LAW OF THE REPUBLIC OF LITHUANIA LAW OF THE REPUBLIC OF LITHUANIA AMENDING THE LAW OF THE REPUBLIC OF LITHUANIA ON AUDIT 15 June 1999 Mo VIII-1227 Vilnius (A new version of 3 July 2008 No X-1676) Arti

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of this Law, may temporarily withdraw from the audit firm the working documents for up to 60 calendar days, transfer them to the competent authority of the member state or non-member country for carrying out public oversight of auditors and audit firms having written the document of seizure of working documents. The Authority of Audit and Accounting may make copies of working documents. In cases the Authority of Audit and Accounting seizes the working documents temporarily or transfers copies of working documents to the competent authority of a member state and/or non-member country, it must notify the audit firm and the audited entity thereof .

1. The law enforcement and other authorities may seize or inspect the working documents which the auditor has received or prepared when auditing only in cases established by law. Article
2. The Auditor’s Report
3. The auditor’s report shall comprise: 1) preface. Indicated in it shall be the subject of audit – financial statements or consolidated financial statements and legal acts on the basis whereof the financial statements or consolidated financial statements were prepared; 2) descriptive part of the audit. Indicated therein shall be the standards according to which the audit has been carried out; 3) the auditor’s opinion. It is indicated therein whether or not the financial statements or consolidated financial statements in all material cases presents fairly the financial position, performance and cash flows of each undertaking or group of undertakings according to the requirements of legal acts on book keeping and financial reporting.. The auditor’s opinion may be positive, qualified or negative or, if the auditor may not state his opinion, disclaimer of opinion; 4) reference to issues. Issues to which the auditor pay attention, but which shall not change his opinion; 5) view whether the financial data submitted in the annual report of the undertaking (consolidated annual report of the undertaking) corresponds to the data of annual financial statements (annual consolidated financial statements) if the audited entity is a public company, private company, general partnership or limited partnership, in which all general members are public companies or private companies or the view whether or not the data submitted in the entity’s annual report corresponds to the data of annual financial statements, if the audited entity must submit annual report according to the procedure established by the legal acts regulating its activities or prepares the annual report at its discretion.
4. The auditor’s report shall be signed by the head of the audit firm or, on his authorization, any auditor working at the audit firm or the member of the management body who is an auditor and the auditor who carried out the audit, the date of the auditor’s report shall also be indicated. CHAPTER SEVEN QUALITY ASSURANCE AND INVESTIGATION OF THE AUDIT CARRIED OUT BY AUDITORS AND AUDIT FIRMS Article 34.Quality Assurance of the Audit Carried out by Auditors and Audit Firms
5. Quality assurance of the audit carried out by auditors and audit firms shall be implemented by the Authority of Audit and Accounting together with the Chamber of Auditors. The Chamber of Auditors, complying with the requirements of this Chapter, shall establish the implementation in the Chamber of Auditors of the procedure for the quality assurance of the carried out audit and coordinate it with the Authority of Audit and Accounting. The Authority of Audit and Accounting must be informed of the other than controllers members and employees of the Chamber of Auditors who are appointed responsible for the performed audit quality assurance, and other persons invoked to carry out this function..
6. In order to assure quality of audit carried out by auditors and audit firms, the Chamber of Auditors shall organise quality reviews of the carried out audit so that all auditors and audit firms be checked at least once per 6 years. In case of audit firms of member states entered in the list of audit firms, the quality of audit carried out shall be reviewed to the extent it concerns the audit carried out according to the legal acts of the Republic of Lithuania. The Chamber of Auditors shall be responsible for the actual operations of yearly quality review plans of audit carried out by auditors and audit firms, indicated in subparagraph 1 of paragraph 8 of this Article.
7. Quality reviews of audit carried out by auditors and audit firms which carry out the audit of public interest entities must be performed at least every 3 years. If the audit performance deficiencies were established during the quality review and/or the investigation of audit carried out by auditors and audit firms, the next audit quality review shall be performed not later than after 3 years. Quality reviews of audit carried out by non-member country auditors specified in paragraph 5 of Article 23 of this Law and by audit-firms specified in paragraph 5 of Article 24 of this Law shall be performed according to the procedure established by the Government of the Republic of Lithuania or the authority authorised by it.
8. Quality reviews of the carried out audit shall be performed by the controllers indicated in Article 35 of this Law.
9. The quality of the audit shall be assured by organizing that it should be independent of the auditor and the audit firm, the quality of audit whereof is reviewed.
