CONTENT OF THE AUDIT LAW

Transcription

1 CONTENT OF THE AUDIT LAW I. GENERAL PROVISIONS Article 1 This Law shall regulate the conditions for conducting an audit of legal entities which perform activities, seated in the Republic of Macedonia. Article 2 The provisions of this Law do not refer to auditor engagements in the Republic of Macedonian not being statutory or contractual audits. Article 3 Issues not regulated with this Law shall be regulated with the provisions of the Company Law, with regard to the conduct of an audit. Article 4 Definitions Certain terms and abbreviations used in this law shall have the following meaning: 1) "Audit" shall mean an independent examination of the financial statements and financial information with the objective of expressing an opinion as to their truth and fairness and as to their compliance with the adopted International Accounting Standards and International Financial Reporting Standards, published in the Official Gazette of the Republic of Macedonia; 2) Statutory audit, shall mean a mandatory examination of the financial statements and other information performed on the basis of a law in accordance with the IFAC International Standards on Auditing, translated and published in the Official Gazette of the Republic of Macedonia, of: (a) financial statements of entities specified by law, with the objective of expressing opinions as to their truth and fairness and their compliance with the adopted International Accounting Standards and International Financial Reporting Standards mandated by law in Macedonia, and/or (b) financial information, prepared in accordance with appropriate criteria, with the objective of expressing an opinion on the financial information; 3) "Contractual audit" shall mean a non-compulsory examination of the financial statements, carried out on the basis of a contract in accordance to the IFAC International Standards for Auditing, translated and published in the Official Gazette of the Republic of Macedonia, with the objective of expressing an opinion as to their truth and fairness and as to their compliance with the adopted International Accounting Standards and International Financial Reporting Standards mandatory by law in the Republic of Macedonia, whereby the - 1 -

2 entities which are not parties to the audit contract shall rely on the financial statements and the audit report prepared in accordance with these standards; 4) Audited entity shall mean legal entity whose financial statements are being audited in accordance with article 478 of the Company law; 5) Associated entities shall mean entities which are connected with economic, financial or other interest with the audited entity; 6) Certified auditor shall mean a natural person holding a certificate for a certified auditor, who is registered with the Institute for Certified Auditors. 7) Audit firm shall mean a firm which is registered and conducts audit in accordance with this law and the Company Law; 8) Certified auditor sole proprietor - shall mean a natural person registered in accordance with this law and the Company Law and who holds a certificate for certified auditor. 9) "Certificate for Certified Auditor" shall mean a certificate issued by the Minister of Finance, upon a proposal from the Institute, to persons who passed the exam for certified auditors; 10) Confidential information shall mean information classified as information not available to the public by the Institute, the Minister of Finance or by law of Macedonia; 11) Disciplinary proceeding shall mean the procedure for determining a violation of this law, implementing regulations of this law, and the Code of Ethics for professional accountants of IFAC adopted by the Institute of certified auditors 12) Institute of Certified Auditors shall mean a professional chamber association of certified auditors established by this Law; 13) IFAC shall mean the International Federation of Accountants; 14) "ISA" shall mean International Standards on Auditing; Article 5 The audit, pursuant to this Law, can be carried out by audit firm or certified auditorsole proprietor, under the conditions and manner determined by this Law and the Company law. II: COMPETENT BODY Article 6 The Ministry of Finance shall be the competent body for monitoring the implementation of the provisions of this law. Certain issues related to audit can be delegated, pursuant to this Law, to the Council for Advancement and Oversight of Auditing and to the Institute of Certified Auditors, under the conditions and manner determined by this Law

