New Obligations for Registration of Accountants and Auditors

In accordance with the latest amendments to the Law on Accounting (“Law”), in order for the provider of accounting services to perform accounting activities, it is necessary for it to be register in that capacity in the Register of Accounting Services Providers (“Register”) no later than 1 January 2023. Starting from the mentioned date, entrusting the keeping of business books to a legal entity or an entrepreneur performing accounting activities will only be possible if that entity is registered in the Register as a provider of accounting services.

As of 1 January 2021, the Law entrusted the Serbian Business Registers Agency with the management of the Register, which contains the electronic database of legal entities and entrepreneurs whose registered main activity is the provision of accounting services, and licenses for the provision of those services issued by the Chamber of Authorized Auditors.

Auditing firms, as providers of accounting services, are also subject to the registration in the Register. In the case of auditing firms, the Register does not enter the data on employed accountants, considering that the license to such firms is issued ex officio, and is thus registered by the Chamber.

The Law prescribes the conditions that must be met by a legal entity or an entrepreneur in order to be registered in the Register as a provider of accounting services.

First of all, it is necessary for a legal entity or an entrepreneur that wants to be registered in the Register to submit a request for a license for providing accounting services to the Chamber of Authorized Auditors.

The Chamber of Authorized Auditors will then issue a license for the providing accounting services, which is necessary for the registration of a legal entity for the purpose of providing accounting services, under the condition that:

  1. Its registered main activity is the provision of accounting services;
  2. The founder, i.e. the actual owner, as well as a member of the management body of a legal entity whose registered main activity is the provision of accounting services, has not been convicted by a final judgment for a criminal offense in the sense of the law regulating the liability of legal entities for criminal offenses, and if the founder, i.e. the owner, as well as a member of the management body of a legal entity, is a natural person, it has not been legally convicted of any criminal offenses prescribed by the Law;
  3. It has at least one full-time employee with a professional title in the field of accounting or auditing, which was obtained from a professional organization that is a member of the International Federation of Accountants.

The conditions for the registration of entrepreneurs are identical to the conditions prescribed by the Law for the registration of legal entities in the Register, with the fact that the condition from Item 2) applies to the entrepreneur itself (it must not be legally sentenced to prison for a criminal offense), and it can fulfil the condition from Item 3) itself.

After the Chamber of Authorized Auditors issues the license, it will ex officio submit to the Business Registers Agency the decision on issuing the license, for the purpose of further registration of the entrepreneur, i.e. legal entity into the Register as a provider of accounting services.

The Rulebook on the conditions and manner of disclosing financial statements and keeping a register of financial statements prescribes that starting from 1 January 2023, a financial report will not be considered complete if it was drawn up by a legal entity, i.e. an entrepreneur that is not registered in the Register, in the event that it was entrusted with keeping the business books.

From the financial year 2022, when submitting financial reports to the Business Registers Agency, the entities submitting the reports will be obliged to specify the legal entity, i.e. the entrepreneur entrusted with the preparation of the financial reports, and at the same time a check will be made to see if this entity is registered in the Register, all in accordance with the Law. If it is determined that the reports were made by an entity that is not registered in accordance with the Law, such reports will not be accepted as complete, and the Business Registers Agency will disclose such reports as incomplete. Therefore, it should be borne in mind that the Business Registers Agency will publish the reports, i.e. documentation in which the obligor failed to eliminate deficiencies in accordance with the notification of deficiencies, as incomplete and inaccurate financial statements, i.e. as defective documentation after the deadline for acting upon the notification of deficiencies has expired, and no later than 30 September of the following year in relation to the business year equal to the calendar year. In that case, it would be treated as if the user of the service did not act in accordance with the Law and submitted complete and accurate reports to the Agency for Business Registers, which further entails its responsibility for a misdemeanor (in the case of an entrepreneur) or an economic offense (in the case of legal entities).

Although the Law entered into force on 1 January 2020, and the Register began with the registration of accounting service providers on 1 January 2021, the information on the website of the Ministry of Finance of the Republic of Serbia shows that by 30 June 2022, i.e., six months before the deadline, a total of 1,072 legal entities and entrepreneurs have been registered as providers of accounting services, and that there is a large number of legal entities and entrepreneurs that have not yet done so, as well as that the Ministry of Finance does not intend to extend the deadline, which expires on 1 January 2023.

In one of its official opinions number 011-00-00354/2021 dated 9 April 2021, the Ministry of Finance specifically emphasized that it is not allowed for a natural person that meets the requirement in terms of an acquired professional title in the field of accounting or auditing, in accordance with the Law, to be listed in the Register in two places at the same time, i.e. within the data on the entrepreneur and the legal entity (two licenses for the provision of accounting services cannot be issued, based on the fulfilment of the condition regarding the acquired professional title for the same natural person).

Article 57 of the Law prescribes high penalties for accountants and legal entities that do not prepare financial reports in accordance with the Law, namely:

  • from 100,000.00 dinars to 3,000,000.00 dinars for a legal entity;
  • from 20,000.00 dinars to 150,000.00 dinars for a responsible person in a legal entity;
  • from 100,000.00 dinars to 500,000.00 dinars for a misdemeanour for an entrepreneur.

The Law prescribes the same range of threatened penalties for a legal entity or an entrepreneur that fails to submit to the Business Registers Agency financial reports, documentation accompanying financial reports and the statistical report in the manner and within the deadlines prescribed by the Law.

FOR MORE INFO CONTACT:

Dušan Vukadin

Attorney-at-law | Senior Counsel

Maja Grbić

Senior Associate
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