Lithuania : Accounting and Auditing
This assessment of accounting and auditing standards and practices in Lithuania was focuses on the strengths and weaknesses of the institutional arrangements needed to observe International Accounting Standards (IAS) and International Standards on...
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| Language: | English en_US |
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Washington, DC
2013
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| Online Access: | http://documents.worldbank.org/curated/en/2002/06/6568396/report-observance-standards-codes-rosc-lithuania-accounting-auditing http://hdl.handle.net/10986/14993 |
| Summary: | This assessment of accounting and
auditing standards and practices in Lithuania was focuses on
the strengths and weaknesses of the institutional
arrangements needed to observe International Accounting
Standards (IAS) and International Standards on Auditing
(ISA). Financial reporting and accounting by Lithuanian
enterprises are currently governed by laws and other
regulations issued in 1992 and 1993. New laws that came into
effect in 2002 will significantly increase conformity
between Lithuanian requirements and European Union (EU)
Directives, establish a new national standard-setting body,
and require greater compliance with IAS. There is a risk,
therefore, that banks may be unable to fully comply with IAS
because of conflicting requirements under national bank
(BOL) regulations. While the quality of many of the IAS
financial statements reviewed was good, there were a number
of possible conflicts resulting from the application of BOL
regulations and other circumstances peculiar to Lithuania.
There is currently no enforcement or monitoring of
compliance with IAS or national standards. The audit of
financial statements must be carried out by qualified
auditors and in accordance with Lithuanian standards that
are based on ISA. While many audit firms make strenuous
efforts to carry out audits in accordance with ISA, there
are variations in the quality of audits. Furthermore, the
quality of some audits is affected by management attitudes
and misconceptions about the role of audits. Some of the
powers granted to the Ministry of Finance for the
supervision. of auditors have not yet been implemented. The
implementation of these powers plus further changes are
required in order to achieve conformity with EU Directives
and greater use of ISA. The report makes a number of policy
recommendations that are designed to achieve greater
conformity between Lithuanian law and European Union
Directives, and improve compliance with IAS and ISA. |
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