3 III: COUNCIL FOR ADVANCEMENT AND OVERSIGHT OF AUDITING Article 7 For the purpose of advancement and oversight of auditing, the Minister of Finance shall establish the Council for Advancement and Oversight of Auditing. The resources necessary for the operations of the Council for Advancement and Oversight of Auditing shall be provided in the Budget of the Republic of Macedonia. Article 8 All audit firms and certified auditors - sole proprietors must be subject to oversight carried out by the Council for Advancement and Oversight of Auditing The competencies of Council for Advancement and Oversight of Auditing shall be as follows: 1) to promote adherence to high professional standards in the auditing profession; 2) to monitor the implementation of the provisions of this law and the regulations arising thereof, and, on such basis, to propose amendments and modifications thereto to the Minister of Finance; 3) to review the procedure of acquiring the title certified auditor conducted by the Institute; as well as to ensure that the Institute has put in place an up-to-date continuing professional education program 4) to monitor the implementation and provide opinion upon the proposals of the general acts of the Institute of certified auditors, the Code of Professional Ethics for members of the Institute of certified auditors, the auditing standards, and on that basis, to propose the Minister of Finance their acceptance, i.e. their modification and amending; 5) to monitor the operations of the Institute of Certified Auditors regarding the operations of its members, in relation to education, quality assurance system and professional ethics, and on such basis, to propose the Minister adoption of acts that would lead to adherence to high professional standards in the auditing profession. Where necessary, it has right to conduct investigation on audit firms and certified auditors- sole proprietors and based on that has a right to take appropriate action; 6) to adopt Rules of procedure regarding its activities, annual program, financial plan and annual report, approved by the Minister of Finance. The annual report on activities of the Council for Advancement and Oversight of Auditing is published on the web site of the Ministry of Finance; 7) to conclude Memoranda of understanding with public oversight bodies of other countries with the objective to coordinate and cooperate in implementing the provisions of this law and 8) to performs other activities for which is authorized by the Minister of Finance. Composition of Council for Advancement and Oversight of Auditing - 3 -

4 Article 9 The Council for Advancement and Oversight of Auditing shall comprise a Chairperson and six (6) members out of whom only two (2) are certified auditors, from the following institutions: 1) one representative from the National Bank of the Republic of Macedonia employed in the Supervision Department of NBRM, 2) one representative from the Insurance Supervision Department of the Ministry of Finance, 3) one representative from the Securities and Exchange Commission, 4) one representative from the major business entities, and 5) two certified auditors nominated by the Institute of certified auditors. The Minister of Finance shall appoint the Chairperson of Council for Advancement and Oversight of Auditing. The chairperson shall be a person with appropriate qualifications and shall have an extensive experience in the areas of business, finance, or law and who is not a certified auditor. The Minister of Finance shall appoint the members of Council for Advancement and Oversight of Auditing, on the proposal of the institutions listed in paragraph 1 of this article. In the event that any institution from paragraph 1 of this article does not nominate a member in the Council for Advancement and Oversight of Auditing, then the Minister shall appoint a person to take that position. The duration of an appointment of Council for Advancement and Oversight of Auditing members shall be three years. Council for Advancement and Oversight of Auditing shall have a secretary appointed from the pool of civil servants in the Ministry of Finance with a term of three years. The Chairperson and the members of the Council for Advancement and Oversight of Auditing shall be entitled to allowance for their work. The Minister of Finance shall determine the amount of the allowance. The decision for the Council for Advancement and Oversight of Auditing composition shall be published in "Official Gazette of the Republic of Macedonia". IV: PROFESSIONAL ASSOCIATION OF CERTIFIED AUDITORS - INSTITUTE OF CERTIFIED AUDITORS Establishment of the Institute of Certified Auditors Article 10 For the purpose of promoting high professional standards and improving the quality of auditing services the certified auditors shall associate in an Institute of Certified Auditors- a professional chamber association (hereinafter in the text "Institute")

