A requirement to carry out the audit of annual financial statements of a joint-stock company (both public and private) is stipulated in the Law of Ukraine "On Securities and Stock Market" dated 23 February 2006, as amended and restated (the "Securities Law") and the Law of Ukraine "On Audit Activity" dated 22 April 1993, as amended and restated (the "Audit Law").
Pursuant to Article 8(1) of the Audit Law, the audit is mandatory, inter alia, for confirmation of accuracy and completeness of financial statements that are subject to public disclosure. Due to amendments to the Securities Law of 16 November 2017 (the "Amendments"), some market players got the impression that audit of annual financial statements for 2017 became non-mandatory for private joint-stock companies, except for banks and financial companies.
However, this is not the case. Indeed, pursuant to para 4 of Article 40(8) of the Securities Law as amended by the Amendments, private joint-stock companies are no longer required to disclose their annual financial statements to public. At the same time, according to the final and transitional provisions of the Amendments the first accounting reference period, for which the securities' issuers must file annual information in a new way, is 2018.
Therefore, private joint-stock companies must disclose auditor's report as part of annual information of securities issuers for 2017 and ,consequently, the audit of financial statements for 2017 is required.
Author: Viktoria Serhiichuk, associate with OSTIN LAW Firm
Source: Yuridicheskaya Praktika, http://pravo.ua/news.php?id=0654271