10. The Authority of Audit and Accounting shall: 1) establish the audit quality assurance procedure; 2) on the recommendation of the Chamber of Auditors approve the methodology of carried out audit quality review, identifying the cases when quality reviews of the audit’s of consolidated financial statements are carried out by the auditor and/or audit firm; 3) on the recommendation of the Chamber of Auditors approve and revoke the controllers, approve the annual plans of audit carried out by the auditor and/or audit firm quality reviews, check the actual operations of quality review plans; 4) establish the procedure for controller selection, preparation and qualification development procedure; 5) establish the requirements of report on audit quality review.
11. The Chamber of Auditors, when implementing the audit quality assurance: 1) shall draw up and submit to the Authority of Audit and Accounting for approval plans of carried out audit quality reviews (indicating the auditors and audit firms, the audit quality reviews whereof are intended to be carried out, the controllers who shall perform the audit quality reviews of audit carried out by certain auditors and audit firms), submit to the Authority of Audit and Accounting the review plans for the checking of the actual operations thereof ; 2) choose the candidatures of controllers and submit to the Authority of Audit and Accounting for approval, 3) coordinate the quality of reviews of the audit quality performed by controllers; 4) consider and approve the report on quality reviews performed by controllers; 5) where during the review weaknesses were identified in the quality of carrying out the audit, it shall submit to the Authority of Audit and Accounting for approval the proposed decision and having received the evaluation of the Authority of Audit and Accounting of the proposed decision in the manner laid down in paragraph 3 of Article 37 of this Law shall have the right to impose disciplinary penalties specified in paragraph 1 of Article 39 of this Law and give compulsory instructions which are specified in Article 38 of this Law; 6) if during the review material deficiencies of carrying out of audit are identified, the Authority of Audit and Accounting shall be applied to initiate the investigation of the audit carried out by the auditor and/or audit entity.
12. During the review of quality of audit carried out by the auditors/audit entities, i.e. checking the audit-related documents: 1) it shall be established how the provisions of the Standards of International Quality Control are observed; 2) it shall be established how the provisions of the International Audit Standards are observed; 3) it shall be established how the principles of independence and other principles of professional ethics established in Article 4 of this Law are observed; 4) the quality and quantity of resources used for audit and the audit fee shall be assessed.
13. The controller, having performed the review of the quality of audit carried out by the auditor or audit firm must prepare the report on the review of the audit carried out by the auditor or audit firm and submit it for the Chamber of Auditors and the Authority of Audit and Accounting.
14. The Authority of Audit and Accounting having received the proposed decision specified in subparagraph 5 of paragraph 7 of this Article shall not later than within 20 working days submit its evaluation specified in paragraph 3 of Article 37 of this Law.
15. When the Chamber of Auditors approves the quality review of the audit carried out by the auditor and/or audit firm, the Chamber of Auditors shall notify thereof the auditor, the audit firm and the Authority of Audit and Accounting and at the same time submit to the auditor and the audit firm not later than within 10 working days the approved report on audit quality review. Article
16. Requirements to Candidates to the Office of Controllers, the Rights and Duties of Controllers
17. The review of the quality of the carried out audit shall be carried out by the controllers who must have an experience of at least 5 years in the position of auditor and/or member state auditor and have no disciplinary penalties in force.
18. Citizens of the Republic of Lithuania and/or member states may be controllers .
19. Other requirements to candidates to the office of controllers shall be established by the Authority of Audit and Accounting. When the Authority of Audit and Accounting, as established in subparagraph 3 of paragraph 6 of Article 34 of this Law, approves candidatures of the controllers, the Chamber of Auditors shall conclude contracts for the provision of services according to the procedure established by the Chamber of Auditors. It shall be established in the contracts in addition to other things, that the performance of quality review of the carried out audit shall be materially and technically serviced by the Chamber of Auditors.
20. When carrying out the reviews of the quality of the carried out audit the provisions of paragraph 8 of Article 5 of this Law shall be applied.
21. The controller when carrying out the quality review of the carried out audit assigned to him shall have the right to: 1) use the information collected by the audit firm and the auditor which is required for carrying out the work of the controller, for submitting the report and taking the decisions, check the working documents and the methodology of carrying out audit; when carrying out the quality of the review of the audit carried out by the auditor and/or audit firm auditing the consolidated financial statements - check the working documents of audit of the financial statements of subsidiaries; 2) receive explanations from the auditor and audit firm how the auditor and the audit firm carried out the audit; 3) receive explanations from each employee who participated in carrying out the audit; 4) receive from other natural and legal persons information required for carrying out audit quality review; 5) invoke experts/specialists having appropriate knowledge for settling the issues arising during audit quality review.
