.
Supervision of the auditing companies work shall be conducted in the premises of the Ministry and in the premises of the auditing company.
Supervision of the auditing companies work includes:
1) Control whether auditing companies fulfill conditions for the issuance of the license to perform the audit of financial statements and for inscription into the register;
2) control whether licensed authorized auditors fulfill the conditions for inscription into respective registers of the Chamber;
3) Control of accounting companies and licensed authorized auditors independence from the entity that ordered the audit;
4) Supervision, gathering and trial of report that audit companies must deliver to the Ministry;
5) Control whether the auditing companies have established and applied internal procedure quality assurance system
6) Whether there are reasons for taking away the license for performing the business of audit from the audit company;
7) Insight into general and individual acts, records and other documents in order to determine facts and circumstances which are important for conducting supervision;
8) Impose supervision measures in line with the present law.
Supervision from the Paragraph 1 of the present Article may be also conducted on a reasoned request by the Chamber.
Auditing companies, as well as the Chamber, shall deliver all documents necessary for conducting the supervision from the Paragraph 12 of the present Article within the time frame determined by the Ministry.
The auditing company shall allow the authorized person from the Ministry to enter into its offices and shall provide that person with necessary conditions for conducting supervision, with all requested explanations and present documents and data on companies business.
Article 63a
Authorized person of the Ministry in the process of supervision may impose following measures to the audit company:
1) To remove determined irregularity or illegality;
2) Additional measures;
3) To take away the license for performing business of audit.
Article 63b
Authorized person of the Ministry shall order removal irregularities or illegalities by resolution in case it is determined that:
1) The audit company acts contrary to Article 5 of the present law;
2) The audit company performs its activities contrary to Article 40, Paragraph 5 of the present law;
3) The audit company acts contrary to the Article 47a of the present law;
4) The audit company does not fulfill any of conditions for issuing of license for performing the business of audit;
5) The audit company does not conduct audit in lie with provisions of the present law.
Authorized person of the Ministry determines the time frame for repairing irregularities or illegalities.
Article 63v
Authorized person of the Ministry may determine additional measure by a resolution in case it is determined that:
1) The audit company does not act in line with the order for removal of irregularities or illegalities;
2) The procedure for taking away the license from de licensed authorized auditor who performs audit in the audit company has been started;
3) audit company in last two years more then four times breaches its obligations of timely and properly reports submission or information or in some other way interferes with supervision of it business.
The following measures are ordered to the audit company by additional measure:
1) Improving internal procedures which assure quality of conducting the audit;
2) change of the internal organization of the audit company;
3) Other measures needed for removal of determined irregularities.
Article 64
The minutes shall be made about conducted supervision over the audit company.
A copy of the minutes shall be distributed to the audit company.
Article 65
(erased)
Article 66
An appeal can be filed against the resolution from Article 63b, Paragraph 1 and Article 63v, Paragraph 1 to the Minister of Finance no later than 15 days after the delivery of the resolution.
The appeal against the resolution from the Article 63b, Paragraph 1 and Article 63v, Paragraph 1 does not postpone enforcement.
Minister of Finance shall decide on an appeal no later than 30 days after the day of reception of the appeal.
Against the final resolution from Article 63b, Paragraph 1 and Article 63v, Paragraph 1 and resolution from the Paragraph 3, the administrative dispute may not be initiated.
2. Supervision over Chamber's Work
Article 67
The Ministry of Finance shall conduct supervision over the Chamber's work on performing entrusted state administration affairs defined by the present Law, in compliance with law governing the state administration.
