Compliance Responses and Action Plans

  • Compliance Responses and Action Plans

    IFAC members and associates have provided self-assessment information about the regulatory and standard-setting framework in their countries (Part 1) and their organizations' activities in addressing IFAC's membership requirements (Part 2) as described in the Statements of Membership Obligations. Based on an analysis of this information, they are developing SMO Action Plans for continuous development and improvement.

    Some organizations have qualified to submit SMO Action Plans on a biennial basis by meeting eligibility criteria. These organizations are indicated with an asterisk (*).

    In the interest of transparency and providing information to the profession, regulators, and other stakeholders, all responses and SMO Action Plans are accessible below.

    Lithuanian Chamber of Auditors

     

    Introduction

    The information below has been submitted as part of the IFAC Member Body Compliance program. The Program has two components:

    Part 1: Assessment of the Regulatory and Standard-Setting Framework (provides information about regulatory requirements and standard-setting processes in member body countries); and
    Part 2: Assessment of Compliance (provides information on compliance by member bodies with the Statements of Membership Obligations). Part 2 of the Compliance Program will begin later this year, and the results will also be posted to the website.

    The responses to Part 1 are provided below. IFAC staff has reviewed the responses and, where necessary, validated them with external knowledgeable parties. A list of key terms is available to assist readers in understanding the responses.

    The purpose of this Part 1 Assessment is to collect information on the roles of IFAC member bodies and other organizations (including government, regulatory or other appointed authorities) with respect to:

    1. Setting auditing, accounting, ethics, public sector and education standards; and
    2. Regulating the accountancy profession.

    Sections 1 and 2 of Part 1 contain an introduction and instructions for member body respondents. For this reason, they are not included here, and the responses begin with Section 3.

    Questions or comments may be sent to complianceassessment@ifac.org.


    Section 3 -- Member Body General Information

    1. Country:

      LITHUANIA


    2. Name of member body:
      Lithuanian Chamber of Auditors

      Or please specify name:



    3. Individual responsible for preparation:
      Rita Jankunaite


    4. Date member body became a member of IFAC:
      Note: Please enter a numeric date (e.g., 12/2001, Month/Year)

      12 / 2003



    Questions 5 - 22 are for internal use only


    Section 3G -- Affiliations


    23. Please list those regional organizations to which your organization belongs (e.g., FEE, CAPA, ECSAFA, IAA, etc.):
      The European Federation of Accountants - a member correspondent from 16 December 2004.



    Section 4 -- Statutory Framework


    Responses to this section will provide a description of the legal framework governing the commercial aspects of auditing and financial reporting in your country.

    Section 4A -- The Companies Act or Commercial Code


    The following questions concern the Companies Act (the Act) or Commercial Code (the Code) or similar Legal authority in your country. If no Legal authority exists, or the Legal authority does not address particular questions, please indicate "N/A" for Not Applicable.

    24. What is the full name of:
      a). the Act or the Code: Company Law
      b). the Enacting body: Parliament
      c). date the Act or Code came into force: 07 / 2001


    25. How can IFAC obtain a copy of the Act or Code?
      The official version of Lithuanian Law is that contained in the "Parliament of the Republic of Lithuania". However, access to Lithuania legislation can be obtained via the Internet, a starting point is http://www3.lrs.lt


    26. Is the Act or Code available in English?
      Yes   No


    27. What are the types of entities covered by the Act or the Code?
      Please check all that apply.
      Listed entities   Other (please specify): financial institutions
      Private companies   Other (please specify): Insurance Companies
      Governmental   Other (please specify):
      Not-for-profit   Other (please specify):


    28. Is there a requirement for the following entities to prepare annual statutory financial statements? If YES, please describe the financial reporting requirements including the accounting standards to be followed.
      Please check all that apply.
        No Yes (If YES, please describe)
      Listed entities Financial statements of all entities shall be prepared pursuant to the general accounting principles, the Law on Financial Stetementsof entities and the Business accounting standards, issued by Lithuanian Accounting Institute or International Accounting Standards. The Business Accounting Standards become operative for financial statements covering periods begining on or after 1 January 2004. the provision regarding the application of the International Accounting Standards entered into force from 1 July 2007. From 1 January 2005 listed companies pursuant to the Law on Financial Statements of Entities and the Law on Consolidated Accounts of Entities are required to prepare their financial statements and consolidated accounts in accordance with (endorsed) International Accounting Standards.
      Private companies See above - IAS optional
      Governmental See above
      Not-for-profit Bussiness Accounting Standards (BAS)
      Other (please describe) Financial Institutions IAS or BAS and Bank of Lithuania regulations. The BOL establishes requirements specific to Lithuania
      Other (please describe) Insurance Companies See above - IAS optional


    29. Is there a statutory requirement for the following entities to be audited? If YES, describe the requirement including the auditing standards to be followed:
      Please check all that apply.
        No Yes (If YES, please describe)
      Listed entities Audit required in accordance with Lithuanian law and standards
      Private companies Audit required in accordance with Lithuanian law and standards - exemption available for small limited liability companies
      Governmental Audit required in accordance with Lithuanian law and standards
      Not-for-profit Audit required in accordance with Lithuanian law and standards
      Other (please describe) Financial Institutions
      Other (please describe) Financial Institutions


