Accounting is the collection, registration and summarization of information about the activities of accounting subjects (assets, liabilities, capital, income and expenses). It is also an analytical and synthetic accounting of data based on primary accounting documents for the purpose of compiling financial, tax and other reports. In the simplest terms, accounting can be understood as a database about the activities of subjects. Thus, accounting information is used to investigate the activity of each economic entity and comprehensively analyze the results obtained from it, to study them in different directions and to make decisions.
How is the accounting of large, medium and small business entities conducted and how is the preparation of financial statements regulated?
Small, medium and large business entities must prepare their financial statements in accordance with the International Standards of Financial Reporting for Small and Medium Business Entities and the accounting system approved by the executive authority.they should behave accordingly. It is also possible that, depending on their choice, they exercise their right to prepare financial statements in accordance with the standards. In this case, they must keep the accounting in accordance with the accounting rules established by the law.
Note: Accounting and reporting of the Law of the Republic of Azerbaijan "On Accounting". should be carried out in accordance with the rules specified in the relevant articles. Accounting in all accounting subjects is mandatory in accordance with the relevant standards and regulations.
At the same time, let's note that small, medium and large business entities with one or more subsidiaries have the right not to prepare consolidated financial statements if they meet the following conditions:
- if the institution is a subsidiary company and all its owners (shareholders, participants), including those without voting rights, have reached a general agreement on not submitting consolidated financial statements;
- unless securities are publicly traded;
- if the institution does not issue securities on the open market;
- if the main company to which the institution is directly or ultimately subordinate publishes consolidated financial statements in accordance with the requirements of the legislation in accordance with the International Standards of Financial Reporting or the International Standards of Financial Reporting for Small and Medium Enterprises.
Small, medium and large business entities, according to their choice, make the decision to prepare annual financial statements for the following year by reflecting in the accounting policy by December 31 of the current year.
How is the confidentiality of accounting data ensured?
If the accounting documents contain information that is a commercial secret, the disclosure of this information is carried out in accordance with the legislation of the AR "On Commercial Secrets".
In the cases and in the order established by the law, state bodies can get acquainted with all the documents used in accounting.
Also, the auditor involved in the audit can familiarize himself with all the accounting documents in the manner established by the legislation.
Who is responsible for violations of accounting legislation and how?
Persons who violate the requirements of the law regarding the preparation, publication, presentation, and storage of documents of financial statements and combined (consolidated) financial statements by the accounting entity shall be held accountable in accordance with the Code of Administrative Offenses.
The head of the accounting entity, the chief accountant, as well as the business entities that provide the accounting service are responsible for the failure to conduct accounting.
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