5 Members of the Institute shall be certified auditors, audit firms and certified auditors sole proprietors, and only the certified auditors shall have the right to vote. The Institute shall have the status of a legal entity. The seat of the Institute shall be in Skopje. The Institute shall acquire its status by registering in the court register. Bodies of the Institute Article 11 The bodies of the Institute shall be: Chairperson. the Assembly, the Board of Directors and the The Assembly shall be the highest authority of the Institute, consisting of all of the members. The organization, responsibility, composition, selection method, rights and obligations of the bodies of the Institute shall be regulated by the statute and the other acts of the Institute. The Minister of Finance shall monitor the operations of the Institute and shall give consent for the Statute and other Acts adopted by the Institute based on proposal of the Council for Advancement and Oversight of Auditing. Competences of the Institute Article 12 The Institute shall perform the following works: 1) set up register for certified auditors and a register for audit firms and certified auditors sole proprietors; 2) enact program for examination for acquiring the title certified auditor and administer examinations for acquiring the title certified auditors; 3) give a proposal to the Minister of Finance for approval - issuance of a licence to audit firm, certified auditor sole proprietor,, as well as for issuance of certificate for a certified auditor; 4) consider and give opinion on the applications for approval of qualifications of a certified auditor obtained abroad, based on prescribed rules and procedures; 5) organize a verification of knowledge in the area of the legislation of the Republic of Macedonia relevant to auditing when approving the qualifications of a certified auditor obtained abroad; 6) set and enforce continuing professional education requirements ; 7) monitors the implementation of ISA and the IFAC Code of Ethics for Professionals Accountants, by the audit firms and the certified auditors sole proprietors; - 5 -

6 8) enforces the International Standards on Auditing and the IFAC Code of Ethics for Professionals Accountants ; 9) translate the International Standards on Auditing, International Accounting Standards, the IFAC Code of Ethics for Professionals Accountants, and International Standards on Quality Controls ; 10) instigates disciplinary procedures and enforces measures against members for violations of ISA Acts of the Institute, and the IFAC Code of Ethics for Professionals Accountants ; 11) informs the Minister of Finance about the imposed measures related to the implemented control of the audit firms and and/or certified auditors-sole proprietors. 12) set such level of the membership fee of the Institute which allows proper functioning of the Institute. 13) adopt rules ensuring that members are able to meet claims arising out of auditing work by having professional indemnity insurance at a level established in the rules of the Institute. 14) authorize persons or establishes a committee so that they will assess the practice of audit firms and certified auditors- sole proprietors, inspect and make copies of any book, document or thing in the possession or under the control of an audit firm, as well as obtain information from any partner or employee of the certified auditor. A certified auditor or a person from audit firm must, at the request of the Institute, or a person authorized by it, present a book, document or a thing and may not, subject to the provision of the law, refuse to present such book, document or thing, even though the auditor is of the opinion that the book, document or thing contains confidential information of a audited entity. 15) perform such other activities as the Minister of finance determine necessary or appropriate to promote high professional standards among audit firms and certified auditors and to improve the quality of audit services they offer, and 16) shall enact annual program and an annual report of its activities that shall be approved by the Minister of Finance upon a proposal from the Council for Advancement and Oversight of Auditing. The approved annual report shall be published in one public medium and on the Web site of the Institute, and 17) shall issue a Buletin 18) performs other things in accordance with this law. Authority to Control Article 13 The Institute shall control the implementation of ISA, IFAC Code of Ethics for Professionals Accountants, and Acts of the Institute. The control shall be made on the basis of the annual program of the Institute or upon a request by interested parties. The control procedure from paragraph 1 of this article shall be prescribed by the Institute. The audit firms and the certified auditors sole proprietors shall be obliged to make available the overall required documentation in the control procedure of paragraph 1 of this article to the authorized person from the Institute

