Estonian Auditors’ Association

Member | Established: 1999 | Member since 2004

The Estonian Auditors' Association (EAA) is a public-private network of over 150 audit firms and 350 individual auditors, standing for a reliable business environment in Estonia. It is the only legally recognized, self-governing PAO in the country. Membership in the association for all certified auditors desiring to practice the audit profession is compulsory. The EAA (i) seeks to be a leader in initiatives supporting the development of Estonia as a smart economy with a competitive and transparent business and investment environment, (ii) leads and participates in public discussions in order to increase public awareness of the auditors’ value proposal, (ii) cooperates closely with different interest groups, state authorities and business organizations, (iv) contributes to the development of the financial regulatory and legal framework, (v) supports provision of high-quality assurance services by organizing trainings for professionals, exchange of information, networking, and oversight of the audit profession.

EAA is a member of IFAC as well as an associate member of Accountancy Europe.

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Statements of Membership Obligation (SMO)

The Statements of Membership Obligations form the basis of the IFAC Member Compliance Program. They serve as a framework for credible and high-quality professional accountancy organizations focused on serving the public interest by adopting, or otherwise incorporating, and supporting implementation of international standards and maintaining adequate enforcement mechanisms to ensure the professional behavior of their individual members.

Last updated: 08/2022
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SMO Action Plan

Status of Fulfillment by SMO

  • SMO 1: Quality Assurance

    The 2017 Auditors Activities Act authorizes the Auditors Activities Oversight Council (AAOC) the mission of public oversight of the audit profession and the AAOC is responsible for carrying out QA reviews of all audits in the jurisdiction.

    EAA reports that the QA review system in place meets the SMO 1 best practices and the consistency and effectiveness of QA system is under continuous monitoring and review. The EAA cooperates with AAOC in this regard. The association provides members with a variety of guidelines, sample forms, manuals, and checklists that are updated annually to prepare for QA reviews along with offering voluntary inspections to support auditors in advance of formal reviews. Based on the results of the AAOC’s QA reviews — available on EAA’s website—EAA will organize trainings for members within the CPD calendar. EAA also notes that QA reviewers receive additional training to carry out their function.

    The association is translating the ISQM 1 and 2 standards and expects these to be approved for adoption by the end of 2022.

    Previously, the EAA carried out all QA reviews under the direction and supervision of the AAOC. When EAA did carry out QA reviews, it maintained two full-time QA specialists to develop a high quality, standardized QA inspection program that met the SMO 1 best practices.

    The EAA has demonstrated an ongoing process to maintain its level of fulfillment with the SMO 1 obligations and is committed to continuous review & improvement.

    Current Status: Sustain

  • SMO 2: International Education Standards

    The Auditors Activities Act stipulates the initial and continuing professional development (IPD and CPD) requirements to practice as an auditor in Estonia, which include a Bachelor’s degree or other equivalent higher education, three year’s practical experience, and passing professional examinations. Professional examinations for auditors are organized by the Auditors Activities Oversight Council (AAOC) with the examination program & questions ultimately approved by the Ministry of Finance (MoF).

    The EAA states that it uses its best endeavors to ensure the national requirements incorporate the IES. It supports the MoF in creating exam questions (there are eight exams that candidates must pass on varying topics) as well as with the continuous monitoring and feedback of examination results. Candidates for EAA membership must fulfill their practical experience under the supervision of another EAA member firm.

    The EAA states that the Estonian university education system and curricula provide the technical competence, professional skills and practical experience needed for the entry into the profession – in line with the IES requirements. EAA has actively engaged with the four largest universities to promote accounting curricula and support accounting students. Auditing courses have been added to Master programs and at the end of 2022, a new master’s program will launch on Risk Management at the University of Tartu. Lecturers will be EAA members.

    With regards to IES 7—8, EAA is responsible for organizing and monitoring CPD of auditors in Estonia which is aligned with the IES requirements at 120 credits over three years. Members must submit an annual activity report detailing the fulfillment of their CPD obligations. EAA reports that it is continuously evaluating and updating its training program for the auditors to reflect the changing local regulations and expectations of the society.

    EAA has demonstrated its best efforts to review & improve its actions as related to the SMO 2 obligations. As part of continuing to promote the IES to all relevant stakeholders, EAA could utilize the IFAC Accountancy Education E-Tool and may considering completing the IES Checklist developed by IFAC as part of its efforts.

    Current Status: Review & Improve

  • SMO 3: International Standards on Auditing

    The Auditors Activities Act specifies the basis of auditing as international standards (IAASB standards). The Auditors Activities Oversight Council has legal responsibility for auditing standard-setting in Estonia. However, for any regulation to have legal effect in Estonia it must be translated into Estonian.

    In 2016, the Estonian Association of Auditors (EAA) was delegated the responsibility of standards’ translation. The association has an annual screening process of IAASB pronouncements and has developed a process for timely translations of standards. EAA has translated all ISA that are applicable for audits on or after December 15, 2021 (i.e., the 2020 ISA).

