
According to the Auditing Activities Act, certain thresholds have been set, above which it becomes mandatory for a company to audit or review its annual financial statements. The purpose of the thresholds is to ensure that companies with greater impact and risk comply with the requirements established by law and that the reliability of their financial data is at a high level.
The limits were increased compared to the previously valid rates 25% and the new limits will apply to the annual report prepared for 2024. Companies that meet the criteria for mandatory review or audit should start selecting an auditor today, because currently the supply of auditors in Estonia is lower than the demand.
Inspection obligation
The inspection is mandatory for a company whose annual financial statements contain at least two of the indicators for the reporting year that exceed the following conditions:
- Sales revenue or income – 2,000,000 euros;
- Amount of assets as of the balance sheet date – 1,000,000 euros;
- Average number of employees in the reporting year – 24 people.
In addition, an inspection is mandatory if one of the indicators exceeds the following limits:
- Sales revenue or income – 6,000,000 euros;
- Amount of assets as of the balance sheet date – 3,000,000 euros;
- Average number of employees in the reporting year – 72 people.
Audit engagement
The audit obligation applies to a company whose at least two of its reporting year indicators exceed the following thresholds:
- Sales revenue or income – 5,000,000 euros;
- Amount of assets as of the balance sheet date – 2,500,000 euros;
- Average number of employees in the reporting year – 50 people.
If at least one of the indicators for the reporting year exceeds the following thresholds, an audit is also required:
- Sales revenue or income – 15,000,000 euros;
- Amount of assets as of the balance sheet date – 7,500,000 euros;
- Average number of employees in the reporting year – 180 people.
How to prepare?
We recommend:
- Analyze your financial year's indicators and assess whether they exceed the established limits;
- Consult with accounting and audit specialists, and immediately agree on a schedule for either the audit or review.