NORMATIVE RESOLUTION OF CALCULATING COMMITTEE ON CONTROL OF EXECUTION OF THE REPUBLICAN BUDGET OF THE REPUBLIC OF KAZAKHSTAN

of April 28, 2020 No. 5-HK

About entering of amendments into the normative resolution of Calculating committee on control of execution of the republican budget of March 31, 2016 No. 5-HK "About approval of procedural standards of external state audit and financial control"

According to the subitem 2) of Item 2 of article 8 of the Law of the Republic of Kazakhstan of November 12, 2015 "About the state audit and financial control" the Calculating committee on control of execution of the republican budget (further - Calculating committee) DECIDES:

1. Bring in the normative resolution of Calculating committee on control of execution of the republican budget of March 31, 2016 No. 5-HK "About approval of procedural standards of external state audit and financial control" (it is registered in the Register of state registration of regulatory legal acts No. 13647, it is published on May 11, 2016 in the Information system of law of Ad_let) the following amendments:

Item 1:

add with the subitem 12) of the following content:

"12) 300. The procedural standard of external state audit and financial control on carrying out financial records audit according to appendix 12 to this normative resolution.".

add with appendix 12 according to appendix to this normative resolution.

2. To provide to legal department of Calculating committee in the procedure established by the legislation of the Republic of Kazakhstan:

1) state registration of this normative resolution in the Ministry of Justice of the Republic of Kazakhstan;

2) placement of this normative resolution on Internet resource of Calculating committee.

3. To impose control of execution of this normative resolution on the chief of staff of Calculating committee.

4. This normative resolution becomes effective after ten calendar days after day of its first official publication.

Appendix

to the Normative Resolution of Calculating committee on control of execution of the republican budget of the Republic of Kazakhstan of April 28, 2020 No. 5-HK

Appendix 12

to the Normative Resolution of Calculating committee on control of execution of the republican budget of the Republic of Kazakhstan of March 31, 2016 No. 5-HK

300. The procedural standard of external state audit and financial control on carrying out financial records audit

Chapter 1. General provisions

1. This Procedural standard of external state audit and financial control (further - the Standard) determines the principles and approaches to carrying out audit by carrying out financial records audit consolidated and separate financial statements, performed by bodies of external state audit and financial control (further - bodies of audit).

2. The standard ISSAI 200 "The fundamental principles of financial audit", standards of financial audit ISSAI 2000-2999 is developed according to the regulatory legal acts of the Republic of Kazakhstan regulating questions of external state audit and financial control and based on acceptable provisions of International standards (ISSAI) approved by the International organization of the supreme bodies of audit (INTOSAI) including ISSAI 100 "The basic principles of audit in public sector".

3. The purpose of the Standard is establishment of the single principles and requirements to carrying out financial records audit and preparation of the audit report by its results.

4. Action of the Standard extend to statutory auditors and experts (auditing organizations, specialists of state bodies and other legal, physical persons involved by bodies of audit in carrying out the state audit on the corresponding profile).

Chapter 2. The basic concepts used in the Standard

In the Standard the following concepts are used:

1) auditor documentation - documents in which the performed audit procedures, the obtained auditor evidence, the conclusions drawn by the statutory auditor are reflected;

2) the audit report according to the financial reporting - the document, the constituted directly booking state audit by statutory auditors containing the opinion on reliability of the financial reporting, and also compliance of procedure for conducting financial accounting and creation of the financial reporting to requirements expressed in writing the established legislation of the Republic of Kazakhstan in the field of financial accounting and the financial reporting;

3) auditor proofs - actual data taking into account their legality, reliability and admissibility on the basis of which statutory auditors establish availability or lack of violations or shortcomings of work, and also other materials confirming the facts stated in the audit report;

4) the auditor file - the grouped information containing the records constituting auditor documentation on any specific object of audit;

5) audit risk is risk of expression by the statutory auditor of wrong auditor opinion in case the financial reporting contains essential misstatements;

6) auditor selection - application of audit procedures to less than hundred percent of elements of set, significant for audit so that each element of set had probability to get to selection that will provide to the statutory auditor reasonable basis for forming of conclusions about all set;

7) analytical procedures - assessment of financial information on the basis of studying of natural interrelations, as between financial, and non-financial information;

8) external confirmation - the auditor evidence obtained by the statutory auditor in the form of the direct written reply of the third party (the confirmatory party) on the paper, electronic medium;

9) population - full range of data from which selection is made, and concerning which, the statutory auditor draws conclusions;

10) sufficiency (the auditor proof) - the quantitative criterion of auditor proofs depending on risk level of misstatement, and also quality of these auditor proofs;

11) the request - consists in information search, both financial, and non-financial nature, at the informed persons in object or beyond its limits;

12) request for negative confirmation - request to which the confirmatory party responds to directly statutory auditor only if the confirmatory party does not agree with information provided in request;

13) request for positive confirmation - request to which the confirmatory party responds to directly statutory auditor, with indication of consent with information containing in request and providing required information;

14) inspection - consists in check of internal or external records or documents on the paper, electronic medium, or in physical control of asset;

15) component - subject or type of economic activity on which the management of group or component prepares financial information for inclusion in the financial reporting of group;

16) the control circle - internal (corporate) culture, organizational structure and the internal code the politician and the procedures predetermining quality of the reporting and efficiency of activities of state body;

17) the modified opinion - opinion with clauses or refusal of opinion expression;

18) not modified opinion - the opinion expressed by the statutory auditor in which the statutory auditor concludes that the financial reporting is prepared, in all essential aspects, according to applicable basis of accounts presentation;

19) unfair action - the deliberate action made by one or several persons from among management of object, persons given the leading authority, the employees or the third parties, having deception signs for the purpose of receipt of unfair or illegal benefit;

20) observation - consists in visual studying of processes or the procedures performed by other persons;

21) mistake - inadvertently allowed misstatement in the financial reporting, including not reflection of any numerical indicator or not disclosure of any information;

22) recalculation - represents check of accuracy of arithmetic calculations in source documents or accounting records;

23) materiality threshold - the size or sizes established by the statutory auditor at lower level than volume which is established for the financial reporting in general to reduce to it is acceptable low level probability that the cumulative size of undetected misstatements will exceed the materiality level established for the financial reporting in general;

24) repeated accomplishment - independent holding by the statutory auditor the procedures or control actions (which were originally executed by management or personnel of the audited face within internal control system of the audited face) performed as manually, and using computer methods of carrying out audit;

25) procedures for risk assessment - the audit procedures which are carried out for the purpose of receipt of the correct idea of activities of the audited face and its circle including its internal control system, for the purpose of identification and risk assessment of the essential misstatements caused by unfair actions or mistake at the level of the financial reporting and at the level of approvals;

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