Frequently asked questions

Category 1: General questions about audit

Question: What is an audit and why is it needed?

Answer: An audit is an independent review of a company's financial statements, conducted to confirm their reliability and compliance with legislation and accounting standards, such as International Financial Reporting Standards ( IFRS ). An audit is necessary to ensure business transparency, increase confidence among investors, partners and regulators, and to identify and assess potential financial and operational risks.

Question: Which companies are required to undergo audit in Armenia?

Answer: According to the legislation of the Republic of Armenia, mandatory audit must be conducted by:

Companies with an annual turnover of over 4,000,000,000 AMD;
Organizations subject to government regulation (e.g. banks, insurance companies, public companies);
Companies in which foreign investors participate;
Companies that represent public interest;

Companies with assets over 2,000,000,000 AMD;
Number of Employees is over 100;

Organizations required to submit financial statements according to international standards ( IFRS ).

Question: What risks does an audit reveal?

Answer: An audit allows you to identify:

Errors in accounting accounting;
Non-compliance of financial statements with legislation and standards;
Risks losses assets companies;
Problems in management and internal control;
Financial fraud or abuses.

Question: How is internal audit different from external audit ?

Answer:

Internal audit is carried out by company employees or external consultants to assess the effectiveness of internal processes, management and control.
External audit is carried out by an independent party, such as our company, to verify the accuracy of financial statements and compliance with legal and international requirements.

Question: What are the primary objectives of an audit?

Answer: The primary objectives of an audit include:

Confirmation reliability financial reporting;
Verification of compliance with legal and regulatory requirements;
Rating internal control companies;
Identification of financial risks and weaknesses in business;
Ensuring the confidence of shareholders, investors and creditors.

Question: How to choose the right auditor for your company?

Answer: When choosing an auditor, it is important to consider:

Having a license and experience in your industry;
Deep knowledge of national and international standards;
Reputation on market;
Flexibility in providing additional services such as consulting or tax planning.

Question: When is the best time to order an audit?

Answer: The best time to order an audit is at the end of the financial year, when the annual reports are ready. However, for large companies or in the case of internal audit, it is advisable to conduct audits in stages, for example, once a quarter.

Category 2: Questions about the audit process

Question: What steps does the audit process include?

Answer: The audit process typically includes the following steps:

Planning : Defining the objectives, scope and strategy of the audit.
Risk assessment : Analysis of management and financial risks of the company.
Evidence Collection : Review of source documents, records and transactions.
Report preparation : The auditor's conclusions on the reliability of the financial statements and compliance with requirements.
Conclusion : Transfer of results to the client with recommendations for process improvement.

Question: What documents need to be prepared for the audit?

Answer: To conduct the audit, you need to prepare:

Financial statements for the audited period (balance sheet, profit and loss statement, cash flow statement);
Primary accounting documents (invoices, consignment notes, contracts);
Registers accounting accounting;
Tax declarations;
Credit and leasing agreements (if any);
Documents confirming the company's main assets.

Question: How long does an audit take?

Answer: The time frame depends on the volume of financial information and the complexity of the audit. For example :

For small businesses, an audit can take 2 to 4 weeks.

For medium and large businesses, the process can last from 1 to 3 months.
The exact timeframes are discussed after reviewing the scope of work.

Question: What to do if the audit reveals serious errors?

Answer: If the audit reveals significant errors or discrepancies, we:
- We inform management about the problems identified.
- We provide recommendations for their elimination.
- If necessary, we help develop an action plan to improve financial processes.
It is important to respond quickly to comments to avoid sanctions from regulators.

Category 3: Questions on legislation and standards

Question: What is the risk for a company if it fails to undergo a mandatory audit?

Answer: According to Armenian legislation, failure to undergo a mandatory audit may result in:
- Overlay fines from regulators;
- Suspension of licenses for regulated companies;
- Loss of trust from investors and partners;
- Restrictions on participation in tenders and receiving government orders.
Question: Which regulatory bodies in Armenia control auditing activities?

Answer: In Armenia , auditing activities are regulated by:

The Ministry of Finance of the Republic of Armenia, which issues licenses for auditing;
The Chamber of Auditors of Armenia, which carries out professional control;
A government tax authority that monitors compliance with accounting and reporting laws.

Question: What is the difference between a tax audit and a tax inspection?

Answer:

A tax audit is carried out by tax authorities to verify the correctness of the calculation and payment of taxes, as well as compliance with tax legislation.
An audit is an independent review of financial statements to ensure their accuracy and compliance with standards.

Question: Is it mandatory to apply International Financial Reporting Standards ( IFRS ) in Armenia?

AAnswer: The application of IFRS is mandatory For following categories companies :

Public companies;
Financial institutions (banks, insurance companies);
Companies with foreign investments;
Large companies with an annual turnover of over 2,000,000,000 AMD.

