Text consolidated by Valsts valodas centrs (State Language Centre) with amending laws of: 22 January 2004 [shall come into force on 19 February 2004]; 29 March 2007 [shall come into force on 1 May 2007]; 12 June 2008 [shall come into force on 29 June 2008]; 29 January 2009 [shall come into force on 4 March 2009]; 11 February 2010 [shall come into force on 31 March 2010]; 3 June 2010 [shall come into force on 6 July 2010]; 3 March 2011 [shall come into force on 6 April 2011]; 22 March 2012 [shall come into force on 25 April 2012]; 12 September 2013 [shall come into force on 1 January 2013]; 18 April 2013 [shall come into force on 22 May 2013]; 9 July 2013 [shall come into force on 7 August 2013]; 12 September 2013 [shall come into force on 1 January 2014]; 29 October 2015 [shall come into force on 1 January 2016]; 15 December 2016 [shall come into force on 1 January 2017]; 19 April 2018 [shall come into force on 23 May 2018]; 21 June 2018 [shall come into force on 18 July 2018]; 20 June 2019 [shall come into force on 16 July 2019]; 14 September 2023 [shall come into force on 11 October 2023]; 26 September 2024 [shall come into force on 17 October 2024]; 19 June 2025 [shall come into force on 16 July 2025]; 4 September 2025 [shall come into force on 11 September 2025]. If a whole or part of a section has been amended, the date of the amending law appears in square brackets at the end of the section. If a whole section, paragraph or clause has been deleted, the date of the deletion appears in square brackets beside the deleted section, paragraph or clause.

The Saeima¹ has adopted
and the President has proclaimed the following law:

Law on Audit Services

[15 December 2016]

Chapter I
General Provisions

Section 1. Terms Used in this Law

(1) The following terms are used in this Law:

1) opinion - an integral part of an auditor's report which states a clearly expressed view on whether the financial statements included in the annual statement, also in the consolidated annual statement, present a fair and clear view of the financial position, profits or losses, and cash flow of the relevant client in accordance with the relevant financial statement preparation principles (standards) and conform to the legal acts. There may be an opinion without reservations, an opinion with reservations, and a negative opinion;

2) audit working papers - materials which are prepared for a sworn auditor or a commercial company of sworn auditors or which are prepared, obtained, and stored by a sworn auditor or commercial company of sworn auditors and which are related to the provision of audit services. The audit working papers may be prepared in printed form, on electronic data carriers, or in other form [for example, documents the information included wherein is formed by an image or sound and which are perceived and used via a relevant equipment (audiovisual and cinematographic records, photographs, and sound records)];

3) [19 June 2025];

4) client - a merchant, a State or local government authority, an association or foundation, or any other person who receives an audit service in accordance with this Law;

5) [19 April 2018];

6) self-employed person - a natural person who earns employment income independently without entering into contractual employment relationship with an employer as a paid employee, and does not hold a position that gives the right to remuneration. A natural person who is a member (shareholder) of a partnership and earns employment income based on a contract entered into with such partnership and the assignor of an audit task shall also be considered a self-employed person;

7) auditor's report - a written document prepared by a sworn auditor or the responsible auditor of a commercial company of sworn auditors regarding the audit (review) of the annual statement and consolidated annual statement;

8) audit service:

a) the audit (review) of a client's annual statement, also consolidated annual statement, specified in the legal acts and the provision of an auditor's report;

b) the performance of an audit task upon request specified by law of the Commercial Register institution, an investigative institution, a prosecutor, a judge, or a court in the cases specified in the law;

c) the financial audit of State and local government authorities and the provision of an auditor's report, and also the provision of an opinion on the report on the financial year;

d) the performance of an audit task provided for in other legal acts or an audit service contract;

e) the limited review of a client's annual statement specified in the legal acts and the provision of a review report;

9) [19 June 2025];

10) audit task - the review of an annual statement, also a consolidated annual statement, of a client, and also the review of the economic activities of a client in accordance with the law or a contract entered into;

11) [19 April 2018];

12) international auditing standards recognised in Latvia - the international auditing standards, the international standards on review engagements, the international quality management standards that are issued by the International Auditing and Assurance Standards Board of the International Federation of Accountants and determined by the Latvian Association of Sworn Auditors, and the statements and standards related thereto insofar as they are related to audit services;

12¹) international auditing standards for public sector recognised in Latvia - the international standards determined by the Auditor General for supreme audit institutions;

13) network of commercial companies of auditors - cooperation between sworn auditors, commercial companies of sworn auditors, Member State or third country auditors or commercial companies of auditors the purpose of which is income or cost allocation, joint administration or ownership, joint quality assurance policy and procedures, or joint strategy for commercial activities and which provides for the partners of this cooperation to use the same commercial company or a significant portion of the professional resources at the disposal of these cooperation partners;

14) third country - a country which is not a European Union Member State or a country of the European Economic Area;

14¹) Member State - a European Union Member State or a country of the European Economic Area;

15) third country auditor - a natural person who, in accordance with the laws of a third country, is entitled to provide an audit service and, in the relevant case, a sustainability report assurance service and who is not an auditor of the Member State;

16) third country commercial company of auditors - a commercial company of any type registered in a third country which, in accordance with the laws of a third country, is entitled to provide an audit service and, in the relevant case, a sustainability report assurance service and which is not a commercial company of auditors of the Member State;

17) [19 June 2025];

18) competent authority of the Member State - an authority to which the responsibility for the supervision of the auditor and the commercial company of sworn auditors and also the audit services provided thereby is specified in the legal acts of the relevant Member State, and of which the relevant Member State has notified the European Commission;

19) auditor of the Member State - a natural person who is approved by the competent authority of the Member State other than the Republic of Latvia (hereinafter - another Member State) to be entitled to carry out an audit (review) of the annual statement and the consolidated annual statement of the commercial company registered in this another Member State;

20) commercial company of auditors of the Member State - a commercial company of any type registered in another Member State which has been approved by the competent authority of this another Member State as entitled to carry out an audit (review) of the annual statement and the consolidated annual statement of the commercial company registered in this another Member State;

21) competent authority of the third country - an authority to which the competence to carry out the supervision of auditors of this third country and commercial companies of auditors of the third country, and also the audit services provided by them, has been granted under the legal acts of the third country;

22) State or local government authority - a State or local government institution, a derived public entity fully or partly financed from the State or local government budget, and also a State or local government agency;

23) sustainability report assurance service - performance of the assurance engagement of the sustainability report, also the consolidated sustainability report (if such has been prepared), of the subject (client) and the preparation of an assurance report laid down in the Law on Sustainability Disclosures;

24) lead sustainability auditor - a sworn auditor who has been designated by the management of a commercial company of sworn auditors as the auditor being primarily responsible for carrying out the specific assurance engagement of the sustainability report and who signs the assurance report on behalf of the commercial company of sworn auditors. In case of the consolidated sustainability report assurance service, it is a sworn auditor who has been designated by the commercial company of sworn auditors as the auditor being primarily responsible for carrying out the specific assurance engagement of the consolidated sustainability report at the level of the group of companies (group), or a sworn auditor who has been designated by the commercial company of sworn auditors as the auditor being primarily responsible for carrying out the assurance engagement of the sustainability report of material subsidiaries of the group of companies (group);

25) assurance report - a written document prepared by a sworn auditor or the lead sustainability auditor designated by the management of a commercial company of sworn auditors on the review results of the sustainability report and the consolidated sustainability report (if there is an obligation to prepare one) of the client.

26) professional code of ethics - the International Code of Ethics for Professional Accountants (including the International Independence Standards) approved by the International Federation of Accountants.

(1¹)The term "public-interest entity" used in this Law corresponds to the term "public-interest entity" included in Regulation (EU) No 537/2014 of the European Parliament and of the Council of 16 April 2014 on specific requirements regarding statutory audit of public-interest entities and repealing Commission Decision 2005/909/EC (hereinafter - Regulation No 537/2014), and it constitutes:

1) a commercial company which is registered in Latvia and the transferable securities of which are admitted to trading on the regulated market of Latvia or any other Member State;

2) a financial institution.

(1²) Within the meaning of this Law, a financial institution is:

1) a credit institution which operates in accordance with the Credit Institution Law;

2) an insurance and reinsurance undertaking which operates in accordance with the Insurance and Reinsurance Law;

3) an open pension fund which operates in accordance with the Private Pension Fund Law;

4) an investment management company which operates in accordance with the Law on Investment Management Companies;

5) a licensed payment institution and an electronic money institution which operate in accordance with the Law on Payment Services and Electronic Money and the operation of which corresponds to all of the following criteria:

a) more than 50 per cent of its clients are natural persons who are residents of the Republic of Latvia;

b) it opens payment accounts for natural persons who are residents of the Republic of Latvia;

c) the total amount of payments made within a year exceeds EUR 100 000 000;

6) an investment firm which conforms to:

a) the term "credit institution" defined in Section 1, Paragraph two, Clause 1 of the Credit Institution Law and which has received a licence (permit) of a credit institution in accordance with the requirements of Section 11.² of the Credit Institution Law;

b) the term "investment firm" defined in Section 1, Paragraph one, Clause 6 of the Law on Investment Firms and which, in accordance with Section 3, Paragraph three of the Law on Investment Firms, applies the prudential requirements provided for in the Credit Institution Law and in the regulations issued by Latvijas Banka on the basis thereof.

(2) The term "international accounting standards" used in this Law corresponds to the definition included in Regulation (EC) No 1606/2002 of the European Parliament and of the Council of 19 July 2002 on the application of international accounting standards.

(3) The term "related parties" used in this Law corresponds to the term used in IAS 24 "Related party disclosures" referred to in Annex to Regulation (EC) No 1126/2008 of 3 November 2008 adopting certain international accounting standards in accordance with Regulation (EC) No 1606/2002 of the European Parliament and of the Council.

(4) The term "a sworn auditor and a commercial company of sworn auditors providing audit services to public-interest entities" used in this Law shall be used in the meaning of the sworn auditor and commercial company of sworn auditors which have provided audit services to a public-interest entity at least once in three years after the audit services quality control referred to in Section 35.¹, Paragraph one of this Law. This term corresponds to the term "statutory auditor and an audit firm carrying out statutory audits of a public-interest entity" used in Regulation No 537/2014.

(5) The terms "transferable securities", "regulated market", and "regulated market operator" used in this Law correspond to the terms used in the Financial Instrument Market Law.

(6) The terms "sustainability report" and "consolidated sustainability report" used in this Law correspond to the terms used in the Law on Sustainability Disclosures.

(7) The term "data reporting services provider" used in this Law corresponds to the term used in Regulation (EU) No 600/2014 of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Regulation (EU) No 648/2012.

[22 January 2004; 12 June 2008; 9 July 2013; 29 October 2015; 15 December 2016; 19 April 2018; 21 June 2018; 20 June 2019; 14 September 2023; 26 September 2024; 19 June 2025 / See Paragraph 36 of Transitional Provisions]

Section 2. Purpose and Scope of Application of the Law

(1) The purpose of this Law is to govern the legal basis of such professional activities of persons which are manifested as audit services and sustainability report assurance services and to ensure the supervision of professional activities of such persons in order to promote a stable, safe, and credible market of audit services and to protect the common interests of the public (as the user of annual statements and consolidated annual statements).

(2) The Law shall apply to sworn auditors, commercial companies of sworn auditors, recipients of audit services and sustainability report assurance services, public-interest entities, and also competent authorities in the field of the supervision of professional activities of sworn auditors and commercial companies of sworn auditors, and public-interest entities.

(2¹) The requirements laid down in this Law for the audit service, the conditions, rights and obligations specified for the provider of the audit service, and the supervision of such service provider shall also apply to the sustainability report assurance service and its provider, except for the cases specified in this Law where specific requirements are provided for the sustainability report assurance service and its provider.

(3) The Law prescribes:

1) the procedures for the obtaining and registration of the sworn auditor certificate and the licence for a commercial company of sworn auditors;

1¹) the procedures by which a sworn auditor and a commercial company of sworn auditors are granted the right to provide the sustainability report assurance service and the procedures for registering such a right;

2) the requirements for the independence, objectivity, and professional ethics of sworn auditors and commercial companies of sworn auditors, the regulations of professional activities, and the liability for the failure to comply with the requirements laid down in this Law and Regulation No 537/2014;

3) the rights and obligations of the recipients of audit services;

4) the competent authorities in the field of the supervision of the professional activities of sworn auditors and commercial companies of sworn auditors, the obligations and rights of such institutions and authorities;

5) the legal basis for the establishment, operation, and supervision of the audit committee of a public-interest entity;

6) the regulations for ensuring the application of Regulation No 537/2014.

[15 December 2016; 19 April 2018; 26 September 2024; 19 June 2025]

Section 3. Sworn Auditors and Commercial Companies of Sworn Auditors

(1) Only sworn auditors and commercial companies of sworn auditors which conform to the requirements laid down in this Law are entitled to provide audit services.

(2) A sworn auditor may provide audit services as:

1) a sole proprietorship;

2) a responsible sworn auditor appointed by a commercial company of sworn auditors;

3) a self-employed person.

(3) A commercial company of sworn auditors may be a commercial company of any type.

[19 April 2018; 19 June 2025]

Section 3.¹ Special Provisions for Sustainability Report Assurance Service Providers

The sustainability report assurance service shall be provided by:

1) a sworn auditor or commercial company of sworn auditors which at the same time is the responsible sworn auditor of the annual statement or, if the client is the parent undertaking of a group of companies, the consolidated annual statement of the relevant client;

2) another sworn auditor or commercial company of sworn auditors which at the same time is not the responsible sworn auditor of the annual statement or, if the client is the parent undertaking of a group of companies, the consolidated annual statement of the relevant client;

3) several sworn auditors who provide the sustainability report assurance service as sole proprietorships or self-employed persons, or several commercial companies of sworn auditors who have agreed to jointly provide the sustainability report or consolidated sustainability report assurance service (if there is an obligation to prepare one).

[26 September 2024]

Section 4. Status of a Sworn Auditor

(1) A natural person shall obtain the status of a sworn auditor after such person has passed a sworn auditor qualification examination in accordance with the procedures laid down in this Law, has obtained the sworn auditor certificate issued by the Latvian Association of Sworn Auditors, and has been registered in the Sworn Auditor Register.

(2) The status of a sworn auditor is valid only during the period of validity of the sworn auditor certificate.

Section 5. Status of a Commercial Company of Sworn Auditors

(1) A commercial company shall obtain the status of a commercial company of sworn auditors after it has obtained, in accordance with the procedures laid down in this Law, a licence issued by the Latvian Association of Sworn Auditors and has been registered with the Register of Commercial Companies of Sworn Auditors.

(2) The status of a commercial company of sworn auditors is valid only during the period of validity of the licence.

Chapter II
Latvian Association of Sworn Auditors

Section 6. Status, Purpose of Activities, and Tasks of the Latvian Association of Sworn Auditors

(1) The Latvian Association of Sworn Auditors is an independent professional corporation of Latvian sworn auditors.

(2) All the sworn auditors and commercial companies of sworn auditors of Latvia are, on the principle of professional activity, united in the Latvian Association of Sworn Auditors.

(3) The Latvian Association of Sworn Auditors shall supervise that the professional activities of sworn auditors in the field of provision of audit services and sustainability report assurance services conform to the requirements of this Law, other legal acts governing the provision of such services, the requirements of the international auditing standards recognised in Latvia, standards for sustainability report assurance, and also the international auditing standards for public sector recognised in Latvia, and the norms of the professional code of ethics.

(4) The Latvian Association of Sworn Auditors shall:

1) [19 June 2025];

2) organise qualification examinations for sworn auditors;

3) decide on the issuance or cancellation of a sworn auditor certificate, suspension and restoration of the validity thereof;

3¹) decide on the issuance, re-registration, and cancellation of a licence for a commercial company of sworn auditors, suspension or restoration of the validity thereof;

4) keep the Sworn Auditor Register and the Register of Commercial Companies of Sworn Auditors;

5) [19 June 2025];

6) organise and supervise the continuation of education and improvement of professional qualification of sworn auditors as part of the further education process recognised by the Latvian Association of Sworn Auditors;

7) perform the quality control of the audit services and sustainability report assurance services provided by sworn auditors and commercial companies of sworn auditors;

8) perform other tasks laid down in laws and its articles of association.

(5) To finance the operation of the Latvian Association of Sworn Auditors, its members shall pay an annual fee in the amount specified by the general meeting of the Association.

(6) The Latvian Association of Sworn Auditors shall inform the public of its activities once a year. The Latvian Association of Sworn Auditors shall make the abovementioned information available on its website each year by 31 March as well as send it to the Ministry of Finance.

[12 June 2008; 22 March 2012; 18 April 2013; 19 April 2018; 19 June 2025]

Section 7. Administrative Bodies and Permanent Committees of the Latvian Association of Sworn Auditors

(1) The supreme administrative body of the Latvian Association of Sworn Auditors is the general meeting. It shall elect the chairperson of the board of the Latvian Association of Sworn Auditors, members of the board and establish the permanent committees.

(2) The permanent committees shall operate in accordance with the articles of association of the Latvian Association of Sworn Auditors and shall implement the decisions of the general meeting and the board.

[19 April 2018]

Chapter III
Qualification Examinations for Sworn Auditors

Section 8. Specific Requirements for Applicants

(1) An applicant for sworn auditor may be a natural person with the capacity to act who meets all the requirements referred to in this Section:

1) has reached 25 years of age;

2) has obtained higher education in the Republic of Latvia or in a foreign country in the field of economics, management, or finances or also has obtained the qualification of an auditor of the relevant foreign country. The decision to recognise the documents certifying the relevant education issued by foreign countries shall be taken by the Latvian Association of Sworn Auditors in conformity with the procedures laid down in the Education Law;

3) is fluent in the Latvian language;

4) has acquired at least three-year experience which is recognised by the Latvian Association of Sworn Auditors in the auditing of annual statements of clients and also in financial auditing. At least two-thirds of the abovementioned length of experience must be obtained under the supervision of an auditor of a Member State or in a commercial company of auditors of a Member State;

4¹) [19 June 2025];

5) has a perfect reputation (none of the conditions referred to in Section 9 of this Law is applicable).

(2) In order for an applicant who meets the requirements of Paragraph one of this Section to acquire the right to take the qualification examination in the field of sustainability, he or she must obtain eight months of experience recognised by the Latvian Association of Sworn Auditors in performing a sustainability report assurance engagement or preparing a sustainability report. These eight months of experience may be counted as part of the period of three years referred to in Paragraph one, Clause 4 of this Section.

[22 January 2004; 15 December 2016; 26 September 2024; 19 June 2025]

Section 8.¹ Training of Applicants

(1) A precondition for taking a sworn auditor qualification examination shall be training in the subjects of qualification examination which is attested by a document certifying the completion of the training issued by the training organisers.

(2) The Latvian Association of Sworn Auditors shall develop and approve the content of the training programmes of applicants and publish it on its website.

(3) An applicant shall undergo the training referred to in Paragraph one of this Section at the Latvian Association of Sworn Auditors or another training organiser. Any training organiser shall ensure that the training content conforms to the content of the training programme for applicants approved by the Latvian Association of Sworn Auditors. A document certifying the completion of the training shall be issued to the applicant for the acquisition of the relevant training.

(4) The Cabinet shall determine the process of the training referred to in Paragraph one of this Section, the minimum content, and the information to be included in the document certifying the completion of the training.

(5) The applicant has the obligation to submit a derivative (copy) of the document certifying the completion of the training to the Latvian Association of Sworn Auditors before taking each sworn auditor qualification examination.

[26 September 2024; 19 June 2025 / See Paragraph 35 of Transitional Provisions]

Section 9. Persons who May not be Sworn Auditors

(1) A sworn auditor may not be a person to whom at least one of the following conditions referred to in this Section applies, that is, a person:

1) in relation to whom insolvency proceedings of a natural person have been declared;

2) who is a defendant or an accused in criminal proceedings for the commission of an intentional criminal offence;

3) who has been convicted of committing an intentional criminal offence (irrespective of whether the criminal record of a person has been extinguished or set aside), except for the case referred to in Paragraph two, Clause 1 of this Section;

4) against whom the criminal proceedings regarding commitment of an intentional criminal offence have been terminated for reasons other than exoneration, except for the case referred to in Paragraph two, Clause 2 of this Section;

5) [19 June 2025];

6) whose occupation is not compatible with the professional activity of a sworn auditor due to ethical considerations.

(2) When conducting an individual evaluation, the Latvian Association of Sworn Auditors may permit the following person to become a sworn auditor:

1) a person who is subject to the restriction specified in Paragraph one, Clause 3 of this Section if the respective person committed the intentional criminal offence while being a minor and the criminal record for this criminal offence has been extinguished or set aside;

2) a person who is subject to the restriction specified in Paragraph one, Clause 4 of this Section if the respective person committed the intentional criminal offence while being a minor.

[22 March 2012; 19 June 2025]

Section 10. Procedures for the Submission and Examination of Applications of Applicants

(1) The applicant shall submit to the Latvian Association of Sworn Auditors a written application for the recognition of experience. The applicant shall certify in his or her application that he or she meets the requirements laid down in Section 8 of this Law and that none of the circumstances referred to in Section 9 of this Law apply to him or her. The applicant shall attach to the application:

1) derivatives (copies) of the documents certifying education and confirming that he or she has obtained higher education in the Republic of Latvia or in a foreign country in the field of economics, management, or finances or also has obtained, in a foreign country, the qualification of an auditor of the relevant foreign country;

2) documents certifying that the applicant has acquired at least three-year experience in the auditing (reviewing) of annual statements of a client, and also in financial auditing;

3) documents certifying that the applicant has acquired the experience of eight months referred to in Section 8, Paragraph two of this Law in the field of sustainability (if the applicant takes the examination in the field of sustainability).

(2) The applicant shall submit to the Latvian Association of Sworn Auditors a written application for the taking of sworn auditor qualification examinations. In order for the applicant to acquire the right to provide also sustainability report assurance services, the applicant shall indicate in the application that he or she will take the examination in the fields specified in Section 14, Paragraph two of this Law, and also the date when the Latvian Association of Sworn Auditors has taken the decision to recognise the experience referred to in Section 8, Paragraph one, Clause 4 and Paragraph two of this Law.

(3) After receipt of the application and the documents attached thereto, the Latvian Association of Sworn Auditors shall examine the application and the documents attached thereto within one month and take the decision to recognise the experience and the decision on the right of the applicant to take sworn auditor qualification examinations or on the refusal.

(4) The decision of the Latvian Association of Sworn Auditors of Latvia shall be notified to an applicant in writing.

(5) If the applicant has received a refusal because the application and the documents attached thereto are incomplete or do not prove conformity to the requirements laid down in Section 8 of this Law, he or she may resubmit the application to the Latvian Association of Sworn Auditors only after rectification of the relevant deficiencies. A repeated application may not be submitted by a person who may not be a sworn auditor in accordance with Section 9, except for the cases where the circumstances which preclude such person from being a sworn auditor have ceased to exist.

(6) Examination of applications for the recognition of experience and applications for the taking of sworn auditor qualification examinations shall be charged for. The procedures for making the payment and the amount thereof shall be determined by the Cabinet.

[22 January 2004; 26 September 2024; 19 June 2025]

Section 11. General Provisions for Sworn Auditor Qualification Examinations

(1) The sworn auditor qualification examinations shall examine whether the applicants have an adequate level of theoretical knowledge as well as the ability to apply such theoretical knowledge in practical work so that they might perform the professional activity referred to in Section 2 of this Law appropriately in conformity with the laws and with the international auditing standards recognised in Latvia.

(1¹) If the sworn auditor or the applicant has indicated in the application that he or she wishes to be granted the right to provide the sustainability report assurance service, the qualification examination in the field of sustainability shall examine whether he or she has an adequate level of theoretical knowledge in the field of sustainability, and also the ability to apply such theoretical knowledge in practice when providing sustainability report assurance services.

(2) Sworn auditor qualification examinations and qualification examination in the field of sustainability (hereinafter collectively - the sworn auditor qualification examinations) shall be taken in writing, in the Latvian language.

(2¹) An applicant who has received the document certifying the completion of the training referred to in Section 8.¹ of this Law is entitled to take the sworn auditor qualification examination.

(3) Sworn auditor qualification examinations shall be charged for. The procedures for making the payment and the amount thereof shall be determined by the Cabinet.

[22 January 2004; 26 September 2024; 19 June 2025]

Section 12. Organisation of Sworn Auditor Qualification Examinations

(1) Sworn auditor qualification examinations shall be organised and held by the Latvian Association of Sworn Auditors.

(2) By-laws for sworn auditor qualification examinations, indicating the number and names of the examination subjects, their programmes, the rules for the establishment of the examination commission, the procedures for the acceptance and examination of applications and also for the preparation, course, and evaluation of examinations shall be approved by the Latvian Association of Sworn Auditors after agreement with the Ministry of Finance.

