LAW
ON ACCOUNTING AND AUDITING
("Official Herald of the Republic of Serbia", No. 46/2006 and
111/2009)
I BASIC PROVISIONS
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
1. Accounting Organization
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.
2. Accounting Documents
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.
III BOOKS OF ACCOUNT
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.
2. Structure of Accounts
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
1. Closing Books of account
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.
VII FINANCIAL STATEMENTS
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
2. Financial Statements
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.
VIII INTERNAL AUDITING
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.
2. Conducting Audits
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.
4. Audit Companies
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
1. Chamber Establishment
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.
2. Chamber Activities
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.
3. Chamber Bodies
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 VicePresident 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.
4. Chamber Work Funds
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.
XIII SUPERVISION
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.
XIV PENALTY PROVISIONS
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".