As we mentioned in our previous post, The Board of Directors is obliged to submit the report with respect to the financial statements to the annual shareholders meeting of a company for approval. In this post, we would like to call your attention to a company’s official financial statement, its scope and requirements.
Companies and other organizations operating in the territory of Mongolia are required to submit financial statements electronically to the local Ministry of Finance. These statements must be maintained in Mongolian language and reported in the national currency of Mongolia, the Tugrug.
The financial statements of company must include the following: (1) A record of the current balance, (2) the income statement, (3) statement of shareholders’ equity, (4) cash flow statement, (5) financial statement clarifications.
The financial statements must be approved by the company’s highest authority and financial officer and submitted by July 20, with completed annual financial statements due by February 10 of the following year. Mongolia has implemented a electronic filing system for submission of the statements. The accounting files and financial statements of the company are required to be maintained for at least 10 years.
The Ministry of Finance is responsible to monitor banking and financial markets and is entitled to request additional explanation and clarification from a company with regard to a submitted financial statement. In this case, the company is obliged to provide accurate and complete explanation and clarification as requested.
The highest authority of the company is responsible for managing and organizing the accounting. The company may engage contracted accountant’s service or professional accounting consulting service.
Some organizations, in particularly foreign invested companies are subject to mandatory auditing of financial statements. We will provide the more information related to these mandatory audits in an upcoming post.