Public audit oversight system in Lithuania. Audrius Linartas Director Audit and Accoun.ng Authority

Transcription

1 Public audit oversight system in Lithuania Audrius Linartas Director Audit and Accoun.ng Authority

2 Basis for establishment The Authority of Audit and Accoun9ng (AAA) was established in 2002, as the Ins.tute of Accoun.ng, which was responsible for issuing Business Accoun.ng Standards (Lithuanian GAAP). During , following the update in the EU Direc.ve on Statutory Audit, the Lithuanian Parlament enacted new version of the Law of the Republic of Lithuania on Audit As a result to this reform, the responsibili.es of the AAA were expanded in order to include the func.ons of public audit oversight 2

3 Mandate of ac.vity AAA mandate for audit oversight according to the Government act Nr. 749 of the AAA is a public en.ty, accountable to the Ministry of Finance Charter of the AAA is approved by the Order of Minister of Finance of

4 AAA Responsibili.es Public oversight of auditing performance of audit investigations approvance of experts performing recurring inspections enforcement of the sanctions after the results of recurring inspection or investigations supervision of the examination and registration of statutory auditors supervision of continuing professional education of auditors cooperation with other public audit oversight authorities supervision of International Standards on Auditing (ISAs) translation decisions regarding auditors complains National accounting standards approvance of Business Accounting Standards assistance in Business Accounting Standards implementation (implementation guidance, written responses to specific questions) 4

5 The subjects of public audit oversight ~200 audit firms ~400 auditors ~4000 audited financial statements Chamber of Auditors 5

6 Structure of AAA 11 members 7 members Accounting Standards Committee Director Audit Oversight Committee Chief Accountant Accounting Standards Department Legal and Activity Organization Department Audit Oversight Department 6

7 Audit Oversight CommiZee (AOC) 4 of AOC members non- prac..oners from: the Bank of Lithuania the Securi.es Commission the Insurance Supervisory Commission the Ministry of Finance 1 from the Chamber of Auditors 2 from other professional organiza.ons (proposed by the AAA, approved by the Ministry of Finance) 7

8 Quality assurance system in Lithuania Auditors controllers Are proposed by the Chamber of Auditors (ChA) Are approved by the AAA Perform quality assurance inspec.ons CommiZee for Audit Quality Control (in ChA) Analyzes the quality assurance inspec.ons reports Proposes drab decisions for Board of Chamber of Auditors Board of Chamber of Auditors Approves the quality assurance inspec.ons reports Approves drab sanc.ons and disciplinary measures for inspected audit firms Asks the AAA for inves.ga.on if the significant discrepancies where found during inspec.on Audit Oversight CommiZee AAA Express opinion regarding proposed sanc.ons and disciplinary measures for inspected auditors and audit firms Evaluates other audit oversight decisions of the AAA Decides on sanc.ons and disciplinary measures aber audit firms inspec.on / inves.ga.ons Approves auditors controllers and inspec.on methodology Performs audit inves.ga.ons Takes the ul.mate responsibility for quality assurance decisions 8

9 Recurring inspec.ons Must be organized in such a way that: - all auditors and audit firms are checked at least once per 6 years - all auditors and audit firms which carry out the audit of PIE are checked at least every 3 years - the next audit quality review shall be performed not later than aber 3 years, if the audit performance deficiencies were iden.fied during the quality assurance inspec.on 9

10 Auditors controllers Approved by the AAA Must: have an experience of at least 5 years in the posi.on of auditor have recommenda.ons of 2 cer.fied and prac.cing auditors not have any disciplinary penal.es in force be of good repute. 10

11 The AAA s inspectors The inves.ga.on of the carried out audit is performed by the employees of the AAA, who have: experience of at least 5 years in the posi.on of auditor have no disciplinary penal.es in force 11

12 Sanc.ons and disciplinary measures (1/2) After recurring inspection The Chamber of Auditor after receiving the AAA approvance may take decision to: instruct the auditor or the audit firm to rectify the established weaknesses within the specified time period instruct the auditor to additionally improve his professional qualification (by setting the number of hours and theme). This instruction may be imposed together with the disciplinary sanction (warning) warn the auditor or the audit firm. 12

13 Sanc.ons and disciplinary measures (2/2) The AAA after the audit investigation may take decision to: instruct the auditor to rectify the established weaknesses within the specified time period instruct the auditor to additionally improve his professional qualification (by setting the number of hours and theme). This instruction may be imposed together with the disciplinary sanction (warning) warn the auditor or the audit firm suspend the auditor's certificate and to entrust the auditor to retake one or several qualification exams cancel the license of the auditor deprive the audit firm of the certificate 13

14 For contacts Audrius Linartas e- mail phone