(3) The sworn auditor qualification examination commission shall be established by the Latvian Association of Sworn Auditors.

[22 January 2004; 19 June 2025]

Section 13. Recognition of Professional Qualifications Obtained Abroad

The Latvian Association of Sworn Auditors shall recognise the qualifications of such person who has obtained his or her professional qualification in a foreign country (an EU Member State, a country of the European Economic Area, or a third country) as equal to the qualifications of a sworn auditor and shall issue the sworn auditor certificate to him or her if such foreign auditor conforms to all the conditions referred to in this Section:

1) in accordance with the procedures laid down in the Education Law, has submitted a document certifying a professional qualification recognised by the Latvian Association of Sworn Auditors which confirms that its holder is entitled, in accordance with the laws of the relevant foreign country, to perform professional activities in that country which, in accordance with the laws of Latvia, are performed by a sworn auditor;

2) has passed such part of the subjects of the sworn auditor qualification examinations, arranged by the Latvian Association of Sworn Auditors, which include a test of the knowledge of applicants in public law, the Civil Law, labour law, and laws governing social guarantees, commercial activity and insolvency laws and tax laws, and also, in the relevant case, a test of the knowledge of applicants in the requirements for the provision of the sustainability report and assurance report;

3) [3 June 2010];

4) has been recorded in the relevant register of auditors of a foreign country (European Union Member State, country of the European Economic Area, or third country).

[12 June 2008; 3 June 2010; 15 December 2016; 26 September 2024]

Section 14. Content of Sworn Auditor Qualification Examinations

(1) The programmes of subjects for sworn auditor qualification examinations shall include questions and tasks which are directly linked to the audit (review) of annual statements and consolidated annual statements, or linked to them indirectly, insofar as they are applicable to the provision of audit services, and which allow to determine the knowledge of applicants in the following areas:

1) theory and technique of an audit, international auditing standards;

2) preparation and analysis of annual statements and consolidated annual statements, accounting methods, and the regulations for evaluation;

3) financial and management accounting;

4) internal audit;

5) public law, the Civil Law, labour law, and laws governing social guarantees;

6) commercial activity and insolvency laws;

7) tax laws;

8) information and computer systems;

9) general and financial economics;

10) management and analysis of commercial activity risk;

11) basic principles for financial management;

12) mathematics and statistics;

13) international accounting standards;

14) professional ethics and independence.

(2) The programme of the qualification examination in the field of sustainability shall include questions and tasks which are directly linked to the sustainability report assurance and other services related to sustainability and which allow to determine the knowledge of applicants in the following areas:

1) legal framework and standards in relation to the content and preparation of the sustainability report and consolidated sustainability report;

2) sustainability analysis;

3) due diligence processes in relation to sustainability matters;

4) legal framework and standards in relation to the procedures for the provision of the sustainability report assurance.

[22 January 2004; 12 June 2008; 26 September 2024; 19 June 2025]

Section 15. Procedures for the Announcement of the Results of Sworn Auditor Qualification Examinations

(1) The decision on the results of the sworn auditor qualification examinations shall be taken by the Latvian Association of Sworn Auditors not later than within two months after the date of the relevant examination, on the basis of the minutes confirmed by the sworn auditor qualification examinations commission, and shall be made known to applicants within 10 days after taking of the decision.

(2) If an applicant has not passed a sworn auditor qualification examination, such examination may be taken again during one of the following examination periods.

(3) The work of an applicant at a sworn auditor qualification examination shall be regarded as restricted access information and shall be stored in the relevant file at the archives of the Latvian Association of Sworn Auditors.

(4) An applicant has the right to become acquainted with the evaluation of his or her work for the sworn auditor qualification examination and to submit a complaint regarding it to the Latvian Association of Sworn Auditors within one month from the day when the applicant has received a notification of the results of the sworn auditor qualification examination.

[22 January 2004; 19 June 2025]

Chapter IV
Procedures for the Issuance, Suspension of Validity, or Cancellation of the Sworn Auditor Certificate, the Sworn Auditor Register

Section 16. Procedures for the Issuance of the Sworn Auditor Certificate

(1) The Latvian Association of Sworn Auditors shall take a decision and shall issue the sworn auditor certificate to applicants who have passed the relevant sworn auditor qualification examinations and afterwards have certified again in writing that none of the conditions referred to in Section 9 of this Law apply to them, and shall specify the date for the signing of the oath of a sworn auditor and for the issuance of the certificate.

(2) Before receipt of the sworn auditor certificate, applicants who wish to become sworn auditors shall sign the following text of the oath: "I swear to comply with the laws of the Republic of Latvia, the articles of association of the Latvian Association of Sworn Auditors and to fulfil my duties honourably, acknowledging that for violation of this oath I shall be liable before the public and the law."

(3) The signed oath of a sworn auditor shall be stored in the relevant file in the archives of the Latvian Association of Sworn Auditors.

[12 June 2008]

Section 16.¹ Granting the Right to Provide the Sustainability Report Assurance Service to a Sworn Auditor

(1) A sworn auditor shall commence the provision of the sustainability report assurance service only after an entry is made in the Sworn Auditor Register that the sworn auditor is entitled to provide the sustainability report assurance service.

(2) To make the entry referred to in Paragraph one of this Section in the Sworn Auditor Register, a sworn auditor shall, after passing the qualification examination in the field of sustainability, submit to the Latvian Association of Sworn Auditors an application for making an entry in the Sworn Auditor Register and shall submit a document which certifies that the further education requirements in the field of sustainability referred to in Section 28.², Paragraph two of this Law have been met. Examination of the application shall be charged for. The procedures for making the payment and the amount thereof shall be determined by the Cabinet.

(3) If the Latvian Association of Sworn Auditors has taken the decision to refuse to make an entry in the Sworn Auditor Register on the right of the sworn auditor to provide the sustainability report assurance service, the sworn auditor is entitled to, after rectification of the deficiencies referred to in the decision, submit a new application to the Latvian Association of Sworn Auditors for making an entry in the Sworn Auditor Register.

[26 September 2024; 19 June 2025]

Section 17. Procedures for the Suspension and Restoration of the Validity of the Sworn Auditor Certificate

(1) If it is found after the issuance of the sworn auditor certificate that any of the conditions referred to in Section 9, Clause 2 or 6 of this Law is applicable to the person who has received such certificate, the Latvian Association of Sworn Auditors shall suspend the validity of the sworn auditor certificate for a specific period.

(2) The Latvian Association of Sworn Auditors shall also suspend the validity of the sworn auditor certificate for the persons who, in accordance with Section 28, Paragraph two of this Law, have submitted an application to suspend the validity of the sworn auditor certificate for a specific period, indicating the reason for and duration of the suspension.

(2¹) The Latvian Association of Sworn Auditors shall make an entry in the Sworn Auditor Register on the suspension of the validity of the relevant sworn auditor certificate for the period determined by the Ministry of Finance when taking the decision to impose an administrative measure on this sworn auditor in accordance with Section 38.⁶, Paragraph one, Clause 2 of this Law.

(3) During the period when the validity of the certificate is suspended, a sworn auditor is not entitled to enter into new contracts for the provision of audit services but is entitled to continue to provide audit services according to the contracts entered into before the validity of the certificate was suspended. If, during the period when the validity of the certificate is suspended, a sworn auditor continues the provision of audit services according to contracts which were entered into prior to the day when the validity of the certificate was suspended, the Latvian Association of Sworn Auditors shall ensure the supervision of professional activity of the sworn auditor in accordance with the procedures stipulated by it until fulfilment of such contracts which were entered into prior to the day when the validity of the certificate was suspended.

(4) Contesting or appealing of the decision of the Latvian Association of Sworn Auditors to suspend the operation of a sworn auditor certificate shall not suspend the operation of such decision.

(5) If the validity of the sworn auditor certificate has been suspended for a period longer than five consecutive years, in order to restore the validity thereof, the sworn auditor shall, within the last three years prior to the expiry of the suspension period of the validity of the certificate, acquire at least one-year audit experience under the supervision of a Latvian sworn auditor or a foreign certified auditor working in a Latvian commercial company of sworn auditors.

(6) In order to restore the validity of the suspended sworn auditor certificate, the sworn auditor shall, not later than two weeks before the expiry of the suspension period of the sworn auditor certificate, submit to the Latvian Association of Sworn Auditors an application for the restoration of the validity of the certificate together with a certification indicating that he or she meets the requirements of Section 8, Paragraph one, Clause 5 of this Law and that none of the circumstances referred to in Section 9 of this Law apply to him or her. The sworn auditor shall indicate information in the application on the fact that the reasons for the suspension of the validity of the certificate no longer exist or that the violations due to which the validity of the certificate was suspended have been rectified.

(7) The Latvian Association of Sworn Auditors is entitled to apply the tacit approval referred to in the Freedom to Provide Services Law if, after receipt of all the documents referred to in Paragraph six of this Section, it has not, within the period laid down in the Administrative Procedure Law, taken the decision to refuse to restore the validity of the sworn auditor certificate and has not notified of this fact.

[22 January 2004; 22 March 2012; 15 December 2016; 19 April 2018; 19 June 2025]

Section 18. Cancellation of the Sworn Auditor Certificate

(1) The Latvian Association of Sworn Auditors shall cancel the sworn auditor certificate if:

1) after the issuance thereof, it is revealed that any of the circumstances referred to in Section 9, Clauses 1, 3, 4, and 5 of this Law apply to the sworn auditor who has received this certificate or that the sworn auditor has not complied with the requirements referred to in Section 8 of this Law, or has provided false information on the circumstances referred to in Section 9 of this Law;

2) the sworn auditor has been recognised as lacking the capacity to act by a court ruling or has died;

3) the sworn auditor has not commenced the provision of audit services within 12 months from the day of receipt of the certificate, except when the validity of the sworn auditor certificate has been suspended, or from the day of restoration of the validity;

4) the sworn auditor has not paid the annual fee in the amount specified by the general meeting of the Latvian Association of Sworn Auditors;

5) the sworn auditor has grossly violated the norms of the professional code of ethics during a period when he or she is not providing professional services;

6) the sworn auditor has submitted an application for the cancellation of the sworn auditor certificate.

(2) The Latvian Association of Sworn Auditors is entitled to decide on the cancellation of the sworn auditor certificate if a sworn auditor the validity of whose certificate has been suspended has not submitted an application for the restoration of the validity of the sworn auditor certificate within the period referred to in Section 17, Paragraph six of this Law.

(3) If the Ministry of Finance has taken the decision to impose the sanction, i.e. the cancellation of the sworn auditor certificate, the Latvian Association of Sworn Auditors shall make an entry in the Sworn Auditor Register on the fact that the relevant sworn auditor certificate has been cancelled.

[19 June 2025]

Section 18.¹ Provision of Information on the Suspension and Cancellation of the Validity of the Sworn Auditor Certificate

(1) If the validity of a sworn auditor certificate is suspended or a sworn auditor certificate has been cancelled for a person who at the same time is an auditor registered in the register of another Member State and who is entitled to audit (review) annual statements and consolidated annual statements of commercial companies registered in that Member State, the Latvian Association of Sworn Auditors shall, within five working days, notify the Ministry of Finance of the relevant fact in writing, indicating the term and reason for the suspension of the validity of certificate or the reason for the cancellation of certificate.

(2) The Ministry of Finance shall, not later than within five working days, send the information referred to in Paragraph one of this Section to the competent authority of the relevant Member State in the field of audit.

[29 January 2009]

Section 19. Sworn Auditor Register

(1) In order to identify a provider of audit services, information on a sworn auditor shall be entered in the Sworn Auditor Register. The Sworn Auditor Register shall be kept, stored electronically, and regularly updated by the Latvian Association of Sworn Auditors. The information included in the Sworn Auditor Register shall constitute information to be stored permanently.

(1¹) The Sworn Auditor Register shall have a public part and a non-public part. The Ministry of Finance shall include a reference on its website to the website of the Latvian Association of Sworn Auditors where the public part of the Register is available.

(2) The public part of the Sworn Auditor Register shall be available to any person on the website of the Latvian Association of Sworn Auditors and it shall include the following information on a sworn auditor:

1) the given name and surname;

2) the address of the place of practice, the telephone number, the electronic mail address, and the reference to the website address, if any;

3) the number of the certificate;

4) the date of and basis for the issuance, suspension and restoration of validity of the certificate;

5) the firm name (with reference to the type of a merchant), legal address, and website address, and also the registration number in the Commercial Register of the commercial company of sworn auditors if the sworn auditor is in an employment relationship with this commercial company, is a partner thereof, or is otherwise linked thereto;

5¹) the note whether the sworn auditor is entitled to provide the sustainability report assurance service;

6) if a sworn auditor is at the same time a foreign auditor, indicate the foreign registration institution in the register of which the auditor has been entered as a provider of the audit service or sustainability report assurance service and whether the sworn auditor is the provider of both such services, and also the registration number if the law of the relevant foreign country provides for the entering of the abovementioned auditor in the register, and the transcript of the relevant services.

(2¹) In order to identify a person who was entitled to provide audit services before the cancellation of the certificate, the non-public part of the Sworn Auditor Register shall include the information referred to in Paragraph two, Clauses 1 and 3 of this Section on such sworn auditors whose certificates have been cancelled, indicating the date of and basis for the cancellation of the certificate. The information included in the non-public part of the Sworn Auditor Register shall be stored in accordance with the requirements of the legal acts governing the document storage, and such information may be obtained from the Latvian Association of Sworn Auditors in accordance with the procedures laid down in legal acts until the expiry of the storage period of such information.

(2²) If the given name, surname, or personal identity number of a sworn auditor changes, the sworn auditor shall, within two weeks, submit to the Latvian Association of Sworn Auditors an application for making amendments to the sworn auditor certificate. The application shall indicate the new given name, surname, or personal identity number of the sworn auditor.

(3) If any information referred to in Paragraph two, Clauses 2, 5, and 6 of this Section is subject to change, the sworn auditor shall submit a relevant statement to the Latvian Association of Sworn Auditors within two weeks. A statement shall be attested with a signature by a sworn auditor.

(3¹) It shall be indicated in the Sworn Auditor Register that:

1) the Latvian Association of Sworn Auditors carries out the certification of sworn auditors and quality control of those audit services and sustainability report assurance services which are provided by a sworn auditor to the clients that are not public-interest entities. In addition, the address of the Latvian Association of Sworn Auditors shall be indicated;

2) the Ministry of Finance shall:

a) impose sanctions and administrative measures on sworn auditors for violations of professional activities;

b) carry out the quality control of those audit services and sustainability report assurance services which are provided by a sworn auditor to the clients that are public-interest entities;

c) perform the State supervision of the Latvian Association of Sworn Auditors. In addition, the address of the Ministry of Finance shall be indicated.

(3²) The Sworn Auditor Register shall be maintained in Latvian. Additionally, the Latvian Association of Sworn Auditors may maintain the register in any other official language of a Member State of the European Union. In such case, it shall be indicated in the register whether the translation is certified or not.

(4) [19 June 2025]

(5) [3 June 2010]

(6) [3 June 2010]

[12 June 2008; 29 January 2009; 3 June 2010; 15 December 2016; 26 September 2024; 19 June 2025]

Chapter V
Regulations for the Licensing of Commercial Companies of Sworn Auditors, Register of Commercial Companies of Sworn Auditors

Section 20. Licensing of Commercial Companies of Sworn Auditors

(1) A commercial company of sworn auditors shall commence the provision of audit services only after obtaining a licence issued by the Latvian Association of Sworn Auditors.

(2) The Latvian Association of Sworn Auditors shall issue a licence for a commercial company of sworn auditors for an indefinite period.

[19 June 2025]

Section 21. Criteria for the Issuance of a Licence

(1) A licence for a commercial company of sworn auditors shall be issued to a commercial company which is entered in the Commercial Register maintained by the Enterprise Register of the Republic of Latvia and which conforms to the criteria specified in Paragraphs two, three, four, and five of this Section.

(2) A member of the general partnership of sworn auditors and a complimentary of the limited partnership may be only sworn auditors or commercial companies of sworn auditors, or auditors of the Member States, or commercial companies of sworn auditors of the Member States.

(3) In a capital company of sworn auditors, more than 50 per cent of the voting capital shares or voting stocks shall be owned by sworn auditors or commercial companies of sworn auditors, or auditors of the Member States or commercial companies of auditors of the Member States.

(4) In a capital company of sworn auditors, at least 75 per cent of the members of the executive board shall be sworn auditors or auditors of the Member States.

(5) If a commercial company of sworn auditors is a joint-stock company, it may only issue registered stocks.

(6) The procedures for the work organisation, resource planning, document management, creation of registers and files for sworn auditors and commercial companies of sworn auditors shall conform to the requirements referred to in the Cabinet regulation issued on the basis of Section 31.¹ of this Law.

(7) [19 June 2025]

[22 January 2004; 12 June 2008; 15 December 2016; 19 June 2025]

Section 21.¹ Recognition of a Licence for a Commercial Company of Auditors Entered in the Register of Another Member State

(1) By derogation from Section 3, Paragraph one of this Law, a commercial company of auditors entered in the register of another Member State is entitled to provide audit services in the Republic of Latvia if the Ministry of Finance has recognised it as equal to a commercial company of sworn auditors, it has been issued a licence for a commercial company of sworn auditors, and such commercial company is entered in the Register of Commercial Companies of Sworn Auditors.

(2) The Ministry of Finance shall prepare an opinion if the following is received:

1) a submission for obtaining (registering) a licence for a commercial company of auditors entered in the register of another Member State which contains also a certification that an auditor's certificate of another Member State has been issued to the persons who, on behalf of the abovementioned commercial company, will provide auditor's report on the audit (review) of the annual statements and consolidated annual statements of a client, and that the professional qualification of such persons has been recognised in accordance with the procedures laid down in Section 13 of this Law;

2) a document issued by the competent authority of the relevant Member State on the fact that this commercial company of auditors has been entered in the relevant register of commercial companies of auditors of this Member State.

(3) Within five working days after receipt of the documents referred to in Paragraph two of this Section, the Ministry of Finance shall examine them and inform electronically a commercial company of auditors entered in the register of another Member State accordingly that:

1) a licence for a commercial company of sworn auditors or a refusal will be issued (sent) within one month;

2) the document referred to in Paragraph two, Clause 2 of this Section has not been submitted and that a licence for a commercial company of sworn auditors or a refusal will be issued (sent) within the period referred to in Clause 1 of this Paragraph only after receipt of all the information referred to in Paragraph two of this Section.

(4) If all the information referred to in Paragraph two of this Section is received, the Ministry of Finance shall examine the abovementioned documents and prepare an opinion on the recognition of the commercial company of auditors entered in the register of another Member State as equal to a commercial company of sworn auditors.

(5) The Ministry of Finance, where necessary, shall cooperate with the competent authority of the relevant Member State in order to find out the conditions related to the information referred to in Paragraph two of this Section.

(6) If it is recognised that a commercial company of auditors entered in the register of another Member State is equal to a commercial company of sworn auditors, the Ministry of Finance shall prepare and, within five working days, send an opinion:

1) to this commercial company;

2) to the Latvian Association of Sworn Auditors.

(7) The Latvian Association of Sworn Auditors shall issue a licence for a commercial company of sworn auditors to a commercial company of auditors entered in the register of another Member State and enter it in the Register of Commercial Companies of Sworn Auditors on the basis of the opinion of the Ministry of Finance and concurrently inform the Ministry of Finance thereof.

(8) The Ministry of Finance shall, within five working days after receipt of the information referred to in Paragraph seven of this Section, inform the competent authority of the relevant Member State of entering of the commercial company of auditors entered in the register of this other Member State in the Register of Commercial Companies of Sworn Auditors.

[15 December 2016; 19 June 2025]

Section 22. Procedures for the Issuance and Re-registration of a Licence

(1) In order to obtain a licence, the applicant who is a commercial company which conforms to the criteria specified in Section 21 of this Law shall submit an application to the Latvian Association of Sworn Auditors certifying that all the information provided in the application and the documents attached thereto is true and complete. The following documents certified in accordance with the procedures laid down in legal acts shall be attached to the application:

1) the decision of the Commercial Register on the entry in the Commercial Register, indicating the officials and beneficial owners of the commercial company;

2) in the case of a capital company, a derivative (copy) of the articles of association, and in the case of a general partnership and a limited partnership, a derivative (copy) of the partnership agreement, if any;

3) in the case of a capital company, a derivative (copy) of the division of the register of shareholders or stockholders, and in the case of a general partnership and a limited partnership, a list indicating for each partner the given name, surname, personal identity number, and address where the person may be reached if the partner is a natural person, or the name, registration number, and registered office if the partner is a legal person;

4) if a member, shareholder, or stockholder of the commercial company is an auditor or a commercial company of sworn auditors of a European Union or European Economic Area country, the documents certifying that, in accordance with the laws of the relevant country, its owner is entitled to perform professional activity in that country which, in accordance with the laws of Latvia, is performed by a sworn auditor or a commercial company of sworn auditors, and also a translation of such documents into the Latvian language;

5) a list of the sworn auditors (indicating sworn auditor certificate numbers) who will provide audit services on behalf of the commercial company.

(2) If a commercial company of sworn auditors is reorganised or independent parts of undertaking thereof are transferred in accordance with the provisions of the Commercial Law, and any of the information referred to in Section 24, Paragraph two, Clauses 1, 2, 5, 6, 8, and 9 of this Law and to be entered into the Register of Commercial Companies of Sworn Auditors changes in the case of reorganisation, the commercial company that will continue to provide audit services as a result of the reorganisation shall, within one month after promulgation of the entry in the Commercial Register, submit to the Latvian Association of Sworn Auditors an application for re-registration of the licence for the commercial company of sworn auditors or for the issuance of a new licence. The application shall be accompanied by the reorganisation agreement or another document certifying which commercial company retains the licence for the commercial company of sworn auditors issued to the commercial company to be reorganised.

(3) After receipt of the application and documents referred to in Paragraphs one and two of this Section, the Latvian Association of Sworn Auditors shall issue or re-register the licence or take the decision to refuse the issuance or re-registration of the licence.

(4) The Latvian Association of Sworn Auditors is entitled to apply the tacit approval referred to in the Freedom to Provide Services Law if, after receipt of the application and documents referred to in Paragraphs one and two of this Section, it has not, within the period laid down in the Administrative Procedure Law, taken the decision to refuse to issue the licence and has not notified of this fact.

(5) If the Latvian Association of Sworn Auditors has taken the decision to refuse the issuance or re-registration of a licence, the applicant of the licence which is a commercial company is entitled to, after rectification of the deficiencies indicated in the decision, submit a new application for the issuance or re-registration of the licence to the Latvian Association of Sworn Auditors.

(6) The examination of the applications referred to in this Section shall be charged for. The procedures for making the payment, and also the amount thereof shall be determined by the Cabinet.

[19 June 2025]

Section 22.¹ Granting the Right to Provide the Sustainability Report Assurance Service to a Commercial Company

(1) A commercial company of sworn auditors shall commence the provision of the sustainability report assurance service only after an entry is made in the Register of Commercial Companies of Sworn Auditors that the commercial company is entitled to provide the sustainability report assurance service.

(2) For the entry referred to in Paragraph one of this Section to be made in the Register of Commercial Companies of Sworn Auditors, a commercial company of sworn auditors shall submit to the Latvian Association of Sworn Auditors an application for making the entry in the Register of Commercial Companies of Sworn Auditors, indicating which sworn auditors who meet the requirement specified in Section 16.¹, Paragraph one of this Law have been appointed by the commercial company of sworn auditors to provide the sustainability report assurance service. Examination of the application shall be charged for. The procedures for making the payment and the amount thereof shall be determined by the Cabinet.

(3) If the Latvian Association of Sworn Auditors has taken the decision to refuse to make an entry in the Register of Commercial Companies of Sworn Auditors regarding the right of the commercial companies of sworn auditors to provide the sustainability report assurance service, the commercial company is entitled to, after rectification of the shortcomings referred to in the decision, submit a new application to the Latvian Association of Sworn Auditors regarding making an entry in the Register of Commercial Companies of Sworn Auditors.

[26 September 2024; 19 June 2025]

Section 23. Suspension, Restoration, and Cancellation of the Validity of a Licence

(1) If the composition of the members of the executive board or the composition of the members, stockholders or shareholders of a commercial company of sworn auditors has changed, such commercial company shall notify the Latvian Association of Sworn Auditors thereof in writing within one month from the day of occurrence of the changes.

(1¹) If a commercial company of sworn auditors plans to carry out reorganisation, it shall notify the Latvian Association of Sworn Auditors thereof in writing not earlier than one month from the day when the decision on reorganisation was taken.

