Audit requirements in Latvia

The law governing annual financial statements and consolidated financial statements forms the basis for Latvia’s financial audit obligations.

Statutory audit

A statutory audit is a legally required inspection of a company’s or government’s financial accounts and records.

By looking at data including bank balances, bookkeeping records, and financial transactions, a statutory audit aims to ascertain if an organization gives a fair and accurate portrayal of its financial status.

Financial audit requirements in Latvia

Companies in Latvia are subject to three different types of audit procedures in accordance with the Law of the Republic of Latvia on Annual Reports and Consolidated Annual Reports:

Audit review

This entails fewer detailed audit procedures, but also less assurance. The evaluation is conducted in accordance with INTERNATIONAL STANDARD ON REVIEW ENGAGEMENTS 2400.

Others

  • Standalone financial statements
  • Consolidated financial statements

AUDIT of standalone financial statements

Any business that, as of the balance sheet date, exceeds two out of the three criteria’s limit values:

  • The total on the balance sheet is EUR 4 000 000
  • The net revenue is EUR 8 000 000
  • The average number of employees was 50 during the reporting year
  • Public corporations and their affiliated entities. In essence, these are businesses that are traded publicly
  • Public-private investment firms
  • Public sector organizations and their affiliates
  • Businesses that choose IFRS regardless of whether IFRS has been implemented fully or not

Note

Parent corporations, with few notable exceptions. This indicates that most businesses with investments imply control. In general, an audit is conducted on a corporation if its investment is greater than 50%

AUDIT of consolidated financial statements

Any corporation that, as of the balance sheet date, exceeds two out of the three criteria limit values:

  • The sum on the balance sheet is EUR 4 000 000
  • The net revenue is EUR 8 000 000
  • The average number of employees was 50 for the reporting year
  • Public corporations and their affiliated entities. In essence, this refers to businesses that are traded publicly

Audit review

Company subsidiaries that are publicly traded. In essence, this refers to businesses that are traded publicly.

  • A balance sheet total of 400 000 euros
  • Net revenue of 800 000 euros
  • An average of 25 employees over the reporting year

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