Question: What are the penalties for non-compliance with audit legislation?

Answer: Penalties for violation of audit legislation in Armenia may include:

Financial penalties for failure to conduct mandatory audits on time;
Cancellation of licenses of companies that do not meet requirements;
Criminal liability for providing false reports.
A warning that is issued in cases where the situation requires the elimination of identified non-conformities.

Question: What accounting standards are in force in Armenia?

AAnswer: In Armenia are used two main approaches :

National Accounting Standards (NAS) : Applicable to local companies.
International Financial Reporting Standards ( IFRS ) : Mandatory for large companies, companies with foreign investors and organizations that conduct foreign economic activity.

Category 4: Questions for International Clients

Question: What audit and accounting services do you provide to international clients?

Answer: We offer a full range of services to international clients, including:

Financial audit according to International Standards on Auditing ( ISA ).
Consultations on adaptation of financial statements to the requirements of International Financial Reporting Standards ( IFRS ).
Accounting support and preparation of tax reporting in accordance with the legislation of the Republic of Armenia.
Internal audit services aimed at improving the effectiveness of risk management and internal control.
Tax planning for companies operating both in Armenia and abroad.

We also provide customized solutions for companies operating in multiple jurisdictions.

Question: Do international companies in Armenia need to pay income tax?

Answer: Yes, all companies operating in Armenia are required to pay income tax. However, international companies can take advantage of double taxation treaties concluded between Armenia and their country of residence. These agreements allow avoiding double taxation of income and reducing the tax burden. We we help to clients with registration relevant documents and calculations.

Question: What tax benefits are there for foreign investors in Armenia?

Answer: Foreign investors can benefit from a number of tax incentives, such as:

Exemption from property tax for certain types of investments.
Reduced tax rates for companies operating in free economic zones.
Preferential conditions for IT companies and startups.

We provide consultations on all available benefits and help to prepare the necessary documents to receive them.

Question: What is the procedure for registering a foreign company in Armenia?

Answer: Registration of a foreign company in Armenia includes the following steps:

Preparation constituent documents companies.
Registration of a company in the State Register of Legal Entities.
Obtaining a tax identification number (TIN).
Opening banking accounts.
If necessary, registration as a VAT payer.

We provide a full range of business registration services, including document translation and interaction with government agencies.

Question: Does an international company need to hire a local accountant?

Answer: Armenian legislation does not oblige international companies to hire a local accountant, but it is highly recommended. A local accountant has a better understanding of the specifics of national legislation and will be able to promptly resolve issues related to reporting and taxation. Our company provides remote and onsite accounting services adapted for international clients.

Question: How are your services adapted for international clients?

Answer: We understand that international companies face unique challenges when operating in a new jurisdiction. That’s why our services include:

Consulting on international taxes and audit.
Translation of financial statements into English and their adaptation to the requirements of foreign regulators.
Support at all stages of business registration and management.
Dedicated multilingual account managers for international clients.

We aim to be your trusted partner in Armenia.

Question: Do you provide services in English and Russian?

Answer: Yes, we provide audit, accounting and reporting services in English and Russian. This is especially relevant for international clients and companies with foreign investors.

Category 5: Tax and Taxation

Question: What are the main types of taxes in Armenia?

Answer: The following main types of taxes are established in Armenia:

Income tax: levied on the income of individuals.
Corporate income tax: applies to legal entities.
Value Added Tax (VAT): The standard rate is 20%.
Excise tax: applies to certain types of goods (e.g. alcohol, tobacco).
Property tax: levied on real estate.
Tourist tax and nature tax: applied in specific areas.

Question: Can you help optimize the company's taxes?

Answer: Yes, we provide tax planning and optimization services. Our specialists analyze your company's current tax liabilities and help use legal methods to minimize them, while complying with the legislation of the Republic of Armenia.

Question: How to reduce the company's tax burden?

Answer: Reducing the tax burden is possible due to:

Optimization of the tax regime (for example, transition to a simplified regime, if permitted by law).
Correct accounting of expenses to reduce the taxable base.
Use of tax incentives and exemptions.
Comprehensive planning of tax liabilities.

Question: Which companies in Armenia are required to pay value added tax (VAT)?

Answer: In Armenia, VAT is payable by companies whose annual turnover exceeds 115 million drams. This tax is applied to goods, services and transactions subject to taxation.

However, there are exceptions for small businesses. Companies registered as small businesses and meeting the criteria for special tax regimes are exempt from mandatory VAT payment.

Question: How do I prepare a tax return for a company?

Answer: Preparing a tax return includes:

Collection of all financial data for the reporting period.
Accounting for all income, expenses, depreciation and other transactions.
Calculation of the tax base and tax amount.
Preparation and submission of the declaration in electronic format through the state platform.