(2) The Latvian Association of Sworn Auditors is entitled to cancel the licence issued to a commercial company of sworn auditors in the following cases:

1) the information provided for the obtaining of the licence is false;

2) the conditions referred to in Section 21 of this Law have been violated, or the reporting obligation referred to in Paragraph one of this Section has not been complied with;

3) the commercial company has not commenced the provision of audit services within 12 months from the date of receipt of the licence;

4) the commercial company has suspended the provision of audit services for a period exceeding 12 months;

5) [19 June 2025];

6) [19 June 2025];

7) the commercial company has submitted a submission for the cancellation of the licence;

8) none of the commercial companies created as a result of the reorganisation of a commercial company of sworn auditors has submitted an application for the re-registration of the licence issued to the reorganised commercial company of sworn auditors.

(2¹) The Latvian Association of Sworn Auditors shall make an entry in the Register of Commercial Companies of Sworn Auditors on the fact that the licence for the commercial company of sworn auditors has been cancelled if the Ministry of Finance has taken the decision to impose the sanction, i.e. to cancel the licence for the commercial company of sworn auditors.

(3) If the Latvian Association of Sworn Auditors has determined circumstances that allow to decide on the cancellation of a licence issued, having assessed the nature of violation, it may take the decision to suspend the validity of the licence the period of which may not exceed six months.

(3¹) If the Latvian Association of Sworn Auditors has established that the suspension of validity of the licence is necessary in relation to the settlement of an inheritance matter, it shall take the decision to suspend the validity of the licence. The period for the suspension of validity of the licence may not exceed 12 months. The period for the suspension of validity of the licence may be extended for a time exceeding 12 months if the commercial company of sworn auditors submits to the Latvian Association of Sworn Auditors an application containing a justification for the extension of the period for the suspension of validity of the licence. After receipt of the abovementioned application, the Latvian Association of Sworn Auditors shall evaluate the circumstances referred to in the application and decide on the extension of the period for the suspension of validity of the licence.

(3²) The Latvian Association of Sworn Auditors shall cancel the issued licence if the commercial company of sworn auditors has not submitted to the Latvian Association of Sworn Auditors an application for the extension of the period for the suspension of validity of the licence within the period specified in Paragraph 3.¹ of this Section, or if such violations have not been rectified due to which the validity of the licence for the commercial company of sworn auditors has been suspended in accordance with Paragraph three of this Section.

(3³) The Latvian Association of Sworn Auditors shall make an entry in the Register of Commercial Companies of Sworn Auditors on the suspension of the licence for the commercial company of sworn auditors for the period determined by the Ministry of Finance when taking the decision to impose an administrative measure in accordance with Section 38.⁶, Paragraph one, Clause 2 of this Law on a sworn auditor who is the sole sworn auditor in the commercial company of sworn auditors who is entitled to provide audit services on behalf of this commercial company of sworn auditors.

(4) During the period when the validity of the licence is suspended, a commercial company of sworn auditors is not entitled to enter into new contracts for the provision of audit services but is entitled to continue to provide audit services according to the contracts entered into before the date when the validity of the licence was suspended. If, during the period when the validity of the licence is suspended, the commercial company of sworn auditors continues the provision of audit services according to the contracts which were entered into prior to the day when the validity of the licence was suspended, the Latvian Association of Sworn Auditors shall ensure the supervision of professional activity of the commercial company of sworn auditors in accordance with the procedures stipulated thereby until fulfilment of such contracts which were entered into prior to the day when the validity of the licence was suspended.

(4¹) To restore the validity of a suspended licence, a commercial company of sworn auditors shall, within one month prior to the expiry of the period specified in the decision on the suspension of validity of the licence, submit to the Latvian Association of Sworn Auditors the application and other documents referred to in Section 22, Paragraph one of this Law for the restoration of the licence. The application shall contain information that the reasons for the suspension of the validity of the licence no longer exist or that the violations due to which the validity of the licence was suspended have been rectified, and also shall certify that the commercial company of sworn auditors conforms to the criteria specified in Section 21 of this Law.

(4²) The Latvian Association of Sworn Auditors is entitled to apply the tacit approval referred to in the Freedom to Provide Services Law if, after receipt of the application and documents referred to in Paragraph 4.¹ of this Section, it has not, within the period specified by the Administrative Procedure Law, taken the decision to refuse to restore the validity of the licence and has not notified of this fact.

(5) [19 June 2025]

(5¹) If the validity of the licence has been suspended, restored, or re-registered or the licence has been cancelled for a commercial company of sworn auditors which at the same time is a commercial company of auditors registered into the register of another Member State and which is entitled to audit (review) annual statements and consolidated annual statements of commercial companies registered in that Member State, the Latvian Association of Sworn Auditors shall, within five working days, notify the Ministry of Finance in writing of the relevant fact, indicating the period and reason for the suspension of the validity of the licence or the reason for and date of the restoration, re-registration, and cancellation of the licence.

(5²) The Ministry of Finance shall, not later than within five working days, send the information referred to in Paragraph 5.¹ of this Section to the competent authority of the relevant Member State in the field of audit.

(5³) If the period for the suspension of validity of the licence for a commercial company of sworn auditors has expired and the commercial company of sworn auditors has not submitted an application for the extension of the period for the suspension of validity of the licence or an application for the restoration of validity of the licence, the Latvian Association of Sworn Auditors shall cancel the licence issued to the commercial company of sworn auditors.

(6) [22 January 2004]

(7) Disputing or appealing a decision of the Latvian Association of Sworn Auditors to suspend the validity of a licence for a commercial company of sworn auditors shall not suspend the validity of such decision.

[22 January 2004; 29 January 2009; 22 March 2012; 15 December 2016; 19 April 2018; 19 June 2025]

Section 24. Register of Commercial Companies of Sworn Auditors

(1) In order to identify a provider of audit services, information on a commercial company of sworn auditors shall be entered in the Register of Commercial Companies of Sworn Auditors. The Register of Commercial Companies of Sworn Auditors shall be maintained, stored electronically, and regularly updated by the Latvian Association of Sworn Auditors. The information included in the Register of Commercial Companies of Sworn Auditors shall constitute information to be stored permanently.

(1¹) The Register of Commercial Companies of Sworn Auditors shall have a public part and a non-public part. The Ministry of Finance shall include a reference on its website to the website of the Latvian Association of Sworn Auditors where the public part of the Register is available.

(2) The public part of the Register of Commercial Companies of Sworn Auditors shall be available to any person on the website of the Latvian Association of Sworn Auditors and it shall include the following information on a commercial company of sworn auditors:

1) the firm name (with reference to the type of a merchant) and registration number entered in the Commercial Register;

2) the legal address, contact person, telephone number, electronic mail address, and reference to the website address, if such exists;

2¹) the address of the location of the practice of the commercial company of sworn auditors. If there are several locations of the practice, the addresses of all locations of the practice;

3) the number of the licence;

4) the date of and basis for the issuance, re-registration, suspension and restoration of validity of the licence;

5) the given names, surnames, and numbers of sworn auditor certificates of members (participants) if the member (shareholder) is a sworn auditor, but for legal persons - the firm name, registration number entered in the Commercial Register, and legal address;

6) the given name, surname, and number of the certificate of the sworn auditor who is a paid employee of the commercial company of sworn auditors, its partner, or is otherwise connected with such commercial company of sworn auditors, and an indication whether the abovementioned sworn auditor is entitled to provide also the sustainability report assurance service on behalf of the commercial company of sworn auditors;

7) the given name, surname, office address, and number of a sworn auditor certificate of a member of the executive board and the supervisory board (if the supervisory board has been established) of the commercial company if the member of the executive board and supervisory board (if the supervisory board has been established) is a sworn auditor;

8) if a commercial company of sworn auditors is part of a network of commercial companies of auditors - information on the cooperation partners of this network (if available) or reference regarding where such information is accessible to the public;

9) if a commercial company of sworn auditors is at the same time a commercial company registered in a foreign country, the foreign registration institution in the register of which the commercial company has been entered as a provider of the audit service or sustainability report assurance service or as a provider of both such services in the relevant foreign country, and also the registration number, if the law of the relevant foreign country provides for the entering of the abovementioned commercial company of sworn auditors in the register, shall be indicated.

(2¹) In order to identify a person who was entitled to provide audit services before the cancellation of the licence, the following information shall be entered in the non-public part of the Register of Commercial Companies of Sworn Auditors:

1) the firm name (with reference to the type of a merchant);

2) the number of the licence;

3) the date of and basis for the cancellation of the licence.

(2²) The Latvian Association of Sworn Auditors shall store the information entered in the non-public part of the Register of Commercial Companies of Sworn Auditors in accordance with the requirements of the legal acts governing the document storage, and such information may be obtained from the Latvian Association of Sworn Auditors in accordance with the procedures laid down in legal acts until the expiry of the storage period of such information.

(2³) If the name of a commercial company of sworn auditors changes, the relevant commercial company shall, within two weeks, submit to the Latvian Association of Sworn Auditors an application for making amendments to the licence for the commercial company of sworn auditors. The application shall indicate the new name of the commercial company of sworn auditors and it shall be signed by an official acting on behalf of the commercial company of sworn auditors.

(3) If any of the information referred to in Paragraph two, Clauses 1, 2, 5, 6, 8, and 9 of this Section is subject to change, the commercial company of auditors shall, within two weeks, submit a relevant statement to the Latvian Association of Sworn Auditors. If any of the information in respect of the given name, surname, and number of sworn auditor certificate of members (shareholders) referred to in Paragraph two, Clause 5 of this Section and also the information referred to in Clause 7 are subject to change, the commercial company of auditors shall submit a relevant statement to the Latvian Association of Sworn Auditors within the time limit referred to in Section 23, Paragraph one of this Law. The statement shall be submitted in writing and it shall be signed by an official who acts on behalf of the commercial company of sworn auditors.

(3¹) The Register of Commercial Companies of Sworn Auditors shall indicate that:

1) the Latvian Association of Sworn Auditors carries out the licensing of commercial companies of sworn auditors and quality control of those audit services and sustainability report assurance services which are provided by a commercial company of sworn auditors to the clients that are not public-interest entities. In addition, the address of the Latvian Association of Sworn Auditors shall be indicated;

2) the Ministry of Finance shall:

a) impose sanctions and administrative measures on commercial companies of sworn auditors for violations of professional activities;

b) carry out the quality control of those audit services and sustainability report assurance services which are provided by a commercial company of sworn auditors to the clients that are public-interest entities;

c) perform the State supervision of the Latvian Association of Sworn Auditors. In addition, the address of the Ministry of Finance shall be indicated.

(3²) The Register of Commercial Companies of Sworn Auditors shall be maintained in Latvian. Additionally, the Latvian Association of Sworn Auditors may maintain the register in any other official language of a Member State of the European Union. In such case, it shall be indicated in the register whether the translation is certified or not.

(4) [19 June 2025]

(5) [3 June 2010]

(6) [19 June 2025]

[12 June 2008; 29 January 2009; 3 June 2010; 22 March 2012; 15 December 2016; 19 April 2018; 26 September 2024; 19 June 2025]

Section 24.¹ Register of Third Country Auditors and Third Country Commercial Companies of Auditors

(1) The Register of Third Country Auditors and Third Country Commercial Companies of Auditors shall be maintained by the Latvian Association of Sworn Auditors in cooperation with the Ministry of Finance. Third country auditors and commercial companies of third country auditors which provide an auditor's report on the annual statement or consolidated annual statement of a commercial company which is registered in a third country (hereinafter in this section - the third country commercial company) and the transferable securities of which are admitted to trading on the regulated market of Latvia shall be entered in the Register. The information on the third country auditor and third country commercial company of auditors referred to in Sections 19 and 24 of this Law shall be entered into the Register. Annual statements and consolidated annual statements that have been audited (reviewed) by third country auditors and third country commercial companies of auditors not included in the Register of Third Country Auditors and Third Country Commercial Companies of Auditors shall have no legal effect.

(1¹) In accordance with the procedures laid down in Paragraph one of this Section, an entry shall be made in the Register of Third Country Auditors and Third Country Commercial Companies of Auditors regarding such third country auditors and third country commercial companies of auditors which provide the assurance report on the sustainability report and consolidated sustainability report (if there is an obligation to prepare one) of such third country commercial company the transferable securities of which are admitted to trading on the regulated market of Latvia. The sustainability report and consolidated sustainability report for which the assurance report has been provided by third country auditors and third country commercial companies of auditors not included in the Register of Third Country Auditors and Third Country Commercial Companies of Auditors shall have no legal effect.

(2) Such third country auditor and third country commercial company of auditors shall not be entered in the Register of Third Country Auditors and Third Country Commercial Companies of Auditors which provide the auditor's report on the annual statement or consolidated annual statement (if there is an obligation to prepare one) of the third country commercial company which has issued only outstanding debt securities to which one of the following conditions applies:

1) the denomination of one unit of such securities is at least EUR 50 000 or if the value of debt securities is expressed in a currency other than euro, the denomination of one unit of such securities is at least the equivalent of EUR 50 000, and such securities are admitted to trading on the regulated market in one or several Member States before 31 December 2010 until the day when such securities are deleted;

2) the denomination of one unit of such securities is at least EUR 100 000 or if the value of debt securities is expressed in a currency other than euro, the denomination of one unit of such securities is at least the equivalent of EUR 100 000, and such securities are admitted to trading on the regulated market in one or several Member States starting from 31 December 2010 until the day when such securities are deleted.

(2¹) The conditions of Paragraph two of this Section shall also be applied to such third country commercial company for the sustainability report and consolidated sustainability report (if there is an obligation to prepare one) of which the third country auditor and third country commercial company of auditors provide the assurance report.

(3) The Register of Third Country Auditors and Third Country Commercial Companies of Auditors shall be maintained in Latvian. Additionally, the Latvian Association of Sworn Auditors may maintain the register in any other official language of a Member State of the European Union. In such case, it shall be indicated in the register whether the translation is certified or not.

(4) The Register of Third Country Auditors and Third Country Commercial Companies of Sworn Auditors shall be accessible to the public, and any person has the right to become acquainted with it. The information contained in this register shall be kept and stored electronically and it shall be available on the website of the Latvian Association of Sworn Auditors. The Ministry of Finance shall include a reference on its website to the website of the Latvian Association of Sworn Auditors where such Register is available.

(5) The Latvian Association of Sworn Auditors shall renew (update) the information included in the Register of Third Country Auditors and Third Country Commercial Companies of Auditors within five working days from the date it has received a written notification from a third country auditor or third country commercial company of auditors entered in the Register on changes in the information included in the Register.

[12 June 2008; 12 September 2013; 15 December 2016; 26 September 2024; 19 June 2025]

Section 24.² Conditions for the Registration of Third Country Auditors and Third Country Commercial Companies of Auditors

(1) For the purpose of provision of audit services, a third country auditor or a third country commercial company of auditors shall be entered in the Register of Third Country Auditors and Third Country Commercial Companies of Auditors in accordance with the procedures laid down in Section 24.¹ of this Law only if an opinion of the Ministry of Finance has been received that the conditions referred to in this Paragraph of the Section have been complied with:

1) a third country auditor is a person who has a perfect reputation and whose professional qualification is equal to the professional qualification of a sworn auditor;

2) the majority of the members of the executive board of a third country commercial company of auditors are persons whose professional qualification is equal to the professional qualification of a sworn auditor and who have a perfect reputation;

3) persons who, on behalf of a third country commercial company of auditors, provide an auditor's report on the annual statement and the consolidated annual statement of a commercial company which is registered in this country have perfect reputation and the professional qualification of these persons is equal to the professional qualification of a sworn auditor;

4) the audit (review) of the annual statement or consolidated annual statement of commercial companies registered in the third country is carried out in accordance with the international auditing standards recognised in Latvia or with equal international auditing standards and the requirements for independence, objectivity, and confidentiality specified in this Law or the requirements of third countries equal thereto are complied with. The remuneration of a third country auditor or a third country commercial company of auditors which has been received for audit services shall not be affected by the additional services provided or other conditions;

5) a third country auditor or a third country commercial company of auditors shall publish on its website a transparency report containing the information referred to in Article 13 of Regulation No 537/2014 or information equal thereto.

(1¹) The equivalence of the requirements laid down in this Law on eight months of experience and qualification examination in the field of sustainability shall not be applicable to the persons referred to in Paragraph one, Clauses 1 and 2 of this Section if a third country auditor and, in the relevant case, a third country commercial company is entered in the Register of Third Country Auditors and Third Country Commercial Companies of Auditors for the provision of audit services.

(1²) For the provision of sustainability report assurance, a third country auditor or third country commercial company of auditors shall be entered in the Register of Third Country Auditors and Third Country Commercial Companies of Auditors in accordance with the procedures laid down in Section 24.¹ of this Law only when the opinion of the Ministry of Finance has been received that the following conditions have been fulfilled:

1) a third country auditor conforms to the requirements of Paragraph one, Clause 1 of this Section and has complied with the condition referred to in Paragraph one, Clause 5 of this Section;

2) a third country commercial company of auditors conforms to the requirements of Paragraph one, Clauses 1 and 2 of this Section and has complied with the condition referred to in Paragraph one, Clause 5 of this Section;

3) persons who, on behalf of a third country commercial company of auditors, provide the assurance report on the sustainability report and consolidated sustainability report (if there is an obligation to prepare one) of the commercial company which is registered in this country have perfect reputation and the professional qualification of these persons is equal to the professional qualification of a sworn auditor in the field of sustainability;

4) the assurance service of the sustainability report and consolidated sustainability report (if there is an obligation to prepare one) of a commercial company registered in a third country is provided in accordance with the assurance standards for sustainability reporting or equivalent assurance standards, and the requirements of independence, objectivity, confidentiality, work organisation and the performance requirements of sustainability report assurance engagement or equivalent third country requirements are complied with. The remuneration of a third country auditor or third country commercial company of auditors which has been received for sustainability report assurance services shall not be affected by the additional services provided or other conditions.

(2) The Ministry of Finance in cooperation with Latvijas Banka shall prepare an opinion if a registration application filled in by a third country auditor or third country commercial company of auditors has been received. The sample form of the registration application shall be approved by the Cabinet. After preparation of an opinion, the Ministry of Finance shall inform the European Commission of such opinion without delay, also indicating whether all the conditions referred to in Paragraph one of this Section have been complied with.

(3) The Cabinet shall determine the sample form of the opinion of the Ministry of Finance referred to in this Section, the procedures for the drawing up and sending thereof.

(4) If the European Commission has recognised third country supervision, audit services quality control, investigation, and penalty systems as equivalent to the supervision, audit services quality control, investigation, and penalty systems of the Member States, then, after receipt of a registration application filled in by such third country auditor or a third country commercial company of auditors, the Ministry of Finance shall prepare the opinion referred to in this Section without assessing whether the conditions referred to in Paragraph one of this Section have been complied with.

(5) The Ministry of Finance is entitled to enter into a mutual agreement with the third country competent authority in the field of audit if it is necessary to obtain additional information on the quality control results of the audit services provided by a third country auditor or a third country commercial company of auditors. The Ministry of Finance shall without delay inform the European Commission of the conclusion of a mutual agreement.

[29 January 2009; 3 June 2010; 22 March 2012; 15 December 2016; 26 September 2024; 19 June 2025]

Section 24.³ Supervision of Activities of Third Country Auditors and Third Country Commercial Companies of Auditors Entered in the Register

A third country auditor or a third country commercial company of auditors which has been entered in the Register of Third Country Auditors and Third Country Commercial Companies of Auditors shall be subject to the quality control of audit services and sustainability report assurance services specified in this Law, and the sanctions and administrative measures specified in this Law shall also be imposed on this auditor or commercial company of auditors.

[19 June 2025]

Chapter VI
Independence, Objectivity of a Sworn Auditor and Requirements of Professional Ethics

[15 December 2016]

Section 25. Independence and Objectivity of a Sworn Auditor

(1) A sworn auditor (also a responsible sworn auditor appointed by a commercial company of sworn auditors) shall be independent and objective in his or her professional activity.

(2) State and local government authorities, courts, prosecutors, and pre-trial investigating institutions shall guarantee the independence of the professional activity of sworn auditors. In order to guarantee the independence of the professional activity of sworn auditors, it is prohibited:

1) to interfere with the professional activity of sworn auditors, to exert influence or pressure upon them;

2) to request information and explanations from sworn auditors, except for the cases referred to in Section 27, Paragraph one and Section 33 of this Law, and also to question them as witnesses regarding facts that have become known to them while providing professional services;

3) to control the mail, telegraph, and other means of correspondence as well as the documents which sworn auditors have received while providing professional services, to perform inspection and withdrawal of correspondence and documents, or to perform searches in order to find and withdraw correspondence and documents;

4) to control, also by the procedural measures referred to in Clause 3 of this Section, the information systems and means of communication necessary for the provision of professional services of sworn auditors, including electronic means of communication, to obtain information from them and to interfere with their functioning;

5) to request information from clients on the content of the professional services provided by sworn auditors;

6) to subject sworn auditors to any sanctions or threats in respect of the professional services they provide, in accordance with law, to clients;

7) to bring sworn auditors to any type of liability for statements made in writing or orally which they have made, in accordance with the law and in good faith, while fulfilling their professional duties.

(3) Members, stockholders or shareholders, manager, members of the executive board and the supervisory board (if the supervisory board is established) of the commercial company of sworn auditors and other persons are prohibited from interfering in the professional activity of the sworn auditor (also a responsible sworn auditor appointed by the commercial company of sworn auditors) or affect him or her with a view to influence independence and objectivity of this auditor, his or her view or opinion as an independent expert.

(4) Illegal activity of a sworn auditor in the client's interests and also his or her activity in promoting illegal commitment of the client shall not be regarded to be a professional activity which expresses as an audit service.

[29 March 2007; 15 December 2016; 19 April 2018]

Section 26. Circumstances which Jeopardise the Independence and Objectivity of a Sworn Auditor or a Commercial Company of Sworn Auditors

(1) A sworn auditor and commercial company of sworn auditors are entitled to undertake the audit of an annual statement and consolidated annual statement only if the independence and objectivity of the sworn auditor, responsible sworn auditor appointed by the commercial company of sworn auditors, and commercial company of sworn auditors involved in this audit and also experts or specialists and assistants invited thereby are not jeopardised.

(2) The independence and objectivity of a sworn auditor, a responsible sworn auditor appointed by a commercial company of sworn auditors, and a commercial company of sworn auditors, and also experts or specialists and assistants engaged by them shall be considered to be jeopardised if any of the circumstances referred to in the professional code of ethics occur, including those related to professional activities, interests, and relationships, or facts which create or may create a threat to independence. The independence and objectivity of the abovementioned persons are jeopardised by at least the following circumstances:

1) financial obligations and participation in transactions of the client;

2) employment relationship with the client which is existing now or which has existed within the last three years;

3) the performance of management functions of the client;

4) kinship or affinity up to the second degree with the member of the executive board or supervisory board of the client of a sworn auditor or his or her spouse, or dependent child, or other relative who has a shared household with the sworn auditor for at least one year;

5) substantial dependence for income on the services provided to one or more mutually connected clients;

6) dependence of the remuneration received for audit services on the results of the audit or additional services provided;

7) acceptance of gifts or services, discounts or other favourable conditions of a transaction from the client, except when an objective and informed third person could consider their value as insignificant or as such which does not cause any consequences;

8) holding in the equity of the client (or a commercial company related thereto) or involvement in the transactions with a view to obtain financial instruments issued, guaranteed or otherwise ensured by the client (or a commercial company related thereto). That referred to in this Paragraph shall not apply to a holding which is owned only indirectly in different collective investment schemes (for example, investment funds, alternative investment funds, life insurance, funded pension schemes in fund investment plans or private pension plans).

(3) The independence and objectivity of a sworn auditor, the responsible sworn auditor designated by a commercial company of sworn auditors, and a commercial company of sworn auditors is also jeopardised if at least one of the conditions referred to in Paragraph two of this Section applies to:

1) a cooperation partner of the network of commercial companies of auditors to which a sworn auditor or a commercial company of sworn auditors belongs;

2) a member, stockholder, or shareholder, manager, member of the executive body, employee of the commercial company of sworn auditors or any other person the services provided by whom are used by or directly or indirectly controlled by a sworn auditor, responsible sworn auditor appointed by a commercial company of sworn auditors, or commercial company of sworn auditors.

(4) A sworn auditor and a commercial company of sworn auditors may not carry out the audit of an annual statement and a consolidated annual statement if there is a risk that the client could be a person related to a sworn auditor or commercial company of sworn auditors, or a risk that this audit could be related with self-interests of a sworn auditor, responsible sworn auditor appointed by a commercial company of sworn auditors, or commercial company of sworn auditors (defence or intimidation of the client in relation to participation in the client's transactions, financial, civil legal, employment, or other relations between a sworn auditor, commercial company of sworn auditors, network of commercial companies of auditors, or such natural person referred to in Paragraph three of this Section who could directly or indirectly influence the audit result, and the client) from which an objective and duly informed third person could conclude that the independence of the sworn auditor, responsible sworn auditor appointed by a commercial company of sworn auditors, or commercial company of sworn auditors is jeopardised.

