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

of September 28, 2022 No. 10-HK

About modification and amendments in some normative resolutions of Calculating committee on control of execution of the republican budget

The calculating committee on control of execution of the republican budget (further – Calculating committee) DECIDES:

1. Bring the following changes and amendments in some normative resolutions of Calculating committee:

1) 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):

in the Procedural standard of external state audit and financial control on carrying out audit of efficiency approved by the specified normative resolution:

exclude Chapter 4;

state Item 29 in the following edition:

"29. The studying of the direction of audit of efficiency or activities of object of the state audit which is carried out at stage of preliminary studying and planning of auditor action is continuation of analytical procedures which were carried out at planning stage. At this stage process of studying is most disaggregated and focused on certain aspects of the direction of the state audit or activities of object of the state audit depending on certain subject of auditor action and is aimed at development of documents of audit.";

state Item 33 in the following edition:

"33. The purpose of auditor action is formulated on the basis of subject of audit of efficiency at stage of forming of the List of objects of the state audit according to the procedure, determined by Rules.";

state Item 41 in the following edition:

"41. One of special criteria of audit of efficiency is the prospects indicator intended for determination of compliance of the made expenses to the purposes and tasks set on the designated expected period. The criterion of prospects is used in case of audit of efficiency of planning of the republican budget and implementation of documents of System of state planning of the Republic of Kazakhstan. Determination and (or) development of special criteria are performed with use of information from available and reliable sources.";

state Item 74 in the following edition:

"74. Auditor documentation is constituted in detail that other statutory auditor who does not have preliminary data on results of the state audit (or during quality control), could estimate:

1) communication between questions, criteria, scale of the state audit, risks assessment, the Program of audit on holding auditor action, terms, amount and results of the performed audit procedures;

2) the auditor proofs confirming audit opinion or opinion of the statutory auditor;

3) reasons which required application of professional judgment;

4) corresponding conclusions and recommendations of the state audit.";

exclude appendices 1 and 2;

in the Procedural standard of external state audit and financial control on carrying out compliance audit approved by the specified normative resolution:

to state heading of paragraph 1 of Chapter 3 in the following edition:

"Paragraph 1. Preliminary studying of objects of the state audit and creation of the Program of audit and orders";

state Item 12 in the following edition:

"12. The procedure for forming of group for carrying out compliance audit, preliminary studying of objects of the state audit, creation of the Program of audit and orders is performed according to the Rules of carrying out external state audit and financial control approved by the normative resolution of Calculating committee on control of execution of the republican budget of July 30, 2020 No. 6-HK (it is registered in the Register of state registration of regulatory legal acts No. 21070) (further – Rules).";

state Item 30 in the following edition:

"30. Owing to the restrictions set by the Program of audit, compliance audit does not provide guarantee or absolute confidence that all facts of discrepancy to requirements will be found.";

add with Item 35-1 of the following content:

"35-1. For forming of sufficient, reliable and urgent auditor evidences, taking into account features and specifics of activities of object of the state audit the statutory auditor, being guided by professional judgment, uses auditor selection.

Auditor selection includes 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.";

in the Procedural standard of external state audit and financial control on quality control by bodies of external state audit and financial control approved by the specified normative resolution:

To state the procedural standard of external state audit and financial control on quality control by bodies of external state audit and financial control in edition according to appendix 1 to this normative resolution.

in the Procedural standard of external state audit and financial control on carrying out financial records audit approved by the specified normative resolution:

state Item 7 in the following edition:

"7. KFO RB is constituted based on consolidated financial statements of administrators of republican budget programs (and public institutions subordinated to them) and the financial reporting on receipts of the budget. The supreme body of the state audit and financial control for carrying out audit of consolidated financial statements of the republican budget generalizes information on execution of local budgets.";

state Item 29 in the following edition:

"29. The general procedure for planning of auditor actions, including forms of the program of audit is determined by the Rules of carrying out external state audit and financial control approved by the normative resolution of Calculating committee of July 30, 2020 No. 6-HK (it is registered in the Register of state registration of regulatory legal acts No. 21070) (further – Rules). Specific features of financial records audit are reflected in the Standard.";

state Item 33 in the following edition:

"33. In case of primary audit the head of group of audit shall study auditor documentation of the previous statutory auditor, and also can in coordination with the head of the structural unit of audit, responsible for carrying out, and the member of body of external state audit and financial control (further – body of external GAFK), responsible for auditor action to increase amount of works on planning, to consider additional questions in case of development of the program of audit.";

state Item 62 in the following edition:

"62. Creating the program of carrying out audit, the statutory auditor shall determine the level of materiality both at the level of the financial reporting in general, and concerning remaining balance by separate accounts of financial accounting, groups of the same transactions and cases of disclosure of information for which misstatements of smaller size, than the level of materiality of the financial reporting in general, could influence the economic decisions of users made on the basis of the financial reporting.";

state Item 142 in the following edition:

"142. The statutory auditor shall establish whether there is need to review the program of audit if:

Nature of the revealed misstatements and circumstance of their origin specify 1) that there can be other misstatements which in total with the misstatements which are saved up during audit could be essential;