    30. Are the auditors ("statutory auditors") that are appointed for audits required by the Act or Code ("statutory audits") appointed for a specific period?
      Yes   No
      If YES, please indicate the term of appointment: Year(s)


    31. Who appoints the statutory auditors?
      Please check all that apply.
      Shareholders   Management
      Board of directors   Other (please specify):
      Audit committee   Other (please specify):
      Government agency   Other (please specify): Re Q30: The period of appointment can vary according to the decisions of the shareholders


    32. Does the Act or Code require joint auditors for the statutory audit?
      Yes   No
      If yes, please describe the requirement:


    33. Does the Act or Code require the rotation of the auditors or audit firms performing statutory audits?
      Yes   No
      If yes, please describe the requirement:
      Pursuant to the Law on Audit (35 article) the statutory auditor responsible for carrying out the statutory audit, shall rotate from statutory engagement within a maximum period of five years.
      The exception is audit of financial institution (The Law on Financial institutions, 45 article) where an statutory auditor of the same audit firm shall be prohibited from performing audit as well as another person shall be prohibited from participating, together with the auditor, in the performance of the audit in the same financial institution for more than three successive financial years.



    Section 4B -- Securities Market Regulations


    Responses to this section will provide a description of the financial reporting and auditing requirements for listed entities in your country.

    34. What are (a) the major items of Legal authority for such requirements, (b) the Enacting body(ies) and (c) the latest amendment date? Please identify the specific articles or sections that pertain to auditing and financial reporting:
    1. the major items of Legal authority for such requirements

      With regard to financial reporting and auditing there are no specific individual laws or regulations applying solely in respect of listed companies.
      According to the Law on Financial Statements of Entities since 2005 listed entities have to prepare consolidated and statutory financial statements in accordance with requirements of (endorsed) International Accounting Standards.
      The Law on Securities (18 January 2007, X-1023) stipulates requirements to a composition of isser's annual information.
      The supervisory institutions

    2. the Enacting body(ies)

      The Parliament of the Republic of Lithuania for the Law on Audit, the Securities Commission of the Republic of Lithuania, the Bank of Lithuania, the Insurance Supervisory Commission for additional requirements.

    3. the latest amendment date?

      Various


    35. How can IFAC obtain a copy of the Legal authority?
      The official version of Lithuanian law is that contained in the "Parliament of the Republic of Lithuania". However, access to Lithuania legislation can be obtained via the Internet, a starting point is: http://www3.lrs.lt


    36. Is the Legal authority available in English?
      Yes   No


    37. Are there any additional or alternative financial statement reporting requirements for listed entities that are not described in your answer to Question 28?
      Yes   No
      If YES, please describe the requirement:


    38. Are there any additional auditing requirements that apply to listed entities other than those described in your answer to Question 29 (e.g., additional GAAS requirements, additional independence requirements, requirements to report to those charged with governance, etc.)?
      Yes   No
      If YES, please describe the requirement:
      When performing the audit of a public interest entity (listed entity) the audit firm shall annually present to the managing body of the enterprise that is being audited a certificate of income received in the entity from audit and non-audit fees (Article 35, Law on Audit).
      It is forbidden to perform an audit of a public interest entity (listed entity) for the auditor who (Article 28, Law on Audit): 1) has less than 3 years experience as an auditor; 2) a disciplinary penalty was imposed on the auditor by the Audit Quality Control Committee or the Auditors


    39. Who appoints the statutory auditors of listed entities?
      Please check all that apply.
      Shareholders   Management
      Board of directors   Other (please specify):
      Audit committee   Other (please specify):
      Government agency   Other (please specify):


    40. Are auditors who perform audits of listed entities appointed for a specified period?
      Yes   No
      If YES, please indicate the term of appointment: Year(s)


    41. Are joint auditors required for audits of listed entities?
      Yes   No
      If YES, please describe the requirement:


    42. Is rotation of the auditor or audit firm for audits of listed entities required?
      Yes   No
      If YES, please describe the requirement:
      According to the Law on Audit (Article 35) the statutory auditor responsible for carrying out the statutory audit, shall rotate from statutory engagement within a maximum period of five years. The exception is audit of financial institution (Article 45, Law on Financial institutions) where an auditor of the same audit firm shall be prohibited from performing audit as well as another person shall be prohibited from participating, together with the auditor, in the performance of the audit in the same financial institution for more than 3 successive financial years.



    Section 5 -- Auditing Standards


    Responses to this section will provide a description of the legal and professional framework governing audit and other assurance standards in your country. The section focuses on the establishment of such standards. Please indicate the role your organization plays within this framework.

