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Independent Financial Audit Act has been adopted

Independent Financial Audit Act /”IFAA”/ was promulgated in SG, issue 95 dated November 29th 2016, which repeals the Independent Financial Audit Act, promulgated in SG, issue 101 dated November 11th 2001, effective January 1st 2002.

IFAA regulates the objective, scope and the principles of the independent financial audit.

Pursuant to Art. 7 of the IFAA the independent financial audit shall be performed by auditors registered with the Register of the registered auditors. Registered auditors pursuant to the IFAA shall mean natural persons and audit companies.

When exercising the audit profession, the registered auditor shall maintain an insurance against all risks of its activity for damages, occurred as a result of guiltily non-performance of its obligations, excluding the time during which the registered auditor shall not exercise its activity.

The minimum insurance amount under the mandatory insurance “Professional liability” for registered auditors, not performing audits of companies with public interests shall be BGN 20 000 for each insurance event and BGN 60 000 for all insurance events for one year, and for registered auditors performing audits of companies of public interest – BGN 250 000 for each insurance event and BGN 1 000 000 for all insurance events for one year.

According to the IFAA a registered auditor shall bear material liability for the damages caused by the latter if the same are direct consequence of his wrongful actions or omission. The liability of the register auditor towards the trustee company shall be limited to three times the agreed remuneration, but not less than the amounts specified above for one insurance event. The limitation of the liability shall not apply in case of intentional wrongful action of the registered auditor. In case the financial audit has been performed by more than one registered auditors, the material liability shall be jointly.