Auditing and sustainability assurance requirements are set in the Law On Audit Services as amended the latest in October 2024 (translation as of September 2023), which transposes the EU Statutory Audit Directive. The main goal of the Law is harmonizing mandatory audit and sustainability assurance requirements and regulating the institution of sworn auditors and the activities of sworn auditors and commercial companies of sworn auditors.
The Ministry of Finance shall develop and implement State policy in the field of audit and sustainability assurance of commercial companies, perform State supervision over the activities of the Latvian Association of Sworn Auditors and cooperate with the competent authorities of other EU Member States and third countries in the field of auditing and sustainability assurance.
The public oversight system within Latvia
In Latvia all sworn auditors and commercial companies of sworn auditors are subjects to the public oversight. Third-country audit firms and auditors are also within scope of these oversight. The public oversight system over the activities of sworn auditors and commercial companies of sworn auditors in Latvia is composed of three bodies:
- the Ministry of Finance (The Competent Authority)
- the Latvian Association of Sworn Auditors and
- the Audit Advisory Council
with their own ultimate responsibility stated by the Law On Audit Service
Latvijas Banka (Central Bank of Latvia) also is involved in the public oversight system as a competent authority in the supervision of public-interest entities (PIEs).
The Ministry of Finance is the main responsible institution of the public oversight system in the field of auditing and sustainability assurance. The Ministry of Finance oversees the activities of the Latvian Association of Sworn Auditors as well as is the institution responsible for the cooperation with the competent institutions of other EU Member States. Ministry of Finance as the competent authority in Latvia is responsible for carrying out the tasks provided for in the Regulation No 537/2014 and for ensuring that all provision of the Regulation is applied.
There is established the Commercial Companies Audit Policy and Oversight Unit of the Ministry of Finance of Latvia (as competent authority in line with the Article 20 (1) of the Regulation).
Contact details of the Commercial Companies Audit Policy and Supervision Division:
e-mail address: revkom@fm.gov.lv
mailing address: Smilšu street 1, Riga, Latvia, LV-1919
The Latvian Association of Sworn Auditors is an independent professional corporation of Latvian sworn auditors. It ensures the supervision of compliance with professional standards and ethical norms, as well as other regulatory enactments applicable to the profession, and of the professional activity of the sworn auditors and commercial companies of sworn auditors.
The Latvian Association of Sworn Auditors certifies sworn auditors and provides licences to commercial companies of sworn auditors.
The Latvian Association of Sworn Auditors maintains the Sworn Auditor Register, Commercial companies of sworn auditors’ Register and Register of Third Country Auditors and Commercial Companies of Auditors. Information of these registers is arranged and kept electronically and available on the home page of the Latvian Association of Sworn Auditors.
As regards issues, which are associated with the certification of sworn auditors, the licensing of commercial companies of sworn auditors and other tasks delegated to the Latvian Association of Sworn Auditors by the Law On Audit Service, it is under the supervision of the Ministry of Finance. The regulations issued by the Latvian Association of Sworn Auditors which regulate the performance of the delegated tasks have to be approved by the Latvian Association of Sworn Auditors after the coordination with the Ministry of Finance.
The Audit Advisory Council is established by the Minister of Finance for purpose of promoting the increase of quality of audit services.
The Ministry of Finance technically ensures operation of the Audit Advisory Council.
Latvijas Banka (Central Bank of Latvia) regulates and supervises the operation of the financial market and its participants.
Latvijas Banka is designated in Latvia as a competent authority in accordance with Article 20(2) of the Regulation No 537/2014 and is responsible for ensuring application of the provisions of Chapter III, Articles 16 (Appointment of statutory auditors or audit firms), 17 (Duration of the audit engagement) and 19 (Dismissal and resignation of the statutory auditors or the audit firms) of this Regulation.
According to the Credit Institution Law Latvijas Banka has the right to request that a credit institution removes the sworn auditor selected for the review of the annual statement if, in performing supervision of credit institutions, Latvijas Banka establishes that the qualifications or professional experience of the sworn auditor is inadequate for the performance of a qualitative examination, or it is established that the auditor does not comply with the international auditing standards recognized in Latvia or ethical norms. Latvijas Banka shall inform the Ministry of Finance of the decision taken.