    Section 5A -- Statutory Framework


    43. Please provide the name of the Legal authority and/or self-regulatory rules that establish audit and other assurance standards in your country, the date of the last amendment of such authority or rules and the name of body responsible for setting audit and other assurance standards. If the standards are different for different entities (e.g., listed entities, private companies, governmental bodies, not-for-profit organizations, etc.), please specify the details that apply to each:
      Type of entity Name of
      applicable
      legal
      authority
      Date of last
      amendment
      (e.g. MM/YYYY 06/2001)
      Name of body responsible
      for setting audit and
      other assurance standards
      Listed entity Law on Audit 06/1999 Lithuanian Chamber of Auditors
      Other (please describe) (applicable for all entities requiring an audit) Law on Audit 06/1999 Lithuanian Chamber of Auditors
      Other (please describe)
      Other (please describe)

      a. How can IFAC obtain copies of these documents?

      The Law on Audit can be located at www3.lrs.lt

      The official version of National Standards on Auditing in Lithuanian only can be obtained via the Internet, a starting point is : http://lar.lt


      b. Are the documents available in English?
      Yes   No


    Section 5B -- Standard-Setting (Lithuanian Chamber of Auditors)


    44. For Lithuanian Chamber of Auditors, please indicate the nature of the body (i.e., whether it is part of a government ministry or department, an agency appointed by government, a private organization established by the profession, or other [please describe]) and the name of the standards.
      a. Nature of body

      Public legal entity established by the Law on Audit (unifying all statutory auditors)

      b. Name of standards

      National Standards on Auditing


    45. How many voting members does the standard-setting body have?
      403


    46. Are the members of the standard-setting body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe:


    47. What are the criteria considered in selecting members of the standard-setting body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?
      As of January 2008 the LCA has 403 members.

      The General Meeting of LCA Members has a right to approve the National Standards on Auditing.
      For performance and coordination of the LCA activities, there were five committees formed, one of them is Audit committee. Audit Committee, which consists of 10 members, prepares drafts of National Standards on Auditing. Appointments to the Audit Committee are based on technical knowledge and experience in auditing.


    48. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      The Presidium of the LCA approves the composition of the Audit Committee


    49. What is the term of appointment for members?
      2 Year(s)


    50. For how many years has the standard-setting body been in existence?
      7 Year(s)


    51. Please indicate the budget in US$ of the standard-setting body for the last fiscal year:
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      There is no separate budget for the standard-setting body, only a total budget of the LCA. The members of the Audit Committee are not paid for their work.

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)

      N/A



    52. To what entity is the standard-setting body accountable?
      Parliament has given the LCA the mandate to establish standards through the Law on Audit. There is not a specific accountability mechanism.


    53. Describe the due process followed by the standard-setting body. Please include explanations of the following:
    1. public exposure of standards

      A draft standard, prepared by the Audit Committee, is published in website of the LCA for public comment(usually 3 months). Approved National Standards on Auditing are published on the website of the LCA.

    2. accessibility of meetings (i.e., public or private)

      Meetings are open only to the LCA members(auditors).

    3. approval process for final standards (i.e., majority required to approve final standards)

      A simple majority of vote General Meeting of the LCA Members is required to approve National Standard on Auditing.

    4. other relevant due process activities

      Public hearings concerning draft standards for those who have sent comment letters and other relevant parties.


    54. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      12 Day(s)



    Section 6 -- Ethics


    Responses to questions in this section will provide a description of the legal and professional framework governing ethics standards for accountants in your country. This section focuses on the establishment of such standards. Please indicate the role your organization plays within this framework.

    Section 6A -- Statutory Framework


    55. For each of the following types of professionals, please indicate the name of the Legal authority and/or self-regulatory rules establishing ethics standards for accountants and auditors in your country, the date of the last amendment of such authority or rules and the name of body responsible for setting the ethics standards.
      Type of professional covered Name of
      applicable
      legal
      authority
      Date of last
      amendment
      (e.g. MM/YYYY 06/2001)
      Name of body responsible
      for setting ethics standards
      Professional Accountants in Public Practice Code for Auditors' Professional Ethics 06/2000 Lithuanian Chamber of Auditors (Ethics Committee)
      Professional Accountants in Business
      Professional Accountants in the Public Sector
      Other (please describe)

      a. How can IFAC obtain copies of these documents?

      The Code of Auditors' Professional Ethics is available on the LCA website http://www.lar.lt

      b. Are the documents available in English?
      Yes   No


    Section 6B -- Standard-Setting (Lithuanian Chamber of Auditors (Ethics Committee))


    56. For Lithuanian Chamber of Auditors (Ethics Committee), please indicate the nature of the body (i.e., whether it is part of a government ministry or department, an agency appointed by government, a private organization established by the profession, or other [please describe]) and the name of the standards.
      a. Nature of body

      Public legal entity established by the Law on Audit

      b. Name of standards

      Code of Auditors' Professional Ethics


    57. How many voting members does the standard-setting body have?
      403


    58. Are the members of the standard-setting body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe:


    59. What are the criteria considered in selecting members of the standard-setting body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?
      As of January 2008 the LCA has 403 members. The General Meeting of LCA Members has a right to approve the Code of Auditors' Professional Ethics.
      For performance and coordination of the LCA activities, there were five committees formed, one of them Ethics committee. The Ethics Committee, which consists of 7 members, prepares drafts of Code of Auditors' Professional Ethics. When appointing members to this committee technical skills and experience are considered.

      Our answers to Questions 57 to 66 are confined to the Ethics Committee of the LCA.


