The Russian Duma has passed a federal law
abolishing compulsory audits for SMEs with total assets of RUB60
million ($1.9million), up from RUB20million.

The law will come into force on the 1 January
2011.

In the latest International Accounting
Bulletin Russia survey firms said they are already struggling
with fierce competition, cases of pour audit quality and a slowly
recovering market. Reduced number of mandatory audits is expected
to hit firms hard as audit fees have been in sharp decline in the
past 18 months.

Unfair competition has also been affecting
Russia’s audit market as the country – regardless of its
international investment appeal – is feeling the pinch of the
economic downturn.