Lithuanian Association of Accountants and Auditors

In Lithuania, responsibility for the adoption and implementation of the quality assurance (QA) review system is shared between the Authority of Audit, Accounting, Property Valuation and Insolvency Management (AAAPVIM) and the Lithuanian Chamber of Auditors (LCA). AAAPVIM is responsible for QA reviews of public interest entity audits, while LCA performs QA reviews for non-public interest entity audits under public oversight. The QA review system is operational and LCA reports that it is aligned with the requirements of SMO 1.

The Lithuanian Association of Accountants and Auditors (LAAA) has no direct responsibility for the statutory audit QA system, as its membership is primarily composed of professional accountants. Within its mandate, LAAA has established a quality control system for members, including a Quality Control Committee responsible for review procedures, member reviews at least every six years, and recommendations and guidance to members. LAAA has also incorporated data protection and anti-money laundering policies into its quality reviews and has used quality review results to recognize members for high-quality services and professionalism.

LAAA continues to use its best endeavors to support quality in the profession by monitoring developments in quality management standards, sharing relevant updates with members, and maintaining quality control activities proportionate to its membership and mandate.

Current Status: Sustain

In Lithuania, Audit Law No. VIII-1227 of 1999 establishes initial professional development and continuing professional development requirements for certified auditors. Other professional accountants are not regulated at the state level. The Lithuanian Association of Accountants and Auditors (LAAA), within the scope of its mandate, establishes education, practical experience, examination, and continuing professional development requirements for members seeking the Professional Accountant designation.

LAAA requires members to complete 120 hours of continuing professional development over a three-year period and organizes training activities throughout the year. Its Training and Professional Activities Committee monitors member compliance, and LAAA reports that its training and examination programs are updated to reflect International Education Standards and relevant changes in European Union and Lithuanian legislation.

LAAA continues to support professional development through training for candidates and members, including updates on accounting, tax, and regulatory developments. However, as professional accountants are not regulated at the jurisdiction level and further evidence is needed that education requirements for all aspiring and professional accountants are fully aligned with the current International Education Standards, fulfillment of SMO 2 remains assessed as Review & Improve.

LAAA is encouraged to continue reviewing its education and continuing professional development requirements against the current International Education Standards and to document related updates in its SMO Action Plan.

Current Status: Review & Improve

Audit Law No. VIII-1227 of 1999 requires statutory audits in Lithuania to be conducted in accordance with International Standards on Auditing (ISA) as issued by the International Auditing and Assurance Standards Board. The Authority of Audit, Accounting, Property Valuation and Insolvency Management (AAAPVIM), as the public oversight authority, is responsible for translating ISA and publishing them for application in the jurisdiction. AAAPVIM has translated and published ISA effective as of December 15, 2023.

The Lithuanian Association of Accountants and Auditors (LAAA) has no direct responsibility for the adoption of auditing standards, and most of its members are not statutory auditors. Within the scope of its mandate, LAAA supports implementation by informing members and stakeholders of developments in ISA and participating in consultations on audit and assurance-related matters.

Considering LAAA’s membership composition and limited authority in this area, it has demonstrated sustained use of best endeavors to support the adoption and implementation of ISA. Accordingly, fulfillment of SMO 3 remains assessed as Sustain.

Current Status: Sustain

In Lithuania, Audit Law No. VIII-1227 of 1999 requires certified auditors to comply with the International Code of Ethics for Professional Accountants, including International Independence Standards, issued by the International Ethics Standards Board for Accountants. The Authority of Audit, Accounting, Property Valuation and Insolvency Management (AAAPVIM) is responsible for translating and publishing the Code, and the 2023 Handbook has been translated and published for application in the jurisdiction.

The Lithuanian Association of Accountants and Auditors (LAAA), which unites accountants on a voluntary basis, has established ethical requirements for its members through the Decalogue of LAAA Ethics Standards and requires members to adhere to the Lithuanian translation of the Code published by AAAPVIM. LAAA has an Ethics Committee responsible for monitoring changes to the Code, maintaining a help line, and processing misconduct complaints. LAAA also supports implementation through ethics-related training and dialogue with stakeholders.

While LAAA demonstrates ongoing activities to support ethics implementation among its members, the latest Handbook has not yet been adopted and translated in Lithuania. Accordingly, fulfillment of SMO 4 is assessed as Review & Improve.

LAAA is encouraged to continue monitoring revisions to the Code, support timely adoption and dissemination of the latest Handbook once available in Lithuanian, and document related implementation activities in its SMO Action Plan.

Current Status: Review & Improve

The Ministry of Finance is responsible for establishing public sector accounting and reporting standards in Lithuania. Since 2010, public sector entities at the state and municipal levels have been required to apply National Public Sector Accounting and Reporting Standards. The Ministry of Finance confirms that the public sector accounting reform introduced accrual-basis accounting, and the International Public Sector Financial Accountability Index identifies Lithuania’s framework as accrual-basis International Public Sector Accounting Standards modified for the national context.

The Lithuanian Association of Accountants and Auditors (LAAA) has no direct responsibility for public sector standard-setting. Within the scope of its mandate, LAAA supports implementation by monitoring developments related to IPSAS, participating in technical discussions with the Ministry of Finance and other public authorities, and communicating relevant updates to members. LAAA’s ongoing activities demonstrate sustained use of best endeavors to support public sector accounting developments in the jurisdiction.

Considering LAAA’s mandate, membership composition, and the jurisdiction’s accrual-basis IPSAS-modified framework, fulfillment of SMO 5 is assessed as Sustain.

Current Status: Sustain

The Lithuanian Association of Accountants and Auditors (LAAA) is responsible for implementing an investigation and discipline (I&D) system for its members and reports that its procedures correspond with the requirements of Statement of Membership Obligations 6. The system includes a Quality Control Committee to investigate complaints, an Ethics Committee to review conclusions and issue sanctions, and an Appeal Work Group to consider appeals. LAAA also requires candidates sitting for its examinations to attest that they are aware of the I&D procedures for misconduct or non-compliance.

LAAA has demonstrated that the system is operational, including through disciplinary actions taken in 2022 and 2023, when three members were expelled for non-compliance with the Code of Ethics. LAAA also maintains an Ethics Committee to address matters related to the application of the Code of Ethics and supports awareness of the I&D process among members and the business community.

Considering LAAA’s direct responsibility for its member-level I&D system, the existence of investigation, discipline, and appeal mechanisms, and evidence that the system is operational and subject to ongoing awareness activities, fulfillment of SMO 6 is assessed as Sustain.

Current Status: Sustain

Lithuania’s financial reporting framework requires entities whose securities are traded on a regulated market and that prepare consolidated financial statements to apply International Financial Reporting Standards (IFRS) as adopted by the European Union. The Ministry of Finance is responsible for developing accounting legislation and approving Lithuanian Business Accounting Standards, which are prepared in compliance with European Union law and International Accounting Standards.

The Lithuanian Association of Accountants and Auditors (LAAA) has no direct responsibility for the adoption of IFRS. Within the scope of its mandate, LAAA supports implementation by organizing seminars on IFRS updates, disseminating information to members, developing guidance on IFRS-related technical matters, and participating in legislative processes and projects related to the application of IFRS in Lithuania.

LAAA has demonstrated sustained use of best endeavors to support adoption and implementation of IFRS. Accordingly, fulfillment of SMO 7 remains assessed as Sustain.

Current Status: Sustain