2) set of the misstatements which are saved up during audit approaches the level of materiality, the Standard established according to paragraph 6 of Chapter 5.";

state Item 156 in the following edition:

"156. The audit report shall have the heading which is accurately specifying that the report is the report of body of external GAFK and is properly addressed.";

state Item 179 in the following edition:

"179. The group of audit determines the following:

1) materiality level for the financial reporting of group in general at development of the program of carrying out audit of group;

2) taking into account features of group if they to eat, identify certain groups of the same transactions, account balances of financial accounting or cases of disclosure of information in the financial reporting of group for which misstatement of the amounts there is less than the level of materiality determined for the financial reporting of group in general can influence, according to reasonable expectations, the economic decisions of users made based on the financial reporting of group.

In such cases the group of audit shall determine the level or levels of materiality which will be applied to the specified certain groups of the same transactions, account balances, disclosures of information;

3) materiality of component for those components in which statutory auditors will book audit for the purpose of financial records audit of group. For the purpose of decrease in risk that set of uncorrected and undetected misstatements in the financial reporting of group will exceed the materiality level determined for the financial reporting of group in general materiality of component lower than the level of materiality for the financial reporting of group in general is established.";

2) in the normative resolution of Calculating committee of July 30, 2020 No. 6-HK "About approval of Rules of carrying out external state audit and financial control" (it is registered in the Register of state registration of regulatory legal acts No. 21070):

in the Rules of carrying out external state audit and financial control approved by the specified normative resolution:

state Item 3 in the following edition:

"3. In these rules the following concepts are used:

1) audit procedures – its carrying out action necessary for goal achievement of auditor action performed during the auditor action according to the program;

2) auditor action – complex of the actions directed to preparation, carrying out, execution of audit reports and audit opinions following the results of the state audit;

3) the resolution – the document of bodies of external state audit and financial control which the audit opinion affirms;

4) materials of the state audit and financial control – the documents necessary for carrying out the state audit, and also documents and the enclosed auditor proofs constituted by its results;

5) bodies of external state audit and financial control (further – Bodies of external state audit) – Calculating committee on control of execution of the republican budget, Audit committees;

6) objects of the state audit and financial control – state bodies, public institutions, subjects of the quasi-public sector, and also receivers of budgetary funds (further – objects of the state audit);

7) quality control of the state audit – check and (or) the analysis of the documents constituted by statutory auditors and other authorized officers of bodies of the state audit and financial control regarding compliance to standards of the state audit and financial control when implementing the state audit;

8) the instruction – the act of bodies of external state audit, obligatory for execution, and financial control sent to state bodies, the organizations and officials, for elimination established violations and (or) the reasons, conditions promoting them, and also taking measures of responsibility provided by the laws of the Republic of Kazakhstan to persons which allowed these violations;

9) the order - the official document granting the right to holding auditor action and check of execution of decisions of body of external state audit and financial control is drawn up on the form of the strict reporting with registration in authorized body in the field of legal statistics and special accounting according to the order of the acting as the Attorney-General of the Republic of Kazakhstan of December 25, 2020 No. 162 "About approval of Rules of registration of acts of appointment, additional acts of prolongation of review periods and preventive control and supervision with visit of subject (object) of control and supervision and their cancellation, notifications on suspension, renewal, prolongation of review periods and preventive control and supervision with visit of subject (object) of control and supervision, change of list of participants and submission of information accounting documents on check and preventive control and supervision with visit of subject (object) of control and supervision and their results" (it is registered in the Register of state registration of regulatory legal acts No. 21964).";

state Item 17 in the following edition:

"17. The structural division responsible for planning, till October 25 of the year previous planned, the preliminary draft of the List of objects of the state audit in form, according to appendix 1 to these rules approved by members of Calculating committee and heads of the structural divisions responsible for carrying out the state audit, quality control and legal support goes to Authorized body on internal state audit (further – Authorized body) and audit committees.

By consideration of the preliminary draft of the List of objects of the state audit the report of the head of the structural unit responsible for planning is heard.";

state Item 34 in the following edition:

"34. Preparation for holding auditor action is its initial stage at which are performed:

1) forming of group of the state audit;

2) preliminary studying of objects of the state audit;

3) creation of the program of carrying out the state audit (further – the Program of audit), orders on the holding auditor action, joint and parallel checks (further – the Order) which are acts of purpose of check.";

state Item 48 in the following edition:

"48. During preliminary studying on the basis of information analysis about object of the state audit depending on type of the state audit:

1) the analysis of condition of the audited sphere, including public administration and (or) industry of economy, social and economic development in regional and (or) country section is performed;

2) basic indicators, the stipulated in Article 4 Laws are determined;

3) the special indicators provided by the corresponding procedural standards on types of audit and methodological documents are determined;

4) risks - existence of any factors (actions or events) exerting negative impact on forming and use of budgetary funds and assets in the checked sphere or financial and economic activities of object of the state audit are estimated, violations and shortcomings can be consequence of what;

5) efficiency rate of internal control of activities of object of the state audit is studied.

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