7 Authority to impose measures Article 14 The Institute may impose the following sanctions for violations of ISA, IFAC Code of Ethics for Professionals Accountants and Acts of the Institute: 1) warning, 2) interim suspension of the membership in the Institute of an audit firm or certified auditor sole proprietor; 3) permanent suspension of membership of the Institute of audit firm or certified auditor sole proprietor The procedures for conducting adjudication of a violations as described in paragraph 1 of this article shall be set forth by the Institute. All measures imposed by the Institute shall be made public in the Bulletin of the Institute. The Institute shall mandatorily inform the Minister of Finance about all imposed measures. For the imposed measures referred to in paragraph 1 of this Article, an appeal may be lodged to the Minister of Finance. A court procedure may be instigated against the decision of the Minister of Finance. Referrals of possible violations Article 15 In the event when it appears to any official of the Institute that there is a potential violation of this law, ISA, IFAC Code of Ethics for Professionals Accountants and bylaws of the Institute, such official must report such possible conduct to the Minister of Finance. V: CONDITIONS FOR APPROVAL OF AUDIT FIRMS AND ISSUING CERTIFICATES FOR CERTIFIED AUDITORS Practice by Certified Auditors Article 16 Only a certified auditor who is a member of the Institute, may perform statutory or contractual audits in the Republic of Macedonia. A person who does not have a status of an certified auditor and who is not a member of the Institute can not perform audits in the Republic of Macedonia, or introduce himself/herself as an auditor or use any mark or description which are likely to create the impression that the person is an auditor. Licensing audit firms and sole proprietors Article 17 The audit shall be performed by an audit firm established as a company and a certified - 7 -

8 auditor established as a sole proprietor, under conditions and in a way specified with this Law and the Company Law,, if it shall have a license to perform auditing. The license to perform audit shall be issued to a certified auditor sole proprietor provided that it possesses a certificate for a certified auditor. The license to perform audit shall be issued to the an audit firm provided that it fulfills the following conditions: 1. is employing at least two certified auditors and 2. the majority of the shares with voting rights of the audit firms is owned by the certified auditors. The license to perform audit shall be issued by the Minister of Finance upon a proposal from the Institute. Application for a license Article 18 The application for acquiring a license to perform audit shall be submitted to the Institute. Evidence for fulfilment of the conditions for acquiring a license to perform audit, referred to in Article 17 paragraph 2 and 3 of this law shall be submitted in addition to the application referred to in paragraph 1 of this Article On the basis of the submitted application and the necessary evidence referred to in paragraph 2 of this Article, the Institute shall give a proposal to the Minister of Finance for issuance of license to perform audit. Procedure for acquiring Certificate for Certified Auditors Article 19 A person who intends to become a certified auditor shall submit a written request for taking the exam for acquiring the title certified auditor to the Institute. The application stipulated in paragraph 1 of this article must contain evidence that the person has fulfilled the conditions stipulated in article 20 of this law. The exam for acquiring the title of a certified auditor shall be conducted in accordance with a program enacted.by the Institute and agreed by the Minister of Finance, based on proposal of the Council for Advancement and Oversight of Auditing. Conditions for Taking the Exam for Acquiring the Title Certified Auditor Article 20 In order for a person to take exam for acquiring the title certified auditor shall be obliged to fulfill the following conditions: 1) completed higher education from the economic studies; 2) to have at least three years of experience in the field of audit out of which two years of work under the supervision of certified auditor; - 8 -

9 3) to present evidence for completed a course of theoretical instructions, 4) to be fluent in the Macedonian language; 5) not to be sentenced to prison, whereby: a) In the period from the day the ruling became legally valid until the day of serving the sentence, and 5 years from the day the sentence was serviced in case he/she was sentenced with legally binding court ruling imposing imprisonment of up to 3 years; b) in the period from the day the ruling became legally valid until the day of serving the sentence, and 10 years from the day the sentence was serviced in case he/she was sentenced with legally binding court ruling imposing imprisonment of up to 3 years, and 6) not to be under security measure prohibition for performing a profession, activity or duty. The evidence for completed course of theoretical instructions of paragraph 1 item 3 cover following subjects: general accounting theory and principles, legal requirements and standards relating to the preparation of annual and consolidated accounts, international accounting standards, financial analysis, cost and management accounting, risk management and internal control, auditing, legal requirements and professional standards relating to statutory audit, international auditing standards, professional ethics and independence; as well as tax legislation and legal framework relevant to auditing and accounting. The examination needed for acquiring the title of certified auditor shall be taken before an examination committee established by the Institute, which shall set the manner of carrying out the examination. The examination committee shall consist of four members who are certified auditors and a President of the committee who shall be a representative from the Ministry of Finance. The Minister of finance shall, upon a proposal from the Institute, issue the certificate of a certified auditor to the persons who have passed the exam. Continuous professional education Article 21 The certified auditor shall be obliged to take courses, at least 40 hours annually, within the continuous professional education for the purpose of upgrading the knowledge in the area of accounting and audit, set by the Institute according to a program approved by the Minister of Finance. Upon the proposal by the Institute, the Minister of Finance shall revoke the certificate from those certified auditors who shall fail to take courses referred to in paragraph 1 of this Article. Dissatisfied parties shall have the right to file an appeal against the decision referred to in paragraph 2 of this Article to the Government of the Republic of Macedonia Second Instance Committee for deciding in administrative affairs in the area of finance. Approval of qualifications for a certified auditor acquired abroad Article