22. The controller must: 1) when carrying out audit quality review of audit carried out by the auditor and audit firm abide by this law, the methodology of audit quality review of the carried out audit approved by the Authority of Audit and Accounting, the Code of Ethics of Professional Accountants and comply with the procedure of observing the principles of confidentiality and professional secrecy specified in paragraph 1 of Article6 of this Law; 2) having performed the audit quality review, prepare a report on quality review of audit where, among other things, recommendations would be given on the elimination of the identified weaknesses of the carried out audit and submit it within the given time to the Chamber of Auditors and the Authority of Audit and Accounting; 3) to refuse carrying out the audit quality review and notify the Chamber of Auditors and the Authority of Audit and Accounting thereof if, when carrying out audit quality review, conflict of interest may arise or the principle of independence may be infringed. Article
23. Investigation of Audit Carried out by Auditors and Audit Firms
24. The investigation of the audit carried out by auditors and audit firms shall be performed by the Authority of Audit and Accounting. In the case of audit firms of member states entered in the list of audit firms the investigations of these audits may be performed only according to the procedure established by legal acts of the Republic of Lithuania.
25. The Chamber of Auditors, taking into account the performed audit quality review, where the material deficiencies are identified in the quality of audit performance, shall apply to the Authority of Audit and Accounting for initiating the investigation of the audit carried out by the auditor and/or audit firm. When the Authority of Audit and Accounting initiates the investigation of the audit carried out by the auditor or the audit firm, the auditor and the audit firm shall be notified thereof not later than one working day before the beginning of the investigation. The investigation of the audit carried out by the auditors of non-member countries set in paragraph 5 of Article 23 of this Law and of non-member country’s audit firms set in paragraph 5 of Article 24 of this Law may be initiated according to the procedure set by the Government of the Republic of Lithuania or the authority authorised by it.
26. In addition to the case set in paragraph 2 of this Article the investigation of the audit carried out by the auditor or audit firm may be commenced on the decision of the Authority of Audit and Accounting when: 1) state authorities, Chamber of Auditors, other legal and natural persons apply to the Authority of Audit and Accounting Service with a proposal to investigate the audit carried out by the auditor and/or audit firm; 2) on the request of competent authorities of member states and of non-member countries; 3) it is sought to assure the quality of audit quality reviews.
27. The Authority of Audit and Accounting shall start investigation if a state authority specified in subparagraph 1 of paragraph 3 of this Article which applies to the Authority of Audit and Accounting is a law enforcement authority.
28. When carrying out the investigation of the audit carried out by the auditor and audit firm: 1) it is established how the International Quality Control Standards are observed; 2) it is established how the International Auditing Standards are observed; 3) it is established how the principles of independence and other principles of professional ethics are complied with; 4) the quality and quantity of resources spent for audit, the received audit fee shall be assessed; 5) the observance of requirements of this Law shall be assessed.
29. The investigation of the carried out audit shall be performed by the employees of the Authority of Audit and Accounting having an experience of at least 5 years in the position of auditor and/or member state auditor and having no disciplinary penalties in force as established by this Law.
30. The investigation of the audit carried out by the Authority of Audit and Accounting employees shall be performed according to confidentiality and professional secrecy requirements procedure established in paragraph 1 of Article 6 of this Law. The investigation may be performed having invoked the experts (specialists) having the appropriate knowledge for settling the issues arising during audit quality review.
31. The Authority of Audit and Accounting shall establish the methodology of investigation of carried out audit and of the employee choice, preparation and qualification development procedure .
32. Having performed the investigation of the audit carried out by the auditor and/or audit firm, the Authority of Audit and Accounting shall within 20 working days inform about the investigation results the auditor and/or the audit firm, the audit carried out by which has been investigated, and the Chamber of Auditors. Article
33. The Rights of the Authority of Audit and Accounting and the Chamber of Auditors when Implementing the Quality Assurance and the Investigation of the Carried out Audit
34. The Authority of Audit and Accounting, when implementing quality assurance, as established in paragraph 1 of Article 34 of this Law and the investigation of the carried out audit, shall have the right to: 1) review the working documents, the methodology of the carrying out of the audit; 2) require from the auditors or audit firms to explain how the auditors and audit firms carried out the audit; 3) review the documents of the audit quality review performed by the controllers; 4) obtain the explanations from each employee of the audit firm who participated when carrying out the audit; 5) obtain from the Chamber of Auditors and other persons the necessary information required for audit quality and performance of the investigation; 6) require withdrawal of the controller from the performance of the audit quality review if a threat to independence or/and quality of review arises; 7) obtain from the Chamber of Auditors the proposed decisions on the performed audit quality review and submit their evaluation; 8) after carrying out the investigation give the instructions specified in Article 38 of this Law and impose disciplinary penalties specified in Article 39 of this Law; 9) participate in performing audit quality reviews.
