Auditing a company

Auditing consists of a review of the company’s annual accounts and providing an assessment. The objective of the auditor’s evaluation is to increase the reliability of your company’s financial information in the eyes of investors, shareholders and the public.

An auditor’s report must be appended to the annual report, if your company was required to undergo an audit. An auditor’s report must be appended to the annual report of an organisation subject to accounting requirements who meets at least two of the following three conditions:

Figures for financial years until December 31 2015:

  • annual net sales of 2 000 000 euros and more;
  • balance sheet volume of 1 000 000 euros and more;
  • average number of employees is at least 30.

The auditor review is also obligatory for organisations subject to accounting requirements who meet at least one of the following three conditions as of the balance sheet date:

  • annual net sales of 6 000 000 euros and more;
  • balance sheet volume more than 3 000 000 euros,
  • average number of employees is at least 90.

Figures for financial years that started on 1 January 2016 or later:

  • annual net sales of 4 000 000 euros and more;
  • balance sheet volume of2 000 000 euros and more;
  • average number of employees is at least 60.

The auditor review is also obligatory for organisations subject to accounting requirements who meet at least one of the following three conditions as of the balance sheet date:

  • annual net sales of 12 000 000 euros and more;
  • balance sheet volume more than 6 000 000 euros,
  • average number of employees is at least 180.

The auditor review is also obligatory for all public limited companies, organisations subject to state accounting requirements, local municipalities, public organisations, foundations and political parties funded from the state budget.

Organizing an audit

The audit is organized by an independent assessor – i.e. a natural person entered on the list of Estonian auditors. The general meeting of the company appoints auditor(s), determines the number of auditors, the procedures for remuneration, and the term of the auditor’s authority. Written permission from the individual is required to appoint him or her as auditor. Before the audit is conducted, an agreement must be entered into with the auditor.

Responsibility of the parties

The auditor is obliged to keep confidential information learned in the course of the audit and is liable for damage caused by violation of obligation stemming from professional activity. At the same time, a signed audit does not release the company and its management from the responsibility for the content of annual accounts.

When the audit has been conducted and the auditor has formulated his written, signed report, it is to be appended to the annual report.

Last amended: 21-09-2016 10:23 | Compiled by: Ministry of Finance