Article 68
Legal entity shall be fined from 100.000 to 3.000.000 dinars for a corporate offence in the following cases:
1) if it does not classify itself on small, medium or large legal entities, in compliance with the Article 7 of the present Law;
2) if in its general act it does not arrange the accounting organization, in compliance with the Article 8 paragraph 1 of the present Law;
3) if it processes data in computer and it does not have the accounting software which enables the functioning of internal accounting control system and prevents erasure of entered business changes (Article 8 paragraph 2);
4) if it does not deliver accounting papers and documents for bookkeeping within a given deadline and if it does not enter business change in books of account within a given deadline (Article 11);
5) if in its general act it does not define a person entrusted to do the bookkeeping and to produce financial statements (Article 16 paragraph 2);
6) if it entrusts bookkeeping and producing financial statements as opposed to the provisions of the Article 17 paragraph 1 of the present Law;
7) if it does not make the inventory of assets and commitments within a given deadline (Article 18 paragraphs 2 and 3 and Article 19);
8) if as creditor it does not deliver its debtor the balance of unsettled accounts and if it does not disclose non-reconciled receivables and payables in the Notes to the financial statements (Article 20 paragraphs 2 and 4);
9) if it does not respond to the authorized auditor's request for independent confirmation of receivables and payables balance (Article 20 paragraph 3);
10) if it does not produce and present financial statements in compliance with the present Law (Article 21);
11) if it does not close books of account in cases and within deadlines stipulated by law, or if it does not file financial reports, books of account and accounting documents under procedure and within deadlines stipulated by the present Law (Article 22 and Article 23 paragraphs 1-13);
11a) if it does not produce financial statements in line with Article 24 of the present law;
12) if it does not deliver financial statements in compliance with the Article 30 of the present Law;
12a) if it does not deliver within deadline prescribed documents form Article 31 of the present law;
13) (erased)
14) if it does not conduct auditing of financial statements in compliance with the Article 37 Paragraphs 1, 2 and 5 of the present Law;
15) If it prevents the authorized auditor of the chosen audit company to attend the session general meeting or other body in the process of adoption of annual financial statements and to get all needed information and documents that the members of a management body get for that session (Article 38, Paragraph 12);
16) If it prevents authorized auditor to get insight into all documents, business books and calculations and to demand and get from the members of the management bodies and the management of the legal entity all additional explanations needed to perform the audit (Article 38. Paragraph 13);
17) If it is audit obligor in terms of the present law but it fails to conclude the contract on audit with the audit company within deadline from Article 38, Paragraph 15 of the present law;
18) If it terminates the contract of audit due to reasons which cannot be deemed as a justified cause for termination of an audit contract in terms of Article 38, Paragraph 19.
Legal entity's responsible person shall also be fined from 5.000 to 150.000 dinars for a corporate offence, for conducting activities specified in paragraph 1 of the present Article.
Article 68a
An audit company shall be fined from 100.000 to 3.000.000 RSD for a corporate offence in the following cases:
1) If it performs audit contrary to Article 38 of the present law;
2) If it doesn't insure itself against the liability risk for damage caused by a false audit opinion of a licensed authorized auditor (Article 40, Paragraph 3);
3) If it performs audit contrary to Article 40, Paragraph 5 of the present law;
4) If it performs audit contrary to Article 45 of the present law;
5) If acts contrary Article 46 of the present law;
6) If acts contrary Article 47 of the present law;
7) If it does not submit prescribed data form Article 47a of the present law.
Legal entities responsible person shall also be fined from 5.000 to 150.000 RSD for corporate offence, for conducting activities specified in Paragraph 1 of the present law.
Article 68b
Authorized auditor shall be fined from 10.000 to 100.000 RSD for a corporate offence in the following cases
1) If he acts contrary to Article 38, Paragraph 14, of the present law;
2) If he conducts audit contrary to Article 45, Paragraph 1, items 3) to 6) of the present law.
Article 69
Entrepreneur shall be fined from 5.000 to 500.000 dinars for a misdemeanor if it conducts activities specified in the Article 68, paragraph 1, items 2)-12) of the present Law.
XV TRANSITIONAL AND FINAL PROVISIONS
Article 70
The Chamber shall commence its work no later than six months following the day the present Law comes into force.
Article 71
The Minister of Finance shall appoint the President and ten members of the Preliminary Commission which shall draft the Statute and other general acts, prepare bodies appointments, and conduct other tasks indispensable for having the Chamber commence its work.
The Preliminary Commission's work funds shall be provided from the Budget of the Republic of Serbia.
The Ministry shall provide premises for the Preliminary Commission's work.
Once the Chamber commences its work, the Preliminary Commission shall terminate its own.
Article 72
The first Chamber's Council shall consist of the President, the Vice-President and nine members, five of them originating from the Preliminary Commission. The Chamber's Assembly shall appoint the other four members.
Article 73
Persons who, prior to the present Law coming into force, have acquired professional titles in compliance with the Law on Accounting ("Official Gazette of the Federal Republic of Yugoslavia", Nos. 46/96, 74/99, 22/01 and 71/01) and Law on Accounting and Auditing ("Official Gazette of the Federal Republic of Yugoslavia", No. 71/02 and "Official Herald of the Republic of Serbia", No. 55/04) shall have those titles recognized.
Persons who, prior to the present Law coming into force, have acquired the certificate or decision on the authorized auditor title by passing examination in compliance with the Federal Government's program shall have the authorized auditor title recognized, in compliance with the present Law.