35. The Chamber of Auditors when implementing the quality assurance of the carried out audit shall have the right: 1) to review the working documents, the methodology of the carrying out of the audit; 2) to require from the auditors or audit firms to explain how the auditors and audit firms carried out the audit; 3) to review the documents of the audit quality review performed by the controller and, as necessary, to participate in audit quality reviews performed by the controller; 4) to receive explanations from every employee of the audit firm who participated in carrying out the audit. 5) to receive from other persons information required for assuring the quality of audit; 6) having received the evaluation of the Authority of Audit and Accounting on the proposed decision, to approve the reports on the audit quality reviews of the carried out audit, including the decision to give the instructions established in Article 38 of this Law and to impose disciplinary penalties specified in paragraph 1 of Article 39 of this Law or apply to the Authority of Audit and Accounting for performing the investigation.
36. The Authority of Audit and Accounting must submit its assessment regarding the proposed decision specified in subparagraph 5 of paragraph 7 of Article 34 of this Law and: 1) approve of the decision proposed by the Chamber of Auditors; 2) not to approve of the decision proposed by the Chamber of Auditors and to propose another decision; 3) not to approve of the decision proposed by the Chamber of Auditors and to assign the repeated performance of quality review of the carried out audit to another inspector or the repeated performance of quality review of the carried out audit; 4) not to approve of the decision proposed by the Chamber of Auditors and to perform the investigation of the audit.
37. Only those decisions of the Chamber of Auditors on the reports on the audit quality reviews shall be valid, where the weaknesses were identified in the quality of audit to which the Authority of Audit and Accounting presents its own evaluation. Article
38. Instructions to Auditors and Audit Firms
39. The Chamber of Auditors having considered and approving the report on the carried out audit quality review or the Authority of Audit and Accounting Service having performed the investigation may: 1) instruct the auditor or the audit firm to rectify the established weaknesses within the specified time period; 2) instruct the auditor to additionally develop his professional qualification (to establish the number of hours and specify the time period). This instruction may be imposed together with the disciplinary penalty specified in paragraph 1 of Article 39 of this Law or without it.
40. The Chamber of Auditors shall check how the auditor and/or the audit firm performs the instructions laid down in paragraph 1 of this Article. The Chamber of Auditors shall inform the Authority of Audit and Accounting on the performance of the instructions according to the procedure harmonised with it. Article
41. Disciplinary Penalties
42. If the auditor and/or the audit firm fails to perform the instructions laid down in Article38 of this Law or after performing the quality review of the audit carried out by auditor or audit firm and re-establishing the quality weaknesses established in former reviews or, upon carrying out the investigation and after that having disclosed the weaknesses of the carrying out of audit the Chamber of Auditors or the Authority of Audit and Accounting may impose one of the following penalties: 1) to warn the auditor or the audit firm; 2) to indicate to the Chamber of Auditors to suspend the validity of the auditor’s certificate and to entrust the auditor to re-take one or several qualification examinations specified in Article 11 of this Law not later than within 3 years.
43. Having performed the investigation of the carried out audit and having established the material deficiencies of the carried out audit, the Authority of Audit and Accounting may impose on the auditor and/or audit firm one of the following penalties: 1) to take a decision to indicate to the Chamber of Auditors to cancel the title of the auditor; 2) to take a decision to indicate to the Chamber of Auditors to deprive the audit firm of the certificate and withdraw the audit firm from the list of audit firms.
44. The Chamber of Auditors or the Authority of Audit and Accounting, having adopted the decision, must within 10 working days from the day of adoption of the appropriate decision notify in writing the auditor and/or the audit firm of the adopted decision and if penalties have been imposed on the auditors and/or audit firms which audited public interest entities – also the Bank of Lithuania, the Securities Commission of the Republic of Lithuania and the Insurance Supervisory Commission of the Republic of Lithuania (hereafter referred to as supervisory authorities). Information about the imposed penalties shall be published in the lists of auditors and audit firms upon the expiration of the term set in Article 40 of this Law.
45. The penalties specified in subparagraph 1 of paragraph 1 of this Article shall be in effect one year. Article
46. Procedure for Appealing against the Decisions of the Chamber of Auditors and the Authority of Audit and Accounting Implementing the audit quality assurance the decisions taken by the Chamber of Auditors and the decisions of the Authority of Audit and Accounting may be appealed against according to the procedure established by the laws of the Republic of Lithuania within 30 calendar days of the day the service of notice of delivery of the appropriate decision. Article
47. Publication of Results of Quality Assurance and Investigation of Audit Carried out by the Auditors and Audit Firms
48. The Authority of Audit and Accounting shall publish every year by 1 March in its internet website the aggregated results of audit quality assurance of auditors and audit firms – specify the number of performed audit quality reviews and investigations, their results, the disciplinary penalties imposed and instructions given.
