In accordance with the current regulations in the Republic of Serbia, audit of regular annual financial statements is mandatory for:
- Legal entities classified as large and medium,
- All public companies (as defined by Law on Capital Market) regardless of their size,
- All legal entities (regardless of their size) whose operating income from the preceding business year exceeds EUR 4,400,000 in dinar equivalent, and
- Parent companies (legal entities that have control of one or more legal entities) that prepare consolidated financial statements.
The deadline for signing an engagement letter for audit of financial statements for 2017 is:
- 30 September 2017 (for legal entities whose business year is the same as the calendar year);
- Three months before end of business year to which the audit is related (for legal entities whose business year is different from the calendar year).
Classification of legal entities
Legal entities are classified depending on the
- average number of employees,
- operating income, and
- average value of operating assets
- Legal entities shall be classified as micro entities if they do not exceed two criteria listed in column 4 of the table.
- Legal entities shall be classified as small and medium entities if they exceed two criteria listed in column 3 of the table, but do not exceed two criteria listed in column 4 of the table.
- Legal entities shall be classified as large entities if they exceed two criteria listed in column 3 of the table.
For calculation of the amount in the table, official middle exchange rate for Euro of the National Bank of Serbia, that was valid on 31 December, is used.
Newly established legal entities shall be classified on the basis of data from financial statements for the year in which they were established and the number of months in business, and determined data shall be used for that and the following financial year.
In order to help legal entities, the Serbian Business Registers Agency put a free Calculator for classification of legal entities on its web site.
In accordance with the Law on Accounting, the following legal entities are not being classified each year, but are considered to be large legal entities, regardless of above mentioned criteria:
- The National Bank of Serbia (NBS),
- Banks and other financial institutions supervised by the NBS,
- Insurance companies,
- Financial leasing providers,
- Voluntary pension funds,
- Companies managing voluntary pension funds,
- Open- and closed-ended investment funds,
- Investment funds’ management companies,
- Stock exchanges and broker-dealer companies,
- Factoring companies.