    60. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      They are elected in ballots by the General Meeting of the LCA Members.


    61. What is the term of appointment for members?
      2 Year(s)


    62. For how many years has the standard-setting body been in existence?
      7 Year(s)


    63. Please indicate the budget in US$ of the standard-setting body for the last fiscal year:
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      There is no separate budget for the standard-setting body, only the total budget of the LCA. The members of the Ethics Committee are not paid for their work.

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)

      N/A



    64. To what entity is the standard-setting body accountable?
      The Ethics Committee is accountable to the Presidium of the LCA and the General Meeting of LCA Members. The LCA is ultimately accountable to the Parliament through the Law on Audit.


    65. Describe the due process followed by the standard-setting body. Please include explanations of the following:
    1. public exposure of standards

      A draft Standard is published in the website of the LCA for public comment usually 3 months). Approved Standard is published on the website of the LCA.

    2. accessibility of meetings (i.e., public or private)

      Meetings are open only to the members of LCA (auditors).

    3. approval process for final standards (i.e., majority required to approve final standards)

      A simple majority of vote General Meeting of LCA Meeting is required to approve the Code od Auditors' Professional Ethics.

    4. other relevant due process activities



    66. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      12 Day(s)



    Section 7 -- Education


    Responses to questions in this section will provide a description of how education requirements for the profession are established. Please indicate the role your organization plays within this process.

    Section 7A -- Education Requirements


    67. Please describe in general terms the education system in your country including the different stages of education from early childhood education through to tertiary level study. Please indicate which aspects / levels are compulsory as part of the national education system:
      Primary education: 4 years (age 6 - 10)
      Secondary education: 6-8 years (age 10 - 16/18)
      Education until the age of 16 is compulsory in Lithuania.
      Tertiary education: Bachelors degree - 4 years or Masters degree - 6 years.
      Technical colleges [similar to polytechnics ]: minimum 2.5 - 3 years.


    68. Is there a legal authority or regulation that specifies the requirements for an individual to operate as an accountant or auditor in your country?
      Yes   No

      If YES, please provide the name and describe the requirements, including any relating to education, experience or qualifications.

      Law on Audit stipulates requirements for auditors.
      The auditor's title is conferred on the basis of personal request that an applicant 1) is a citizen of the Republic of Lithuania or any European Union member state, 2) has a university degree, 3) has experience of at least 3 years as auditor's assistant with an audit firm, 4) has a good command of the state language, 5) is of sufficient good repute, 6) has passed the auditor's qualification examinations or had his knowledge tested, and 7)has been sworn in as auditor (the Law on Audit, 5 article).
      There are five auditor's qualification examinations of: 1) audit theory and practice, 2) accounting and financial analysis, 3) taxation 4) legal acts regulating the activities of enterprises, 5) other disciplines close to audit (economics, statistics, mathematics, informatics).
      The examination is considered passed if a person scores 65 points of possible 100.


    69. Please select from below all the relevant key levels of requirements to obtain certification from your member body (i.e. to qualify as a certified or chartered accountant) and provide a general description of the requirement.
      Academic requirements
      Professional examinations
      Practical experience
      Final qualifying examination
      Other (please describe)
      Nationality, Language


    70. Which of the following arrangements best describes who establishes the education requirements for the accounting profession in your country? Please select one option.
      A government ministry, department or agency establishes education requirements for the accounting profession with no additional requirements set by the member body(ies).
      A government ministry, department or agency establishes minimum education requirements for the accounting profession, and member body(ies) supplement these requirements.
      Member body(ies) establishes the education requirements for the accounting profession.
      Other (please describe)


    71. Please provide the name(s) of the relevant body in the government ministry, department, agency and / or member body who establishes the education requirements.
      The entrance requiremetns for the qualification and the examination are regulated by the Law on Audit.
      The Ministry of Finance (Accounting Methodology Department) is responsible for preparing drafts of the Law on Audit and submitting them to the Parliament. Amendments of the law have to pass the Lithuanian legislative procedure.

    1. A general description of the role of the relevant body(ies) including how it operates and its due process in establishing the education requirements.

      Amendments of the law have to pass the Lithuanian legislative procedure

    2. How many voting members does the relevant body(ies) have

      N/A

    3. Are the members of the relevant body(ies) involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe:

    4. For how many years has the body been in existence?

      Year(s)


    72. How would you describe the authority that the education requirements have?
      Requirements are legally-based
      Requirements are set in the constitution, by-laws or other rules of the relevant body(ies).
      Requirements are set in member body(ies) policy document(s).
      Other (please describe)

    72 a. How can IFAC obtain copies of these documents?
      http://www.lar.lt

    72 b. Are these documents available in English?
      Yes   No


    73. Are the education requirements for accountants and auditors the same throughout your country, or do they differ among regions, provinces or states?
      Same   Different
      If different, please briefly describe the main differences:


    74. Please indicate the scenario that best describes who delivers the education and examination process for members of the profession. Please only select one option.
      The education program and final examination are delivered by the member body.
      The education program and final examination are delivered by the member body and other education institutions (e.g., universities, colleges, and others).
      The education program and final examination are delivered by education institutions (e.g., universities, colleges, and others).
      Other (please explain) The final exam = LCA, ED prog.=Univ/Colleges


