Auditors lose revenue from work with foreigners
In 2024, auditors earned consulting and audit services to foreign organizations almost half as much as according to the results of the previous year. According to market participants, this is due to the change in the structure of owners and the redomycies of companies. The segment is very attractive to auditors due to margin and prices, and auditors hope for interaction with friendly countries and the return of foreigners who have left the Russian Federation.
According to the results of 2024, the revenue of audit and consulting groups from the provision of audit and other services related to audit activities for audible persons registered in foreign states decreased by 1.8 times, to 1.3 billion rubles. In particular, auditors provided services to persons registered in the British Virgin Islands, Marshall Islands, Kayman Islands, Cyprus, as well as in the Netherlands, Kazakhstan, Luxembourg, the UAE and Qatar. This follows from Kommersant’s calculations based on the annual reporting of market participants.
According to the auditors, we are talking about the provision of services to customers who are in Russia, but have foreign roots.
In particular, in the case of Marillion, these are services in relation to branches and representative offices of foreign legal entities in the territory of the Russian Federation, says Polina Viksna, managing partner of the company group of companies. They are classified as “the provision of services in the territory of foreign states”, since a branch or representation of a foreign legal entity in Russia does not form a separate legal entity, she explains.
Reducing revenue is due to serious restructuring of groups and property structures. The revenue of audit companies for 2023 includes work audit for 2022, when among the portfolios of customers – customers of the audit and other services related to audit activities – there was a certain share of foreign holding companies of international groups whose business was in Russia, Mrs. Viksna explains. “After the events of 2022, significant changes began: the change of owners of Russian business of international groups often led to the transfer of the perimeter of companies to a new holding registered in the Russian Federation,” she explains. “In connection with this customer of audit services or other services related to the audit activity, a legal entity in Russia, that is, a Russian customer, became.” There is also the effect of redomyculation, that is, the move of large Russian holdings, primarily their head structures, to Russian jurisdiction from the jurisdictions of foreign ones, says Pavel Mitrofanov, general director of business experts.
At the same time, work with foreigners is extremely interesting to auditors.
The segment is assigned to large companies, since they have more people and competencies. The cost of such an audit, as a rule, is more than 30-50%than the audit in the RAS, says Svetlana Krapiventseva, head of the KSK-Group IFRS. “This is due to the fact that there are features in the group (their own accounting policy), high detail, the need to interact with the foreign auditor of the entire group, in particular, the direction of the working files and the conduct of online meetings,” she explains. “The reporting, as a rule, in English, corresponds to the IFRS, GAAP, ITA GAAP and other generally accepted standards.” Sometimes specific issues arise related to cross -border operations or taxation, which require the involvement of specialized specialists and, accordingly, increase the cost of service, says partner B1 Tatyana Samsonova.
Auditors do not expect a further significant reduction in revolutions. According to the owner and head of the Consulting Company, Julia Mazeina, the market adapts to new conditions, forming a stable, although lower in size segment of demand. There is a chance to maintain the segment at the expense of foreign partners and open the « daughters » of Russian companies in friendly countries, for example, China and India, or the return of foreign organizations to the Russian market, which so much has been talking about recently, she explains. From the report of the AK & M information agency, it follows that the participants of the Russian market see “insignificant signs of moderate foreign interest”, in particular, the South Korean Auto Concert Kia included the Russian market in sales goals. Many Western companies that previously planned to withdraw from the Russian market suspended these plans.
