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Two new orders issued by the Head of SARAS have come into force

The Head of the Service for Accounting, Reporting and Auditing Supervision (SARAS) has issued two new orders which are now in effect. The first order approves the rule for preparing and publishing the annual transparency report by audit firms conducting audits of the financial statements of public-interest entities (PIEs). The second order approves the rule for preparing and submitting an additional report by audit firms to audit committees.

These orders stem from amendments made in June 2024 to the law of Georgia on Accounting, Reporting and Auditing, and the law of Georgia on Entrepreneurship. Following these legislative changes, SARAS was tasked with developing:

• a rule for preparing and publishing the annual transparency report; and
• a rule for preparing and submitting an additional report to audit committees.

To fulfil these obligations, SARAS issued: Order No. N-5 on 16 May 2025, which approves the rule for preparing and publishing the annual transparency report by audit firms conducting audits of the financial statements of PIEs and Order No. N-6 of the same date, which approves the rule for preparing and submitting an additional report by audit firms to audit committees. Both rules were developed in accordance with the EU Regulation 537/2014.

The Rule for Preparing and Publishing the Annual Transparency Report sets out procedures for audit firms conducting audits of the financial statements of PIEs in Georgia, requiring them to prepare and publish an annual transparency report. The rule aims to increase transparency in audit activities, serving as a tool to promote financial transparency and enhance public awareness of the operations of audit firms auditing PIEs. Ultimately, it aims to build trust in audit firms and their work, thereby strengthening investor and customer confidence in the sector. 

In accordance with the Rule for Preparing and Submitting an Additional Report to Audit Committees, audit firms must submit a written report detailing the audit results and/or the circumstances described in Article 141(3) of the Law of Georgia on Accounting, Reporting and Auditing. This requirement improves the quality of audit services in Georgia and increases transparency in audit processes.