    75. Once qualified as a member of your professional body, can members offer their services directly to the public?
      Yes   No



    Section 7B -- Licensing


    76. Are there licensing requirements for auditors in your country?
      Yes (continue with Question 77)   No (proceed to Section 8)


    77. Who sets the requirements to obtain a license?
      The requirements are set by the Law on Audit


    78. What are the requirements to obtain a license (please select all relevant requirements.)?
      Academic study specific for obtaining a license
      Practical experience
      Licensing examination
      Final qualifying examination
      Other (please describe)
      Nationality and Language


    79. Are there ongoing requirements to retain a license?
      Yes   No

      If YES, please select all relevant requirements.
      Continuing professional development
      Re-examination
      Other (please specify):


    80. What entity grants the license?
      Lithuaniana Chamber of Auditors


    81. Describe any additional licensing requirements for auditors of listed entities (e.g., additional education requirements, registration, etc.).
      The same as to other auditors.



    Section 8 -- Public Sector Accounting Standards


    Responses to this section will provide a description of the legal and professional framework governing public sector accounting standards in your country. The section focuses on the establishment of such standards. Please indicate, where appropriate, the role of your organization within this framework.

    Section 8A -- Statutory Framework


    82. Please provide the name of the Legal authority and/or self-regulatory rules establishing public sector accounting standards in your country, the date of last amendment and the name of the body responsible for setting public sector accounting standards. If the standards are different for different entities (e.g., whole of government, ministry/department, statutory authority/agency, profit entity owned by government, state governments, local governments, other [please specify]), please specify the details that apply to each.
      Type of entity Name of
      legal
      authority
      Date of last
      amendment
      (e.g. MM/YYYY 06/2001)
      Name of body responsible
      for setting public sector
      accounting standards
      Whole of government Accounting Law 06/2007 Ministry of Finance
      Ministry/department
      Statutory authority/agency
      Profit entity owned by government
      State governments
      Local governments
      Other (please describe)
      Other (please describe)

      a. How can IFAC obtain copies of these documents?

      The Public Sector Accounting and Accountability Standards will be operative for the financial statements covering periods beginning on or after 1 January 2009.
      The Public Sector Accounting and Accountability Standards are available on the Ministry of Finance website (http:www.finmin.lt)


      b. Are the documents available in English?
      Yes   No


    Section 8B -- Standard-Setting (Ministry of Finance)


    83. For Ministry of Finance, please indicate the nature of the body (i.e., whether it is part of a government ministry or department, an agency appointed by government, a private organization established by the profession, or other [please describe]) and the name of the standards.
      a. Nature of body

      Government Ministry.

      b. Name of standards

      The Public Sector Accounting and Accountability Standards. the standards will be operative for the financial statements covering periods beginning on or after 1 January 2009.


    84. How many voting members does the standard-setting body have?
      N/A


    85. Are the members of the standard-setting body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe:


    86. What are the criteria considered in selecting members of the standard-setting body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?
      N/A


    87. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      N/A


    88. What is the term of appointment for members?
      Year(s)


    89. For how many years has the standard-setting body been in existence?
      Year(s)


    90. Please indicate the budget in US$ of the standard-setting body for the last fiscal year:
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      N/A

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)

      N/A



    91. To what entity is the standard-setting body accountable?
      N/A


    92. Describe the due process followed by the standard-setting body. Please include explanations of the following:
    1. public exposure of standards



    2. accessibility of meetings (i.e., public or private)



    3. approval process for final standards (i.e., majority required to approve final standards)

      The Public Sector Accounting and Accountability are approved by the order of Minister of Finance.

    4. other relevant due process activities



    93. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      Day(s)



    Section 9 -- Private Sector Accounting Standards


    Responses to the questions in this section will provide a description of the legal, statutory and professional framework governing private-sector accounting standards in your country. The section focuses on the establishment of such standards. Please indicate what role your organization plays within this framework.

    Section 9A -- Statutory Framework


    94. Please provide the name of the Legal authority and/or self-regulatory rules that establish private-sector accounting standards in your country, the date of last amendment, and the name of the body responsible for setting private sector accounting standards. If the standards are different for different entities (for example, listed entities, private companies, governmental organization, not for profit organizations, etc.), please specify the requirements that apply to each.
      Type of entity Name of legal
      authority or
      applicable
      rules
      Date of last
      amendment
      (e.g. MM/YYYY 06/2001)
      Name of body responsible
      for setting private sector
      accounting standards
      Listed entity Accounting Law 06/2007 The Institute of Accounting of the Republic of Lithuania.
      Other (please describe)
      Other (please describe)
      Other (please describe)
      Other (please describe)

      a. How can IFAC obtain copies of these documents?

      The Business accounting standards are available on the Institute of Accounting of the Republic of Lithuania website: http://www.apskaitosinstitutas.lt/main_eng.php?category=43&number=1.

      b. Are the documents available in English?
      Yes   No


    Section 9B -- Standard-Setting (The Institute of Accounting of the Republic of Lithuania.)


