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    Country by Country Financial Reporting and Auditing Framework

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    Lithuania - Atskaitomybe ir auditas UAB (prepared October 2015)

    Preparation and Filing of Statutory Financial Statements

     

    All legal entities registered in Lithuanian (Public limited liability company, private limited liability company, individual enterprise, general partnership, limited partnership, agricultural company, co-operative enterprise, non - government organization) are required to file annual reports to the Centre of Registers portal within 5 months after the end of the financial year (after 4 months financial statements shall be approved by shareholders and after the approval within 1 month  submitted to the Centre of Registers) The annual reports may be submitted to the Register a company director or person empowered to act on behalf of the legal entity.

     

    Financial Reporting Framework

     

    Lithuanian entities may choose between IFRS and Lithuanian GAAP for preparing financial statements. Lithuanian GAAP is based on the IFRS for SME standard, with a small number of additional requirements specific to Lithuania.

     

    Beginning January 1, 2016, all entities will be transferred to new formats of financial statements (medium, micro, small and general entities) according to a new EU Accounting Directive.

     

    Audit Requirements

     

    Compulsory audit criteria in Lithuania

    Lithuania audit reviews are not mandatory. Lithuanian companies mandatory audit is based on the following criteria:

     

    If two parameters in the annual report have been exceeded:

    Audit

    Revenue

    3 500 000 €

    Assets total

    1 800 000 €

    The average number of employees

    50 people

    In addition, the audit is mandatory for every public company, accounting entity of state, local government, legal person in public law, foundations and political parties who get financial support from the state budget.

     

    Audit Appointments, Rotation and Joint Audits

     

    Audit appointments in Lithuanian are usually for one year, but it can be extended to several years based on the decision of the owners. Resignation of an auditor after concluding an engagement contract is not allowed without serious reasons due to a disagreement on audit procedures and conclusions. All terminated audit agreements shall be reported to the audit oversight body The Authority of Audit and Accountancy.

     

    There is no requirement to rotate audit firms. The rotation requirments for auditors - 7 years, auditors of public companies - 5 years.

     

    No joint audits were conducted in Lithuanian up to year 2015.

     


     

    Auditing Standards

     

    All audit engagements are undertaken under International Standards on Auditing (ISAs) issued by the IAASB.

     

    Ethical Framework

     

    Lithuanian auditing companies and auditors are bound by ethical standards including the IFAC Code (IESBA). Lithuanian auditors are also required to fully comply with ISQC 1 on quality control.  

     

    Auditor Registration

     

    Lithuanian companies, who wish to sign company audit reports, must gain Registered Audit Firm status. The requirements to gain this status are:

     

    • The company intends to provide audit services must be included in the list of audit firms. The company entered into the list of audit firms will receive a certificate.

     

    • The share capital of an audit firm which is a private limited company shall be at least EUR 2,500.

     

    • At least 3/4 of the audit firm participants have to be auditors, national auditors, audit firms and (or) national audit firms.

     

    • An audit firm shall not be engaged in an area of activity other than the provision of an audit service or other business activities.  An audit firm shall not belong to a network of sworn auditors, the structure of which does not enable them to obtain the exhaustive information required for oversight.

     

    • Professional insurance coverage should be at least EUR 29,000.

     

    Auditor Regulation

     

    Lithuanian audit firms are subject to external review organized  by the Lithuanian Chamber of Auditors together with Audit and Accountancy Authority, which reviews all auditors of listed companies on a six-year cycle. Reports on individual firms are not publicly available.

     

    Internal Quality Control

     

    We have established a formal annual monitoring and peer review process which allows us to gain assurance that our firm's quality control systems are operating effectively. The review consists of both reviews of individual audit files, and an assessment of compliance with the group's policies and procedures relating to independence and audit quality. The files for review are selected using a risk-based approach with a weighting towards public interest entities, and other larger or more complex clients. Every partner is subject to the review of at least one audit file every year.

     


     

    Transparency Report

     

    All Lithuanian audit firms with public entities as audit clients are required by law to publish a transparency report. The Lithuanian audit firm's report is available from the firm's website.

     

    Topics covered by Transparency Report include:

    • Structure, Ownership and Governance;
    • Network Regulations and Guidelines;
    • Internal Quality Control;
    • Independence and Ethics;
    • External Regulation

    Contact Us
    David Chitty - Audit
    London, United Kingdom
    +44 20.7842.7292


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