10 The applications for approval of qualifications for certified auditor obtained abroad shall be submitted to the Institute, for persons who have acquired all or part of the qualifications abroad, provided they fulfill the following conditions. 1) the qualification of the person is of a standard not less than required by this Law to qualify a person as a certified auditor; and 2) the applicant has successfully taken examinations administered by the Institute, ensuring that such person has an adequate knowledge in the area of the legislation in Macedonia relevant to auditing. According to the rules and procedures for approval of qualifications of a certified auditor acquired abroad, the Institute shall submit a proposal to the Minister of Finance for approval of the title certified auditor. Registry of Certified Auditors and Registry of Audit Firms Article 23 The Institute shall keep a registry of certified auditors and registry of audit firms and certified auditors sole proprietors. The registry of certified auditors shall, in particular, contain the following data: (1) Name and last name, address and registry number of the certified auditor, (2) the status that the certified auditor has in the audit firm, and (3) the name and seat of the audit firm where the certified auditor is employed. The registry of audit firms and the certified auditors sole proprietors shall, in particular, contain the following data: (1) name, seat and registration number of each audit firm and the sole proprietor; (2) name and surname and address of the certified auditors employed in the audit firm or with the sole proprietor,. (3) name and surname and address of the founders or the shareholders of the audit firm; (4) name and surname and registry number of all authorized auditors employed in or having partnership or other relations with the audit firms, or the sole proprietor. (5) legal form of audit firm (6) website address The Institute shall disclose to the public the data from the registry of audit firms on its website and in its Bulletin. The audit firm and certified auditor-sole proprietor must notify without undue delay the Institute about any change of information contained in the public register. Conflicts of Interest Article

11 The certified auditor shall be independent in the performance of the audit within the authorizations set by this Law, and in accordance with IFAC International Standards for Auditing issued by the Minister of Finance and the IFAC Code of Ethics of Professional Accountants. The audit firm appointed as statutory auditor of an entity, shall have an obligation to perform the audit with professional integrity and independence. The following persons or entities are ineligible for performing an audit: 1) audit firm which is a shareholder, investor, or founder of the audited entity; 2) audit firm in which the audited entity is also a shareholder, investor or founder of that audit firm; 3) audit firm, the founder of which is simultaneously founder of the audited entity; 4) certified auditor who is a shareholder, investor, partner or founder of the audited entity; 5) certified auditor who was a legal representative, member of the management, i.e. supervisory body of the audited entity, or participated in the keeping of its business books or in the preparation of its financial or tax statements, during the year subject to audit; 6) certified auditor who is related to the legal representative, the member of the management or supervisory body of the audited entity by marriage, direct kinship or indirect kinship up to the 2 nd degree or by adoption, guardianship or tutorship. 7) certified auditor who is a partner of or employee by an officer at the audited entity, and 8) certified auditor or audit firm having direct or indirect business relationship or financial interest at the audited entity or any of its officers, members of management or shareholders. The certified auditor or audit firm, shall not be allowed, while performing audit at the entity, to provide it with the following services: (1) accounting or other services related to the accounting records, annual statements or annual consolidated accounts at the audited entity; (2) preparation and implementation of financial information systems; (3) internal audit outsourcing services as an external auditor; (4) participation in economic interest, direct or indirect, in an entity or any related entity where he/she was engaged to perform external audit; and (5) other activities prescribed by the Institute with its acts. Obligation to Apply Auditing Standards Article 25 The Audit shall be carried out in accordance with the IFAC International Standards on Auditing published by the Minister of Finance in the "Official Gazette of the Republic of Macedonia". International Standards on Auditing are updated on a regular basis, at least once a year.. The certified auditor shall be liable for the accuracy of the balances determined within the auditing procedure and for the opinion given in the audit report

