Important notice by the Ministry of Economic Affairs & Finance

Re: Legal Requirements for Designation of Auditors from Member Firms of the IACPA.

  Background

1-The law concerning inception of the Iranian Association of Certified Public Accountants (IACPA) was ratified by the parliament in 1993. The first group of Certified Public Accountants were elected and introduced to the public in late 2001, and member firms of the IACPA were publicly announced in early 2002.

2-Based on the provisions of the above-mentioned law and its subsequent by-laws, Iranian companies with a turnover of more than Rls. 8 bln. per annum or with assets more than Rls. 12 bln. as well as foreign companies’ branches and/or representative offices which have been registered in Iran according to the provisions and requirements of the law pertaining to registration of such entities, ratified in (1376)-1997, have been included in the list of those entities that must make use of the services of the CPA firms in Iran.


Recent Notifications

3-The Ministry of Economic Affairs Finance, in its recent notification, published in Iran Newspaper No. 2247 of September 19,2002, has announced that provision of services of (IACPA) auditors to above firms is legally mandatory. (photocopy of the newspaper announcement is attached)

4-It is to be noted that financial statements, not supported or accompanied by IACPA member auditor’s report, shall not be acceptable by the ministries, government organizations or companies, banks and insurance companies, non-bank credit entities, Tehran Stock Exchange, and other non-government public establishments.

5-It should be borne in mind that based on the provisions of article 272 of the amendment to the Direct Taxation Act, ratified in February 2002, those IACPA member firms who are engaged as auditors, are fully eligible to also carry-out taxation audit for their clients, reports of which will be submitted to the Taxation Affairs Organization, upon which the tax authorities must issue the pertinent tax assessment notice without further investigation.

6- To put the matter in perspective, all above mentioned firms are required to:

a- Designate an IACPA member audit firm to audit their financial statements.

b- Financial statements that are not audited as such, can not be presented to various ministries, government and public organizations, banks and insurance companies.

c- IACPA member auditors are also legally in a position to carry-out taxation audit for their clients.