49. The Chamber of auditors shall immediately present to the Authority of Audit and Accounting the information requested by it related to the audit carried out by auditors and audit firms quality assurance and investigation CHAPTER EIGHT PUBLIC OVERSIGHT OF AUDIT CARRIED OUT BY AUDITORS AND AUDIT FIRMS Article
50. Public Oversight of Audit Carried out by Auditors and Audit Firms
51. Public oversight of audit carried out by auditors and audit firms (hereafter referred to as public oversight of audit) shall be performed by the Authority of Audit and Accounting.
52. The Authority of Audit and Accounting shall be a public authority established according to the procedure set by laws, operating according to the Law on Public Establishments of the Republic of Lithuania regulating its legal form, unless the Law establishes otherwise, and its statute. The owner of the Authority of Audit and Accounting shall be the state. The right and duties of the owner shall be implemented by the Government of the Republic of Lithuania or the institution authorised by it. Article
53. The Authority of Audit and Accounting
54. The Authority of Audit and Accounting shall abide in its activities by the Constitution of the Republic of Lithuania, this Law, the Law of the Republic of Lithuania on Public Establishments, to the extent this Law does not establish otherwise, other legal acts and their statute. The public oversight of audit – the function delegated to the Audit and Accounting Service shall be performed by one of its structural divisions indicted in its statute.
55. The statute of the Authority of Audit and Accounting shall be approved by the Government of the Republic of Lithuania which implements proprietary rights and duties or the authority authorised by it.
56. The Authority of Audit and Accounting shall be headed by the director. The director of the Authority of Audit and Accounting and the head of the structural division carrying out public oversight of audit (hereafter referred to as division) must be non-practitioner having the experience of at least 3 years working in the sphere of auditing, accounting, law and/or finances.
57. The tender for the position of the director of the Authority of Audit and Accounting (hereafter referred to as the director) shall be organised by the Government of the Republic of Lithuania implementing the proprietary rights and duties or the authority authorised by it according to the procedure established by it. The head of the division shall be appointed by the director, having agreed beforehand the candidature with the Government of the Republic of Lithuania or its authorised authority, implementing proprietary rights and duties.
58. More than half of the employees of the division must be non-practitioners. The qualification of employees of the Authority of Audit and Accounting must be continuously raised according to the procedure established by the Authority of Audit and Accounting having agreed it with the Government of the Republic of Lithuania or its authorised authority, implementing proprietary rights and duties.
59. The auditor, before starting to work in the division or starting to perform the functions of the director, must suspend the validity of his auditor’s certificate and his membership in the Chamber of Auditors.
60. A collegiate body operating in an advisory mode shall be formed in the Authority of Audit and Accounting – the Audit Supervisory Committee. The Committee shall advise the director and the division on the issues of public oversight of the audit.
61. The Audit Supervisory Committee shall be comprised of at least 7 members. More than a half of the Committee members must be non-practitioners. Members of the Audit Supervisory Committee must have the experience of at least 3 years working in the sphere of audit, accounting, law and/or finances. The Bank of Lithuania, the Securities Commission of the Republic of Lithuania and the Insurance Supervisory Commission of the Republic of Lithuania, the Ministry of Finance, the Chamber of Auditors and other professional organisations uniting the auditors shall each appoint one member to the Audit Supervisory Committee. The member/members appointed by other organisations shall be selected on the decision of the Ministry of Finance and must be practicing auditor/auditors.
62. The approval of the Audit Supervisory Committee shall be required when approving the decisions of the Authority of Audit and Accounting: 1) on the procedures set in paragraph 8 of Article 5 of this Law and paragraph 1 of Article 6 of this Law, on the procedure set in subparagraph 1, the methodology established in subparagraph 2, the procedure set in subparagraph 4 and the requirements set in subparagraph 5 of paragraph 6 of Article 34 of this Law, 2) on the results of the investigation set in Article 36 of this Law, on the results of reviews as specified in paragraph 3 of Article 37 of this Law, including related instructions and/or disciplinary penalties; 3) other decisions specified by the Government of the Republic of Lithuania implementing the proprietary rights and duties or the authority authorised by it.
63. Other collegiate bodies may be formed in the Authority of Audit and Accounting for carrying out the functions of the Service. Article
64. Tasks, Functions and Rights of the Authority of Audit and Accounting 1.The tasks of the Authority of Audit and Accounting shall be: 1) carry out public oversight of audit; 2) cooperate with competent authorities of member states and non-member countries: 3) carry out other tasks set in this Law and other legal acts.