12 Public disclosure of fees Article 26 When the audit firm or the certified auditor sole proprietor has received fees from an audited entity for services provided during the reporting period, it shall be obliged to fully publish all fees related to the audit, as well other fees in the Bulletin of the Institute. In the disclosed fees, the total income shall be broken down into four categories: audit services; further quality assurance services; tax advisory services; and other non-audit services. Confidentiality Article 27 A certified auditor shall respect the confidentiality of information acquired as a result of professional and business relationships and shall not disclose any such information to third parties without proper and specific authority, unless there is a legal or professional right or duty to disclose. Where a certified auditor or audit firm is replaced by another certified auditor or audit firm, the former certified auditor or audit firm shall provide access to all relevant information concerning the audited entity to the incoming certified auditor or audit firm. A certified auditor or audit firm who has ceased to be engaged in a particular audit assignment or a former statutory auditor or audit firm shall be subject to the provision of paragraph 1 of this article with respect to that audit assignment. Owners and executives of audited entities should be under correlative obligations to provide information, on demand of both certified auditors and the Institute. Statutory Audit of Annual Accounts and Financial Statements Article 28 The audit firm or the certified auditor sole proprietor shall submit a report on the auditing of the annual accounts and the financial statements to the shareholders, or the members of the company, on the accounts audited by them. The report shall be read at the annual general meeting of the entity and shall be open to inspection and questions by any shareholder or member. The certified auditors of an entity shall have a right to access, at all reasonable times, to the books, accounts and vouchers of the entity, and shall be entitled to require from members of the entity s management, officers and managers of the entity, and from employees or contractors of the entity, information and explanations within their control or knowledge they can acquire, which the certified auditor deems necessary for the performance of his/her duties

13 The audited entity may not restrict the access to the necessary documentation stipulated in paragraph 3 of this article, or to provide false or misleading information. Statutory Audit of Consolidated Annual Accounts and Consolidated Financial Statements Article 29 The audit firm or the certified auditor sole proprietor responsible for auditing the annual consolidated accounts shall submit a report to the shareholders, or the members, on the consolidated accounts audited by them. The audit report shall be read at the annual general meeting of the entity and shall be open to inspection and questions by any shareholder or member. The certified auditor of an entity shall have a right to access, at all reasonable times, to the books, accounts and the overall documentation of the audited entity and all its subsidiaries and associated undertakings, and shall be entitled to require from members of the management body, officers and managers of the entity, and employees or contractors information and explanations within their competence, and considered necessary for the performance of his duties. The audited entity may not restrict the access to the necessary documentation stipulated in paragraph 3 of this article, or to provide false or misleading information. Obligations of the audited entity Article 30 The audited entity shall be obliged to subject to an audit its annual accounts and financial statements. General assemblies of Shareholders or Members Article 31 The auditors of the audited entity shall be entitled to attend any general assembly meeting of the entity and to receive all notices of, and other communications relating to, any general assembly meeting, which any shareholder, or member, of the entity is entitled to receive, and to be heard at any general assembly meeting which they attend regarding any part of the agenda of the meeting which concerns them as auditors. Authorization for conducting investigation Article 32 The Minister of Finance, in accordance with the Law on Financial Police, can initiate investigation for violation of this law and the regulations adopted on the basis of this law