    95. For The Institute of Accounting of the Republic of Lithuania., please indicate the nature of the body (i.e., whether it is part of a government ministry or department, an agency appointed by government, a private organization established by the profession, or other [please describe]) and the name of the standards.
      a. Nature of body

      Public establishment; only founder is the Ministry of Finance.

      b. Name of standards

      Business accounting standards


    96. How many voting members does the standard-setting body have?
      9


    97. Are the members of the standard-setting body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe: 6 volunteers and 3 employed


    98. What are the criteria considered in selecting members of the standard-setting body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?
      The respective institution assigns its civil servant to represent the institution in the Standards Board. 2 members are delegated by the LCA, others 4 delegated by


    99. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      The members of the Board of Standards were elected by the General Meeting of Founders


    100. What is the term of appointment for members?
      3 Year(s)


    101. For how many years has the standard-setting body been in existence?
      5 Year(s)


    102. Please indicate the budget in US$ of the standard-setting body for the last fiscal year:
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      N/A

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)

      N/A



    103. To what entity is the standard-setting body accountable?
      Ministry of Finance


    104. Describe the due process followed by the standard-setting body. Please include explanations of the following:
    1. public exposure of standards

      Approved text of Business accounting standards is presented in the Official Gazette "Valstybes Zinios"

    2. accessibility of meetings (i.e., public or private)



    3. approval process for final standards (i.e., majority required to approve final standards)



    4. other relevant due process activities

      Prepared a Draft Standard (by the staff of the Accounting Institute) is discussed in the Standards Board. After that the Draft standard is announced for public comments and provided to the Ministry of Finance for the comments too. No less than 30 days are given for the comments. Then all submitted comments are discussed in meeting of the Board and after the voting through of the majority of the members of the Board, the Director of the Institute approves the Standard and publishes in the official paper


    105. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      50 Day(s)



    Section 10 -- Monitoring (Quality Assurance) and Enforcement


    Responses to the questions in this section will provide a description of the legal and professional framework governing regulation of the profession in your country. Please indicate what role your organization plays within this framework.

    Section 10A -- Securities Market Regulatory Authority


    106. Name the authority that regulates the securities market:
      Securities Commission of the Republic of Lithuania


    107. What responsibilities does this organization have for monitoring and enforcing compliance with accounting, reporting or auditing requirements? Please identify the Legal authority that establishes that responsibility:
      Law on Audit , Law on Securities
      Securities Commission may set additional independence requirements for auditors and audit firms. The Law on Securities stipulates requirements to a composition of issuer's annual information.


    108. Briefly describe the role of the regulatory authority as it relates to the following:
    1. regulation of the audit profession

      The Securities Commission of the Republic of Lithuania is not directly involved in regulation of the audit profession. According to the Law on Audit a representative of the Securities Commission is involved in the activities of the Audit Quality Control Committee of the LCA.

    2. accounting and auditing standard-setting

      The institution responsible for the drawing up of the Business Accounting Standards and the interpretation thereof is the Institute of Accounting of the Republic of Lithuania. A representative of the Securities Commission is one of the 9 members of the Standards Board.
      The Law on Securities stipulates requirements to a composition of issuer


    3. review of financial statements prepared by listed entities, and monitoring of their compliance with the accounting and disclosure requirements

      The financial statements of issuers are submitted to the Securities Commission as a constituent part of the periodic reports and the issue prospectus of the issuers. Regular review is exercised to ensure the timely submission by the issuers of financial statements and the correspondence of the published annual accounts with the audited annual accounts, also the provision of all financial statements in accordance with the requirements set forth in the IAS, the presence of obvious irregularities or errors, etc. In case of any comments or established shortcomings the issuer is then presented a letter or contacted by telephone, and requested to explain the discrepancies or inconsistencies and submit additional data, or correct the errors of technical character. In the face of the obvious infringements of the accounting procedures the issuer is obligated to provide for additional risk factors. The Securities Commission is however in no position to obligate the issuer to draw the financial statements containing errors anew or specifically impose sanctions for the diversion from the normal accounting procedures.



    Section 10B -- Stock Exchange


    109. Name the four largest stock exchangers (by market capitalization) and whether it is organized as a profit or not-for-profit organization:
      Profit Not
      for
      profit
      Stock Exchange
      Vilnius Stock Exchange



    Section 10B -- Stock Exchange
    Vilnius Stock Exchange Details


    110. For Vilnius Stock Exchange, is there a mechanism at the stock exchange(s) for monitoring and enforcing financial reporting, accounting and auditing of listed entities?
      Yes   No

      If YES, please describe the following:

    1. How the monitoring and enforcement of financial reporting, accounting and auditing is conducted.



    2. The consequences of non-compliance with the financial reporting, accounting or auditing requirements.



    3. How enforcement actions are administered.




    Section 10C -- Regulatory Oversight of the Accounting Profession


    111. Has an audit profession oversight body been established (e.g., to oversee the external quality assurance review process, etc.)?
      Yes   No

      If NO, proceed to the next section.