65. Implementing the tasks set in paragraph 1 of this Article, the Authority of Audit and Accounting Service shall perform the following functions: 1) supervise the adoption of the decisions on the granting of the title of the auditor, on the issuing of the audit firm certificate and on its entry in the list of audit firms, the procedure of issuing the auditor’s certificate and entry of the auditor in list of auditors; 2) approve the areas where the auditor’s qualification examinations shall be held, consider the applications of persons who failed to pass the examinations and disagreed with the assessment of their examination results; 3) monitor the organisation of the qualification development courses of the auditors and, as necessary, make comments on the improvement of their organisation, participate in coordinating the programmes set in Article 28 of this Law, take decisions on the complaints by the auditors who heard other courses than those prescribed by paragraph 2 of Article 28 of this Law and auditors who took part in the equivalent professional qualification development courses on refusals made by the Chamber of Auditors to include the time of the courses into the time of hours specified in paragraph 1 of Article 28 of this Law; 4) monitor the translation into the Lithuanian language of the Code of Ethics for Professional Accountants, the International Auditing Standards and the International Quality Control Standard and, as necessary, take actions to guarantee their proper translation when due; 5) together with the Chamber of Auditors implement the assurance of audit carried out by the auditors and audit firms, perform the investigations, impose the penalties established in paragraphs 1 and 2 of Article 39 of this Law and give the instructions established in Article 38 of this Law, assess the decisions proposed by the Chamber of Auditors on imposing the penalties or instructions or refusing to impose any sanctions according to the procedure established in paragraph 3 of Article 37 of this Law; 6) immediately transfer to the supervisory authorities, the Ministry of Finance, competent authorities of member states and non-member countries the information, including confidential information, required for carrying out their functions of supervision. The information received from appropriate authorities of member states and non-member countries, including the confidential information, shall be used for carrying out public oversight of audit; 7) cooperate with competent authorities of member states and non-member countries when carrying out investigation; 8) cooperate, share information with the supervisory authorities, the Ministry of Finance, competent authorities of member states and non-member countries; 9) according to its competence participate in the activities of committees and working groups formed by the European Commission; 10) perform other functions established in this Law and other legal acts.
66. Carrying out its functions the Authority of Audit and Accounting shall have the right to: 1) cooperate with competent authorities of member states, conclude contracts with competent authorities of non-member countries for cooperation and share of information; 2) participate in the audit investigation of competent authorities of member states and non-member countries investigating the audit carried out by auditors and audit firms; 3) permit participating the competent authorities of member states and non-member countries in the investigation of performed audit carried out by the Authority of Audit and Accounting; 4) obtain information, including confidential information, required for implementing the tasks established in paragraph 1 of this Article; 5) apply to the court for the protection of public interest; 6) participate in the general meetings and meetings of management and collegiate bodies of the Chamber of Auditors and other professional organisations uniting auditors without the right to vote; 7) check the performance by the Chamber of Auditors of the functions assigned to it which are related to the organisation and performance of qualification examinations, the assessment of the Code of Ethics of Professional Accountants, the assessment of International Auditing Standards and of the International Quality Control Standard and give obligatory instructions to the Chamber of Auditors on the development of these functions; 8) check the performance by the Chamber of Auditors of the functions of granting, suspension and withdrawal of the title of auditors, also the function of management of the lists of auditors and audit firms and submit mandatory instructions to Chamber of Auditors on the development of performance of these functions; 9) check the performance by the Chamber of Auditors of the functions related to quality assurance of the carried out audit and submit mandatory instructions to the Chamber of Auditors on the development of performance of these functions; 10) having received the reasoned request of the supervisory authority to revoke the auditor carrying out the audit of public interest entities and/or revoke the audit firm from the audit agreement , give mandatory instruction to revoke the auditor carrying out the audit of public interest entity and/or revoke the audit firm from the audit agreement; 11) apply to the Chamber of Auditors to consider whether the auditor and/or audit firm abides by the Code of Ethics of Professional Accountants and to take appropriate decisions; 12) apply to the Chamber of Auditors to consider whether the audit firm assurance and other related services were provided according to the methodology established by the Chamber of Auditors on International Assurance Engagements, International Review Engagements, International Standards of Related Services and Application of Related Practice Statements and to take appropriate decisions; 13) have other rights established in this Law and other legal acts.
67. The Ministry of Finance shall control the fulfilment by the Authority of Audit and Accounting of the functions assigned to it. The Authority of Audit and Accounting shall, at the end of the calendar year, within 30 calendar days submit to the Ministry of Finance a report on the fulfilment of the functions assigned to it. At the request of the Ministry of Finance the Authority of Audit and Accounting shall submit other additional information related to public oversight of audit or other functions established in other legal acts.
