How to undergo audit of Estonian company

What are the main stages for audit of an annual report of Estonian company.
30th June of each year is the last day for submitting annual reports for the previous financial year.

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).

Possible outcomes of audit

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

• 1. Qualified review (means you did not keep your accounting proper way and it does not quite corresponds with reality or accounting order).
  2. Negative review (everything is fine and the answer is negative to all classifiers which might show that accounting was not made proper way).
  3. Neutral review (auditor could not gather all the data to evaluate whether a company complied with requirements or not).

Getting ready for audit

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

1. 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.

How audit normally works

First of all, accounting for the previous financial year should be completed to determine if the annual report needs to be audited.

Then we proceed with preparing the draft of an annual report, which should be composed according to RTJ 1 “General conditions of composing annual report”.

This after we 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 an 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 demanding work for both sides.

After the auditory review is ready, we proceed with submitting annual report to the Commercial Register.

We use ByCycle Tool for work planning and team collaboration.