Banks Get Online Access to Audit Reports

All banks will now be able to access audit reports online, the director general of Iranian Association of Certified Public Accountants announced.

“Filing of requests by the banking system to confirm the veracity of audit reports related to individuals and companies will henceforth be done electronically,” Seyyed Mohammad Alavi also said in a talk with Fars News Agency.

Alavi said the system, which allows the banking system to confirm the credibility of audit reports done by all accounting firms that are members of IACPA, has been dubbed Pardis and is officially operational.

“After talks were held between IACPA and the banking network, all the banks can freely access the financial status of loan applicants that have been subject to audits,” he added.

On the boons of the new facility, the official said it will achieve a lot in line with increasing the transparency of financial data pertaining to companies throughout the country. 

With the new system, he adds, discrepant financial statements sent from different sources will become obsolete and “will ease data access for other accounting professionals”.

Alavi pointed to Article 7 of the Guidelines to Increase Executive Guarantee and Strengthen Auditing approved by the Cabinet in 2009. It states that “all natural or legal persons, whose financial statements have not been subject to auditing, are not eligible to receive rial or foreign exchange loans from banks and credit institutions”.

In addition, a number of directives issued by the Central Bank of Iran to the banking system dictate that should any individual or legal entity wish to receive loans of over 10 billion rials ($260,416), they must provide financial statements audited by a member institution of IACPA.

Banks and credit institutions are obligated as part of these directives to check the veracity of audit reports with IACPA after receiving a copy of the audit report.

As to why IACPA wanted to move these eligibility checks to the virtual network, the official said the measure was introduced because controlling these processes physically is time-consuming and the loan applicants and the banking system wanted to quicken that process. 

“Paper and physical inquiries have the potential of preparing the ground for corruption,” he said.

According to the official, IACPA has had other collaborations with the banking system in the form of an “agreement struck with the Iran Banking Institute affiliated with the central bank”, which aims to hold joint training courses for the auditors and credit experts of the banking system.

Alavi said the goal of the courses is to acquaint them with the fundamental concepts of financial statements, ways of analyzing them, auditing reports and how to best employ them.