68. At the expiry of the calendar year the Authority of Audit and Accounting shall, within 20 calendar days, publish in its website the programme of work of the accounting year and submit the activities report of the preceding year. Article
69. The Duty of the Employees of the Authority of Audit and Accounting and its Collegiate Body Members not to Disclose Confidential Information The employees of the Authority of Audit and Accounting and its collegiate body members must keep the data or information disclosed to them when exercising their rights, fulfilling their functions if such data or information constitutes a secret protected by law or were received from the working documents specified in Article 32 of this Law and agree to comply with the confidentiality and professional secrecy procedure established in paragraph 1 of Article 6 of this Law. The employees of the Authority of Audit and Accounting and its collegiate body members shall have no right to use confidential information for purposes other than those established in this Law. Article
70. The Resources of the Authority of Audit and Accounting for Fulfilling the Function of Public Oversight The resources of the Authority of Audit and Accounting for performing public oversight of audit: 1) state budget resources; 2) other resources. Article
71. Reorganisation, Overhaul and Liquidation of the Authority of Audit and Accounting The Authority of Audit and Accounting shall be reorganised, overhauled and liquidated according to the procedure established by legal acts. CHAPTER NINE COOPERATION OF THE AUTHORITY OF AUDIT AND ACCOUNTING WITH COMPETENT AUTHORITIES Article
72. Cooperation of the Authority of Audit and Accounting with Competent Authorities of other Member States
73. The Authority of Audit and Accounting fulfilling the functions established in subparagraph 6,

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of this Law shall cooperate and share information with competent authorities of member states.

1. The cooperation shall be based on trust in the public oversight of audit of the member state which granted the auditor or audit firm the right to carry out audit.
2. Cooperation shall be based on the provision to the effect that the employees of the competent authorities of the member state keep to the principle of confidentiality and professional secrecy specified in subparagraph 2 of paragraph 2 of Article 4 of this Law. Keeping to this principle may not impede competent authorities to exchange confidential information.
3. In cases when the Authority of Audit and Accounting decides that the audit activity which was performed and/or is performed in another member state is contrary to the principles of carrying out audit established in this law, it must notify the competent authorities of that member state thereof.
4. If, in the case established by paragraph 4 of this Article, the Authority of Audit and Accounting is notified of the decision by the competent authority of another member state, the Authority of Audit and Accounting must take appropriate actions and notify the competent authority of another member state which informed thereof.
5. If the audit of financial statements of subsidiaries belonging to a group of entities was carried out by auditors or audit firms of other member states and the parent undertaking has been set up in the Republic of Lithuania, the audit carried out by auditors of member states shall be recognised without additional requirements concerning the independence of those auditors or audit firms, keeping to the principles of the Code of Ethics of Professional Accountants, audit standards applied, granting of the right to carry out audit and quality assurance of the carried out audit.
6. If the audit of the company set up in a member state, whose securities are traded in the regulated market of the Republic of Lithuania, was carried out by the auditor or audit firm of the member state, the audit carried out by member state auditors and/or audit firms shall be recognised as the audit carried out by the auditors of member states and/or audit firms without putting additional requirements concerning the independence of those auditors and/or audit firms, keeping to the principles of the Code of ethics of professional accountants, audit standards applied, granting of the right to carry out audit and quality assurance of the carried out audit. Article
7. Cooperation of the Authority of Audit and Accounting with Competent Authorities of Non-Member Countries
8. The Authority of Audit and Accounting, fulfilling the functions set in subparagraphs 6,

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of this Law, shall cooperate and share information according to the procedure established by it with the competent authorities of non-member countries when the working documents and other documents of the auditors and/or audit firms are related to the undertakings trading in their securities on the regulated markets of non-member countries, their subsidiaries and/or when the working documents and other documents of auditors and/or audit firms are related to the undertakings trading in their securities on the regulated market of the Republic of Lithuania registered in non-member countries, their subsidiaries and/or when the working documents and other documents of auditors and/or audit firms are related to the undertakings registered in non-member country.

1. The Authority of Audit and Accounting, performing public oversight of audit, shall have the right to sign cooperation agreements with competent authorities of non-member countries, if the employees of the competent authorities of a non-member country observe the obligation of confidentiality and professional secrecy requirement specified in subparagraph 2 of paragraph 2 of Article 4 of this Law. When the Authority of Audit and Accounting signs the agreements for the cooperation with the competent authorities of non-member countries, the European Commission shall be notified thereof.
