Posted on Tuesday July 16th, 2019 by Ragnar Sepp

Audit of Estonian company

30th of June was the last day for submitting annual reports for the year 2018. Some of our clients managed to present all needed information in time. And some companies missed the last day and the report is still to be submitted. Also, some of our clients managed to create turnover, which made it obligatory to pass auditory review.

Whether your company is obliged to the audit of auditory review you can check from here. Most often it is exceeding gross turnover and asset level or exceeding only gross turnover solely (when it is higher than 4.8 mln EUR per year).

As the result of auditor control there are two possible outcomes:

    • Qualified review (means you did not keep your accounting proper way and it does not quite corresponds with reality or accounting order).
    • Negative review (everything is fine and the answer is negative to all classifiers which might show that accounting was not made proper way).

What to pay attention for if your company is growing this fast, that auditory review is to be performed.

    1. Get yourself prepared for audit review much earlier than next year June. By preparing yourself, we consider – keep all registers and basic accountant documents in order. When company is not very big it is often enough just to present bank statements and invoice registers, and for audit you should be ready to present any document to every single transaction.
    2. The auditor will also check whether your accounting order corresponds with Regulation of accounting commission (RTJ) and Estonian standards of financial reporting. Which also means that the Regulation on inner accounting is to be adopted by company management.
    3. The procedure may take some time (two month or more), so negotiations with auditor should be started in the beginning of the year already. Since first of all, it takes time to find an auditor and second, it takes time to deal with the requests of auditor. Not to mention that the report is to be ready before auditory review begins and most probably you will need to correct the report several times.

So how it usually happens. First of accounting for the year should be completed – so you see if the audit of auditory review is to be passed. Then you prepare the report itself, which should be composed according to RTJ 1 “General conditions of composing annual report”. This after you can start looking for auditor, which means that normally auditors have lots of work to do with other companies and not everyone is ready to start reviewing yours. Thus, finding an auditor might appear to be a challenge. You should be ready to pay not less than 2500 EUR for an auditor’s job in any case.

When the auditor is found, the most interesting part begins – the auditory review itself. Even before starting audit you will receive plenty of forms to fill and requests to manage. Thus, this is a hard work for both sides.

After the auditory review is ready, you proceed with submitting your annual report and together with all other information you fill special form about the auditory review (which mostly includes data about auditor itself). This after you submit the report to the Commercial Register.