Lithuanian Chamber of 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. LCA reports that the QA review system in the jurisdiction is aligned with the requirements of Statement of Membership Obligations 1.

LCA continues to support the operation and improvement of the QA system through regular updates to QA review questionnaires, training and information sessions for auditors, and cooperation with AAAPVIM on quality management implementation. LCA has also supported implementation of International Standard on Quality Management 1 and International Standard on Quality Management 2, including through working group activities, training for firms, and cooperation with AAAPVIM on reviewer training.

Considering LCA’s shared responsibility for the QA review system, its role in reviews of non-public interest entity audits, and its sustained activities to support implementation and improvement of quality management requirements, fulfillment of SMO 1 is assessed as Sustain.

Current Status: Sustain

Audit Law No. VIII-1227 of 1999 establishes initial professional development and continuing professional development requirements for certified auditors and authorizes the Lithuanian Chamber of Auditors (LCA) to implement these requirements under the oversight of the Authority of Audit, Accounting, Property Valuation and Insolvency Management (AAAPVIM). Candidates for the certified auditor designation must meet education and practical experience requirements and pass professional examinations. LCA has established examination-related committees to update examinations in response to current standards, skills, market trends, and professional competencies.

LCA requires certified auditors to complete 120 hours of continuing professional development over a three-year period, organizes training throughout the year, and monitors members’ compliance. LCA reports that its continuing professional development program is updated annually and includes compulsory and general education topics, including International Standards on Auditing.

Within its remit, LCA has demonstrated ongoing activities to implement and improve education, examination, and continuing professional development requirements for certified auditors. However, further clarification is needed on how the requirements are fully aligned with the current International Education Standards, including recent revisions related to information and communications technologies, professional skepticism, and sustainability-related learning outcomes. Accordingly, fulfillment of SMO 2 is assessed as Review & Improve.

LCA 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 Chamber of Auditors (LCA) has a direct role in supporting ISA implementation by developing guidance and templates for auditors, making relevant small and medium practices guidance available in Lithuanian, providing continuing professional development courses, and monitoring compliance through quality assurance reviews. LCA also cooperates with regulators on sector-specific audit guidance and encourages members to provide input on exposure drafts and other pronouncements issued by the IAASB.

Considering LCA’s role in supporting implementation, guidance, training, monitoring, and standard-setting input, fulfillment of SMO 3 is assessed as Sustain.

Current Status: Sustain

Audit Law No. VIII-1227 of 1999 requires certified auditors in Lithuania 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), as the public oversight authority, is responsible for translating and publishing the Code. The 2023 Handbook has been translated into Lithuanian and published by AAAPVIM.

The Lithuanian Chamber of Auditors (LCA), as the professional organization for certified auditors, supports implementation of the Code through member communications, annual ethics-related training, and responses to member inquiries through its Ethics Committee. LCA also monitors member compliance with the Code and has a Court of Honor responsible for considering ethics-related matters and imposing sanctions where appropriate.

Considering LCA’s mandate and ongoing activities to support implementation, monitoring, and enforcement of ethics requirements for certified auditors, fulfillment of SMO 4 is assessed as Sustain.

LCA is encouraged to continue cooperating with AAAPVIM to support timely adoption, translation, communication, and implementation of the latest revisions to the International Code of Ethics for Professional Accountants.

Current Status: Sustain

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 provides methodological guidance for public sector 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 Chamber of Auditors (LCA) has no direct responsibility for public sector standard-setting. Within the scope of its mandate, LCA uses its best endeavors by participating in the National Public Sector Accounting and Reporting Standards Committee and cooperating with the Ministry of Finance, including through comments on NPSAS via its Accountancy and Tax Committee.

Considering LCA’s mandate, membership composition, and sustained engagement with the Ministry of Finance on public sector accounting matters, fulfillment of SMO 5 is assessed as Sustain.

Current Status: Sustain

In Lithuania, a mandatory investigation and discipline (I&D) system for certified auditors is established under Audit Law No. VIII-1227 of 1999. Responsibility for implementation is shared between the Authority of Audit, Accounting, Property Valuation and Insolvency Management (AAAPVIM) and the Lithuanian Chamber of Auditors (LCA). LCA is legally responsible for establishing I&D systems for auditors in cooperation with AAAPVIM.

Under the framework, AAAPVIM has authority over investigations and enforcement related to audit quality, while LCA supports the system through its Auditors’ Court of Honor, which considers ethics-related matters and may impose sanctions for non-compliance with the Code of Ethics. LCA reports that its I&D procedures are publicly available and that it maintains ongoing communication with AAAPVIM and the Ministry of Finance to support continued alignment with Statement of Membership Obligations 6.

Considering LCA’s shared responsibility for the auditor I&D system, its operational disciplinary mechanism, and its ongoing cooperation with AAAPVIM and the Ministry of Finance, fulfillment of SMO 6 is assessed as Sustain.

Current Status: Sustain

In Lithuania, corporate financial reporting requirements are established in law and overseen by the Ministry of Finance. Financial statements are prepared in accordance with the Law on Financial Statements of Entities, Business Accounting Standards, International Accounting Standards, and other legal acts, with the Ministry responsible for preparing and approving Business Accounting Standards. IFRS Accounting Standards as adopted by the European Union are required for listed entities’ consolidated financial statements and certain financial institutions, while other entities generally apply Business Accounting Standards or may use IFRS where permitted.

The Lithuanian Chamber of Auditors has no direct authority for setting accounting standards but continues to use best endeavors to support implementation. LCA contributes to the standard-setting environment through its participation in relevant committees and cooperation with the Ministry through its Accountancy and Tax Committee. It also supports members through continuing professional development on accounting, financial reporting, and related topics, with recent LCA materials confirming ongoing qualification improvement courses and professional guidance activities.

Recent jurisdictional developments further reinforce the need for LCA’s continued support to members, including Lithuania’s implementation of corporate sustainability reporting requirements through amendments approved in June 2024 and effective from July 2024, as well as subsequent proposals to reduce sustainability reporting burdens for certain companies during the 2025 and 2026 financial years. LCA’s ongoing training, technical engagement, and cooperation with public authorities support members in understanding and applying evolving financial and corporate reporting requirements.

Based on its sustained activities to support implementation, participation in relevant consultative mechanisms, and ongoing member education, LCA continues to fulfill the SMO 7 requirements at Sustain.

Current Status: Sustain