20.03.2017

The Government has approved various amendments to the Auditors Activities Act and other laws, which are to reduce the bureaucracy in both private and public sector.

Up till now the qualification of a sworn auditor has been awarded by a decision of the Minister of Finance on the proposal of the Board of Auditors. After the amendments enter into force the qualification of a sworn auditor will be awarded by the Auditing Activities Oversight Board of the Board of Auditors. Other duties of the Ministry of Finance related to recognition of sworn auditors and granting of activity licenses will also be passed over to the Auditing Activities Oversight Board. Members of the Oversight Board will be appointed by the Minister of Finance. 

The professional organization of sworn auditors will be responsible for the recognition of sworn auditors and audit firms, approval of professional activities standards, organization of continuous education, as well as quality assurance systems, and investigative and administrative disciplinary systems. The changes to be performed will shorten the procedural processes, which will reduce administrative burden and save money. Oversight system will be two-levelled instead of former three levels. The Ministry of Finance will continue to perform administrative supervision over the Board of Auditors. 

According to the draft legislation public-interest entities are publicly traded companies, insurance companies and banks. The definition of public-interest entities is narrowed down in order to avoid the increase of administrative burden in both the private and public sector: henceforward the EU legislation requires more detailed reports from audits of public-interest entities and they are subject to other heightened requirements.  

According to the draft legislation the contract for the statutory audit of the financial statements must henceforward be concluded for a minimum period of two years. A longer contract term will enable to increase the quality of audit services. 

The amendments are planned to enter into force on July 1, 2017.  

Source (in Estonian): Ministry of Finance