Persons who, prior to the present Law coming into force, have acquired the certificate or decision on the authorized auditor title without passing examination as stipulated by the Law on Auditing Financial Reports ("Official Gazette of the Federal Republic of Yugoslavia", Nos. 30/96, 74/99, 1/00 and 71/01) shall have the authorized auditor professional title recognized, in compliance with the present Law.
Persons mentioned in paragraphs 2 and 3 of the present Article shall be eligible for conducting financial statements audits specified in the Article 38 paragraph 2 of the present Law without having the audit license, for no longer than for the period of one year starting from the day the regulations specified in the Article 39 paragraph 2 of the present Law were adopted, and within this deadline they shall acquire the license for conducting financial statements audits.
Exceptionally, persons who, prior to the present Law coming into force, have acquired the certificate or decision on the auditor professional title by passing examination in compliance with the Federal Government's program or without passing such examination, as well as persons who have acquired the authorized accountant title in compliance with Law on Accounting ("Official Gazette of the Federal Republic of Yugoslavia", Nos. 46/96, 74/99, 22/01 and 71/01) shall have those professional titles recognized. These persons may be eligible to conduct financial statements audits specified in the Article 38 paragraph 4 of the present Law for no longer than for the period of three years starting from the day the Commission specified in the Article 6 paragraph 1 of the present Law was established, and within this deadline they shall pass the examination and acquire the authorized auditor professional title certificate and license for conducting financial statements audits.
Persons specified in paragraphs 2 and 3 of the present Article shall register within the Register mentioned in the Article 51, paragraph 1, item 5) of the present Law.
Article 74
Persons who, prior to the present Law coming into force, have started taking examinations in compliance with the Federal Government's program for acquiring auditor and authorized auditor titles may take remaining examinations in compliance with the program under which they started taking examinations, no later than for the period of one year starting from the day the Commission specified in the Article 6 paragraph 1 of the present Law was established.
Article 75
Audit companies who, prior to the present Law coming into force, have acquired the license, i.e. the Federal Ministry of Finance license, shall harmonize their businesses with the provisions of the present Law no longer than during the period of one year starting from the day the conditions for acquiring license for conducting financial statements audits specified in the Article 39 of the present Law were prescribed.
Besides filing a request for issuing a license specified in the Article 42 of the present Law, audit companies shall also submit documents specified in paragraph 2 of the present Article, and all other necessary documents requested by the Ministry.
Article 76
Law on Accounting and Auditing ("Official Gazette of the Federal Republic of Yugoslavia", No. 71/02 and "Official Herald of the Republic of Serbia", No. 55/04) shall cease to be valid on the day the present Law comes into force.
Bylaws enacted in compliance with the law that shall cease to be valid in terms of paragraph 1 of the present Article shall apply until bylaws are enacted in compliance with the present Law, unless opposed to the present Law.
Article 77
The present Law shall come into force on the eighth day after its publication in the "Official Herald of the Republic of Serbia".
Independent Articles of the Law on Amendments to the
Law on Free Accounting and Auditing
("Official Herald of the Republic of Serbia", No. 111/2009)
Article 42
Legal entities founded in 2009 are not audit obligors in 2009, as well as small legal entities whose does not issue securities by public offer or whose securities are not being traded on the organized security market, unless otherwise specified by separate regulation.
Article 43
Provisions of Article 5, Paragraphs 2 and 3, Paragraph 18 to 24 and Article 44, Paragraph 1 of the present law shall be applicable from January 1st 2010.
Article 44
The provisions of Article 44 of the Law on registration of business entities ("Official Herald of RS" No. 55/04 and 61/05), and Article 54 of the Law on payment transactions ("Official gazette of SRJ" No. 2/03 and 5/03 and "Official Herald of RS" No.43/04 and 61/05) shall cease to be valid on January 1st 2010.
The provisions of Article 77, Paragraph 2, items 13) and 14) of the Law on registration of business entities ("Official Herald of RS" No. 55/04 and 61/05) shall cease to be valid on the first day of applicability of the act of Government from Article 24 of the present law.
Article 45
On the day of entering the force of the present law the Agency shall take over files, documents, records, database, tools, needed number of employees and part of information system and necessary information equipment and technology that has been used by National bank of Serbia in conducting the tasks of accepting and processing of financial statement and keeping data registers on solvency of legal entities and entrepreneurs.
Take over of files, documents, records, database, tools, needed number of employees and part of information system and necessary information equipment and technology of National bank of Serbia from Paragraph 1 of the present Article shall be executed on the bases of agreement between National bank of Serbia and the Agency.
Article 46
This law shall enter into force on the next day after its publication in the "Official Herald of Republic of Serbia".