Auditors can help companies overcome current crisis

Less companies subject to compulsory auditing of financial statements.

The number of companies oblided to have their financial statements audited decreases.The number of companies oblided to have their financial statements audited decreases. (Source: Unsplash)

The biggest change related to the accounting and tax duties of entrepreneurs is the gradual increase in parameters for the obligation to verify individual financial statements by the statutory auditor through an amendment of the Accounting Act. The Economy Ministry estimates that this change in size conditions will mean that in 2022, the audit obligation will fall from current 3 percent to less than 1 percent of accounting units.

Related articleWaterloos: Tax and accounting laws change too oftenRead more 

While the increase in size parameters under which a company must have its financial statements audited has pleased the business sector, auditors warn that this change may reduce the quality of accounting in individual companies and lead to an increase in tax fraud.

“Slovak legislation in the field of mandatory audits of financial statements is a classic example of gold-plating,” Martin Hošták, secretary of the National Union of Employers (RÚZ), told The Slovak Spectator, adding that the limits in Slovakia are much stricter than required by EU legislation. Thus, the number of companies required to audit is much higher than required by the EU.

Moreover, RÚZ says compulsory auditing creates a kind of business for auditing companies. Hošták juxtaposes it with the business created by legislation that obliges employers to secure meals for their employees when one of possibilities is to do this via meal vouchers. In both cases, it is up to entrepreneurs, who are already facing an unprecedented crisis, to pay.

“It is necessary to gradually cut such tentacles of legally obliged businesses,” said Hošták, adding that if a company wants to have its financial statement audited, it can still do so.

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