(5) A sworn auditor, a responsible sworn auditor appointed by a commercial company of sworn auditors, and a commercial company of sworn auditors has the obligation to indicate the conditions referred to in Paragraphs two and three of this Section in the audit working papers, if such conditions have been established, and also to indicate measures that have been taken to eliminate these conditions.

(6) The requirements for the independence of the sworn auditor and the commercial company of sworn auditors referred to in Section 25 of this Law and this Section shall apply at least to the period to which the client's annual statement or consolidated annual statement to be audited (or reviewed) applies and the period in which the sworn auditor or commercial company of sworn auditors provides an audit (or review) service.

(7) If, during the period covered by the client's annual statement and consolidated annual statement (if such has been prepared), the client is reorganised by way of merger, division, or restructuring, a sworn auditor or a commercial company of sworn auditors shall evaluate whether the circumstances referred to in Paragraphs two and three of this Section which could jeopardise the independence of the sworn auditor or commercial company of sworn auditors have arisen due to the reorganisation of the client. All non-audit services which have been provided to the abovementioned client before its reorganisation and which could influence the independence of the sworn auditor or commercial company of sworn auditors and the capacity to continue audit of such client's annual statement or consolidated annual statement after the date when the client's reorganisation entered into effect shall also be evaluated.

(8) If a sworn auditor or commercial company of sworn auditors detects risk to independence due to the reasons referred to in Paragraph seven of this Section, a sworn auditor and commercial company of sworn auditors has the obligation, as soon as possible but not later than within three months from the day of detection, to take all necessary measures to eliminate conditions that cause risk to independence and may influence the objectivity of a sworn auditor.

(9) A sworn auditor, the responsible sworn auditor designated by a commercial company of sworn auditors, and a commercial company of sworn auditors shall, before entering into a contract with a client for the audit of the annual statement or consolidated annual statement, and also during the provision of audit service provided for in this contract, assess and immediately indicate in the audit working papers:

1) whether the sworn auditor, responsible sworn auditor designated by a commercial company of sworn auditors, and commercial company of sworn auditors meet the requirements for independence and objectivity laid down in this Law;

2) whether any of the conditions referred to in Section 25 of this Law and Paragraphs two and three of this Section is known that may cast substantiated doubts about the independence and objectivity of the sworn auditor, responsible sworn auditor designated by a commercial company of sworn auditors, and commercial company of sworn auditors, and indicate the measures taken to eliminate such conditions;

3) whether the experts, specialists, or assistants invited are sufficiently competent for the performance of the audit of the annual statement or consolidated annual statement of the particular client and whether the amount of employees and other necessary resources attracted to this audit are sufficient;

4) whether the time planned for the audit is sufficient to fulfil the obligations of the contract for the audit of the client's annual statement or consolidated annual statement by not violating the requirements of this Law and other legal acts;

5) in the case of a commercial company of sworn auditors - whether the requirements of Section 31 of this Law are met.

[15 December 2016; 19 April 2018; 19 June 2025 /

Section 27. Confidentiality Requirements

(1) A sworn auditor is prohibited from disclosing a trade secret that he or she has learned while fulfilling professional duties. A sworn auditor and a commercial company of sworn auditors are prohibited from using or disclosing, without the client's written consent, information containing a trade secret, except in the following cases:

1) to the State Revenue Service in the cases referred to in the law On Taxes and Fees when the sworn auditor or the commercial company of sworn auditors has established a suspicious transaction within the meaning of the Law on the Prevention of Money Laundering and Terrorism and Proliferation Financing;

2) to the Ministry of Finance and Latvijas Banka as the competent authorities specified in this Law for the performance of the tasks referred to in this Law and Regulation No 537/2014;

3) to the Latvian Association of Sworn Auditors for the performance of the public administration tasks delegated thereto in accordance with this Law;

4) to the responsible auditor of a group of companies who provides audit services to the parent undertaking of the client of the sworn auditor or the commercial company of sworn auditors;

5) to the sworn auditor carrying out a quality control review of the audit task;

6) to the sworn auditor or the commercial company of sworn auditors with whom an information sharing agreement has been entered into as referred to in the Law on Investment Management Companies;

7) in the cases where the sworn auditor has the right or obligation to do so in accordance with a court ruling;

8) in the cases referred to in Paragraph two of this Section.

(2) If the audit services contract concluded between a client and a sworn auditor or commercial company of sworn auditors is terminated and the client has concluded an audit services contract with another sworn auditor or commercial company of sworn auditors, the sworn auditor or commercial company of sworn auditors with which the contract is terminated shall ensure that the new sworn auditor or commercial company of sworn auditors (with which the contract has been concluded) has access to all relevant information on the client and the last audit of the annual statement and consolidated annual statement thereof.

(3) The requirements of Paragraph one of this Section shall refer to a sworn auditor and a commercial company of sworn auditors during the period of validity of the audit services contract with the client and also after the contract is terminated.

(4) Without prejudice to the confidentiality provisions referred to in Paragraph one of this Section, a sworn auditor or commercial company of sworn auditors which is carrying out an audit (review) of the annual statement or consolidated annual statement for a client which is a part of such group of companies the parent undertaking of which is located in a third country is entitled to transfer the audit working papers prepared by it to the responsible auditor or responsible commercial company of auditors of the abovementioned group of companies located in a third country if such papers are necessary for the audit (review) of the consolidated annual statement of the group of companies. In this case, the processing of personal data shall be subject to the right of the data subject to request information on the processing of data as specified in Article 15 of Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC (General Data Protection Regulation) (hereinafter - Regulation No 2016/679), including information on the purposes of the processing of data, the data recipients, the sources of acquisition thereof, the right to access their data and to request their amending, destruction, discontinuation, or prohibition of processing.

(5) Without prejudice to the confidentiality provisions referred to in Paragraph one of this Section, a sworn auditor or commercial company of sworn auditors which is providing an audit service for a client the transferable securities of which are admitted to trading on the regulated market of a third country or which is a subsidiary of the group of companies of the third country is entitled, upon request of the competent authority of this third country, to transfer the audit working papers or other documents prepared for it which are related to the audit of the annual statement or consolidated annual statement of the abovementioned client in conformity with the requirements of Section 37.⁴ of this Law.

[12 June 2008; 15 December 2016; 19 April 2018; 19 June 2025]

Chapter VII
Activities, Rights, and Obligations of Sworn Auditors and Commercial Companies of Sworn Auditors

Section 28. Professional Activities of a Sworn Auditor

(1) A sworn auditor shall provide audit services in compliance with the provisions referred to in Section 3, Paragraph two of this Law by complying with the requirements of the international auditing standards recognised in Latvia and the international auditing standards for public sector recognised in Latvia, and the norms of the professional code of ethics. If a client is a public-interest entity, the sworn auditor and the commercial company of sworn auditors shall also comply with the requirements laid down in Regulation No 537/2014 for carrying out an audit of annual statements and consolidated annual statements in such public-interest entity.

(1¹) If a client is a State or local government authority, a sworn auditor and a commercial company of sworn auditors shall provide audit services in accordance with the requirements of the legal acts in conformity with the instructions of the State Audit Office as a group auditor, and also the international auditing standards for public sector recognised in Latvia. The State Audit Office as a group auditor shall provide instructions to a sworn auditor or commercial company of sworn auditors by 15 October of the current year.

(1²) A sworn auditor and a commercial company of sworn auditors shall provide the sustainability report assurance service in accordance with the provisions of Section 16 of the Law on Sustainability Disclosures and of this Law and in conformity with the assurance standards for sustainability reporting.

(2) A sworn auditor who cannot for certain reasons perform his or her professional activity for more than one year shall notify the Latvian Association of Sworn Auditors thereof and submit an application for the suspension of the validity of the sworn auditor certificate for a specified period. If the sworn auditor wishes to extend the period for the suspension of validity of the sworn auditor certificate, he or she shall, not later than two weeks before the expiry of the final period for the suspension of validity of the sworn auditor certificate, submit to the Latvian Association of Sworn Auditors an application for the extension of the period for the suspension of validity of the sworn auditor certificate, indicating the reason.

(3) A sworn auditor and the responsible sworn auditor designated by a commercial company of sworn auditors have the right to request from the client and the client has the obligation to provide all information, documents, and explanations required for the provision of the audit service in accordance with this Law. A sworn auditor and the responsible sworn auditor designated by a commercial company of sworn auditors have the right to invite experts or knowledgeable persons and assistants, notifying the client thereof in advance and assuming the responsibility for the activities carried out by the abovementioned persons, and also to check the movable and immovable property (also securities and cash), claims and liabilities of the client.

(4) A sworn auditor and a commercial company of sworn auditors have the right, when providing audit services to a State or local government authority, to receive information from the State Audit Office at the disposal of the Office and obtained from public registers and databases that is necessary for the achievement of the purpose of the relevant audit.

[22 January 2004; 15 December 2016; 26 September 2024; 19 June 2025]

Section 28.¹ Limited Review of the Annual Statement

(1) A sworn auditor and a commercial company of sworn auditors shall carry out a limited review of the annual statements laid down in the Law on Annual Statements and Consolidated Annual Statements in accordance with the provisions of this Law and in conformity with the requirements of the international auditing standards recognised in Latvia, i.e., the International Standards on Review Engagements. The Latvian Association of Sworn Auditors shall determine the procedures including a set of measures, also the methodology for the conformity review of the amounts of the enterprise income tax, which shall be performed by sworn auditors and commercial companies of sworn auditors in order to meet the requirements of this Paragraph.

(2) When the limited review of the annual statements is completed, a sworn auditor shall prepare a review report in accordance with the requirements of the international auditing standards recognised in Latvia, i.e., the International Standards on Review Engagements.

[29 October 2015 / See Paragraph 11 of Transitional Provisions]

Section 28.² Continuing Vocational Education of Sworn Auditors

(1) A sworn auditor has the obligation to continue his or her vocational education and to improve his or her professional qualification in a further education process recognised by the Latvian Association of Sworn Auditors. The further education requirements and the procedures for its course shall be approved by the Latvian Association of Sworn Auditors after agreement with the Ministry of Finance.

(2) If a sworn auditor and a commercial company of sworn auditors wish to provide the sustainability report assurance service, the sworn auditor and the sworn auditor appointed by the commercial company of sworn auditors and also the sustainability auditor have the obligation to improve their professional qualification through the process of further education which is recognised by the Latvian Association of Sworn Auditors and includes the fields referred to in Section 14, Paragraph two of this Law.

[26 September 2024 / See Paragraphs 27 and 32 of Transitional Provisions]

Section 29. Provision of Professional Services of a Sworn Auditor and a Commercial Company of Sworn Auditors

(1) A sworn auditor or commercial company of sworn auditors is entitled to provide audit services:

1) upon an invitation from the client, in State or local government authorities and the institutions which are subordinate to them - upon an invitation from the management of a higher authority, but in capital companies where a State or local government authority is a holder of State or local government capital shares - upon an invitation from the capital company itself or the holder of capital shares;

2) upon an invitation from the State authorities and officials specified in the law.

(2) A sworn auditor and a commercial company of sworn auditors shall provide audit services according to a written contract for the provision of such services - an audit services contract.

(3) A client, members of a commercial company, or a meeting of shareholders (stockholders) have the right to freely choose a sworn auditor or commercial company of sworn auditors with which to enter into an audit services contract insofar as such choice is not restricted by the requirements for independence, objectivity of a sworn auditor or other requirements laid down in this Law but in respect of a public-interest entity - also the restrictions laid down in Article 5(1), (4) and (5), and Article 6 of Regulation No 537/2014. A sworn auditor or commercial company of sworn auditors has the right to freely choose a client with which to enter into a contract on the provision of audit services insofar as such choice is not restricted by the requirements for independence, objectivity of a sworn auditor or other requirements laid down in this Law but in respect of a public-interest entity - also the restrictions laid down in Article 5(1), (4), and (5) and Article 6 of Regulation No 537/2014. The right to a meeting of members or shareholders (stockholders) of the commercial company referred to in this Paragraph may not be limited either by the planned provisions of the audit services contract or any previous agreement, or a provision included in the agreements entered into by the executive board of the capital company.

(3¹) A client may unilaterally withdraw from the audit services contract with a sworn auditor or commercial company of sworn auditors only if a substantiated reason exists. Differences in opinions on accounting techniques or audit procedures or, in the relevant case, on sustainability reporting or sustainability report assurance procedures as expressed by a client and a sworn auditor or commercial company of sworn auditors shall not constitute the basis for the termination of the contract. A client who has unilaterally withdrawn from the audit services contract has the obligation to immediately notify the Ministry of Finance and the Latvian Association of Sworn Auditors thereof in writing, but if the client is a public-interest entity, also to notify Latvijas Banka, indicating the reason.

(3²) If a capital company is a public-interest entity, shareholders (stockholders) of such capital company who represent not less than one-twentieth of the equity capital, or the competent authority referred to in Section 37.⁵, Paragraph two of this Law, may bring an action before a court against such capital company regarding the revocation of the sworn auditor or commercial company of sworn auditors elected by the meeting of shareholders (stockholders) if it has a justified reason.

(3³) A sworn auditor and a commercial company of sworn auditors with which the audit services contract has been terminated during the term of its validity has the obligation to immediately notify the Ministry of Finance and the Latvian Association of Sworn Auditors thereof in writing, but if the client with whom the prematurely terminated contract was entered into is a public-interest entity, also to notify Latvijas Banka, indicating the reason.

(3⁴) A sworn auditor and a commercial company of sworn auditors which has entered into or extended the audit services contract on the audit of the annual statement or consolidated annual statement with a client which is a public-interest entity has the obligation, as soon as possible but not later than within one month from the day when the abovementioned contract has entered into effect, to notify the Ministry of Finance as the competent authority of the name of the client and period (in years) for the provision of the audit services laid down in the abovementioned contract, and also of the period for which the first annual statement or consolidated annual statement audited according to this contract has been prepared.

(3⁵) The stockholders, shareholders or members (hereinafter in this Paragraph - the shareholders) of large commercial companies, small and medium commercial companies, parent undertakings of the group of companies which are public-interest entities but are not such commercial companies the transferable securities of which are admitted to trading on the regulated market of Member States and which, in accordance with the Law on Sustainability Disclosures, prepare the sustainability report or consolidated sustainability report (if there is an obligation to prepare one), jointly representing five and more per cent of the equity capital or the number of stocks or shares with voting rights are entitled to submit to the meeting of shareholders a draft decision proposing the invitation of another sworn auditor or commercial company of sworn auditors which is not a sworn auditor or commercial company of sworn auditors elected at the meeting of shareholders, or a member of the network of commercial companies of auditors to which the elected sworn auditor or commercial company of sworn auditors belongs, to provide the assurance report on specific sections of the company's sustainability report and consolidated sustainability report (if there is an obligation to prepare one) and on the availability of the assurance report to the meeting of shareholders.

(3⁶) A sworn auditor and a commercial company of sworn auditors may unilaterally withdraw from the audit services contract with a client only if there is a justified reason. A sworn auditor and a commercial company of sworn auditors who have unilaterally withdrawn from the audit services contract have the obligation to immediately notify the Ministry of Finance and the Latvian Association of Sworn Auditors thereof in writing, but if the client is a public-interest entity, also to notify Latvijas Banka, indicating the reason.

(4) [15 December 2016]

(4¹) A sworn auditor and a commercial company of sworn auditors have no right to provide audit services for the same State or local government authority for more than six consecutive years, and also they are prohibited from participation in the audit of the annual statement of the abovementioned client for at least two years after the end of this period.

(5) At least one year after termination of the contract on the audit of the annual statement or consolidated annual statement, a sworn auditor and the responsible sworn auditor designated by a commercial company of sworn auditors are prohibited from holding an office in the executive board or supervisory board of the commercial company which has been the client referred to in the terminated contract. If the client referred to in the terminated contract on the audit of the annual statement or consolidated annual statement is a public-interest entity, at least two years after termination of the abovementioned contract the sworn auditor and the responsible sworn auditor designated by a commercial company of sworn auditors are prohibited from:

1) holding an office in the executive board and supervisory board of such public-interest entity;

2) becoming a member of the audit committee of such public-interest entity or, if the relevant public-interest entity does not establish the audit committee, a member of such authority which performs functions similar to the audit committee.

(5¹) At least one year after provision of audit services, a sworn auditor who provides audit services as a sole proprietorship or self-employed person and a responsible sworn auditor appointed by a commercial company of sworn auditors are prohibited from holding an office in a management body, executive board, supervisory board, audit committee of the former client or, if the relevant client does not establish the auditor committee, in a body which performs functions similar to the audit committee.

(6) A sworn auditor, a commercial company of sworn auditors, and a responsible sworn auditor shall, once a year, provide a written declaration of the independence of their professional activities of a sworn auditor from the audited client to the audit committee of a capital company whose transferable securities are admitted to trading on the regulated market of Member States, and also inform the audit committee of any additional services provided to this client. A sworn auditor, a commercial company of sworn auditors, and a responsible sworn auditor shall inform the client's audit committee of conditions jeopardising his or her independence within the meaning of Section 26, Paragraph two of this Law and shall consult on measures implemented to eliminate these conditions.

(7) A sworn auditor and a commercial company of sworn auditors providing audit services to a client that is a public-interest entity has the obligation to notify the Ministry of Finance as the competent authority and Latvijas Banka in writing of the reason for the delay in providing the sworn auditor's report, if the provision of the sworn auditor's report to the client is delayed and the delay exceeds the period for the submission of annual statements and consolidated annual statements specified in legal acts.

[22 January 2004; 12 June 2008; 29 October 2015; 15 December 2016; 19 April 2018; 26 September 2024; 19 June 2025]

Section 30. Special Provisions for Audit Services Contracts

(1) Upon receipt of an audit task, a sworn auditor shall inform the assignor of the task and, if he or she is an employee of a commercial company of sworn auditors, also the management of this company as to whether the conditions referred to in Section 26, Paragraph two of this Law apply to him or her. A sworn auditor may undertake the provision of audit services only if his or her independence and objectivity in the submission of an opinion are not jeopardised.

(2) If the conditions referred to in Paragraph two of Section 26 enter into effect during the period after conclusion of the audit services contract, the sworn auditor has the obligation to, without delay, notify the assignor of the task and, if he or she is an employee of a commercial company of sworn auditors, also the management of this company and to decline the carrying out of the task specified in the contract.

[15 December 2016]

Section 31. Responsible Sworn Auditor and Lead Sustainability Auditor

(1) On the basis of an audit services contract with the client, the management of a commercial company of sworn auditors shall appoint a responsible sworn auditor (in the case of an audit of a consolidated annual statement - the responsible auditor of a group of companies) for the provision of audit services (performance of audit task) and notify the client of his or her appointment.

(1¹) On the basis of a sustainability report assurance services contract with the client, the management of a commercial company of sworn auditors shall designate the lead sustainability auditor for the provision of the sustainability report assurance service and notify the client of his or her appointment.

(2) The responsible sworn auditor shall provide the audit services and prepare an auditor's report. Such document, indicating the given name, surname, certificate number, and licence number of the commercial company of sworn auditors, shall be signed by the responsible sworn auditor and the official who acts on behalf of the commercial company of sworn auditors.

(3) The mutual legal relations and also the liability of a commercial company of sworn auditors and the responsible sworn auditor designated by it, and, where applicable, the lead sustainability auditor shall be governed by the concluded contract.

[22 January 2004; 26 September 2024; 19 June 2025]

Section 31.¹ Competence of the Cabinet in the Field of Audit Services

The Cabinet shall determine the requirements for work organisation, resource planning, document management, creationt of registers and files for sworn auditors and commercial companies of sworn auditors.

[15 December 2016]

Section 31.² Auditor's Report

The auditor's report shall include:

1) a paragraph where a client is identified (indicating the name and type of the client) the financial statements included in the annual statement (consolidated annual statement) of which have been audited, indicating the date and reporting period regarding which the annual statement (consolidated annual statement) has been prepared and the laws and regulations used in the preparation of the annual statement (consolidated annual statement) which determine the structure, scope, content, and procedures for the preparation of the annual statement (consolidated annual statement) of the relevant client (the laws and regulations of the Republic of Latvia or the legal acts of the European Union), and also the information on the responsibility of the client and sworn auditor is included;

2) a description of the volume of audit work performed and a reference to the auditing standards applied in the audit;

3) the opinion of a sworn auditor or a statement on the refusal to provide an opinion;

4) an indication to all conditions or events to which a sworn auditor wishes to pay attention by emphasising them but not providing an opinion with reservations, and also an indication to any material uncertainty (if any detected) relating to the events or conditions that may cast significant doubt on the client's ability to continue its activity;

5) the view of the sworn auditor on whether the management report is consistent with the financial statement, but in relevant cases - whether the consolidated report is consistent with the consolidated financial statement and whether the abovementioned report has been prepared in accordance with the requirements of the law or regulation governing the preparation thereof;

6) the view of the sworn auditor on whether, in the light of the knowledge and understanding of the client and the environment in which the client operates obtained in the course of the audit, he or she has identified material misstatements in the management report, and an indication of the nature of any such material misstatements;

7) the view of the sworn auditor on whether the corporate governance statement of a capital company (if the transferable securities thereof are admitted to trading on the regulated market of the Member States) contains information in accordance with the requirements of Section 56.¹, Paragraph one, Clauses 3, 4, 6, 8, and 9, and also Section 56.², Paragraph two, Clause 5 and Paragraph three of the Financial Instrument Market Law and whether the information specified in Paragraph two, Clauses 1, 2, 3, 4, 7, and 8 of Section 56.² is included. If a capital company has included the information referred to in Section 56.², Paragraph two, Clause 8 of the Financial Instrument Market Law in the sustainability report, it is not required to indicate in the view of the sworn auditor whether the corporate governance statement contains this information;

8) information on whether a client (if the client is such capital company the transferable securities of which are admitted to trading on the regulated market of the Member State, credit institution, insurance company in the form of a joint-stock company or reinsurance company in the form of a joint-stock company) has prepared a non-financial statement, but if the abovementioned client has the obligation to prepare a consolidated annual statement - a consolidated non-financial statement, and on whether the non-financial statement (consolidated non-financial statement) is included in the management report (consolidated management report) or prepared as a separate part of the annual statement (consolidated annual statement) or included in the consolidated non-financial statement prepared by the parent undertaking of the abovementioned capital company;

9) the view of the sworn auditor on whether the information referred to in Section 59.⁴ of the Financial Instrument Market Law has been included in the remuneration statement of the capital company (if its stocks are admitted to trading on the regulated market) and whether significant non-conformities have been established in the remuneration statement in relation to the financial information indicated in the annual statement;

10) information on whether the commercial company referred to in Law on Disclosure of Information on Revenue and Income Taxes had an obligation to submit the report on income taxes for the reporting year which was before the relevant reporting year on which the annual statement to be audited or the consolidated annual statement to be audited (if there is an obligation to prepare such) has been prepared and, if there was such an obligation, whether this report was submitted to the State Revenue Service in accordance with the requirements of Section 23 of the abovementioned law and published on the website in accordance with the requirements of Section 24 of the abovementioned law.

[14 September 2023; 26 September 2024]

Section 32. Particulars of an Auditor's Report

(1) In order to acquire legal validity, an auditor's report shall contain the following particulars (identification data):

1) the addressee;

2) the date of the document and the place of its preparation;

3) the name of the document;

4) the given name and surname of the sworn auditor (in the cases provided for in the law - of the responsible sworn auditor);

5) the number of the certificate;

6) the signature of the sworn auditor (in the cases provided for in the law - of the responsible sworn auditor);

7) in the cases provided for in this Law - the given name, surname, and signature of the person who acts on behalf of the commercial company of sworn auditors and the number of the licence of the commercial company of sworn auditors;

8) if the author of the report is a commercial company of sworn auditors - the legal address thereof but if the author of the report is a sworn auditor as a sole proprietorship or self-employed person - also the address indicated by a person or, if such address is not indicated, the address of declared place of residence.

(2) If several sworn auditors who provide audit services as sole proprietorships or self-employed persons or responsible sworn auditors designated by commercial companies of sworn auditors are involved in the audit of the annual statement or consolidated annual statement and they have agreed on the results of the relevant audit, they shall provide a joint auditor's report which is signed by all the abovementioned sworn auditors.

