Eurasian Economic Commission and International Auditing and Consulting Network FinExpertiza in the round-table discussion

On 26 November 2015, the Eurasian Economic Commission (EEC) and FinExpertiza Network held a panel in Moscow to discuss further steps in the common market for audit services in EAEU countries in the context of the Russian-Armenian cooperation.

Robert Arutyunyan, EEC Collegium Member (Minister) chaired the panel. The key speakers were Askar Kishkembaev Head of Secretariat of the Minister for Economy and Financial Policies under EEC, Larisa Kosholkina General Director of OOO FinExpertiza-Network, Ilgiz Baymuratov Partner of FinExpertiza-Network, Vaagn Voskanyan Managing Partner of consulting company Shirakamut (Armenia). The other participants of the panel were representatives from large Russian companies, public organizations, and federal mass media.

Robert Arutyunyan was the first to address the panel, "Services are a critical component for each economy. The global practice evidences, that almost 70% of GDP in developed countries is gained from this sector. In EAEU, services account for around 50% of GDP. It is a high priority for us to move forward in this sector especially when we have such an opportunity. We have done a lot in this aspect. Now, after a decision was approved in the Supreme Board, the common market has included 43 services sectors since the EAEU treaty became effective on 1 January 2015. We have prepared a liberalization plan under which we developed a "road map" to form the common market for audit services within EAEU. In particular, we have set deadlines to prepare and approve an audit treaty that is meant to specify commitments of the countries to adopt the international standards on auditing. This is crucial since evolvement of the audit market should encourage their export to other countries."

Then Askar Kishkembaev described the progress of the task force on preparation of the draft agreement on auditing in EAEU, "The task force members were authorized by the EEC advisory unit on 19 March 2014, and the relevant concept of the draft agreement was approved on the 3d of October. On 9 July 2015, the Advisory Committee on Financial Markets approved the action plan ("road map" ) to form the common market for audit services within EAEU. Under the concept, the purpose of preparing the draft agreement is to lay the foundations of the common market for audit services within EAEU as well as harmonization of the regulatory framework on auditing. The work on the draft agreement itself is aimed at formation of a unified approach within EAEU to the regulation of audit activities. In particular, this includes provision of the right to provide and obtain audit services without any restrictions, recognition of qualification certificates of auditors in EAEU countries, acceptance of auditor's reports and other reports issued by an audit firm of one Union member on the territories of other member states of the Union, as well as application of the international standards on auditing. The task force held 8 meetings where we agreed on the concept and action plan, reviewed and generally agreed on the first two chapters of the draft agreement, initiated discussion of the third chapter dedicated to the quality control of an audit firm and individual practitioners. I'd like to emphasize that this agreement would indeed be a great step in implementing unrestricted mobility of services within EAEU, and in 2016 we expect to submit the agreement for approval at the govenrment level."

Then Robert Arutyunyan asked Ilgiz Baymuratov to express views of the audit and consulting business on building up the common audit market.

Ilgiz Baymuratov noted some important aspects to be settled for harmonization of standards and laws on auditing in EAEU. Some of them include difference in regulatory approaches, national restrictions on access of auditors to work with certain categories of entities in audit, difference in standards on preparation of financial statements, need to synchronize the process of transition to IFRS.

"It is difficult to predict how regulatory requirements for audit firms will change, as a common format of the regulation is not defined for the market for audit services. A supranational regulator may be created as a result of the concordance of positions. Of course, the audit markets in EAEU countries will be affected differently, but the impact of the changes will be significant for each. Harmonization will concern not only the national audit rules, but also the legislative aspects relating to activities of auditors. EAEU members have to formulate a common approach to the regulation of the audit profession, which requires concerted actions of different government bodies."

Finally, Ilgiz Baymuratov shared the experience of the international network FinExpertiza on the application of common rules and approaches that are based on the international standards on auditing for each member of the network.

During the event, the Armenian company Shirakamut was admitted to the global network FinExpertiza. Before signing the network agreement Larisa Kosholkina addressed the participants:

"Building up the common audit market within the EAEU is time and effort consuming,but modern business is impatient, and currently needs an explicit and clear auditing and consulting party within the EAEU that can provide services in line with the international standards on quality. FinExpertiza Network aspires to the role of such a provider of auditing and consulting services. It is encouraged now to declare oneself as a national producer and define oneself as a participant of the program for import substitution. Today I'd like to propose the broader interpretation – in the whole territory of the EAEU. Thanks to this agreement with the Armenian company Shirakamut, the companies operating in the EAEU will get not only a reliable partner, but also a professional auditor & consultant that fits an international level.

Then the network agreement was officially signed by Larisa Kosholkina from FinExpertiza and Vaagn Voskanyan from Shirakamut. Now the firm begins to operate under the brand FINEXPERTIZA but still remains committed to its original name part. Thanks to the signed network agreement, Russian businesses operating in Armenia as well as Armenian companies in Russia can get professional support of the single international consultant with headquarters in the EAEU.

Vaagn Voskanyan delivered a speech in which he expressed hope for further successful cooperation, exchange of experience, professionals, technologies, as well as for new business opportunities for both the Russian and the Armenian parties.

The official part of the event ended with the speech by Robert Arutyunyan who congratulated the representatives of FinExpertiza Network on the new stage of development, "We find it very important that now Armenia has a company that will switch to international standards, provide services in the domestic market under your network. Besides the agreement between Russian and Armenian parties in the audit sector is very important for EEC, as this is one more step in integration between our countries. This is a good example that Armenian and Russian companies work together exactly in this market. You need to expand further, enter the markets of other countries within the EAEU, involving new partners to build a large network that can indeed become one of the leaders in this market".