14 X. PENALTY PROVISIONS Article 33 Legal entity failing to perform the legal obligation to submit its financial reports and annual accounts to audit shall be fined from Denar 200,000 to 300,000 (Article 30). Responsible person at the legal entity shall also be fined for the actions referred to in paragraph 1 of this Article from Denar 40,000 to 50,000. In addition to the fine referred to in paragraph 2 of this Article, the responsible person at the legal entity shall be subject to security measure, prohibition to practice the profession in a period of 3 months up to 1 year. Article 34 An Audit firm or a certified auditor sole proprietor shall be fined from Denar 150,000 to 300,000 if: 1) it performs statutory or contractual audits and who is not a certified auditor and who is a member of the Institute (Article16), 2) it fails to fully publish the annual transparency report (Article 26). 3) if it fails to apply the IFAC International Standards on Auditing published by the Minister of Finance in the "Official Gazette of the Republic of Macedonia" (article25). In addition to the fine stipulated in paragraph 1 of this article, the responsible person within the legal entity audit firm shall be sanctioned with a security measure stipulating prohibition from core activities and tasks for a period ranging between 1 and 3 years. The Responsible person in the audit firm shall also be fined for the actions referred to in paragraph 1 of this Article from Denar 20,000 to 50,000. In addition to the fine referred to in paragraph 2 of this Article, the responsible person in the audit firm shall be sanctioned with a security measure, prohibition to practice responsible activities and tasks in a period of 3 months up to 1 year. Article 35 The certified auditor shall be fined with Denar 20,000 to 50,000 for an offence if he/she: 1) Performs statutory or contractual audits and is not a member of the Institute (Article 16), 2) Fails to apply the IFAC International Standards on Auditing published by the Minister of Finance in the "Official Gazette of the Republic of Macedonia" (article 25). 3) Fails to provide confidentiality of the data and the information in the performance of the audit (Article 27). Article 36 The Legal entity which is an audited entity shall be fined from with a fine Denar 150,000 to 300,000 if it restricts the access of the audit firm or the certified auditor sole proprietor to the necessary documentation according to Article 28 paragraph 4 and Article 29 paragraph 4, or provides information that is false or misleading

15 The Responsible person in the legal entity audited entity shall also be fined for the actions referred to in paragraph 1 of this Article from Denar 20,000 to 50,000. The individual which is an audited entity shall also be fined for the actions referred to in paragraph 1 of this Article from Denar 10,000 to 50,000. XI. SPECIAL PROVISIONS Article 37 Until the establishment of the Institute, the preparatory works regarding initiation of its operations shall be carried out by three-member Commission, established by the Minister of Finance. Members of the Commission shall be certified auditors. The Commission referred to in paragraph 1 of this Article shall perform the following: 1) register the initial membership and provide funds for commencement of the operations; 2) draft bylaws for initiating the operations of the Institute in consultation with Council for Advancement and Oversight of Auditing ; Article 37-a The preparatory activities for holding the founding General Assembly of the Institute, which shall elect the bodies and approve the Acts of the Institute shall be completed within six (6) months from the day this Law enters into force. VIII. TRANSITIONAL AND FINAL PROVISIONS Article 38 The Institute shall be established within six (6) months from the day this Law enters into force. Article 39 The program for the examination for acquiring the title certified auditor, for obtaining working license for audit firms and the other regulations from this Law shall be passed within ninety (9) months from the day this Law enters into force. Article 40 The already commenced procedures for taking the exam for acquiring the title certified auditor and for obtaining working license for audit firms shall be completed according to the regulations valid until this Law entered into force, but no later than one year from the day this Law entered into force

16 Article 41 The regulations valid until the day this Law entered into force shall apply until the adoption of regulations pursuant to this Law. Article 42 With the day this Law enters into force, the Audit Law ("Official Gazette of the Republic of Macedonia" no. 65/97, 27/00, 31/01 and 61/02), shall cease to be valid, except the provisions 4, 5, 6, 7, 8,9, 10, 17 paragraph 2, 29, and 30 from the Law which shall apply for one year after this Law enters into force. Article 43 This Law shall enter into force on the eighth day from the day of its publishing in the "Official Gazette of the Republic of Macedonia"