(3) If several sworn auditors who provide audit services as sole proprietorships or self-employed persons or responsible sworn auditors appointed by commercial companies of sworn auditors are involved in the audit of the annual statement or consolidated annual statement and they cannot agree on the results of the relevant audit in general or on certain issues to be included in the auditor's report or opinion, they shall submit a joint auditor's report in which each of the abovementioned sworn auditors shall include a separate opinion accordingly regarding the results of the abovementioned audit or a certain issue of the auditor's report or opinion by indicating a reason due to which an agreement has not been reached.

(4) That referred to in Paragraph one of this Section shall apply also to a review report which the sworn auditor provides in accordance with Section 28.¹ of this Law on a limited review of the annual statement by accordingly applying the requirements of Section 31.², Clauses 1, 2, 3, and 4 of this Law thereto.

[12 June 2008; 15 December 2016; 14 September 2023]

Section 32.¹ Assurance Report

(1) The assurance report on the sustainability report shall contain:

1) a paragraph identifying the client (indicating the client's name and type) for which the integrity and completeness of the information included in the sustainability report and consolidated sustainability report (if there is an obligation to prepare one) is assured, indicating the date and reporting period for which the sustainability report and consolidated sustainability report (if there is an obligation to prepare one) is prepared, and the legal acts and standards used in the preparation of the sustainability report and consolidated sustainability report (if there is an obligation to prepare one) which lay down the structure, scope, and content of the sustainability report and consolidated sustainability report (if there is an obligation to prepare one) of the relevant client and the procedures for preparing them, and also information on the liability of the client and sworn auditor;

2) a description of the scope of the carried out assurance engagement of the sustainability report and consolidated sustainability report (if there is an obligation to prepare one) and a reference to the assurance standards for sustainability reporting complied with during the assurance;

3) a view of the sworn auditor or a refusal to express the view on the conformity of the sustainability report and consolidated sustainability report (if there is an obligation to prepare one) with the requirements of the Law on Sustainability Disclosures, including a view of the sworn auditor or a refusal to express the view on the conformity of the requirement for marking (labelling) sustainability information with the reporting requirements laid down in Article 8 of Regulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020 on the establishment of a framework to facilitate sustainable investment, and amending Regulation (EU) 2019/2088.

(2) If several sworn auditors who provide such services as sole proprietorships or self-employed persons or responsible sworn auditors designated by commercial companies of sworn auditors are involved in the assurance engagement of the sustainability report and consolidated sustainability report (if there is an obligation to prepare one) and they have agreed on the results of the relevant sustainability report assurance, they shall provide a joint assurance report on the sustainability report which is signed by all the abovementioned sworn auditors.

(3) If several sworn auditors who provide such services as sole proprietorships or self-employed persons or responsible sworn auditors designated by commercial companies of sworn auditors are involved in the assurance engagement of the sustainability report and consolidated sustainability report (if there is an obligation to prepare one) and they cannot agree on the results of the relevant sustainability report assurance in general or on certain paragraphs to be included in the assurance report in relation to the sustainability report or in the view, they shall submit a joint assurance report on the sustainability report where each of these sworn auditors shall include a separate opinion on the results of the abovementioned assurance report or on the relevant paragraph of the assurance report by indicating a reason due to which an agreement has not been reached.

(4) The assurance report on the sustainability report shall be signed and dated by the sworn auditor who provides the assurance service of the sustainability report and consolidated sustainability report (if there is an obligation to prepare one), indicating the given name, surname, and number of the certificate. If the sustainability report assurance service is provided by a commercial company of sworn auditors, the assurance report shall be signed and dated by the lead sustainability sworn auditor, indicating the given name, surname, and number of the certificate of the sworn auditor and the licence number of the commercial company of sworn auditors. If several sworn auditors who provide such service as sole proprietorships or self-employed persons or lead sustainability auditors designated by commercial companies of sworn auditors are involved in the provision of assurance service of the sustainability report and consolidated sustainability report (if there is an obligation to prepare one), the assurance report on the sustainability report shall be signed and dated by all the sworn auditors involved in the provision of this service, or at least by those sworn auditors who are entitled to assure the integrity and completeness of the information provided in the sustainability report on behalf of the commercial company.

(5) A sworn auditor and a commercial company of sworn auditors have the obligation, upon request from the Latvian Association of Sworn Auditors and the Ministry of Finance, to inform them of the sworn auditors, the responsible sworn auditor, the invited experts or knowledgeable persons and assistants involved in the assurance engagement of the sustainability report and consolidated sustainability report (if there is an obligation to prepare one).

[26 September 2024; 19 June 2025]

Section 33. Provision of Information to the Management of a Client, Latvijas Banka, and the Corruption Prevention and Combating Bureau

(1) A sworn auditor or a commercial company of sworn auditors shall notify the management (executive board or its responsible members) of a client or an audit committee (if such committee has been established) of the issues not included in the opinion (for example, deficiencies, errors, and violations of the internal control system) which do not affect the opinion delivered.

(1¹) A sworn auditor and a commercial company of sworn auditors which provide the sustainability report assurance service to a public-interest entity have the obligation to comply with the requirements referred to in Article (7) of Regulation No 537/2014 and, according to these requirements, to inform the management of the client and to notify the law enforcement authorities.

(2) A sworn auditor or commercial company of sworn auditors has the obligation to immediately submit a report in writing to Latvijas Banka in accordance with Article 12(1)(a), (b), and (c) of Regulation No 537/2014 on the facts which were discovered during the provision of audit services in respect of a public-interest entity or any other electronic money institution, payment institution, investment firm, regulated market operator, or data reporting service provider.

(3) A sworn auditor or commercial company of sworn auditors has the obligation to immediately submit a report in writing to Latvijas Banka on the facts referred to in Paragraph two of this Section which have been discovered while providing audit services to a client who is in close relations with a public-interest entity or any other electronic money institution, payment institution, investment firm, regulated market operator, or data reporting service provider within the meaning of Article 4(1)(38) of Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and amending Regulation (EU) No 648/2012.

(3¹) A sworn auditor or commercial company of sworn auditors has the obligation to submit such information and documents to Latvijas Banka which it has requested in writing in accordance with the legal acts governing the financial market to ensure the performance of its functions.

(3²) A sworn auditor or commercial company of sworn auditors has the obligation to submit a report in writing to the Corruption Prevention and Combating Bureau on the facts which have been discovered during the provision of audit services and might be related to the transfer of financial values, property benefits, or benefits of other nature to a public official in the form of a bribe or related to intermediation in the transfer of such financial values, property benefits, or benefits of other nature. A sworn auditor or commercial company of sworn auditors shall submit a report not later than within three working days after discovery of such facts. The Latvian Association of Sworn Auditors shall determine the procedures which include a set of measures that have to be taken by sworn auditors and commercial companies of sworn auditors to comply with the requirements of this Paragraph. Within the meaning of this Section, the term "public official" shall have the same meaning as the term "public official" in the Criminal Law.

(4) The reporting of information specified in this Section and the submission of documents shall not be regarded as a violation of any contracts, legal acts, or professional code of ethics, and shall not create a civil legal liability for the sworn auditor or the commercial company of sworn auditors.

[22 January 2004; 29 March 2007; 12 June 2008; 11 February 2010; 3 March 2011; 29 October 2015; 19 April 2018; 21 June 2018; 26 September 2024; 19 June 2025]

Section 33.¹ Transparency Report of a Sworn Auditor and a Commercial Company of Sworn Auditors

(1) A sworn auditor and a commercial company of sworn auditors providing audit services to a public-interest entity shall prepare and publish a transparency report on their website. The content of the transparency report and also the procedures for the preparation and publication thereof are determined by Article 13 of Regulation No 537/2014. After publishing the transparency report, the sworn auditor and the commercial company of sworn auditors shall, in accordance with the requirements of Article 13a(1) of Regulation No 537/2014, immediately submit this report to the Ministry of Finance which shall ensure availability thereof in the European single access point. The formatting requirements for the transparency report to be submitted to the Ministry of Finance are determined by Article 13a(1)(a) and (b) of Regulation No 537/2014.

(2) [15 December 2016]

(3) The transparency report of a commercial company of sworn auditors referred to in Paragraph one of this Section shall be signed by a person acting on behalf of this commercial company of sworn auditors.

[12 June 2008; 29 October 2015; 15 December 2016; 19 June 2025 / See Paragraph 39 of Transitional Provisions]

Section 34. Audit Working Papers, Reports and Other Documents

(1) Audit working papers shall be the property of the provider of the audit service - the sworn auditor or the commercial company of sworn auditors accordingly.

(2) A sworn auditor or the management of a commercial company of sworn auditors has the obligation to properly keep the audit working papers. They may not be revealed to third parties or passed to third parties without the permission of the client, except for the cases specified in this Law. The storage period for audit working papers shall be six years.

(2¹) Auditor's reports prepared by a sworn auditor or a responsible auditor designated by a commercial company of sworn auditors and other reports and documents referred to in Article 15 of Regulation No 537/2014 and also descriptions of the policies and procedures referred to in the legal acts governing the requirements for work organisation, resource planning, document management, creation of registers and files for sworn auditors and commercial companies of sworn auditors, registers for the record of clients, received written claims, complaints and registers for the record thereof, and also other documented information related to audits of the annual statement or consolidated annual statement shall be kept for at least five years.

(3) Audit working papers and also reports and other documents referred to in Paragraph 2.¹ of this Section shall be available for the needs of the audit services quality control and the inspection of compliance with the requirements for the audit services quality control. The same confidentiality requirements which are laid down for a sworn auditor and commercial company of sworn auditors in Paragraph two of this Section shall also apply to the persons who perform the audit services quality control. The same confidentiality requirements which apply to sworn auditors shall also apply to the persons who perform the audit services quality control.

[22 January 2004; 15 December 2016; 19 April 2018]

Section 34.¹ Audit Working Papers of Consolidated Annual Statement

(1) The responsible auditor of a group of companies shall have full responsibility for an auditor's report on the audit of the consolidated annual statement of the client, but if the client is a public-interest entity - for the auditor's report referred to in Article 10 and for the additional report at a level of group of companies referred to in Article 11 of Regulation No 537/2014.

(1¹) If the same responsible sworn auditor of a group of companies audits (reviews) the annual statement and consolidated annual statement of a parent undertaking of the group of companies, the auditor's report on the consolidated annual statement of a group of companies may be combined with the auditor's report on the annual statement of a parent undertaking of the group of companies.

(2) The responsible auditor of a group of companies shall review the work of the audit carried out by another person during the audit (review) of the group of companies - another sworn auditor or a third country auditor, another commercial company of sworn auditors, or a third country commercial company of auditors. The responsible auditor of a group of companies shall prepare review materials of an audit work carried out by another person and include them in his or her audit working papers. The review materials shall be prepared in such a way that the competent authority could review the work of the responsible auditor of a group of companies on an audit review process carried out by another person.

(3) If an audit (review) of the annual statement of a subsidiary of the group of companies involved in consolidation is carried out by a third country auditor or a third country commercial company of auditors and if there is no cooperation with the competent authority of this third country in the field of audit, the responsible auditor of a group of companies shall have the responsibility to ensure that the audit working papers prepared by a third country auditor or a third country commercial company of auditors pertaining to the relevant audit (review) of the consolidated annual statement are submitted to the competent authority upon request.

(4) To ensure the conformity with the requirement referred to in Paragraph three of this Section, the responsible auditor of a group of companies shall include in his or her audit working papers the copies of the audit working papers prepared by a third country auditor or a third country commercial company of auditors or shall agree with a third country auditor or a third country commercial company of auditors on adequate and unlimited access to these papers upon request.

(5) If legal or other conditions impede access to the audit working papers prepared by a third country auditor or a third country commercial company of auditors, the responsible sworn auditor of a group of companies shall attach to his or her audit working papers the evidence that he or she has taken all the necessary measures to gain access to the audit working papers prepared by a third country auditor or a third country commercial company of auditors and the evidence of existence of the delaying conditions and inform the Ministry of Finance thereof. Where necessary, the responsible sworn auditor of a group of companies (himself or herself or by involving another person referred to in Paragraph two of this Section) shall ensure additional audit procedures which he or she considers necessary in relation to the audit (review) of the annual statement of the subsidiary of the group of companies involved in the consolidation.

(6) If a quality control of the provided audit services or the inspection of compliance with the requirements for the audit services quality control, or investigative actions in relation to the audit of the consolidated annual statement are carried out for the responsible sworn auditor of a group of companies, the responsible sworn auditor of a group of companies shall submit the relevant documents to the Latvian Association of Sworn Auditors or the Ministry of Finance accordingly, upon their request, which he or she has kept in respect of the audit work in the audit of the consolidated annual statement carried out by a third country auditor or third country commercial company of auditors, including all audit working papers which refer to the audit of the consolidated annual statement.

(7) The Ministry of Finance has the right to request and receive from other competent authorities the information necessary for the quality control of audit services, the inspection of compliance with the requirements for the audit services quality control, or the investigation referred to in Paragraph six of this Section and the documents regarding the work carried out by a sworn auditor or commercial company of sworn auditors in the audit of the group of companies. When cooperating with other competent authorities, the Ministry of Finance shall comply with the confidentiality requirements for the exchange of information and documents.

(8) If the audit of the annual statement of the parent undertaking or subsidiary of the group of companies is carried out by a third country auditor or third country commercial company of auditors, the Ministry of Finance has the right to request additional documents and information from the competent authority of the relevant third country on the audit carried out by such third country auditor or third country commercial company of auditors, applying the cooperation measures referred to in Section 37.⁴ of this Law.

[12 June 2008; 29 October 2015; 15 December 2016; 26 September 2024; 19 June 2025]

Section 34.² Audit (Review) of Adjusted Annual Statements and Consolidated Annual Statements

If a client submits an adjusted annual statement or consolidated annual statement before the date when the responsible sworn auditor signs the auditor's report or review report, a sworn auditor shall audit (review) it repeatedly directly in relation to the adjustments made. A sworn auditor shall indicate the fact of a repeated audit (review) of an annual statement or consolidated annual statement in the auditor's report.

[29 October 2015]

Section 34.³ Consolidated Sustainability Report Assurance

(1) The lead sustainability auditor who carries out the assurance engagement of the consolidated sustainability report at the level of group of companies (hereinafter in this Section - the lead sustainability auditor of a group of companies) shall be fully responsible for the assurance report on the consolidated sustainability report.

(2) If, during the consolidated sustainability report assurance of a group of companies, the sustainability report assurance service of a subsidiary included in a group of companies is provided by another lead sustainability auditor, sworn auditor or third country auditor, another commercial company of sworn auditors or third country commercial company of auditors (hereinafter in this Paragraph - another auditor), the lead sustainability auditor of a group of companies shall evaluate and document the sufficiency of evidence obtained by another auditor. The lead sustainability auditor of a group of companies shall include in his or her working papers also the assessment of the procedures and conclusions of the sustainability report assurance engagement carried out by another sworn auditor. The lead sustainability auditor of a group of companies shall prepare his or her working papers so that the competent authority could examine whether the procedures carried out by him or her to verify the evidence obtained by another auditor in the sustainability report assurance engagement are sufficient.

(3) To ensure conformity with the requirement referred to in Paragraph two of this Section, the lead sustainability auditor of a group of companies shall include in his or her working papers the copies of working papers of sustainability report assurance prepared by a third country auditor or a third country commercial company of auditors or shall agree with a third country auditor or a third country commercial company of auditors on adequate and unlimited access to these papers upon request.

(4) If legal or other conditions impede access to the sustainability report assurance working papers prepared by a third country auditor or a third country commercial company of auditors, the lead sustainability auditor of a group of companies shall attach to his or her working papers the evidence that he or she has taken all the necessary measures to gain access to the sustainability report assurance working papers prepared by a third country auditor or a third country commercial company of auditors and to examine them, and also the evidence of existence of the delaying conditions and shall inform the Ministry of Finance thereof. Where necessary, the lead sustainability auditor of a group of companies himself or herself or by involving another outsourced service provider shall ensure additional procedures which he or she considers necessary in relation to the sustainability report assurance of the subsidiary of the group of companies involved in the consolidation.

(5) If the quality control of the consolidated sustainability report assurance service provided by the lead sustainability auditor of a group of companies is carried out or investigative actions are taken in relation to the assurance engagement of the consolidated sustainability report, the lead sustainability auditor of a group of companies shall, upon request of the respective authority, submit to the Latvian Association of Sworn Auditors or, in the relevant case, to the Ministry of Finance the documents which he or she has kept in relation to the assurance engagement of the consolidated sustainability report assurance carried out by a third country auditor or third country commercial company of auditors, including all working papers related to the consolidated sustainability report assurance.

(6) The Ministry of Finance has the right to request and receive from other competent authorities the information necessary for the quality control or investigation referred to in Paragraph five of this Section and the documents on the assurance engagement of the consolidated sustainability report of a group of companies carried out by the lead sustainability auditor of the group of companies, applying the cooperation measures referred to in Section 37.¹ of this Law. When cooperating with other competent authorities, the Ministry of Finance shall comply with the confidentiality requirements for the exchange of information and documents.

(7) If the sustainability report assurance engagement of the parent undertaking or subsidiary of the group of companies is carried out by a third country auditor or third country commercial company of auditors, the Ministry of Finance has the right to request additional documents and information from the competent authority of the relevant third country on the sustainability report assurance engagement carried out by such third country auditor or third country commercial company of auditors, applying the cooperation measures referred to in Section 37.⁴ of this Law.

(8) If the sustainability report assurance engagement of the parent undertaking or subsidiary of the group of companies is carried out by a third country auditor or third country commercial company of auditors with which no agreement has been entered into on cooperation measures, the lead sustainability auditor of a group of companies shall also be responsible for ensuring that the additional documents of the sustainability report assurance engagement carried out by a third country auditor and a third country commercial company of auditors, including working papers related to the consolidated sustainability report assurance engagement, are properly submitted. To ensure the fulfilment of the requirements of this Paragraph, the lead sustainability auditor of a group of companies shall keep the copies of such documents or shall agree with a third country auditor or third country commercial company of auditors on unlimited access to these papers upon request.

(9) If legal or other conditions impede access to the sustainability report assurance working papers prepared by a third country auditor or a third country commercial company of auditors and referred to in Paragraph eight of this Section, the lead sustainability auditor of a group of companies shall attach to his or her working papers the evidence that he or she has taken all the necessary measures to gain access to the sustainability report assurance working papers prepared by a third country auditor or a third country commercial company of auditors, and also the evidence of existence of the delaying conditions and shall inform the Ministry of Finance thereof.

(10) The requirements for the lead sustainability auditor of a group of companies referred to in this Section shall apply to the responsible auditor of a group of companies if, in addition to the audit of the consolidated annual statement of a group of companies, he or she provides the assurance service of the consolidated sustainability report of a group of companies.

[26 September 2024]

Section 35. Assistants of a Sworn Auditor

[15 December 2016]

Section 35.¹ Audit Services Quality Control

(1) The Ministry of Finance shall, in cooperation with the Latvian Association of Sworn Auditors, ensure audit services quality control based on risk approach in order to conform to the requirements of the legal acts, the international auditing standards recognised in Latvia and the international auditing standards for public sector recognised in Latvia, the norms of the professional code of ethics, independence and objectivity in the provision of audit services. The Ministry of Finance shall ensure audit services quality control based on risk assessment (inspection of the conformity with the requirements for the audit services quality control) for those commercial companies of sworn auditors and those sworn auditors who have provided audit services to public-interest entities during the last three years since the last audit services quality control performed for them.

(2) The following shall be subject to the audit services quality control referred to in Paragraph one of this Section:

1) all commercial companies of sworn auditors and sworn auditors providing audit services, and also sole proprietorships or self-employed persons, not less than once every six years;

2) all commercial companies of sworn auditors and sworn auditors providing audit services to public-interest entities, not less than once every three years;

3) all commercial companies of sworn auditors and sworn auditors providing audit services to State and local government authorities, not less than once every six years.

(3) The Latvian Association of Sworn Auditors shall ensure an audit services quality control for commercial companies of sworn auditors and sworn auditors and inform the Ministry of Finance of the results thereof, including of the findings and conclusions made. The audit services quality control for commercial companies of sworn auditors and those sworn auditors who do not provide audit services to public-interest entities shall be carried out in accordance with the by-laws which, after agreement with the Ministry of Finance, are approved by the Latvian Association of Sworn Auditors.

(3¹) The Latvian Association of Sworn Auditors shall, each year as soon as possible, but not later than one month prior to commencing the audit services quality control, inform the Ministry of Finance of the sworn auditors and commercial companies of sworn auditors which are subject to the audit services quality control in accordance with the provisions of this Section.

(3²) Commercial companies of sworn auditors and sworn auditors who provide audit services to public-interest entities shall, each year by 1 July, submit the information referred to in Article 14 of Regulation No 537/2014 to the Ministry of Finance, and also information on vocational qualification (further education) programmes acquired in the previous calendar year. The Ministry of Finance shall compile and analyse the information received and take measures to rectify the established non-conformities.

(4) An authorised representative of the Ministry of Finance shall, not less than once every three years, inspect how the requirements for the audit services quality control are complied with by those commercial companies of sworn auditors and sworn auditors who provide audit services to public-interest entities and shall draw up an inspection report thereon. The inspection of compliance with the requirements for the audit services quality control shall be carried out in accordance with the requirements of this Law and Article 26 of Regulation No 537/2014. The Cabinet shall determine the procedures for the inspection of the compliance with the requirements for the audit services quality control, the requirements for the qualification of authorised representatives, the information to be included in an inspection report, and also the content of the inspection programme. The authorised representative of the Ministry of Finance has the right to carry out an inspection of the compliance with the requirements for the audit services quality control at the practice place of a sworn auditor or a commercial company of sworn auditors providing audit services to public-interest entities.

(4¹) In order to ensure inspections of compliance with the requirements for the audit services quality control in conformity with the requirements of Article 26 of Regulation No 537/2014, the Ministry of Finance is entitled to attract experts for carrying out certain inspections at the place of practice of the sworn auditor or commercial company of sworn auditors which provides audit services to public-interest entities. Within the meaning of this Section, the term "expert" corresponds to the term "expert" used in Article 26(1)(c) of Regulation No 537/2014.

(5) When performing an inspection of the compliance with the requirements for the audit services quality control at the place of practice of the sworn auditor or commercial company of sworn auditors which provides audit services to public-interest entities, an authorised representative of the Ministry of Finance has the right to become familiar with audit working papers and transparency report of the sworn auditor or commercial company of sworn auditors, and also to request other data, documents, and explanations from the sworn auditor or commercial company of sworn auditors to be inspected which are necessary for the performance of the obligations laid down in Article 26(6) of Regulation No 537/2014 and the performance of the inspection of the compliance with the requirements for the audit services quality control and are at the disposal of the sworn auditor or commercial company of sworn auditors. When performing an inspection of the compliance with the requirements for the audit services quality control, the authorised representative of the Ministry of Finance has the right to get acquainted with the reports on the audit services quality control carried out and also to request other information, documents, and explanations obtained during the audit services quality control which are necessary for the inspection of the compliance with the requirements for the audit services quality control.

(5¹) The authorised representative of the Ministry of Finance is prohibited from disclosing a trade secret or personal data obtained when getting acquainted with the documents, information, or explanations referred to in Paragraph five of this Section, except for the cases specified in laws. The authorised representative of the Ministry of Finance shall submit a written declaration to the Ministry of Finance on compliance with the confidentiality requirements. The Ministry of Finance shall send a copy of such declaration to the Latvian Association of Sworn Auditors within five working days after receipt of the declaration which has been prepared in accordance with the laws and regulations regarding the development and drawing up of documents.

(5²) The authorised representative of the Ministry of Finance has the right to participate in general meetings, meetings of the executive board, meetings of the commissions and committees of the Latvian Association of Sworn Auditors in which issues and documents related to the audit services quality control are examined, and also to get acquainted with the decisions taken in such general meetings and meetings which are related to the audit services quality control.

(6) A sworn auditor to be checked or a person who provides audit services or has provided them in accordance with the provisions laid down in Article 26(5)(c) of Regulation No 537/2014 during the last three years under the supervision of this sworn auditor or is otherwise connected or has been connected for the last three years with the sworn auditor or commercial company of sworn auditors to be checked may not be as the authorised representative of the Ministry of Finance who inspects the compliance with the requirements for the audit services quality control. A relative of a sworn auditor up to the third degree of kinship, a spouse and also a person who is otherwise interested in the result of an audit also may not be the authorised representative of the Ministry of Finance who inspects the compliance with the requirements for the audit services quality control. The authorised representative of the Ministry of Finance shall submit to the Ministry of Finance a declaration in writing that the restrictions referred to in this Paragraph do not apply to him or her. The Ministry of Finance shall send a copy of such declaration to the Latvian Association of Sworn Auditors within five working days after receipt of the declaration which has been prepared in accordance with the laws and regulations regarding the development and drawing up of documents.