2. Personal data may be transferred to the competent authority of a non-member country only according to the requirements set in the Law on Legal Protection of Personal Data. Article
3. Refusal to Cooperate 1.The Authority of Audit and Accounting shall have the right to refuse to cooperate or to provide information, as established in subparagraphs 6,

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of this Law to the competent authorities of member states and non-member countries in case: 1) the transmission of information, cooperation or performance of the investigation established in subparagraph 2 of paragraph 3 of Article 36 of this Law may have an adverse effect on the sovereignty, security or public order of the Republic of Lithuania; 2) the trial or pre-trial procedure has been started in the Republic of Lithuania against the actions or persons; 3) the final court decision has already been taken in the Republic of Lithuania in respect of the same actions and the same persons.

1. If the Authority of Audit and Accounting exercised the right provided in paragraph 1 of this Article, it shall immediately notify the competent authority which submitted the application to provide information or aid of a qualitatively different nature, specifying the reasons of refusal to cooperate and share information. CHAPTER TEN AUDIT OF PUBLIC INTEREST ENTITIES Article
2. Additional Requirements to Auditors and Audit Firms Auditing Public Interest Entities
3. Public interest entities may be audited by the auditor who, in addition to other requirements set in this Law, has at least 3 years' relevant professional experience working in the sphere of audit and who when carrying the audit has no effective disciplinary penalties.
4. The audit firms which audited public interest entities shall within 3 months of the end of their financial year publish in their internet website their annual transparency report that includes at least the following: 1) description of the entity’s legal structure and ownership; 2) if the audit firm belongs to a network – a description of the network and the legal and structural arrangements in the network; 3) a description of the governance structure of the audit firm; 4) ) a description of the internal quality control system of the audit firm and a statement by the administrative or management body on the effectiveness of its functioning; 5) an indication of when the last quality review of carried out audits by that audit firm took place; 6) a list of public-interest entities for which the audit firm has carried out audits during the preceding financial year; 7) a statement concerning the audit firm's independence practices which also confirms that an internal review of independence compliance has been conducted; 8) a statement on the policy followed by the audit firm concerning the development of qualification of auditors; 9) information for the previous year showing the net turnover – separately indicated revenue from each activity of the audit firm; 10) information concerning the basis for the partners' remuneration.
5. The transparency report shall be signed by the head of the audit firm.
6. The head of the audit firm shall be liable for the preparation, publication of transparency report as established in paragraph 2 of this Article, and preservation according to the procedure established by the Law of the Republic of Lithuania on Documents and Archives.
7. The transparency report shall be prepared in the Lithuanian language and in case of auditing of an entity registered in a member state or a non-member country, which is considered public interest entity, also in the English language. Article
8. The Audit Committee
9. An Audit Committee shall be formed in each public interest entity established in subparagraphs 1 and 2 of paragraph 24 of Article 2 of this Law .
10. The requirements for the Audit Committee shall be established by the appropriate supervisory authorities.
11. Duties of the Audit Committee: 1) to monitor the financial reporting process; 2) to monitor the effectiveness of the company's internal control, internal audit where applicable, and risk management systems; 3) to monitor the carrying out of audit; 4) to monitor the independence and objectivity of the auditor or audit firm.
12. The audit firm shall be elected by the general meeting of shareholders taking into account the proposal of the management body or the supervisory authority on the audit firm which must be based on the recommendation of the Audit Committee regarding the audit firm.
13. The audit firm shall notify the Audit Committee about the problematic issues related to audit, especially when the material deficiencies of internal control related to financial statements are established.
14. The public interest entity which is a subsidiary and the financial statements whereof are consolidating may wave the requirements of this Article if the parent company thereof is registered in the Republic of Lithuania or in any member state and forms the Audit Committee. Article
15. Requirements for the Independence of the Audit Firm Carrying out the Audit of Public Interest Entities
16. The requirements of independence from the public interest entity which it intends to audit shall be posed to the auditors and audit firms also in the period before concluding the contract for audit.
17. In addition to the principles of independence set in Article 5 of this Law the audit firm which carries out the audit of private interest entities must: 1) every year by December 1 submit to the Authority of Audit and Accounting and the Audit Committee of the audited entity, where it is formed in the cases provided in paragraph 1 of Article 52, a letter evidencing that it is independent from the audited public interest entities; 2) every year inform the Audit Committee of the audited entity, where it is formed in the cases provided in paragraph 1 of Article 52, about the non-audit services provided to the entity; 3) discuss with the Audit Committee, where it is formed in the cases provided in paragraph 1 of Article 52, the emerging threats to compliance with the principles of independence and the measures which were taken seeking