      If YES, please describe :

    1. What are the name and duties of the oversight body?

      The following relates to auditors only:

      The Audit Quality Control Committee under the lCA was founded in September 2002 for audit quality assurance, analysis and evaluation. The Committee prepared the quality assurance control methods for auditors as well as audit firms; besides, 9 auditors-inspectors were prepared and audit quality assurance inspections started since July, 2003


    2. The number of members on the oversight body

      Audit Quality Control Committee consists of 9 members. Most of them can not be auditors. The LCA appoints 3 members, while the Ministry of Finance, the Bank of Lithuania, Insurance Supervisory Commission of the Republic of Lithuania, Securities Commission of the Republic of Lithuania, the organizations uniting entrepreneurs and / or their self-governance organisations as well the organisations of scientists shall appoint 1 member each. The Chairman of the Committee is appointed and the composition of the Committee is approved by the Minister of Finance. The Chairman can not be the member of the Presidium. Each member of the Audit Quality control Committee is appointed for a period of 3 years. The same person may not be appointed as a member of the Audit Quality Control Committee for more than two consecutive terms.

    3. Its powers

      The Audit Quality Control Committee has the following functions:
      1) coordinate quality assurance of auditors and audit firms;
      2) analyse the material of reviews carried out by auditors inspectors;
      3) examine the received statements and complaints about the improperly performed audit;
      4) draw up and approve plans for annual reviews of activities of auditors and audit firms;
      5) coordinate the reviews carried out by auditors inspectors, examine and sum up the results of reviews carried out by auditors inspectors;
      6) submit proposals to the LCA regarding improvement of audit methodology;
      7) prepare and submit to the LCA for approval the methodology for quality assurance for auditors and audit firms (methodology for the evaluation of review results, rules for the examination of complaints about audit quality, etc.);
      8) review compliance of the audit performance with this Law and other legal acts regulating audit as well as with the National or International Accounting Standards;
      9) upon establishing negative outcomes of quality reviews impose disciplinary penalties and take decisions;
      10) provide information to the Ministry of Finance;
      11) annually report at the General Meeting of the LCA members of on the activities. The quality reviews of auditors and audit firms carried out shall be evaluated in the report (giving the number of the performed reviews, their results, etc.).


    4. How the oversight body conducts or oversees a program of inspections to assess the degree of compliance of each audit firm/auditor with applicable auditing standards and regulations

      Such quality assurance is binding to all auditors and audit firms. Inspections of auditors and audit firms must be performed at least one in five years. The inspections are performed in compliance with a special quality assurance action plan, as well as complaints and applications and/or any information received from the third parties.
      The action plan for inspections of auditors and audit firms activities is prepared and approved by the Audit Quality Control Committee before Mach 1 of each current year. Quality assurance inspections are performed according to questionnaires prepared especially for this purpose.


    5. The sanctions the oversight body may impose in the event of non-compliance

      The Audit Quality Control Committee may impose such sanctions as a notice, a reprimand, a reprimand with the publication thereof on the website of the LCA, an order to improve professional qualification additionally in the LCA. For significant or repeatedly established violations of quality of audit performance the Committee may apply to the Auditors

    6. How the oversight body is accountable to any public institution or body

      The Audit Quality Control Committee has to report once a year at the General Meeting of LCA Members; and to submit an information on function implementation of supervision of auditors and audit firms activities to the Ministry of Finance twice a year, before 1 June and December 1, annually.


    Section 10D -- Banks Regulatory Authority


    112. Name the authority that regulates the banks and similar financial institutions. Discuss how this authority differentiates between accounting requirements for regulatory reporting and general purpose external financial reporting:
      Bank of Lithuania


    113. Discuss briefly the legal requirements with respect to monitoring and enforcement by the regulatory authority of accounting and auditing standards that apply to the banks and similar financial institutions:
      The Law on Banks


    114. Briefly describe the role of the regulatory authority as it relates to the following:
    1. regulation of the audit profession

      The Bank of Lithuania (BOL) does not impose any regulations for the audit profession. According to the Law on Audit a representative of the Bank of Lithuania is involved in the activities of the Audit Quality Control Committee of the LCA.

    2. accounting and auditing standard-setting

      The Bank of Lithuania establishes principles and procedures on financial accounting and reporting in its ambit (Law on the Bank of Lithuania).

    3. review of financial statements prepared by listed entities

      The Bank of Lithuania does not perform the review of Statutory Financial Statements and relies on Statutory Auditors opinion. Nevertheless, it is monitoring of compliance with the accounting and disclosure requirements established for prudential purposes.

    4. enforcement of accounting, reporting and auditing requirements

      Financial statements of banks and similar financial institutions are a source of information for the regulatory authority. The Bank of Lithuania establish principles and The enforcement covers only accounting and reporting requirements established for prudential purposes. The Law on Banks (Article 74) stipulates: The BOL has the right to impose the following penalties on a bank or a branch of a foreign bank: 1) for a failure to supply the information or documents specified or requested by this Law or legal acts of the supervisory institution within the fixed time limit or for the supply of incorrect information - up to 0,5 per cent of annual gross income; 2) for a failure to carry out the instructions given by the supervisory institution in accordance with this Law or for improper carrying out thereof



    Section 10E -- Non-Banking Financial Institutions Regulatory Authority


    115. Name the regulatory authority(ies) responsible for monitoring compliance with and enforcing accounting, reporting and auditing requirements imposed on non-banking institutions.
      The Bank of Lithuania, Insurance Supervisory Commission of the Republic of Lithuania, Lithuanian Securities Commission


    116. What is the source of Legal authority of the regulatory authority(ies)?
      Law on Banks, Law on Financial institutions, Law on Insurance.