(7) The authorised representative of the Ministry of Finance who inspects the compliance with the requirements for the audit services quality control is prohibited from holding an office in the executive board or supervisory board (if a supervisory board has been established) of such commercial company of sworn auditors in which he or she has carried out inspections of the compliance with the requirements for the audit services quality control for two years after inspection of the compliance with the requirements for the audit services quality control.

(8) When performing an audit services quality control for a sworn auditor or commercial company of sworn auditors which provides audit services to State and local government authorities, the Latvian Association of Sworn Auditors has the obligation to obtain information from the State Audit Office on whether the State Audit Office as a group auditor, in preparing an opinion on the report on the financial year of the Republic of Latvia on implementation of the State budget and local government budgets regarding the previous reporting year, could use the financial audit carried out by the relevant sworn auditor or commercial company of sworn auditors in the State or local government authority and the opinion provided in the result thereof.

[22 January 2004; 12 June 2008; 29 January 2009; 22 March 2012; 29 October 2015; 15 December 2016; 19 April 2018; 19 June 2025]

Section 35.² Quality Control of the Sustainability Report Assurance Service

(1) The Ministry of Finance shall, in cooperation with the Latvian Association of Sworn Auditors, ensure the quality control of the sustainability report assurance service based on risk approach during which it will be ascertained that the requirements of laws and regulations, assurance standards for sustainability reporting, and professional code of ethics, and also the requirements of independence and objectivity laid down in this Law have been complied with when providing the abovementioned service.

(2) The Ministry of Finance shall perform the quality control of the sustainability report assurance service for the sworn auditors and commercial companies of sworn auditors which have provided sustainability report assurance services to public-interest entities.

(3) The Latvian Association of Sworn Auditors shall perform the quality control of the sustainability report assurance service for the sworn auditors and commercial companies of sworn auditors which have provided sustainability report assurance services to clients other than public-interest entities.

(4) The sworn auditors or commercial companies of sworn auditors which have provided the sustainability report assurance service to a public-interest entity shall be subjected to the quality control of the sustainability report assurance service referred to in Paragraph two of this Section at least once every three years. All commercial companies of sworn auditors and sworn auditors which have provided the sustainability report assurance service shall be subjected to the quality control of the sustainability report assurance service referred to in Paragraph three of this Section at least once every six years.

(5) The time limits referred to in Paragraph four of this Section shall be counted from the last audit services quality control and in compliance with the condition specified in Paragraph six of this Section.

(6) If the sworn auditor or commercial company of sworn auditors which is subjected to the audit services quality control referred to in Section 35.¹ of this Law has provided the sustainability report assurance service to the same audit client, the Latvian Association of Sworn Auditors (if the abovementioned audit client is a public-interest entity - the Ministry of Finance) shall perform the quality control of the sustainability report assurance service within the scope of audit services quality control.

(7) The representative of the Latvian Association of Sworn Auditors and the Ministry of Finance who performs the quality controls of the sustainability report assurance service referred to in this Section shall have an experience in the preparation of the sustainability report and in the preparation of the sustainability report assurance, or other experience in the field of sustainability.

[26 September 2024 / See Paragraph 34 of Transitional Provisions]

Chapter VIII
Supervision of Operations of the Latvian Association of Sworn Auditors and Commercial Companies of Sworn Auditors

Section 36. Supervision of Operations of Commercial Companies of Sworn Auditors

(1) The Latvian Association of Sworn Auditors shall verify the conformity of commercial companies of sworn auditors with the criteria specified in Section 21 of this Law.

(2) The Latvian Association of Sworn Auditors has the right to request from commercial companies of sworn auditors information and documents on their operations.

(3) A representative of the Latvian Association of Sworn Auditors is entitled to check the documents of commercial companies of sworn auditors to such extent as is necessary to decide on questions regarding the review of compliance, the issuance, suspension, or cancellation of a licence and to participate, without having the right to vote, in meetings of the administrative bodies of such company.

(4) If the Latvian Association of Sworn Auditors establishes that a commercial company of sworn auditors has violated the criteria specified in Section 21 of this Law, it shall take the decision to suspend the validity of the licence of such company within one month from the day when the violation was established. If, within six months from the date when the decision on the suspension of the licence has been received, the commercial company of sworn auditors has not eliminated the abovementioned violations, the decision to cancel the licence issued is taken.

(5) The Latvian Association of Sworn Auditors and its employees do not have the right to disclose information which has been obtained while carrying out the supervision functions specified in this Law, for the cases specified in the law.

[22 January 2004; 19 June 2025]

Section 36.¹ Responsible Institution

(1) The State policy in the field of auditing of commercial companies and in the field of sustainability report assurance shall be developed and implemented by the Ministry of Finance.

(2) The Ministry of Finance shall carry out State supervision of the Latvian Association of Sworn Auditors and cooperate with the competent authorities in the field of audit of other Member States and third countries.

(3) The Ministry of Finance shall include information on the implementation of the State policy in the field of audit of commercial companies and measures taken throughout the year in relation to State supervision of the Latvian Association of Sworn Auditors in the annual public report thereof.

[29 January 2009; 3 June 2010; 22 March 2012; 15 December 2016; 26 September 2024]

Section 36.² Cooperation of the Competent Authorities in the Field of the Sustainability Report Assurance Service

The provisions of Sections 37.¹, 37.⁴, and 37.⁵ of this Law for the competent (supervision) authorities in relation to the field of audit shall also be equally applicable in the field of sustainability report assurance service.

[26 September 2024]

Section 36.³ Submission of Information to the European Single Access Point

(1) In accordance with Article 2(2) of Regulation (EU) 2023/2859 of the European Parliament and of the Council of 13 December 2023 establishing a European single access point providing centralised access to publicly available information of relevance to financial services, capital markets and sustainability (hereinafter - Regulation No 2023/2859):

1) the Ministry of Finance shall be the competent authority responsible for ensuring that the information published on its website on the sanctions and administrative measures imposed on sworn auditors and commercial companies of sworn auditors and also the transparency reports of sworn auditors and commercial companies of sworn auditors are submitted to the European single access point;

2) the Latvian Association of Sworn Auditors shall be the competent authority responsible for ensuring that the information on sworn auditors and commercial companies of sworn auditors published on its website and included in the public part of the Sworn Auditor Register and the Register of Commercial Companies of Sworn Auditors is submitted to the European single access point.

(2) The competent authorities shall submit the information referred to in Paragraph one, Clauses 1 and 2 of this Section to the European single access point, ensuring that the information conforms to the following requirements:

1) the information is prepared in the format specified in Article 2(3) of Regulation No 2023/2859 that allows data extraction by a machine;

2) the information is accompanied by the following metadata:

a) the given name, surname, and address of the location of the practice of the sworn auditor;

b) the name of the commercial company of sworn auditors and its legal entity identifier (if available);

c) an indication of the fact that the information has been submitted in accordance with the requirements of this Law and Article 13a of Regulation No 537/2014;

d) an indication of whether the information contains personal data.

[19 June 2025 / See Paragraph 39 of Transitional Provisions]

Section 37. State Supervision of the Latvian Association of Sworn Auditors

(1) As regards issues which are associated with the certification of sworn auditors, the licensing of commercial companies of sworn auditors and other tasks delegated to the Latvian Association of Sworn Auditors by this Law and related to the supervision of audit services, the Latvian Association of Sworn Auditors shall be under supervision of the Ministry of Finance. The legal acts of the Latvian Association of Sworn Auditors which govern the certification of sworn auditors, the licensing of commercial companies of sworn auditors, and the execution of other tasks delegated to the Latvian Association of Sworn Auditors by this Law shall be approved by the Latvian Association of Sworn Auditors after agreement with the Ministry of Finance.

(2) An authorised representative of the Ministry of Finance who implements the supervision of the Latvian Association of Sworn Auditors and cooperation with the competent authorities of other Member States and third countries in the field of audit is entitled to participate in meetings of the executive board, general meetings, meetings of the committees and commissions of the Latvian Association of Sworn Auditors, and also to become acquainted with the decisions taken during the meetings of the executive board of the Latvian Association of Sworn Auditors. The Latvian Association of Sworn Auditors has the obligation to inform the Ministry of Finance of the convening of a general meeting and the meetings of the executive board and committees, and commissions not later than three working days before the general meeting or meeting in question and to inform the Ministry of Finance of the taken decisions in writing.

(3) The authorised representative of the Ministry of Finance who implements the supervision of the Latvian Association of Sworn Auditors and cooperation with the competent authorities of other Member States and third countries in the field of audit is entitled to request from the Latvian Association of Sworn Auditors all information, documents, and explanations which are necessary to ensure supervision.

(4) A person who, during the last three years before commencement of the fulfilment of the duties which are connected with the supervision and cooperation, has provided audit services or has been a voting shareholder or stockholder or the member of the executive board or supervisory board, or an employee in a commercial company of sworn auditors, or has been otherwise connected with a commercial company of sworn auditors may not be the authorised representative of the Ministry of Finance who implements the supervision of the Latvian Association of Sworn Auditors and cooperation with competent authorities of other Member States and third countries in the field of audit.

(5) The authorised representative of the Ministry of Finance who implements the supervision of the Latvian Association of Sworn Auditors and cooperation with the competent authorities of other Member States and third countries in the field of audit is prohibited from disclosing a trade secret and personal data obtained during the supervision and cooperation specified in this Law, except for the cases specified in laws.

(6) The requirements referred to in this Section in the field of supervision of audit services shall be equally applicable to the supervision of sustainability report assurance service.

[22 January 2004; 12 June 2008; 29 January 2009; 3 June 2010; 22 March 2012; 19 April 2018; 26 September 2024]

Section 37.¹ Cooperation with Competent Authorities of Other Member States

(1) The Ministry of Finance shall be the institution responsible for cooperation with the competent authorities of other Member States and third countries in the field of audit.

(2) Upon request of the competent authority of another Member State, the Ministry of Finance shall, without delay, provide assistance in investigative actions that are associated with audits (reviews) of annual statements and consolidated annual statements of commercial companies carried out by sworn auditors or commercial companies of sworn auditors. Within the meaning of this Section, the assistance shall mean investigation and communication of information upon request by the competent authority of the Member State and also the provision of authorisation to the competent authority of another Member State or to persons authorised by that institution to participate in the investigation. If the Ministry of Finance is unable to provide, without delay, the requested assistance, it shall inform the requesting entity of this circumstance and indicate the reasons for delay.

(3) The Ministry of Finance may refuse to provide the assistance referred to in Paragraph two of this Section if:

1) the communication of information or investigation could interfere with the interests of the State or are in conflict with the national security standards;

2) legal proceedings have been initiated against the same sworn auditors or the same commercial companies of sworn auditors regarding the same audit services provided by whom or which the request for assistance referred to in Paragraph two of this Section has been received;

3) for the same actions the final decision has already been taken on the same sworn auditors or the same commercial companies of sworn auditors regarding the same audit services provided by whom or which the request for assistance referred to in Paragraph two of this Section has been received.

(4) The Ministry of Finance has the right to request from the competent authority of another Member State information which is necessary to provide assistance in investigative actions that are associated with audits (reviews) of annual statements and consolidated annual statements of commercial companies carried out by sworn auditors or commercial companies of sworn auditors of another Member State eligible to carry out audits (reviews) of annual statements and consolidated annual statements of commercial companies registered in this Member State. The Ministry of Finance shall use the received information only for the provision of assistance in the investigative actions referred to in this Section.

(4¹) The Ministry of Finance shall, without delay, inform the competent authority of another Member State if, while taking the investigative actions referred to in Paragraph four of this Section, at least one of the following situations is established:

1) a person which is entitled to carry out audits (reviews) of annual statements and consolidated annual statements of commercial companies registered in another Member State has not complied with the requirements connected with professional ethics, independence, objectiveness, confidentiality or has not been registered in the public register, or has not been subject to quality assurance system;

2) an audit (review) of an annual statement or consolidated annual statement of the commercial company registered in another Member State has not been carried out in accordance with the international auditing standards recognised in Latvia or equal international auditing standards;

3) an audit (review) of an annual statement or consolidated annual statement of the commercial company registered in another Member State has been carried out by a person who is not entitled to carry it out.

(4²) The Ministry of Finance is entitled to request from the competent authority of another Member State information on the investigative actions which have been taken after receipt of information on the conditions referred to in Paragraph 4.¹ of this Section and significant facts discovered during the investigation which may be the basis for taking appropriate measures to eliminate these conditions.

(4³) If the Ministry of Finance receives the information from the competent authority of another Member State that a sworn auditor or a commercial company of sworn auditors has not complied with the requirements of this Law or that an audit (review) of annual statement or consolidated annual statement has been carried out by a person who is not entitled to carry it out, the Ministry of Finance shall take the necessary investigative actions and inform the competent authority of another Member State of the results of this investigation and the measures taken.

(4⁴) The Ministry of Finance has the right to request that the investigative actions within the territory of another Member State are taken by the competent authority of this Member State or that the competent authority of another Member State permits an authorised representative of the Ministry of Finance to participate in the investigation performed by the competent authority of this Member State.

(4⁵) If the investigation is performed in the territory of Latvia, the Ministry of Finance shall supervise the investigation during its entire course.

(5) The Ministry of Finance shall comply with the confidentiality requirements when cooperating with the competent authorities of other Member States in the field of audit. When communicating the information referred to in Paragraphs two and six of this Section to the competent authority of another Member State, the Ministry of Finance shall indicate whether the relevant information contains a trade secret or personal data. All persons who have become aware of the information referred to in Paragraph two of this Section while performing the investigation referred to in this Section and who have participated in the provision of the information referred to in Paragraph six of this Section are prohibited from disclosing a trade secret or personal data obtained while performing the abovementioned investigation and providing information, except for the cases specified in laws.

(6) The Ministry of Finance shall cooperate with the competent authorities of Member States in the field of audit, providing them with information on the supervision of sworn auditors and commercial companies of sworn auditors and receiving information from them on the supervision of foreign auditors and foreign commercial companies of auditors entered in their register. The Ministry of Finance shall, when cooperating with the competent authorities of other Member States in the field of audit, rely on the supervision conditions of foreign auditors and foreign commercial companies of auditors in such Member State in the relevant register of which the foreign auditor or the foreign commercial company of auditors is entered.

(7) If an auditor of another Member State or a commercial company of auditors of another Member State carries out the audit (review) of the annual statement or consolidated annual statement (if such has been prepared) of a subsidiary of a group of companies of the Republic of Latvia registered in another Member State which is used for the preparation of the consolidated annual statement of a group of companies of the Republic of Latvia, then the audit (review) of such annual statement or consolidated annual statement (if such has been prepared) shall be recognised as equivalent to the audit (review) of the annual statement or consolidated annual statement (if such has been prepared) carried out by a sworn auditor or a commercial company of sworn auditors and the auditor of another Member State or the commercial company of auditors of another Member State which carries out the audit (review) of such annual statement or consolidated annual statement (if such has been prepared) is not subject to additional requirements in relation to registration, audit services quality control, independence, the auditing standards applied during auditing (review) of the consolidated annual statement and the conformity to the requirements of the professional code of ethics.

(8) If an auditor of another Member State or a commercial company of auditors of another Member State provides audit services to such commercial company which is not registered in the Republic of Latvia but whose transferable securities are admitted to trading on the regulated market of the Republic of Latvia, then such audit services shall be recognised as equivalent to the audit services provided by a sworn auditor or a commercial company of sworn auditors, and the auditor of another Member State or the commercial company of auditors of another Member State which provides such audit services is not subject to additional requirements in relation to registration, audit services quality control, independence, the auditing standards applied during the audit (review) of the consolidated annual statement and the conformity to the requirements of the professional code of ethics.

[12 June 2008; 29 January 2009; 22 March 2012; 19 June 2025]

Section 37.² Audit Advisory Council

(1) The Audit Advisory Council (hereinafter - the Council) is a consultative body which is established and whose staff is approved by the Minister for Finance. The purpose of the operation of the Council is promoting the increase of quality of audit services.

(2) The Council shall consist of one member from each of the following: the Ministry of Finance, the Ministry of Justice, Latvijas Banka, the Latvian Association of Sworn Auditors, the Latvian Association of Accountants, akciju sabiedrība "Nasdaq Riga" [joint-stock company Nasdaq Riga], the Foreign Investors Council in Latvia, the Employers' Confederation of Latvia, and one of the Latvian higher education institutions.

(3) The Council shall act in accordance with the by-laws approved by the Cabinet. The activities of the Council shall be technically ensured by the Ministry of Finance from the funds allocated for this purpose in the State budget.

[12 June 2008; 3 June 2010; 18 April 2013; 26 September 2024; 19 June 2025]

Section 37.³ Tasks and Rights of Audit Advisory Council

(1) The Council shall examine the documents prepared by the Latvian Association of Sworn Auditors regarding the examination and certification of applicants for sworn auditors, licensing of commercial companies of sworn auditors, maintaining the qualification of sworn auditors and the audit services quality control, and also regarding the international auditing standards recognised in Latvia and requirements for the professional code of ethics, and shall make recommendations to the Latvian Association of Sworn Auditors for their improvement while concurrently informing the Ministry of Finance of the recommendations it has made.

(2) The Council has a right to receive from the Latvian Association of Sworn Auditors information and documents necessary for the execution of the tasks of the Council.

(3) The authorised members of the Council have the right to participate in general meetings and meetings of the executive board and committees of the Latvian Association of Sworn Auditors where the documents referred to in Paragraph one of this Section are reviewed, as well as to get familiarised with the decisions pertaining to the documents referred to in Paragraph one of this Section, taken in these general meetings and sessions.

(4) The Council has the right to make recommendations to the Ministry of Finance regarding the necessary amendments to the legal acts governing the field of auditing.

(5) The Council members who, while performing the assignments of the Council, have become aware of trade secret shall comply with the confidentiality requirements. The confidentiality requirements shall apply to all members of the Council, including persons who have completed their term in the Council.

(6) Once every year, the Council shall submit summarised information on its activities to the Ministry of Finance.

[12 June 2008; 19 June 2025]

Section 37.⁴ Cooperation with the Competent Authorities of the Third Countries

(1) The Ministry of Finance shall enter into a mutual agreement with the competent authority of a third country in the field of audit if a request for the audit working papers and other documents referred to in Paragraph two of this Section has been received therefrom. The Ministry of Finance shall without delay inform the European Commission of the conclusion of a mutual agreement.

(2) Upon request of the competent authority of a third country, the Ministry of Finance shall hand over thereto copies of audit working papers and other documents of a sworn auditor and a commercial company of sworn auditors which are at the disposal of the sworn auditor or the commercial company of sworn auditors if all of the following conditions referred to in this Paragraph of the Section exist:

1) the audit working papers and other documents requested are related to the provision of audit services to such commercial companies the transferable securities of which are admitted to trading on the regulated market of the relevant third country or to such commercial company which is a subsidiary of the group of companies involved in consolidation the audit (review) of the annual statement of which is carried out by an auditor of the relevant third country or a commercial company of auditors of the relevant third country;

2) the competent authority of the third country has provided a justification for the request of audit working papers and other documents;

3) confidentiality requirements apply to the employees of the competent authority of the third country who receive copies of the audit working papers or other documents requested;

4) the competent authority of the third country is from such third country the supervision, audit services quality control, investigation, and penalty systems of which have been recognised by the European Commission as equivalent to the supervision, audit services quality control, investigation, and penalty systems of Member States.

(3) The Ministry of Finance is entitled to refuse to hand over copies of the documents referred to in Paragraph two of this Section if at least one of the following conditions referred to in this Paragraph of the Section exists:

1) the handing over of copies of documents may harm the interests of the State or is in conflict with the national security standards;

2) judicial proceedings have been commenced against the same sworn auditors or the same commercial companies of sworn auditors regarding which or regarding the same audit services provided by which the request referred to in Paragraph one of this Section was received.

(4) Within a month after receipt of the request of the competent authority of a third country referred to in Paragraph one of this Section, the Ministry of Finance shall send a request to the Latvian Association of Sworn Auditors to submit the copies of the audit working papers and other documents referred to in Paragraph two of this Section to the Ministry of Finance.

(5) Upon request of the Ministry of Finance referred to in Paragraph four of this Section, the Latvian Association of Sworn Auditors shall request copies of the audit working papers or other documents referred to in the request of the Ministry of Finance from the relevant sworn auditor or commercial company of sworn auditors which have been certified in accordance with the legal acts regarding the development and drawing up of documents.

(6) Within a month after receipt of the request of the Ministry of Finance, the Latvian Association of Sworn Auditors shall submit copies of the audit working papers and other documents referred to in Paragraph two of this Section to the Ministry of Finance for theu handing over to the relevant competent authority of the third country. The Latvian Association of Sworn Auditors shall submit the abovementioned copies of documents certified in accordance with the legal acts regarding the development and drawing up of documents. The Latvian Association of Sworn Auditors shall comply with the confidentiality requirements and, when submitting copies of the abovementioned audit working papers and other documents, indicate whether the particular documents contain a trade secret or personal data. Personal data shall be handed over to the competent authorities of third countries in accordance with Article 15 of Regulation No 2016/679. All persons who have become aware of a trade secret and personal data when handing over copies of the abovementioned audit working papers and other documents to the Ministry of Finance are prohibited from disclosing them, except for the cases specified in laws.

(7) If the Latvian Association of Sworn Auditors cannot submit copies of the requested documents within the time limit referred to in Paragraph six of this Section due to objective reasons, it shall notify the Ministry of Finance thereof in writing, indicating the reasons for delay and the date when copies of documents will be submitted.

(8) The Ministry of Finance shall comply with the confidentiality requirements when cooperating with the competent authorities of the third country in the field of audit. When handing over copies of the audit working papers and other documents referred to in Paragraph two of this Section, the Ministry of Finance shall indicate whether the particular documents contain trade secret or personal data. All persons who have become aware of trade secret or personal data in handing over copies of audit working papers and other documents to the third country competent authority are prohibited from disclosing them, except for the cases specified in laws.

[22 March 2012; 19 June 2025]

Chapter VIII.¹
Regulations for Ensuring the Application of Regulation No 537/2014

[15 December 2016]

Section 37.⁵ Competent Authorities

(1) In accordance with Article 20(1) of Regulation No 537/2014, the competent authority which is responsible for the performance of the tasks provided for in this Regulation and ensuring application of the provisions of this Regulation (except for the performance of the tasks and ensuring application of the provisions provided for in Regulation No 537/2014 for the performance of and ensuring application of which Latvijas Banka is determined to be the responsible institution in Paragraph two of this Section) shall be the Ministry of Finance.

(2) In accordance with Article 20(2) of Regulation No 537/2014, the competent authority which is responsible for ensuring application of the provisions of Chapter III, Articles 16, 17, and 19 of this Regulation shall be Latvijas Banka. Latvijas Banka shall fulfil the following obligations as the competent authority referred to in this Paragraph:

1) supervise whether a public-interest entity complies with the provisions of this Law and Article 16 of Regulation No 537/2014 in respect of appointing of a sworn auditor or commercial company of sworn auditors in the public-interest entity and whether the public-interest entity, when entering into an audit services contract or extending the validity of the abovementioned contract, has complied with the provisions of Section 37.⁸ of this Law and Article 17 of Regulation No 537/2014 regarding the duration of the period for the performance of the audit task in the public-interest entity;

2) within 10 days starting from the day when the report referred to in Section 29, Paragraph 3.¹ or 3.³ of this Law on termination of the audit services contract before expiry thereof, in accordance with the requirements of Article 19 of Regulation No 537/2014, notify the Ministry of Finance thereof in writing;

3) immediately notify the Ministry of Finance in writing of the possible violations of the requirements of this Law and Regulation No 537/2014 in which a sworn auditor or commercial company of sworn auditors appointed by the public-interest entity is involved and which are detected during the supervision process carried out by Latvijas Banka as the competent authority;

4) not later than until 1 February of the next year, compile and submit a written information to the Ministry of Finance on the measures taken and administrative acts issued in the previous year which are related to the supervision referred to in Clause 1 of this Paragraph.

(3) Latvijas Banka is entitled to issue regulations for the procedures for the compliance with Chapter III, Articles 16, 17, and 19 of Regulation No 537/2014.

(4) The competent authorities referred to in Article 8(5)(g) of Regulation No 537/2014 shall be the Ministry of Finance and Latvijas Banka.

[15 December 2016; 26 September 2024; 19 June 2025]

Section 37.⁶ Non-audit Services

(1) A sworn auditor and a commercial company of sworn auditors which carry out the audit of annual statements or consolidated annual statements of a public-interest entity but, if the abovementioned sworn auditor or commercial company of sworn auditors is a cooperation partner of the network of commercial companies of auditors, also any cooperation partner of such network of commercial companies of auditors are prohibited from providing prohibited non-audit services referred to in the second sub-paragraph of Article 5(1) of Regulation No 537/2014 to such public-interest entity, the parent undertaking thereof and subsidiaries of such public-interest entity in the European Union during the period indicated in the first sub-paragraph of Article 5(1) of Regulation No 537/2014. Exception is such non-audit services which are referred to in Paragraph two of this Section if all provisions of Paragraph three of this Section are conformed to.

