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Audit of the report of compliance of the resident of Diia City

  • Audit of the initial compliance report of the resident of Diia City
  • Audit of the report on compliance of the resident of Diia City at the request of the authorised body
  • Audit of the annual report on the compliance of the resident of Diia City

Results of audit of the report

  • An independent opinion provided by the subject of audit activity based on the results of the verification of the statements of the resident of Diia City, provided in their Report on compliance, taking into account the requirements of Ukrainian legislation, International Standard on Assurance Engagements (ISAE), International standards of quality control, audit, review, other assurance and related services (IAS);
  • A detailed report to management and participants with conclusions and summaries based on audit results.

Benefits for you:

  • A team of certified auditors of the national company AUDIT INVEST with 20 years of experience and impeccable reputation will be working for you.
  • Proof of the accuracy and completeness of the company’s accounting (financial) statements and/or completeness of the consolidated financial statements;
  • Reducing the risk of making wrong decisions based on unverified or inaccurate information contained in financial statements;
  • Increasing confidence in business on the part of creditors, investors, partners.
  • Reduced risk of claims from tax authorities and other regulators;
  • Identification of hidden reserves of the company, implementation of opportunities for legal reduction of the tax burden

More information

The audit of the compliance report of the resident of Diia City is an audit of the compliance report prepared and submitted by the resident of Diia City to the authorized body in accordance with the requirements of the Law of Ukraine “On Stimulating the Development of Digital Economy in Ukraine” No. 1667-IX dated 15.07.2021.

https://zakon.rada.gov.ua/laws/show/1667-20#Text

The authorized body is the central body of the executive power that ensures the formation and implementation of state policy in the field of the digital economy (Ministry of Digital Transformation of Ukraine).

What does audit of the report of compliance of the resident of Diia City give?

Providing confidence regarding the statements of the resident of Diia City set out in their Compliance Report on compliance with the requirements specified in the first part of Article 5 of Law No. 1667:

  • implementation of relevant types of activities (according to information in the statute and/or information contained in the Unified State Register);
  • observance of the appropriate size of the average monthly remuneration of the involved employees and gig-experts (not less than the equivalent of 1,200 euros);
  • compliance with the average number of employees and gig-experts of a legal entity of at least nine people;
  • compliance with the requirements regarding the amount of qualified income of the legal entity (at least 90 percent of the amount of total income);
  • absence of circumstances provided for in Part 2, Article 5 of Law No. 1667 – IX regarding a legal entity (foreign registration, status of a non-profit enterprise, bankrupts, tax debtors, etc.)

