Types of Audit: Classification and Purpose

By legal basis: statutory and voluntary

• Statutory audit — annually for joint stock companies, banks, insurers, agricultural cooperatives, investment and other funds, exchanges, companies with a state share, and commercial organizations meeting two of three criteria: assets over 100,000 BCV, revenue over 200,000 BCV, more than 100 employees (Article 35). BCV is the base calculation value used in Uzbekistan to express statutory thresholds and fines.
• Voluntary audit — by decision of the company itself, its owner, participants with a share of at least 5%, or supervisory or law enforcement bodies; the subject, timing and terms are set by the contract, and the initiator pays (Article 36).

Statutory vs voluntary: a comparison

• Basis: statutory — the law (Article 35); voluntary — the client's decision (Article 36).
• Frequency: statutory — annually; voluntary — whenever needed.
• Scope: statutory — the annual financial statements; voluntary — as per contract, down to a single area.
• Deadline: a copy of the statutory audit report is submitted to the tax authority within 15 days after the audit, no later than 15 June (Article 35); the law sets no deadline for a voluntary audit.
• Auditor requirements: for a statutory audit — at least two auditors with at least three years of continuous experience or an international certificate, and no violations found by external quality control (Article 35).

By performer: external, internal, state

• External audit — an independent audit organization listed in the Register (Article 27 of ZRU-677).
• Internal audit — a service within the company. In a JSC with assets over 100,000 BCV an internal audit service is mandatory and reports to the supervisory board (Article 108 of the Law on Joint Stock Companies).
• Tax audit — a review by the tax authorities of the correct calculation and payment of taxes for a period; it is carried out in respect of high-risk taxpayers (Article 140 of the Tax Code).

By subject

• financial audit — reliability of the accounting (financial) statements;
• tax (voluntary) audit — a check of taxes by an auditor before the tax authority arrives;
• operational and management audit — effectiveness of processes and controls;
• HR and legal audit — documents and contracts;
• IT audit — systems and security of financial information;
• forensic audit — examination of signs of fraud and abuse;
• due diligence — review of a company before an acquisition or investment.

By scope

• full — all financial statements for the period;
• thematic — a single area: inventory, settlements, payroll, fixed assets;
• express audit — rapid diagnostics of key risks without an opinion on the financial statements as a whole.

Related services are not an audit

Audit organizations may provide related services: keeping and restoring accounting records, preparing financial statements, including under IFRS, acting as the revision commission, advising on accounting and taxes, financial analysis, valuation and others (Article 33). But they cannot audit financial statements that the same organization prepared, or whose books it kept, in the period under audit (Article 34).

Which type to choose

• You have an obligation under Article 35 — only a statutory audit by an organization meeting the requirements of the law.
• You need a report for a bank, a tender or an investor — a voluntary audit of the financial statements.
• You suspect errors or abuse — a thematic audit or a forensic audit.
• You are buying a business — due diligence.