(2) The non-audit services which the sworn auditor, the commercial company of sworn auditors, and the cooperation partner of the network of commercial companies of auditors referred to in Paragraph one of this Section are entitled to provide if all provisions of Paragraph three of this Section are complied with shall be as follows:

1) the provision of tax consultancy services, including consultations in respect of tax reliefs, tax calculation, and preparation of tax declarations;

2) the provision of consultations in respect of receipt of financial aid and support payments.

(3) A sworn auditor, a commercial company of sworn auditors, and a cooperation partner of the network of commercial companies of sworn auditors referred to in Paragraph one of this Section are entitled to provide the non-audit services referred to in Paragraph two of this Section if all of the following conditions are met:

1) these services (separately or in the aggregate) have no direct or have immaterial effect on the annual statement or consolidated annual statement of the public-interest entity;

2) these services have no relation to the management or decision-taking of the public-interest entity;

3) the estimation of the effect of these services on the annual statement or consolidated annual statement of the public-interest entity is comprehensively documented and explained to the audit committee of the public-interest entity or equal entity in accordance with Article 11 of Regulation No 537/2014;

4) a sworn auditor or commercial company of sworn auditors complies with the independence requirements laid down in this Law;

5) the provision of these services, before the commencement thereof, has been approved by the audit committee of the public-interest entity or an entity equal to the audit committee.

(4) A sworn auditor and a commercial company of sworn auditors which provide the sustainability report assurance service to a public-interest entity but, if the abovementioned sworn auditor or commercial company of sworn auditors is a cooperation partner of the network of commercial companies of sworn auditors, also any cooperation partner of this network of commercial companies of sworn auditors are prohibited from directly or indirectly providing the prohibited non-audit services referred to in Article 5(1)(2)(b), (c), (e), (f), (g), (h), (i), (j), and (k) of Regulation No 537/2014 to such public-interest entity, its parent undertaking, or companies controlled by such public-interest entities:

1) during the period from the beginning of such period for which the sworn auditor or commercial company of sworn auditors assures the integrity and completeness of the information provided in the sustainability report until the date of issue of the assurance report referred to in Section 32.¹ of this Law;

2) in the reporting year immediately preceding the period referred to in Clause 1 of this Paragraph, in relation to the prohibited non-audit services referred to in Article 5(1)(2)(e) of Regulation No 537/2014.

(5) A sworn auditor and a commercial company of sworn auditors which provide the sustainability report assurance service to a public-interest entity but, if the abovementioned sworn auditor or commercial company of sworn auditors is a cooperation partner of the network of commercial companies of sworn auditors, also any cooperation partner of this network of commercial companies of sworn auditors may provide non-audit services other than the prohibited non-audit services referred to in Paragraph four of this Section to such public-interest entity, its parent undertaking, or companies controlled by such public-interest entities, except for the services referred to in Paragraph two of this Section, if all of the provisions referred to in Paragraph three of this Section have been fulfilled.

(6) If a member of such network of commercial companies of sworn auditors the cooperation partner of which is a sworn auditor or commercial company of sworn auditors which provides the sustainability report assurance service to a public-interest entity provides the prohibited non-audit services referred to in Paragraph four of this Section to a commercial company registered in a third country and controlled by a public-interest entity for which the integrity and completeness of the information provided in the sustainability report is being assured, the relevant sworn auditor or commercial company of sworn auditors shall assess whether the provision of services of such network member have an impact on its independence. A sworn auditor and a commercial company of sworn auditors may continue the provision of the sustainability report assurance service to the relevant public-interest entity only if, in accordance with Section 26, Paragraph nine of this Law, a sworn auditor or commercial company of sworn auditors justifies that the services provided by such cooperation partner (member) of the network do not affect the professional opinion of the sworn auditor and the assurance report.

[15 December 2016; 19 April 2018; 26 September 2024]

Section 37.⁷ Restriction of Receipt of a Fee for Non-audit Services and Granting of an Exemption

(1) In accordance with the first sub-paragraph of Article 4(2) of Regulation No 537/2014, when the sworn auditor or commercial company of sworn auditors provides audit services to a public-interest entity and concurrently provides also non-audit services that are not the prohibited non-audit services referred to in Article 5(1) of this Regulation to such company or parent company or subsidiary thereof for three consecutive reporting years or more, the total amount of calculated consideration (hereinafter - the fee) for such non-audit services shall be limited to maximum 70 % of the average annual fee received for an audit (review) of the annual statement and consolidated annual statement within the period of the last three consecutive years. The average annual fee shall be calculated on the basis of the fee calculated within the last three reporting years for an audit (review) of the annual statement and consolidated annual statement which is carried out for a public-interest entity and, in the relevant case, for its parent undertaking or subsidiary.

(1¹) The restrictions of receipt of the fee for non-audit services referred to in Paragraph one of this Section shall not be applicable to the sustainability report assurance services.

(2) In exceptional case, when a submission of the sworn auditor or commercial company of sworn auditors which carries out an audit (review) of the annual statement and consolidated annual statement for a public-interest entity is received where the need to receive exemption in respect of a particular public-interest entity is substantiated, Latvijas Banka is entitled to exempt the abovementioned sworn auditor or commercial company of sworn auditors from the requirement of the first sub-paragraph of Article 4(2) of Regulation No 537/2014 referred to in Paragraph one of this Section in respect of the particular public-interest entity. Such exemption may be granted for a period not exceeding two reporting years.

[15 December 2016; 26 September 2024; 19 June 2025]

Section 37.⁸ Maximum Duration of an Audit Task and the Extension Thereof

(1) In accordance with the second sub-paragraph of Article 17(1) of Regulation No 537/2014, a sworn auditor or commercial company of sworn auditors do not have the right to carry out an audit (review) of the annual statement and consolidated annual statement for more than 10 consecutive years in the same public-interest entity (hereinafter in this Section - the maximum duration of audit task).

(2) By way of derogation from the provisions of Paragraph one of this Section, a public-interest entity is entitled to extend the duration of the audit task for a commercial company of sworn auditors so that this term would be longer than the maximum duration of audit task referred to in Paragraph one of this Section if both of the following conditions are complied with:

1) after expiry of the maximum duration of the audit task, the public-interest entity organises an open procurement for the provision of audit services by using a tendering procedure;

2) the maximum duration of the audit task together with the extension thereof (hereinafter in this Section - the extended duration of audit task) does not exceed 20 years.

(3) In accordance with Article 17(3) of Regulation No 537/2014, after expiry of the maximum duration of audit task referred to in Paragraph one of this Section or after expiry of the extended duration of the audit task referred to in Paragraph two of this Section, a sworn auditor and a commercial company of sworn auditors are prohibited from undertaking a new audit task in the abovementioned public-interest entity within the following four-year period. If the sworn auditor or commercial company of sworn auditors belongs to a network of commercial companies of sworn auditors, the prohibition referred to in this Paragraph shall also apply to the cooperation partners of such network.

[15 December 2016 / See Paragraph 18 of Transitional Provisions]

Section 37.⁹ Establishment of the Audit Committee

(1) A commercial company which is registered in Latvia and the transferable securities of which are admitted to trading on the regulated market in Latvia or any other Member State shall establish an audit committee or an equivalent body and ensure its operation in accordance with the requirements for the establishment and operation of the audit committee laid down in Part D, Chapter II.¹ of the Financial Instrument Market Law.

(2) A public-interest entity other than the commercial company referred to in Paragraph one of this Section shall establish an audit committee or similar entity thereto, applying the requirements for the establishment and operation of the audit committee laid down in Part D, Chapter II¹ of the Financial Instrument Market Law accordingly. The public-interest entity need not establish the audit committee if such entity conforms to any of the conditions of Section 55.¹¹, Paragraph four of the Financial Instrument Market Law or it is an open pension fund within the meaning of the Private Pension Fund Law, or a manager of the State funded pension scheme funds within the meaning of the Law on State Funded Pensions.

(2¹) A public-interest entity has the obligation to inform Latvijas Banka in writing of the establishment of the audit committee or equivalent body, composition thereof, and any changes in the composition of the audit committee. If the public-interest entity applies the exemption provided for in the law and does not establish the audit committee, it shall inform Latvijas Banka of the fact that it does not establish an audit committee and provide a justification for this decision. Latvijas Banka is entitled to issue regulations by specifying the scope of information to be submitted and the period within which a public-interest entity shall provide information on the establishment of the audit committee or equivalent body, composition thereof, and any changes in the composition of the audit committee, or a justification for not establishing it.

(3) A public-interest entity has an obligation to provide the additional report to the audit committee referred to in Article 11 of Regulation No 537/2014 to Latvijas Banka within five working days after a written request by Latvijas Banka.

[15 December 2016; 26 September 2024; 19 June 2025]

Section 37.¹⁰ Responsibility of a Public-interest Entity

[19 June 2025]

Chapter VIII.²
Responsibility of Public-interest Entities

[19 June 2025]

Section 37.¹¹ Types of Sanctions Imposed by Latvijas Banka

Latvijas Banka may impose the following sanctions:

1) a warning;

2) a public notice;

3) a fine.

[19 June 2025]

Section 37.¹² Warning of Latvijas Banka

A warning is a written condemnation of an offence committed by the natural or legal person responsible for the violation.

[19 June 2025]

Section 37.¹³ Public notice of Latvijas Banka

(1) A public notice is a notice which indicates the natural or legal person responsible for the violation and the essence of the violation.

(2) Latvijas Banka shall post a public notice on its website.

(3) A public notice may be imposed in addition to the sanctions referred to in Section 37.¹¹, Clauses 1 and 3 of this Law.

(4) The public notice shall be available on the website of Latvijas Banka for a period of five years after the date of its posting.

[19 June 2025]

Section 37.¹⁴ Fine Imposed by Latvijas Banka

Latvijas Banka is entitled to impose a fine:

1) on a commercial company in an amount of up to 10 per cent of the net turnover amount of the previous reporting year. If 10 per cent of the net turnover amount of the previous reporting year is less than EUR 142 300, Latvijas Banka is entitled to impose a fine of up to EUR 142 300;

2) of up to one million euros on a natural person who is responsible for the violation.

[19 June 2025]

Section 37.¹⁵ Types of Administrative Measures Imposed by Latvijas Banka

(1) Latvijas Banka may impose the following administrative measures:

1) to request the person liable for the violation to cease the relevant activity;

2) to impose a temporary prohibition on a member of the supervisory board or executive board of the commercial company who is responsible for the relevant violation to perform duties determined for him or her in the commercial company until the violation has been rectified, but for not longer than three years.

(2) Latvijas Banka may impose one or more administrative measures separately or in addition to the sanctions.

[19 June 2025]

Section 37.¹⁶ Violations in the Field of Activities of Public-interest Entities

(1) Latvijas Banka is entitled to impose on a public-interest entity the sanctions or administrative measures specified in this Law if the public-interest entity fails to comply with:

1) the requirements for the establishment of the audit committee and the ensuring of operation of this committee;

2) the obligation to provide to Latvijas Banka, within five working days upon a written request of Latvijas Banka, the additional report to the audit committee referred to in Article 11 of Regulation No 537/2014;

3) the regulations related to the appointment of a sworn auditor or a commercial company of sworn auditors in the public-interest entity;

4) the regulations regarding the duration of the period for the performance of the audit task in the public-interest entity when entering into an audit services contract with a sworn auditor or a commercial company of sworn auditors or extending the duration of the respective contract.

(2) The fines collected for the violations referred to in Paragraph one of this Section shall be paid into the State budget.

(3) The procedures laid down in Section 38.¹² of this Law shall apply to the period within which Latvijas Banka is entitled to impose the sanctions or administrative measures specified in this Law.

[19 June 2025]

Section 37.¹⁷ Informing of the Sanctions and Administrative Measures Imposed

(1) Latvijas Banka shall post information on the sanctions and administrative measures imposed on persons for the violations referred to in Section 37.¹⁶, Paragraph one of this Law on its website, indicating information on the appeal of the administrative act issued thereby and the taken court ruling.

(2) Latvijas Banka shall post the information referred to in Paragraph one of this Section on its website within five working days from the day when the period for the appeal of the administrative act has expired and it has not been appealed.

(3) In respect of the information referred to in Paragraph one of this Section, Latvijas Banka is entitled to:

1) make it available to the public without identifying the person if, upon previous assessment, it has been ascertained that the disclosure of data of the natural person on whom a sanction or administrative measure has been imposed is not commensurate or that the disclosure of data of the natural or legal person may pose a threat to the stability of the financial market or the course of initiated criminal proceedings, or cause incommensurate damage to the persons involved;

2) not make it available to the public if, upon previous assessment, it has been ascertained that the disclosure of such information may pose a threat to the stability of the financial market or is not commensurate with the committed violation.

(4) If it is expected that the circumstances referred to in Paragraph three of this Section may terminate within a reasonable time period, making of the information referred to in Paragraph one of this Section available to the public may be suspended for this time period.

(5) The information posted on the website of Latvijas Banka in accordance with the procedures laid down in this Section shall be available for five years from the day of its initial posting.

[19 June 2025]

Section 37.¹⁸ Appeal of an Administrative Act Issued by Latvijas Banka

(1) When appealing an administrative act issued by Latvijas Banka, the application shall be submitted to the Regional Administrative Court. The court shall examine a case as the court of first instance. The case shall be examined in the composition of three judges. A judgement of the Regional Administrative Court may be appealed by submitting a cassation complaint.

(2) The appeal of the administrative act referred to in Paragraph one of this Section, except for an administrative act on the imposition of a fine or a public notice, shall not suspend the operation of such act.

[19 June 2025]

Section 37.¹⁹ Obligation of Latvijas Banka to Provide Information to the Ministry of Finance

Latvijas Banka shall, within five working days after the day of taking the decision, inform the Ministry of Finance in writing of the sanctions and administrative measures imposed for the violations referred to in Section 37.¹⁶, Paragraph one of this Law, indicating the responsible person on whom the abovementioned sanctions and administrative measures have been imposed, and also the type of such sanctions and measures.

[19 June 2025]

Chapter IX
Liability of Sworn Auditors and Commercial Companies of Sworn Auditors

[4 September 2025]

Section 38. Initiation and Examination of Disciplinary Matters and Procedures for the Imposition of Sanctions

[22 January 2004]

Section 38.¹ Initiation and Examination of Disciplinary Matters and Imposition of Sanctions

[4 September 2025]

Section 38.² Types of Sanctions Imposed by the Ministry of Finance

The Ministry of Finance may impose the following sanctions:

1) a warning;

2) a public notice;

3) a fine;

4) a prohibition for a sworn auditor, a commercial company of sworn auditors, or a responsible sworn auditor to provide audit services and to sign auditor's report for a period of up to three years;

5) a prohibition for a sworn auditor, a commercial company of sworn auditors, a responsible sworn auditor, or a lead sustainability auditor to provide sustainability report assurance services and to sign the assurance report on the sustainability report for a period of up to three years;

6) a prohibition to provide sustainability report assurance services (cancellation of the entry in the Sworn Auditor Register on the right of a sworn auditor to provide sustainability report assurance services, cancellation of the entry in the Register of Commercial Companies of Sworn Auditors on the right of a commercial company of sworn auditors to provide sustainability report assurance services);

7) a prohibition to provide audit services (cancellation of the sworn auditor certificate or cancellation of the licence for a commercial company of sworn auditors).

[19 June 2025]

Section 38.³ Warning of the Ministry of Finance

A warning is a written condemnation of an offence committed by the natural or legal person responsible for the violation.

[19 June 2025]

Section 38.⁴ Public Notice of the Ministry of Finance

(1) A public notice is a notice which indicates the natural or legal person responsible for the violation and the essence of the violation.

(2) The Ministry of Finance shall post a public notice on its website:

1) indicating the sworn auditor responsible for the violation (the given name, surname, and certificate number of the sworn auditor) and the responsible commercial company of sworn auditors (the name and licence number of the commercial company of sworn auditors), and also the essence of the committed violation;

2) that the signed auditor's report does not conform to the content of the auditor's report specified in this Law and the requirements for the auditor's report laid down in Article 10 of Regulation No 537/2014;

3) that the signed assurance report on the sustainability report does not conform to the requirements of Section 32.¹ of this Law.

(3) A public notice may be imposed in addition to the sanctions referred to in Section 38.², Clauses 1, 3, 4, 5, 6, and 7 of this Law.

(4) The public notice shall be available on the website of the Ministry of Finance for five years after the day of its posting.

[19 June 2025]

Section 38.⁵ Fine Imposed by the Ministry of Finance

The Ministry of Finance is entitled to impose a fine:

1) on a commercial company of sworn auditors - up to EUR 14 200;

2) on the sworn auditor responsible for the violation - up to EUR 7200.

[19 June 2025]

Section 38.⁶ Types of Administrative Measures Imposed by the Ministry of Finance

(1) The Ministry of Finance may impose the following administrative measures:

1) to request that a sworn auditor or a commercial company of sworn auditors immediately cease the relevant actions and request immediate rectification of the violation;

2) to impose a temporary prohibition on a member of the management body of the commercial company of sworn auditors if he or she is a sworn auditor and is responsible for the relevant violation to fulfil the duties determined for him or her in the commercial company of sworn auditors until the moment of rectification of the violation, but not longer than for a period of up to three years.

(2) The Ministry of Finance may impose one or more administrative measures separately or in addition to the sanctions.

[19 June 2025]

Section 38.⁷ Violations in the Field of Activities of Sworn Auditors and Commercial Companies of Sworn Auditors

(1) The Ministry of Finance is entitled to impose the sanctions or administrative measures specified in this Law on a sworn auditor and a commercial company of sworn auditors if the sworn auditor or the commercial company of sworn auditors:

1) violates the requirements for maintaining independence and objectivity;

2) fails to comply with the requirements to provide the new sworn auditor or the new commercial company of sworn auditors (with whom a contract has been concluded) with access to all information on the client and the last audit of its annual statement and consolidated annual statement;

3) violates the requirements for maintaining confidentiality;

4) fails to comply with the requirements for the improvement of professional qualification (further education) of sworn auditors;

5) fails to comply with the requirements in respect of the planning, performance, and final procedure of the audit task;

6) fails to comply with the requirement to provide the audit committee of the audited client with an attestation of independence of his or her professional activity from the audited client;

7) fails to comply with the requirement to inform the audit committee of the client of any circumstances that jeopardise the independence of the sworn auditor and to consult on the measures taken in order to eliminate such circumstances;

8) provides audit services in the case when he or she has not concluded an audit services contract;

9) fails to comply with the requirement to inform the Ministry of Finance, the Latvian Association of Sworn Auditors, and Latvijas Banka of the termination of an audit services contract during its term of validity and of the reasons for its termination;

10) fails to comply with the requirement to inform the Ministry of Finance of the concluded or extended audit services contract for the audit of the annual statement or consolidated annual statement concluded with a client that is a public-interest entity;

11) violates the prohibition to hold a position in the management body, executive board, supervisory board, audit committee of a former client, or, if the relevant client does not establish the audit committee, in an authority performing functions equivalent to those of the audit committee;

12) fails to comply with the requirement to appoint the responsible sworn auditor for the provision of audit services and to notify the client of such appointment;

13) fails to comply with the regulations regarding the particulars and content of the auditor's report;

14) fails to comply with the requirement to inform the audit committee of the client's management or public-interest entity of the issues not included in the opinion;

15) fails to comply with the requirement to provide Latvijas Banka with information in accordance with Article 12(1)(a), (b), and (c) of Regulation No 537/2014 in respect of the facts discovered during the provision of audit services;

16) fails to comply with the requirement to provide the Corruption Prevention and Combating Bureau with information in respect of the facts discovered during the provision of audit services which may be related to the bribery of an official;

17) fails to comply with the requirement for the preparation and publication of a transparency report and reporting to the competent authorities;

18) fails to comply with the requirements for the keeping of audit working papers and audit files and the storage of reports and other documents;

19) fails to comply with the requirements for handing over audit working papers and ensuring cooperation between the responsible sworn auditor of a group of companies and the auditor of a subsidiary of a group of companies;

20) fails to comply with the requirement to perform a re-audit of the updated annual statement and consolidated annual statement;

21) fails to comply with the requirements for the organisation of work and quality management at the level of the audit task or the practice of sworn auditors;

22) fails to comply with the requirement for the provision of information to the competent authorities in relation to the list of audited public-interest entities and the income obtained therefrom, and also the further education of sworn auditors;

23) fails to comply with the requirements for the provision of prohibited non-audit services and the independence requirements;

24) exceeds the determined remuneration limit for the services not related to the audit of public-interest entities;

25) fails to comply with the requirement for the extension of the maximum period for the provision of audit service to a public-interest entity, fails to comply with the prohibition to provide audit service for four years after the expiry of the maximum period for the audit task, fails to comply with the prohibition on lead audit partners to resume participation in the mandatory audit for three years after the expiry of the maximum period for the audit task, fails to comply with the requirement of Article 17 of Regulation No 537/2014 regarding the establishment of a gradual rotation mechanism for employees, reporting to the competent authority;

26) fails to comply with the requirement of Article 4(3) of Regulation No 537/2014 in respect of the notification of the audit committee of a public-interest entity if the total fees for audit services received from the public-interest entity for each of the last three consecutive financial years exceed 15 per cent of the total income of the sworn auditor or commercial company of sworn auditors;

27) fails to comply with the requirement of Article 7 of Regulation No 537/2014 regarding the provision of information to the competent authorities if a potential violation, including fraud, has been established during the provision of audit services;

28) fails to comply with the requirement of Article 10 of Regulation No 537/2014 regarding the additional content of the auditor's report prepared by the sworn auditor appointed by a public-interest entity;

29) fails to comply with the requirement of Article 11 of Regulation No 537/2014 regarding the additional report to the audit committee.

(2) For the violations referred to in Paragraph one of this Section which have been committed by sworn auditors and commercial companies of sworn auditors providing audit services, including sustainability report assurance services, to clients that are not public-interest entities, the Ministry of Finance may impose sanctions or administrative measures upon the proposal of the Latvian Association of Sworn Auditors.

(3) The fines collected for the violations referred to in Paragraph one of this Section shall be paid into the State budget. The person shall pay the fine imposed by the Ministry of Finance not later than within one month from the day when the decision of the Ministry of Finance to impose the fine has entered into effect.

[19 June 2025]

Section 38.⁸ Imposing of Sanctions and Administrative Measures

(1) When taking the decision on the imposition of administrative measures on sworn auditors and commercial companies of sworn auditors and on the amount of a fine, the Ministry of Finance shall assess the proportionality, effectiveness, and deterrent nature of the imposed sanctions and administrative measures, and also take into account:

1) the gravity of the violation;

2) the duration of the violation;

3) the level of responsibility of the person;

4) income gained by the person as the result of violation;

5) compensation of losses caused as the result of violation;

6) cooperation of the person with the Ministry of Finance in the investigation of the violation;

7) the financial position of the person: for a commercial company of sworn auditors - the total net turnover in the previous reporting year, for a sworn auditor who carries out professional activity as a sole proprietorship or self-employed person - the total turnover (income) from economic transactions in the previous reporting year;

8) the previous violations of the person committed in the field of provision of professional services.

(2) The Ministry of Finance shall issue recommendations (guidelines) on the imposition of the sanctions referred to in Section 38.² of this Law and the administrative measures referred to in Section 38.⁶, Paragraph one of this Law, and shall publish them on its website.

(3) The Ministry of Finance shall not impose the sanctions referred to in Section 38.² of this Law and the administrative measures referred to in Section 38.⁶, Paragraph one of this Law in the case where criminal proceedings have been initiated for the same violation.

[19 June 2025]

Section 38.⁹ Obligation of the Ministry of Finance to Provide Information to the Committee of European Auditing Oversight Bodies

(1) The Ministry of Finance shall, within one month after the end of each calendar year, prepare and send to the Committee of European Auditing Oversight Bodies compiled information on the sanctions and administrative measures imposed in the previous year by the Ministry of Finance and Latvijas Banka, indicating all the persons on whom sanctions and administrative measures have been imposed, and also the type of sanctions and administrative measures imposed.