Question: What are the penalties for non-payment of taxes?

Answer: The following sanctions are provided for non-payment of taxes in Armenia:

Financial penalties (usually a percentage of the amount of the arrears).
Penalties for late payment of taxes.
Administrative or criminal penalties in case of significant violations.
Deprivation of the License for the further right to conduct the relevant activity.

Category 1: General questions about audit

Question: What is an audit and why is it needed?

Question: Which companies are required to undergo audit in Armenia?

Answer: According to the legislation of the Republic of Armenia, mandatory audit must be conducted by:

Companies with an annual turnover of over 4,000,000,000 AMD;
Organizations subject to government regulation (e.g. banks, insurance companies, public companies);
Companies in which foreign investors participate;
Companies that represent public interest;

Companies with assets over 2,000,000,000 AMD;
Number of Employees is over 100;

Organizations required to submit financial statements according to international standards ( IFRS ).

Question: What risks does an audit reveal?

Answer: An audit allows you to identify:

Errors in accounting accounting;
Non-compliance of financial statements with legislation and standards;
Risks losses assets companies;
Problems in management and internal control;
Financial fraud or abuses.

Question: How is internal audit different from external audit ?

Answer:

Internal audit is carried out by company employees or external consultants to assess the effectiveness of internal processes, management and control.
External audit is carried out by an independent party, such as our company, to verify the accuracy of financial statements and compliance with legal and international requirements.

Question: What are the primary objectives of an audit?

Answer: The primary objectives of an audit include:

Confirmation reliability financial reporting;
Verification of compliance with legal and regulatory requirements;
Rating internal control companies;
Identification of financial risks and weaknesses in business;
Ensuring the confidence of shareholders, investors and creditors.

Question: How to choose the right auditor for your company?

Answer: When choosing an auditor, it is important to consider:

Having a license and experience in your industry;
Deep knowledge of national and international standards;
Reputation on market;
Flexibility in providing additional services such as consulting or tax planning.

Question: When is the best time to order an audit?

Category 2: Questions about the audit process

Question: What steps does the audit process include?

Answer: The audit process typically includes the following steps:

Planning : Defining the objectives, scope and strategy of the audit.
Risk assessment : Analysis of management and financial risks of the company.
Evidence Collection : Review of source documents, records and transactions.
Report preparation : The auditor's conclusions on the reliability of the financial statements and compliance with requirements.
Conclusion : Transfer of results to the client with recommendations for process improvement.

Question: What documents need to be prepared for the audit?

Answer: To conduct the audit, you need to prepare:

Financial statements for the audited period (balance sheet, profit and loss statement, cash flow statement);
Primary accounting documents (invoices, consignment notes, contracts);
Registers accounting accounting;
Tax declarations;
Credit and leasing agreements (if any);
Documents confirming the company's main assets.

Question: How long does an audit take?

Answer: The time frame depends on the volume of financial information and the complexity of the audit. For example :

For small businesses, an audit can take 2 to 4 weeks.

For medium and large businesses, the process can last from 1 to 3 months.
The exact timeframes are discussed after reviewing the scope of work.

Question: What to do if the audit reveals serious errors?

Answer: If the audit reveals significant errors or discrepancies, we:

We inform management about the problems identified.
We provide recommendations for their elimination.
If necessary, we help develop an action plan to improve financial processes.
It is important to respond quickly to comments to avoid sanctions from regulators.

Category 3: Questions on legislation and standards

Question: What is the risk for a company if it fails to undergo a mandatory audit?

Answer: According to Armenian legislation, failure to undergo a mandatory audit may result in :

Overlay fines from regulators;
Suspension of licenses for regulated companies;
Loss of trust from investors and partners;
Restrictions on participation in tenders and receiving government orders.

Question: Which regulatory bodies in Armenia control auditing activities?

Answer: In Armenia , auditing activities are regulated by:

The Ministry of Finance of the Republic of Armenia, which issues licenses for auditing;
The Chamber of Auditors of Armenia, which carries out professional control;
A government tax authority that monitors compliance with accounting and reporting laws.

Question: What is the difference between a tax audit and a tax inspection?

Answer:

A tax audit is carried out by tax authorities to verify the correctness of the calculation and payment of taxes, as well as compliance with tax legislation.
An audit is an independent review of financial statements to ensure their accuracy and compliance with standards.

Question: Is it mandatory to apply International Financial Reporting Standards ( IFRS ) in Armenia?

Answer :

The application of IFRS is mandatory For following categories companies :

Public companies;
Financial institutions (banks, insurance companies);
Companies with foreign investments;
Large companies with an annual turnover of over 2,000,000,000 AMD.