    To further implementation, EAA’s Methodology Committee provides members with the latest standards on its website along with guides and examples of best practice. It also works to ensure inclusion of changes and developments to the ISA in the auditors’ final examination and initial professional development program. Additionally, as the entity responsible for provision of continuing professional development (CPD), the EAA strives to update CPD programs and seminars appropriately to embody standards’ updates and address any emerging themes / issues.

    The EAA has demonstrated an ongoing process to maintain its level of fulfillment with the SMO 3 obligations and is committed to continuous review & improvement.

    Current Status: Sustain

  • SMO 4: Code of Ethics for Professional Accountants

    The Auditors Activities Act specifies that auditors must comply with the requirements in the IESBA Code of Ethics. The Auditors Activities Oversight Council has legal responsibility for ethical standard-setting in Estonia. However, for any regulation to have legal effect in Estonia it must be translated into Estonian. In 2016, the Estonian Association of Auditors (EAA) was delegated the responsibility of standards’ translation and the association translated the 2018 International Code of Ethics for Professional Accountants – including independence standards. The EAA plans to start translation of the 2021 International Code of Ethics in 2022.

    The EAA’s Methodology Committee monitors developments to the IESBA Code and will determine the necessary amendments to the Estonian translation to maintain alignment with the IESBA Code on an ongoing basis.

    In addition to supporting translations and monitoring amendments, the EAA reports that it conducts trainings on the Code of Ethics and has incorporated these into its formal CPD program, other seminars, and will issue written communications as needed regarding ethic topics.

    The 2021 version of the International Code of Ethics is now available, which includes recent revisions to Part 4B to align with ISAE 3000 revised and Part 1 & 2 on the role and mindset of professionals. EAA should raise awareness on this latest version that came into effect in 2021, as well as the revisions that will become effective throughout 2022 (i.e., non-assurance services, fee provisions, and objectivity of an engagement quality reviewer). EAA is encouraged to continue efforts to include updated ethical questions and issues in the development of the professional examination as well as to encourage university programs to cover ethical subjects as part of their curricula.

    Current Status: Sustain

  • SMO 5: International Public Sector Accounting Standards

    Government entities in Estonia utilize General Rules for State Accounting (GRSA) which is issued by the Ministry of Finance, and is based on the Estonian GAAP and the International Public Sector Accounting Standards (IPSAS). Since 2004, a full accrual accounting and reporting system with reference to the IPSAS has been implemented in Estonia although the Estonian Auditors’ Association indicates that there are some areas where simplified application or non-application of the IPSAS has been opted for. According to the Accrual Practices and Reform Experiences in OECD Countries, accrual budgeting was set to be implemented in 2017.

    EAA reports that it has evaluated ways to comply with the requirements of SMO 5 and, apart from its general intention to promote IPSAS, does not deem further involvement in public sector accounting matters to be feasible at this time.

    Current Status: Sustain

  • SMO 6: Investigation and Discipline

    The 2017 Auditors Activities Act establishes an investigation and disciplinary system (I&D) system for auditors, which is handled by the Auditors Activities Oversight Council (AAOC).

    Effective 2021, the AAOC has issued updated procedures regarding investigations of complaints and disciplinary proceedings. The Estonian Association of Auditors (EAA) indicates that the AAOC’s procedures are aligned with the SMO 6 best practices. For some components (i.e., timeframe targets for handling cases; monitoring progress with cases; and independent review of complaints with no follow-up), the EAA notes that there are no specific written policies, but the AAOC can carry out these functions as needed.

    Previously, most case proceedings were carried out by the EAA, and the decision (including the chosen disciplinary punishment) was approved by the AAOC. The EAA indicates it monitored the efficiency and effectiveness of the system on an ongoing basis. In addition, the association states that it incorporated the relevant topics in relation with auditors’ and auditing firms’ rights and obligations into training programs, lectures and written communications and provides the necessary counseling for its members.

    The association may encourage the AAOC to formalize certain administrative procedures & public interest considerations related to its I&D system as outlined in the SMO 6 best practices.

    Current Status: Sustain

  • SMO 7: International Financial Reporting Standards

    IFRS as adopted by the EU are required for the consolidated financial statements of all European companies whose debt or equity securities trade in a regulated market in Estonia.  In addition to listed companies, IFRS as adopted by the EU are required to be applied by credit institutions, insurance undertakings, financial holding companies, mixed financial holding companies, and investment firms – which are considered public interest entities in the jurisdiction. All other Estonian companies can choose whether to prepare their consolidated and annual accounts in accordance with IFRS as adopted by the EU or in accordance with the Estonian Accounting Standards (Estonian Generally Accepted Accounting Principles — Estonian GAAP) as promulgated by the Estonian Accounting Standards Board (EASB). Estonian GAAP (effective from 2013) is based on IFRS for Small and Medium-sized Entities (IFRS for SMEs) with limited differences from IFRS for SMEs with regard to accounting policies as well as disclosure requirements.

    EAA reports that it supports its members in understanding and implementing IFRS and Estonian GAAP through training, lectures, and written communications. EAA has at least one training on IFRS updates per year.

    The EAA has demonstrated an ongoing process to maintain its level of fulfillment with the SMO 7 obligations and is committed to continuous review & improvement.

    Current Status: Sustain


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