Банкеръ Weekly

Briefs

THE MINISTRY OF FINANCE REVEALS AUDITING AFFAIRS

Violations of the tax discipline and tricks of the auditors infuriated Bulgaria's Deputy Minister of Finance Gati Al Djebury. He pointed out two specific cases. In one of them a company applied for a credit from Biochim Comercial Bank and showed the bankers a certified balance sheet and a profit and loss account proving it has reported a profit. However, the company also presented certified documents to the tax authorities which failed to report that profit. Everything seems very clear: when taxes need to be paid - there is no profit, but when a credit needs to be applied for - there is one. The auditor has signed both of its balance sheets, being fully aware of the fact that probably neither of them reflected the actual financial condition of the company.The second case that made the Deputy Finance Minister angry concerned an energy trading company. It has certified its 2000 report with its capital being reported in undenominated Bulgarian levs. However, the denomination of the national currency was completed in the end of 1999. It seems that the auditor has not even cast a glance at the documents that he signed, although this is exactly what he is paid for.Gati Al Djebury got furious with these tricks because they are not an exception in the auditing practice. He asked for an urgent meeting with the Chairman of the Management Board of the Institute of the Certificated Expert Accountants (ICEA), Prof. Stoyan Dourin, the Chairman of the Union of the Accountants, Ivan Dushanov, and the Chairwoman of the Accounting Houses Association, Hristinka Petrova. Mr. Djebury warned them he would not tolerate such actions of the auditors since they harm the budget. Prof. Dourin promised that if the Deputy Minister could find evidence for the violations no one of the guilty would escape the sanctions of ICEA. In effect, when there is proof for these tricks, the institute should deprive such violators of the right to certify accounting documents for ever. The BANKER weekly wrote some time ago about blank accounting reports signed by auditors that everybody can fill in with the figures he wants.It's not a secret that some of the expert accountants certify the documents of a hundred companies every year without even checking what they contain. And this is only a part of the violations of a group of auditors who discredit the whole branch.I will revise the accounting reports of the hundred largest companies and will inform ICEA about all auditing violations that I find out, said Mr. Al Djebury. - If Prof. Dourin fails to keep his promise to sanction the guilty, I will see if I have a right to bring them to court and I will do so.People familiar with the talks between the Deputy Finance Minister and the accounting bosses claim that he even brought up the problem about the auditors hiding taxes. Mr. Al Djebury also announced that accountants are conductors of the grey economy in Bulgaria.Gati Al Djebury made similar warnings to the software companies during the IT-forum on May 29. He said this branch was one of those that hided most taxes and social insurance payments. He didn't hesitate to reject the Greek entrepreneurs on a meeting last week. When they complained of the frequent amendments to the tax legislation, he replied that the laws would keep suffering changes until all problems in the country were solved.

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