Question: What are the penalties for non-compliance with audit legislation?

Answer: Penalties for violation of audit legislation in Armenia may include:

Financial penalties for failure to conduct mandatory audits on time;
Cancellation of licenses of companies that do not meet requirements;
Criminal liability for providing false reports.
A warning that is issued in cases where the situation requires the elimination of identified non-conformities.

Question: What accounting standards are in force in Armenia?

Answer :

In Armenia are used two main approaches :

National Accounting Standards (NAS) : Applicable to local companies.
International Financial Reporting Standards ( IFRS ) : Mandatory for large companies, companies with foreign investors and organizations that conduct foreign economic activity.

Category 4: Questions for International Clients

Question: What audit and accounting services do you provide to international clients?

Answer: We offer a full range of services to international clients, including:

Financial audit according to International Standards on Auditing ( ISA ).
Consultations on adaptation of financial statements to the requirements of International Financial Reporting Standards ( IFRS ).
Accounting support and preparation of tax reporting in accordance with the legislation of the Republic of Armenia.
Internal audit services aimed at improving the effectiveness of risk management and internal control.
Tax planning for companies operating both in Armenia and abroad.
We also provide customized solutions for companies operating in multiple jurisdictions.

Question: Do international companies in Armenia need to pay income tax?

Question: What tax benefits are there for foreign investors in Armenia?

Answer: Foreign investors can benefit from a number of tax incentives, such as:

Exemption from property tax for certain types of investments.
Reduced tax rates for companies operating in free economic zones.
Preferential conditions for IT companies and startups.
We provide consultations on all available benefits and help to prepare the necessary documents to receive them.

Question: What is the procedure for registering a foreign company in Armenia?

Answer: Registration of a foreign company in Armenia includes the following steps:

Preparation constituent documents companies.
Registration of a company in the State Register of Legal Entities.
Obtaining a tax identification number (TIN).
Opening banking accounts.
If necessary, registration as a VAT payer.
We provide a full range of business registration services, including document translation and interaction with government agencies.

Question: Does an international company need to hire a local accountant?

Question: How are your services adapted for international clients?

Answer: We understand that international companies face unique challenges when operating in a new jurisdiction. That’s why our services include:

Consulting on international taxes and audit.
Translation of financial statements into English and their adaptation to the requirements of foreign regulators.
Support at all stages of business registration and management.
Dedicated multilingual account managers for international clients.
We aim to be your trusted partner in Armenia.

Question: Do you provide services in English and Russian?

Answer: Yes, we provide audit, accounting and reporting services in English and Russian. This is especially relevant for international clients and companies with foreign investors.

Category 5: Tax and Taxation

Question: What are the main types of taxes in Armenia?

Answer: The following main types of taxes are established in Armenia:

Income tax: levied on the income of individuals.
Corporate income tax: applies to legal entities.
Value Added Tax (VAT): The standard rate is 20%.
Excise tax: applies to certain types of goods (e.g. alcohol, tobacco).
Property tax: levied on real estate.
Tourist tax and nature tax: applied in specific areas.

Question: Can you help optimize the company's taxes?

Question: How to reduce the company's tax burden?

Answer: Reducing the tax burden is possible due to:

Optimization of the tax regime (for example, transition to a simplified regime, if permitted by law).
Correct accounting of expenses to reduce the taxable base.
Use of tax incentives and exemptions.
Comprehensive planning of tax liabilities.

Question: Which companies in Armenia are required to pay value added tax (VAT)?

Answer: In Armenia, VAT is payable by companies whose annual turnover exceeds 115 million drams. This tax is applied to goods, services and transactions subject to taxation.

However, there are exceptions for small businesses. Companies registered as small businesses and meeting the criteria for special tax regimes are exempt from mandatory VAT payment.

Question: How do I prepare a tax return for a company?

Answer: Preparing a tax return includes:

Collection of all financial data for the reporting period.
Accounting for all income, expenses, depreciation and other transactions.
Calculation of the tax base and tax amount.
Preparation and submission of the declaration in electronic format through the state platform.
Our company can help you with this process.

Question: What are the penalties for non-payment of taxes?

Answer: The following sanctions are provided for non-payment of taxes in Armenia:

Financial penalties (usually a percentage of the amount of the arrears).
Penalties for late payment of taxes.
Administrative or criminal penalties in case of significant violations.
Deprivation of the License for the further right to conduct the relevant activity.

Frequently asked questions

Category 1: General questions about audit

Category 2: Questions about the audit process

Category 3: Questions on legislation and standards

Category 4: Questions for International Clients

Category 5: Tax and Taxation

Category 1: General questions about audit

Category 2: Questions about the audit process

Category 3: Questions on legislation and standards

Category 4: Questions for International Clients

Category 5: Tax and Taxation