Answers to frequently asked questions are here

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FAQ
Audit of resident compliance report for diia city
Diia City was launched on February 8, 2022 – a special legal regime for IT industry, which includes a special system of taxation and employment of IT-specialists, as well as special preferences for resident companies. At its core there are several laws, in particular:
  • Framework Law of Ukraine “On Promotion of Digital Economy Development in Ukraine” №1667-ІХ as of 15.07.2021 (later referred to as Law of Ukraine №1667-ІХ) and
  • the tax Law of Ukraine “On amendments to the Tax Code of Ukraine and other laws regarding stimulating the development of the digital economy in Ukraine” № 1946-ІХ as of 14.12.2021.
The Ministry of Digital Information expects that due to Diia City growth rate the IT sector can double to 40-50% per year, while the revenue of IT sector of Ukraine can grow from current $6 billion to $16,5-$17 billion in 2025 simultaneously with the growth of the number of jobs. Notwithstanding that the beginning of such a perspective project coincided with the beginning of the full-scale invasion of Ukraine, by March 15, 2022 Diia City comprised around 100 Ukrainian and international companies.
What is the relationship between the audit company and the it sphere of diia city?
When registering as resident of Diia City the company needs to meet a number of requirements, outlined in Part 1 of Article 5 of the Law of Ukraine №1667-ІХ. To avoid subjectivism and risk of corruption it was decided to reduce the role of the competent authority (Ministry of digital transformation) in approving whether the company is eligible to become resident. That is why the law introduced a declarative form of fixing the necessary requirements – the compliance report and the provision of the audit function of such reports by independent audit companies.
How often is it required to submit a compliance report along with an independent audit report?
Diia City residents should apply for audit services on the Compliance Report in one of the following four cases:
  1. During initial registration, an initial Compliance Report is provided along with independent opinions by the auditor (Paragraph 1-3 Point 2 Article 13 of the Law of Ukraine №1667-ІХ) in the period before the 6 calendar months after the month of acquiring the status of resident.
  2. The first Annual Compliance Report, together with the independent audit opinion, is submitted for the period from the date of acquiring the status of resident on the reporting date (December 31 of the respective year) (Paragraph 2 Point 3 Article 13 of the Law of Ukraine №1667-ІХ) in term till June 1 of the following year.
  3. In the future, an independent audit conclusion is submitted to the Annual Compliance Report for the period from January 1 till December 31 (Point 3 Article 13 of the Law of Ukraine №1667-ІХ) in term till June 1 of the following year.
  4. On request of the competent authority the resident of Diia City who acquired the status of resident in accordance with Part 3 of Article 5 of the Law of Ukraine №1667-ІХ should provide an independent auditor’s opinion (Paragraph 4-6 Point 2 Article 13 of the Law of Ukraine №1667-ІХ) within 60 days from the date of receipt of the request by the resident.
What will the auditor’s report look like?
According to conditions and circumstances of the task the auditor will take guidelines from the following international standards of the audit:
  • INTERNATIONAL AUDIT STANDARD 700 (revised) “Formation of opinion and preparation of report of the financial statements” – in the event that the Compliance Report verification service will be provided to resident companies of Diia City whose financial statements are subject to a mandatory audit in accordance with the provisions of the Law of Ukraine dated 07.16.99 No. 996-XIV “On accounting and financial reporting in Ukraine”. In this case, auditor’s opinions regarding the verification of compliance with the requirements of the Law of Ukraine №1667 will be set out in a separate section of the independent auditor's report under the heading “Report on the requirements of other legislative and regulatory acts”.
  • INTERNATIONAL CONFIDENCE TASK STANDARD 3000 (revised) “Assurance engagement that is not an audit or a review of historical financial information” – in the event that the resident company of Diia City does not have to undergo a mandatory audit, or orders a separate assurance service regarding the statements of a Diia City resident detailed in their Compliance reports.
All legal requirements and regulations governing this issue will be taken into account when preparing the Independent Auditor's Report. Currently, the Ministry of Digital Transformation is developing by-laws, in particular, the procedure for submitting and considering the Report on the compliance of the Diia City resident and the independent opinion of the auditor. In accordance with the basic Law of Ukraine №1667 This document should be approved by the relevant decision of the Cabinet of Ministers of Ukraine.
What are the costs and terms of providing auditor’s services?
The time of the audit will significantly depend on the state of the company's accounting, the speed of providing information to the auditor's requests, the size of the activities of each individual company, as well as the range of services ordered.
Which procedures will be followed by the auditor?
The Diia City Resident Compliance Report audit will include, among others, the following basic procedures:
  • checking the average monthly remuneration of employees and gig-workers;
  • checking the average number of employees and gig-workers;
  • checking the size of the qualified income of the resident of Diia City received for the reporting period, in the total income of the resident of Diia City received for the reporting period;
  • checking the compliance report for completeness and arithmetic accuracy;
  • checking the primary documentation (selectively or in a continuous order – depending on the volumes), which confirms business transactions of the resident of Diia City.
Is audit-invest eligible to provide services of audit of the compliance report of the resident of diia city?
According to Point 5 of Article 13 of the Law of Ukraine №1667-ІХ an independent opinion must be submitted by the subject of audit activity, which, in accordance with the Law of Ukraine № 2258-VIII “On the Audit of Financial Statements and Audit Activity” as od=f 12.21.2017, has the right to conduct a mandatory audit of financial statements. LLC AF Audit-Invest has the right to conduct a mandatory audit of financial statements, including financial statements of enterprises of public interest, has all the necessary certificates and accreditations, which can be found on the website: https://audit-invest.com.ua/ua/accreditation-status. The future stands with the information technology and we are happy to engage in the cooperation with the domains of Diia City.
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