Financial statement audit

Our most important audit service is the assurance (inspection) of the client’s annual report, including the consolidated annual report, as well as the provision of the auditor’s report in accordance with the procedures as provided by the regulatory enactments.

Assurance and auditing is performed for financial statements, that have been prepared in accordance with the regulatory enactments of Latvia and International Financial Reporting Standards, as well as in accordance with the accounting policy of the group of companies.

Within our audit we additionally provide information about the identified risks that, if materialised, may lead to errors in financial reporting and the calculation of taxes, as well as general recommendations for the provision of accounting and tax compliance.

In accordance with the Law On the Annual Financial Statements and Consolidated Financial Statements mandatory audit refers to:

1) annual reports of average and large companies,
2) annual reports of the companies, the transferable securities of which are included in the regulated market,
3) annual reports of the holding parent companies.

In the case of annual reports of small companies, the inspection must be executed in the following cases:

1) If it exceeds two of the following criteria for two consecutive years (both in the current and in the previous year):

• total balance amount – EUR 800 000,
• net turnover – EUR 1 600 000,
• the average number of employees in the report year – 50,

2) it is the holding parent company,

3) it is a capital company of a public person, its subsidiary or a public private capital company within the meaning of the Law on the Governance of Capital Shares of a Public Person and Capital Companies,

4) it has recognised, provided items of the financial statement in accordance with international accounting standards.

Limited scope audit

Within the scope of limited inspection the sworn auditor performs the inspection of data and information specified in the financial statement, incl. verification of the compliance of the enterprise income tax calculation procedure.

For a small company the sworn auditor executes the limited inspection and prepares an audit report if:

• the small company does not require an inspection,
• the indicators of the small company exceed at least 2 of the following thresholds for 2 consecutive years (both current and previous year):
  • total balance amount – EUR 400 000,
  • net turnover – EUR 800 000,
  • the average number of employees in the reporting year – 25.

The small company that requires the limited inspection has the right to choose to conduct a full audit by the sworn auditor.

Internal Audit

Internal audit service is the independent and objective activity of the auditor, as a result of which the performance of the internal control system is assessed in order to improve the operation of the internal control system in the company or in the association.

We perform the full cycle of internal audit or execute individual components of it that include:

• preparation of the internal audit procedure plan and execution of the internal audit in accordance with it,
• the assessment of the compliance of the commercial company with the regulatory enactments, management decisions and other binding regulations,
• assessment of the effectiveness of the internal control system and recommendations for its improvement,
• audit and assessment of the key risks, their qualitative and quantitative indicators,
• preparing of the audit reports on the performed inspection regarding the identified deficiencies or insufficiently managed risks,
• provision of advice and suggestions on the identified deficiencies.

We also provide consultations on the internal control, as well as internal audit issues, and we also offer internal control procedures, including tax risk management system, i.e. in-depth cooperation with the members of the SRS.

Development of tax risk management systems

We offer internal control procedures, including tax risk management system, i.e. in-depth cooperation with the members of the SRS.  The tax risk management system in its essence reflects the internal control mechanism that is established to identify and eliminate the tax risks.

Tax risks:

• business risks – the typical risks resulting from the type of economic activity and the non-typical risks – risks inherent in the particular company,
• operational risks – arising from non-compliance with the regulatory enactments,
• compliance risks – execution risks of tax payer’s liabilities (including timely submission of declarations) and timely payment of taxes,
• accounting risks – correct recording of the transactions in accordance with the accounting requirements and documents for organising the accounting.

Due diligence

An in-depth study of the company activity includes Financial Due Diligence (financial risk assessment, financial status assessment) and Tax Due Diligence (tax risk audit).

Valuation

Our specialists are included in the list of property valuation experts of the Register of Enterprises of the Republic of Latvia with the right to evaluate and provide opinions in the following areas:

• merchant’s activity (e.g. company valuation in the case of restructuring),
• intellectual property (trademarks, licences, patents),
• capitalised debts/debt commitments,
• equity shares, shares.

Audits provided by the commercial law

We perform inspections and audits stipulated by the Commercial Law, incl.

• audits of reorganisation agreements,
• reviews of holding agreement,
• distribution plan of the assets in the case of liquidation, etc.

Preparation and analysis of the financial statement

Our experience in providing audit services enables us not only to provide audit services, but also to provide support in accounting and recording issues, including:

• to prepare annual reports,
• to develop consolidation procedures and to implement the consolidation process,
• to implement analyses of balance sheets, profit and loss, cash flows, etc.,
• to develop and to control the budget,
• to solve separate issues of recording.