Department for Audit and IFRS HR Audit

1.

Department for Audit and IFRS
HR Audit

2.

HR Audit
HR Audit means control of availability of all necessary HRrelated documents and their compliance with applicable laws
and corporate requirements.
Losses:
▪ Reputational
▪ Financial
▪ Time-related
Help to eliminate:
Losses
Abuses
• We will reveal certain risks which can cause direct financial losses:
lack or inappropriate execution of HR documents which cause fine
charging from tax authorities; documentation of payroll expenses
insufficient for tax inspection; financial claims on the part of
employees
• We will reveal certain losses which arise as a result of abuses or
other illegal actions of certain executive officers (groups of people):
unreasonable bonus payment/ additional payments; intentional
raising of payroll expenses in production; payments under civil
contracts for employees
34 %
59
%
7%
About 60 % revisions by labor inspection
result in fines
Responsibility:
▪ Fine for organizations up to RUB 200,000
Inefficiency
• We will reveal inefficient use of HR: duplication of functional
responsibilities for different positions; nonoptimal structure of
production / management staff
▪ Fine for manager up to RUB 50,000
▪ Prohibition to take executive positions for
up to 3 years

3.

Projects
Case
Payroll control during audit of financial and business activities
• Goal – assurance of payroll expenses
• Audit extent– based on aggregates with selective revision of HR documents for certain employees
• Evaluated risks– failure to comply with applicable accounting, tax, and labor laws
Verification of HR documentation in case of changing persons responsible for its maintaining
• Goal – risk elimination during handover of responsibilities
• Audit extent– from selective to total (depending on different groups of staff)
• Evaluated risks– loss of HR documents in the event of handover of responsibilities (or their
execution/ lack thereof), errors in execution of HR documents
Preparation for government audit (labor inspection, tax office)
• Goal – loss minimization after revisions by public authorities
• Audit extent– – from selective to total (depending on different groups of staff)
• Evaluated risks– amount of claims on the part of labor and tax authorities which can arise from
inappropriate HR documenting
Result
1) Detection of system errors in
payroll accounting and HR
documents
2) Evaluation of tax risks (income tax,
fees, corporate tax)
1) Detection of errors in individual
HR documents or failures to
execute those
59 %
2) Development of schedule for
7 %correction of errors
1) Detection of system errors in HR
documents
2) Evaluation of amount of tax claims
on the part of public authorities
(fines, additional tax payments)
3) Development of schedule for
correction of errors