    117. Briefly describe the role of the regulatory authority(ies) as it relates to the following:
    1. regulation of the audit profession



    2. accounting and auditing standard-setting



    3. review of financial statements prepared by listed entities

      The regulatory authorities do not perform a review in the general sense, but only in as far as is necessary for their regulatory function.

    4. enforcement of accounting, reporting and auditing requirements




    Section 10F -- Insurance Companies Regulatory Authority


    118. Name the regulatory authority responsible for monitoring compliance with and enforcing accounting, reporting and auditing requirements imposed on insurance companies.
      Insurance Supervisory Commission of the Republic of Lithuania


    119. What is the source of Legal authority of the regulatory authority(ies)?
      The Law on Insurance


    120. Briefly describe the role of the regulatory authority(ies) as it relates to the following
    1. regulation of the audit profession

      The Insurance Supervisory Commission does not impose any regulations for the audit profession. According to the Law on Audit a representative of the Insurance Supervisory Commission is involved in the activities of the Audit Quality Control Committee of the LCA.

    2. accounting and auditing standard-setting

      A representative of the Insurance Supervisory Commission is one of the 9 members of the Standards Board of the Accounting Institute. The Securities Commission is not involved in auditing standard setting process.

    3. review of financial statements prepared by listed listed entities

      The Insurance Supervisory Commission of the Republic of Lithuania does not perform a review in the general sense, but only in as far as is necessary for its regulatory function.

    4. enforcement of accounting, reporting and auditing requirements

      The Insurance Supervisory Commission of the Republic of Lithuania has to draft, approve, amend, and repeal legal acts regulating activities of insurance undertakings, insurance intermediaries, branches of non-member-country insurance undertakings and branches of companies of independent insurance intermediaries established in the Republic of Lithuania, including financial and statistical accounts.



    Section 10G -- Other Regulatory Authority


    121. Name any other regulatory authority(ies) responsible for monitoring compliance with and enforcing accounting, reporting and auditing requirements.
      Accounting and Audit division of Accounting methodology department of the Ministry of Finance


    122. What is the source of Legal authority of each regulatory authority?
      The same laws as mentioned above (Law on Accounting, Law on Financial Statements of Entities, Law on Consolidated Financial Accounts


    123. Briefly describe the role of the regulatory authority(ies) as it relates to the following
    1. regulation of the audit profession



    2. accounting and auditing standard-setting

      Accounting and Audit division of Accounting methodology department of Ministry of Finance is responsible for the legislation concerning accounts, audit of accounts and related areas.

    3. review of financial statements prepared by listed listed entities



    4. enforcement of accounting, reporting and auditing requirements




    Section 10H -- Quality Assurance


    124. Does any organization of professional accountants/auditors organize a program of quality assurance review to monitor compliance with accounting, reporting and auditing requirements?
      Yes   No

      If NO, proceed to next Section.

      If YES, briefly describe the monitoring and enforcement mechanism.

      See Section 10C.



    125. Under what authority does the organization conduct the program of quality assurance review?
      See Section 10C.


    126. Who performs the review (e.g., one firm reviewing another firm, staff from the national professional organization, contractors, or a combination of these)?
      Quality assurance reviews are carried out by auditor



    Section 10 I -- Investigation and Discipline


    127. Is there a process for investigating and disciplining the accounting profession in your country?

    128. Which of the following best describes the responsibility for the investigatory and disciplinary function in your country?
      Government or other agencies are solely responsible for this function.
      Government or other agencies have this responsibility, but the member body or bodies participate in the process.
      Government formally delegates this function to the member body or bodies, to exercise on its behalf.
      Member body or bodies have separate and independent processes that operate alongside processes of legal authorities.
      Other (please explain)


    129. Please indicate the name of the body or bodies responsible for investigation and discipline.
      The Auditors' Court of Honour investigates breaches of provisions of The Law an Audit, the Code of Auditors' Professional Ethics, violations of audit quality or professional activity.
      The Auditors



    Responses to the remaining questions in this Section are required if your organization has responsibility for investigation and disciplinary actions.

    130. How many voting members does the body have?
      7


    131. Are the members of the body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe:


    132. What are the criteria considered in selecting members of the body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?
      The General Meeting of Members shall elect 3 members to the Auditors' Court of Honour. Auditors appointed as members of the Auditors


    133. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      The General Meeting of Members shall elect 3 members.


    134. What is the term of appointment for members?
      3 Year(s)


    135. For how many years has the body been in existence?
      7 Year(s)


    136. Please indicate the budget in US$ of the body for the last fiscal year.
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      There is no separate budget for the Auditors

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)

      (specify currency)



    137. To what entity is the body accountable?
      The General Meeting of LCA


    138. Approximately how many days per year does the body meet in full session (including teleconferences)?
      6 Day(s)



     

     

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