News in Brief

International Journal of Government Auditing – Spring 2017

Latavia

NEW LAW PERMITS AUDITOR GENERAL TO SET APPLICABLE INTERNATIONAL STANDARDS

In December 2016, the Parliament of the Republic of Latvia made legislative changes to the law “On Sworn Auditors,” which was replaced with a new one entitled “On Audit Services.”

The new law extends the mandate of the Auditor General (AG). As the Head of the State Audit Office of the Republic of Latvia (SAO), the AG now has the right to set applicable public auditing standards in Latvia. The law provides the legal framework for applying and recognizing International Standards of Supreme Audit Institutions (ISSAI) during public sector audits in state and local government bodies.

This is an important step towards consistency of public sector audits, which are performed by the SAO, as well as by sworn private sector auditors (in certain cases).

For example, in order to gain assurance on the accuracy of Annual Reports of the 119 local municipalities of Latvia, the SAO collaborates with, and relies on, sworn auditors (as prescribed by ISSAI 1600–Special Considerations–Audits of Group Financial Statements). The new law stipulates sworn auditors are obligated to pursue duties according to SAO guidance and instructions.

The new law also requires SAO involvement in the quality control process for work performed by sworn auditors. Additionally, a rotation policy for sworn auditors will be introduced, thus limiting the possibility for an individual auditor to audit the same state or local government body for a period exceeding six years.