(2) The Ministry of Finance shall immediately inform the Committee of European Auditing Oversight Bodies of the following:

1) the imposition of the administrative measure referred to in Section 38.⁶, Paragraph one, Clause 2 and of the sanctions referred to in Section 38.², Clauses 4 and 5 of this Law, indicating the person on whom the administrative measure has been imposed and the type of such administrative measure;

2) the imposition of the administrative measure referred to in Section 37.¹⁵, Paragraph one, Clause 2, indicating the person on whom the administrative measure has been imposed and the type of such administrative measure;

3) if the Latvian Association of Sworn Auditors has temporarily suspended the validity of a sworn auditor certificate due to the circumstances referred to in Section 17, Paragraph one of this Law, indicating the sworn auditor whose validity of the certificate has been suspended;

4) if the Latvian Association of Sworn Auditors has temporarily suspended the validity of a licence for a commercial company of sworn auditors due to the circumstances referred to in Section 36, Paragraph four of this Law, indicating the commercial company of sworn auditors whose validity of the licence has been suspended.

[19 June 2025]

Section 38.¹⁰ Informing of the Sanctions and Administrative Measures Imposed

(1) The Ministry of Finance shall post on its website the information on the sanctions referred to in Section 38.² of this Law and the administrative measures referred to in Section 38.⁶, Paragraph one of this Law imposed on persons, indicating the person responsible for the violation (the given name, surname, certificate number of the sworn auditor and the name, registration number, and licence number of the commercial company of sworn auditors), the type and essence of the violation, and the sanction or administrative measure imposed by the Ministry of Finance, and also information on the appeal of its issued administrative act and the court ruling taken.

(2) The Ministry of Finance shall post the information referred to in Paragraph one of this Section on its website within five working days from the day when the period for the appeal of the administrative act has expired and it has not been appealed.

(3) In respect of the information referred to in Paragraph one of this Section, the Ministry of Finance is entitled to:

1) make it available to the public without identifying the person if, upon previous assessment, it has been ascertained that the disclosure of data of the natural person on whom a sanction or administrative measure has been imposed is not commensurate or that the disclosure of data of the natural or legal person may pose a threat to the stability of the financial market or the course of initiated criminal proceedings, or cause incommensurate damage to the persons involved;

2) not make it available to the public if, upon previous assessment, it has been ascertained that the disclosure of such information may pose a threat to the stability of the financial market or is not commensurate with the committed violation.

(4) If it is expected that the circumstances referred to in Paragraph three of this Section may terminate within a reasonable time period, making of the information referred to in Paragraph one of this Section available to the public may be suspended for this time period.

(5) The information posted on the website of the Ministry of Finance in accordance with the procedures laid down in this Section shall be available for five years from the day of its initial posting.

[19 June 2025]

Section 38.¹¹ Appeal of an Administrative Act Issued by the Ministry of Finance

(1) An administrative act (decision) of the Ministry of Finance issued in relation to the sanctions referred to in Section 38.² of this Law and the administrative measures referred to in Section 38.⁶, Paragraph of this Law may be appealed to the Regional Administrative Court. The Regional Administrative Court shall examine the case as the court of first instance. The case shall be examined in the composition of three judges. A judgement of the Regional Administrative Court may be appealed by submitting a cassation complaint.

(2) The appeal of the administrative act referred to in Paragraph one of this Section, except for an administrative act on the imposition of a fine or a public notice, shall not suspend the operation of such act.

[19 June 2025]

Section 38.¹² Statute of Limitation

(1) The Ministry of Finance is entitled to initiate proceedings not later than within five years from the day of committing the violation but, in case of a continuous offence, from the day of terminating the violation.

(2) The calculation of the statute of limitation specified in Paragraph one of this Section shall be stopped from the day of initiation of the proceedings.

(3) The Ministry of Finance may take the decision to impose the sanctions and administrative measures specified in Section 38.² of this Law within two years from the day of initiation of the proceedings.

(4) The Ministry of Finance shall terminate the proceedings if the decision on the imposition of sanctions and administrative measures provided for in this Law has not been taken within the period specified in Paragraph three of this Section.

[19 June 2025]

Section 38.¹³ Submission and Examination of Complaints Regarding the Professional Activities of Sworn Auditors and Commercial Companies of Sworn Auditors by the Latvian Association of Sworn Auditors

(1) A legal or natural person may submit a complaint to the Latvian Association of Sworn Auditors regarding the actions of a sworn auditor or a commercial company of sworn auditors when providing the audit service or sustainability report assurance service to a client that is not a public-interest entity.

(2) The Latvian Association of Sworn Auditors is entitled to request the information and documents required by it from the submitter of the complaint, the sworn auditor, or the commercial company of sworn auditors against whose actions the complaint has been submitted.

(3) Complaints regarding the actions of a sworn auditor or a commercial company of sworn auditors when providing the audit service or sustainability report assurance service to a client that is not a public-interest entity shall be examined by the Latvian Association of Sworn Auditors within one month from the day of receipt of the complaint.

(4) If the period referred to in Paragraph three of this Section cannot be complied with due to objective reasons, the Latvian Association of Sworn Auditors may extend it, but for not longer than three months from the day of receipt of the complaint, notifying the submitter of the complaint of this fact.

(5) If, during the examination of a complaint, the Latvian Association of Sworn Auditors establishes that a sworn auditor or a commercial company of sworn auditors has committed the violation referred to in Section 38.⁷, Paragraph one of this Law, it shall, in accordance with Paragraph two of the respective Section, propose the Ministry of Finance to apply sanctions or administrative measures.

(6) The procedures for the examination of complaints shall be determined by the by-laws which shall be approved by the Latvian Association of Sworn Auditors after agreement with the Ministry of Finance.

[19 June 2025]

Section 39. Disciplinary Sanctions

[22 January 2004]

Section 40. Dispute and Appeal of Decisions by the Latvian Association of Sworn Auditors

(1) Complaints regarding unlawful activities of the Latvian Association of Sworn Auditors or activities that do not comply with the articles of association shall be adjudicated by a court.

(2) Decisions by the Latvian Association of Sworn Auditors that are related to the certification of sworn auditors, the licensing of commercial companies of sworn auditors, and other tasks delegated thereto by this Law in relation to the supervision of audit services and sustainability report assurance services may be disputed to the Ministry of Finance. The decision of the Ministry of Finance may be appealed to a court in accordance with the procedures laid down in the law.

[22 January 2004; 19 June 2025]

Section 41. Civil Liability of a Sworn Auditor and a Commercial Company of Sworn Auditors and Time Limits for the Compensation for Losses

(1) A sworn auditor or a commercial company of sworn auditors shall be liable for the commitments which have arisen as a result of entering into a contract with a client for the provision of audit service or sustainability report assurance service.

(2) A sworn auditor or a commercial company of sworn auditors shall be liable for the losses incurred by third parties who are users of the client's annual statement and also the consolidated annual statement, including the sustainability report, if the auditor's report provided in accordance with international auditing standards recognised in Latvia, or the assurance report on the sustainability report provided in accordance with the sustainability report assurance standards substantially contradicts the actual state of things and if the provisions of Sections 26, 27, 30, 32.¹, 34, 34.¹, or 34.³ of this Law have not been complied with.

(3) If two or more sworn auditors, or responsible sworn auditors designated by a commercial company of sworn auditors, or, where applicable, lead sustainability auditors, have signed the auditor's report or the assurance report on the sustainability report, they shall be jointly and severally liable for the losses referred to in Paragraph two of this Section.

(4) The compensation for losses shall be covered by the sworn auditor or commercial company of sworn auditors by a mutual agreement or recovered by judicial means not later than within three years from the day when the auditor's report or assurance report on the sustainability report was signed.

[19 June 2025]

Section 42. Civil Liability Insurance of a Sworn Auditor and a Commercial Company of Sworn Auditors

(1) A sworn auditor who is a self-employed person or a sole proprietorship (hereinafter in this Section - the sworn auditor) and a commercial company of sworn auditors have the obligation to insure their civil liability for professional activities manifesting as the provision of audit service or sustainability report assurance service which sets in if such professional activities cause losses to third parties. The procedures for insuring professional civil liability and also the insurance limits shall be determined by the Cabinet.

(2) The minimum liability limit for the professional civil liability insurance of a sworn auditor shall be the total revenue earned by this sworn auditor in the previous reporting year from audit services and, where applicable, sustainability report assurance services, and it may not be less than the minimum insurance amount determined by the Cabinet. In the year the sworn auditor commences activity, the minimum insurance limit for the professional civil liability insurance shall be the insurance amount determined by the Cabinet.

(3) The minimum liability limit for the professional civil liability insurance of a commercial company of sworn auditors, except for partnerships that do not employ employees who are sworn auditors, shall be the total revenue earned by this commercial company of sworn auditors in the previous reporting year from audit services and, where applicable, sustainability report assurance services, and it may not be less than the minimum insurance amount determined by the Cabinet. In the year the commercial company of sworn auditors commences activity, the minimum insurance limit for the professional civil liability insurance shall be the insurance amount determined by the Cabinet.

(4) When providing audit services to a public-interest entity, the minimum liability limit for the professional civil liability insurance of a service provider who is a sworn auditor or a commercial company of sworn auditors shall be two per cent of the amount of assets of the audited annual statement of such public-interest entity for whom such assets are the highest ones at the end of the previous reporting year, but not more than EUR 10 million and not less than the limit calculated in accordance with Paragraph two or three of this Section.

(5) For the purpose of insuring professional civil liability, a sworn auditor and a commercial company of sworn auditors may choose to enter into a civil liability contract with:

1) an insurance company registered in the Commercial Register which has obtained a licence issued by Latvijas Banka for general civil liability insurance;

2) an insurance company registered in a country of the European Economic Area or a member state of the Organisation for Economic Co-operation and Development.

[19 June 2025]

Section 43. Liability for Fraud of a Person who Does Not Have the Sworn Auditor Certificate

If a person who does not have the sworn auditor certificate or the licence of a commercial company of sworn auditors accordingly performs the activities permitted by this Law only to a sworn auditor or commercial company of sworn auditors and submits an auditor's report, he or she shall be held liable in accordance with the law.

[14 September 2023]

Transitional Provisions

1. With the coming into force of this Law, the law On Sworn Auditors (Latvijas Republikas Saeimas un Ministru Kabineta Ziņotājs, 1996, No. 24; 2000, No. 10) is repealed.

2. The sworn auditor certificates which have been issued on the basis of the laws which were in force until the day of coming into force of this Law shall be recognised as valid.

3. Until 1 January 2003, the mandatory review prescribed by laws of annual statements and also consolidated annual statements of financial institutions as well as the commercial companies the stocks of which are admitted to the official stock exchange listing may be carried out by sworn auditors and companies of sworn auditors indicated by the Financial and Capital Market Commission which do not meet the requirements of this Law.

[22 January 2004]

4. Until 1 January 2005, the sworn auditor qualification examination may be taken by persons who do not have the three-year practical experience specified in Section 8 of this Law. The sworn auditor certificate shall not be issued to such persons after passing of the sworn auditor qualification examination. If such persons acquire, within 5 years after passing of the sworn auditor qualification examination, the three-year practical experience specified in this Law by working as assistants of sworn auditors, they may receive the sworn auditor certificate in accordance with the procedures laid down in Section 16 of this Law.

5. Until 1 January 2005, not only sworn auditors but also other natural persons may be members of the Latvian Association of Sworn Auditors if they have passed the sworn auditor qualification examinations, are employed as assistants of sworn auditors, and comply with the provisions of the articles of association of the Association. Until 1 January 2003, all licensed commercial companies of sworn auditors must become members of the Latvian Association of Sworn Auditors.

6. Until 1 January 2003, all commercial companies which provide audit services must receive the relevant licence of the Latvian Association of Sworn Auditors.

7. Individual undertakings providing audit services are entitled to continue the provision of such services in the status of individual undertakings until the end of the transitional period specified in the Law on the Procedures for the Coming into Force of the Commercial Law.

8. The provisions of Section 21, Paragraphs two and three of this Law shall come into force on 1 January 2004.

9. Amendments to Sections 19 and 24 of this Law and Sections 24.¹, 24.², and 24.³ shall come into force on 29 June 2009.

[29 January 2009]

10. Amendments to Section 1, Clause 7, Sub-clause "e" of this Law, and also Clause 7, Sub-clauses "f" and "g" of this Section shall be applicable to the auditor's report which is prepared by a sworn auditor and a commercial company of sworn auditors on an annual statement and consolidated annual statement starting from the reporting year 2016 (the reporting year which starts on 1 January 2016 or during the calendar year 2016).

[29 October 2015; 14 September 2023]

11. A sworn auditor and a commercial company of sworn auditors shall carry out the limited review of annual statements provided for in Section 28.¹ of this Law starting from the reporting year 2016 (the reporting year which starts on 1 January 2016 or during the calendar year 2016).

[29 October 2015]

12. Amendments to Section 33 of this Law in relation to the provision of information to the Corruption Prevention and Combating Bureau shall come into force on 1 January 2016.

[29 October 2015]

13. The Latvian Association of Sworn Auditors shall develop and approve the procedures referred to in Section 28.¹, Paragraph one and also in Section 33, Paragraph 3.² of this Law until 1 December 2015.

[29 October 2015]

14. Until relevant amendments are made to other laws, the reference to the law On Sworn Auditors used therein shall be understood as reference to the Law on Audit Services.

[15 December 2016]

15. A commercial company of sworn auditors which does not meet the requirements of Section 21, Paragraph four of this Law (at least 75 per cent of the members of the executive board are sworn auditors or auditors of Member States) is entitled to continue the provision of audit services, however, not longer than until 1 January 2018.

[15 December 2016]

16. The provisions of Section 28, Paragraph 1.¹ of this Law shall be applied starting from the audit of the annual statement for 2017.

[15 December 2016]

17. When starting the application of Section 29, Paragraph 4.¹ of this Law, the time limit specified therein shall be counted from the day of coming into force of this norm.

[15 December 2016]

18. Section 37.⁸ of this Law shall be applied by taking into account the conditions of Article 41 of Regulation No 537/2014.

[15 December 2016]

19. The public-interest entities referred to in Section 37.⁹, Paragraph two of this Law shall establish an entity equal to an audit committee or elect an audit committee in the next meeting of stockholders, but not later than within 12 months from the day of coming into force of this norm.

[15 December 2016]

20. The Financial and Capital Market Commission shall, in accordance with Section 17.¹, Paragraph two of the Law on Financial and Capital Market Commission and by 1 January 2018, issue recommendations (guidelines) for the imposition of the sanctions and supervisory measures referred to in Section 37.¹⁰ of this Law and post them on its website.

[15 December 2016; 19 June 2025]

21. The Ministry of Finance shall, by 1 January 2018, issue recommendations (guidelines) for the imposition of the sanctions and supervisory measures referred to in Section 38.² of this Law and post them on its website.

[15 December 2016; 19 June 2025]

22. Section 31.², Clause 10 of this Law shall be applicable to the auditor's report which is prepared by a sworn auditor or a responsible sworn auditor of a commercial company of sworn auditors on such annual statement and consolidated annual statement which has been prepared for the reporting year that starts on 22 June 2024 or later.

[14 September 2006]

23. The requirements of Section 8, Clause 4.¹, Section 11, Paragraph 1.¹, Section 14, Paragraph two, and Section 16.¹, Paragraph two of this Law for the sworn auditor examination in relation to the field of sustainability shall not be applicable to the sworn auditors who, until the day of coming into force of amendments to this Law in relation to the field of sustainability, have obtained the certificate of the sworn auditor for the provision of audit services.

[26 September 2024; 19 June 2025]

24. The requirements of Section 8, Clause 4.¹, Section 11, Paragraph 1.¹, and Section 14, Paragraph two of this Law for the field of sustainability shall not be applicable to applicants who, until the day of coming into force of amendments to this Law in relation to the field of sustainability, have commenced the process for the receipt of the sworn auditor certificate, if such process is completed until 1 January 2026.

[26 September 2024]

25. The requirements of Section 8.¹, Paragraph one of this Law for mandatory training in the subjects of qualification examination shall not be applicable to applicants who are taking sworn auditor qualification examinations in 2024.

[26 September 2024]

26. The requirement referred to in Section 8, Paragraph two of this Law for experience in the field of sustainability and also the requirement to take the qualification examination in the fields referred to in Section 14, Paragraph two of this Law shall be applicable to the applicants who have not completed the process of obtaining a sworn auditor certificate by 1 January 2026 and to the sworn auditors who have obtained their sworn auditor certificate after 1 January 2026 and wish to provide sustainability report assurance services.

[19 June 2025]

27. The sworn auditors who, until 1 January 2026, have obtained a sworn auditor certificate and wish to provide sustainability report assurance services shall acquire the required knowledge on the preparation of sustainability reports and the provision of sustainability report assurance in accordance with the requirements of Section 28.², Paragraph two of this Law. The sworn auditor who provides the sustainability report assurance service shall certify the fulfilment of the further education requirements referred to in Section 28.², Paragraph two of this Law to the Latvian Association of Sworn Auditors starting from 1 January 2026.

[26 September 2024]

28. The Latvian Association of Sworn Auditors shall, within three months after coming into force of the Cabinet regulations referred to in Section 8.¹, Paragraph four of this Law, develop and approve the training programme referred to in Section 8.¹, Paragraph two of this Law.

[26 September 2024]

29. The procedures laid down in Section 16.¹ of this Law shall be applicable to sworn auditors for the provision of the sustainability report assurance service for the report period starting from the reporting year 2024 (the reporting year that starts on 1 January 2024 or later).

[26 September 2024]

30. The procedures laid down in Section 22.¹ of this Law shall be applicable to commercial companies of sworn auditors for the provision of the sustainability report assurance service for the report period starting from the reporting year 2024 (the reporting year that starts on 1 January 2024 or later).

[26 September 2024]

31. Until the day of coming into force of the assurance standards for sustainability reporting adopted by the European Commission and referred to in Section 28, Paragraph 1.² of this Law, a sworn auditor and a commercial company of sworn auditors shall provide sustainability report assurance services in conformity with the International Standard on Assurance Engagements (ISAE) 3000, Assurance Engagements Other than Audits or Reviews of Historical Financial Information, issued by the International Auditing and Assurance Standards Board.

[26 September 2024]

32. The Latvian Association of Sworn Auditors shall, by 30 December 2024, submit to the Ministry of Finance for agreement the further education requirements referred to in Section 28.², Paragraph one of this Law and its implementation procedures. Until the day of coming into force of the regulations regarding the further education requirements and its implementation procedures, the By-laws Regarding the Mandatory Training of Sworn Auditors of the Latvian Association of Sworn Auditors shall be applicable.

[26 September 2024]

33. The requirement of Section 32.¹, Paragraph one, Clause 3 of this Law for the provision of the opinion of a sworn auditor on the conformity of the markup (tagging) of sustainability information shall be applicable from the day when the technical requirements for the markup (tagging) of sustainability reports which have been determined in accordance with the delegated legal act of the European Commission amending Commission Delegated Regulation (EU) 2019/815 of 17 December 2018 supplementing Directive 2004/109/EC of the European Parliament and of the Council with regard to regulatory technical standards on the specification of a single electronic reporting format (hereinafter - Regulation (EU) No 2019/815) have become applicable to the verifiable sustainability reports that have been prepared in the single electronic reporting format in accordance with Article 3 of Regulation (EU) No 2019/815.

[26 September 2024]

34. Until 31 December 2025, the persons referred to in Section 35.², Paragraph six of this Law shall not be subject to the requirements laid down in this Paragraph for experience in the preparation of the sustainability report and the provision of the sustainability report assurance, or experience with other services related to sustainability.

[26 September 2024]

35. The requirement for training referred to in Section 8.¹, Paragraph three of this Law and the requirement laid down in Paragraph five of this Section to submit a document certifying the completion of the training shall apply to the sworn auditor qualification examination session commencing on 1 August 2025.

[19 June 2025]

36. The licensed payment institutions and electronic money institutions referred to in Section 1, Paragraph 1.², Clause 5 of this Law shall ensure conformity to the requirements laid down for public-interest entities starting from the reporting year 2026.

[19 June 2025]

37. The Latvian Association of Sworn Auditors shall, within four months after coming into force of Section 38.¹³ of this Law, develop and submit to the Ministry of Finance for agreement the by-laws referred to in Section 38.¹³, Paragraph six of this Law.

[19 June 2025]

38. The Latvian Association of Sworn Auditors shall, within four months after coming into force of the amendments to Sections 10, 17, 18, Section 19, Paragraph 2.², Sections 22, 23, and Section 24, Paragraph 2.² of this Law, develop and submit to the Ministry of Finance for agreement the by-laws establishing the procedures for submitting and examining applications of applicants for the taking of the qualification examinations, and also the by-laws establishing the procedures for the certification of sworn auditors and the licensing of commercial companies of sworn auditors. Until the day of coming into force of the respective by-laws, the existing by-laws of the Latvian Association of Sworn Auditors establishing the procedures by which applicants acquire the right to take the sworn auditor qualification examinations and the by-laws governing the process of certification of sworn auditors and licensing of commercial companies of sworn auditors shall apply.

[19 June 2025]

39. The requirements laid down in the third sentence of Section 33.¹, Paragraph one and Section 36.³ of this Law shall be applicable starting from 10 January 2030.

[19 June 2025]

Informative Reference to Directives of the European Union

[29 March 2007; 12 June 2008; 11 February 2010; 3 March 2011; 18 April 2013; 29 October 2015; 15 December 2016; 21 June 2018; 14 September 2023; 26 September 2024; 19 June 2025]

The Law contains norms arising from:

1) the Eighth Council Directive 84/253/EEC of 10 April 1984 based on Article 54(3)(g) of the Treaty on the approval of persons responsible for carrying out the statutory audits of accounting documents;

2) Council Directive 89/48/EEC of 21 December 1988 on a general system for the recognition of higher-education diplomas awarded on completion of professional education and training of at least three years' duration;

3) European Parliament and Council Directive 95/26/EC of 29 June 1995 amending Directives 77/780/EEC and 89/646/EEC in the field of credit institutions, Directives 73/239/EEC and 92/49/EEC in the field of non- life insurance, Directives 79/267/EEC and 92/96/EEC in the field of life assurance, Directive 93/22/EEC in the field of investment firms and Directive 85/611/EEC in the field of undertakings for collective investment in transferable securities (Ucits), with a view to reinforcing prudential supervision;

4) Directive 2004/109/EC of the European Parliament and of the Council of 15 December 2004 on the harmonisation of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market and amending Directive 2001/34/EC;

5) Directive 2005/68/EC of the European Parliament and of the Council of 16 November 2005 on reinsurance and amending Council Directives 73/239/EEC, 92/49/EEC as well as Directives 98/78/EC and 2002/83/EC;

6) Directive 2006/43/EC of the European Parliament and of the Council of 17 May 2006 on statutory audits of annual accounts and consolidated accounts, amending Council Directives 78/660/EEC and 83/349/EEC and repealing Council Directive 84/253/EEC;

7) Directive 2007/64/EC of the European Parliament and of the Council of 13 November 2007 on payment services in the internal market amending Directives 97/7/EC, 2002/65/EC, 2005/60/EC and 2006/48/EC and repealing Directive 97/5/EC;

8) Directive 2009/110/EC of the European Parliament and of the Council of 16 September 2009 on the taking up, pursuit and prudential supervision of the business of electronic money institutions amending Directives 2005/60/EC and 2006/48/EC and repealing Directive 2000/46/EC (Text with EEA relevance);

9) Directive 2006/123/EC of the European Parliament and of the Council of 12 December 2006 on services in the internal market;

10) Directive 2013/34/EU of the European Parliament and of the Council of 26 June 2013 on the annual financial statements, consolidated financial statements and related reports of certain types of undertakings, amending Directive 2006/43/EC of the European Parliament and of the Council and repealing Council Directives 78/660/EEC and 83/349/EEC (Text with EEA relevance);

11) Directive 2014/56/EU of the European Parliament and of the Council of 16 April 2014, amending Directive 2006/43/EC on statutory audits of annual accounts and consolidated accounts (Text with EEA relevance);

12) Directive 2014/95/EU of the European Parliament and of the Council of 22 October 2014 amending Directive 2013/34/EU as regards disclosure of non-financial and diversity information by certain large undertakings and groups (Text with EEA relevance);

13) Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (Text with EEA relevance);

14) Directive (EU) 2021/2101 of the European Parliament and of the Council of 24 November 2021 amending Directive 2013/34/EU as regards disclosure of income tax information by certain undertakings and branches;

15) Directive (EU) 2022/2464 of the European Parliament and of the Council of 14 December 2022 amending Regulation (EU) No 537/2014, Directive 2004/109/EC, Directive 2006/43/EC and Directive 2013/34/EU, as regards corporate sustainability reporting;

16) Directive (EU) 2023/2864 of the European Parliament and of the Council of 13 December 2023 amending certain Directives as regards the establishment and functioning of the European single access point (Text with EEA relevance).

The Law shall come into force on 1 January 2002.

The Law has been adopted by the Saeima on 3 May 2001.

Acting for the President, the Chairperson of the Saeima J. Straume

Rīga, 22 May 2001

---

¹The Parliament of the Republic of Latvia

Translation © 2026 Valsts valodas centrs (State Language Centre)