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 to mitigate them, as established in paragraph 7 of Article 5 of this Law.
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Article 54Preparation and Submission of the Report on Audit when Carrying out the Audit of Public Interest Entities
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1.The audit firm, when processing the results of the audit in the public interest entity shall prepare the report on audit together with the auditor’s report. The report on audit of the public interest entity must be submitted to the audited entity and its supervisory authority.
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2.The requirements of the report on audit of public interest entity shall be established, taking into account the provisions of laws regulating the activities of the public interest entity, by the Chamber of Auditors upon coordination thereof with the Authority of Audit and Accounting and with the appropriate supervisory authority.
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CHAPTER ELEVEN CHAMBER OF AUDITORS
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Article 55Chamber of Auditors
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1.Chamber of Auditors shall be a public legal person uniting the auditors and implementing professional self-governance.
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2.In its activities the Chamber of Auditors shall be guided by the Constitution of the Republic of Lithuania, this Law, the Law of the Republic of Lithuania on Associations to the extent this Law does not establish otherwise, other legal acts and the Statute of the Chamber of Auditors. The Statute of the Chamber of Auditors shall be approved by the general meeting of members of the Chamber of Auditors.
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Article 56Members of the Chamber of Auditors
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1.Persons having the auditor’s certificate and entered in the list of auditors shall be members of the Chamber of Auditors. The provision shall not apply to member state auditors and auditors of non-member countries who are granted the title of auditor according to the procedure established in Articles 15 and 16 of this Law.
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2.The rights of members of the Chamber of Auditors shall be established by the Statute of the Chamber of Auditors.
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3.The auditor may be excluded from the Chamber of Auditors according to the procedure established by the General Meeting of the members of the Chamber of Auditors.
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Article 57Rights of the Chamber of Auditors
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1.The Chamber of Auditors shall have the right to:
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1)manage and use the assets and funds owned by it and dispose of the same;
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2)enter into contracts and assume obligations;
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3)collect, store and summarize information about auditors and audit firms;
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4)provide services in accordance with the procedures prescribed by the Statute of the Chamber of Auditors;
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5)render support to its members in accordance with the procedure prescribed by the Statute of the Chamber of Auditors;
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6)establish means of mass media, engage in publishing activities;
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7)join international organizations;
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8)receive from state institutions, the Authority of Audit and Accounting, auditors and audit firms the information required for the fulfilment of their functions about auditors and audit firms
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Article 58Obligations of the Chamber of Auditors
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In addition to the obligations established in this Law the Chamber of Auditors shall have the following obligations:
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1)to control the observance to the Code of Ethics of Professional Accountants by auditors and audit firms and apply due to violations the penalties established in paragraph 2 of Article 59;
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2)to translate into the Lithuanian language the Code of Ethics of Professional Accountants, the International Auditing Standards, the International Quality Control Standard and publish them;
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3)to organise the auditor’s qualification examinations as established in Article 11 of this Law, provide conditions for the Examining Board to duly perform the assigned functions;
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4)to organise quality development courses as prescribed by Article 28 of this Law;
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5)to coordinate the practice of auditors’ assistants as prescribed by Article 10 of this Law;
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6)to settle the issues of audit performance and enhancement of the auditors’ professional activities;
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7)to prepare the draft on the carried out audit quality review and submit it to the Authority of Audit and Accounting for approval;
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8)to set the methodology in relation to application of international assurance engagement standards, international review engagement standards, international standards of related services and of related practice statements when providing assurance and other related services, and to control the quality of the performed assurance and other related services and, where there are irregularities, impose the penalties set in paragraph 2 of Article 59 of this Law;
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9)according to the procedure established by the Statute of the Chamber of Auditors, to establish the procedure of control of assurance and other related services for the performance of control specified in subparagraph 8 of this Article to establish the assurance procedure and the procedure of control of related services, the procedure of considering complaints about improper provision of assurance and related services;
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10)immediately provide information to the Authority of Audit and Accounting about the restrictive measures applied according to the procedure established in Article 59;
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11)having received information about the improperly carried out audit commence the review of quality of the audit carried out by the auditor or audit firm or apply to the Authority of Audit and Accounting with a request to start investigation of the audit;
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12)to provide the conditions for the Auditors’ Court of Honour to properly perform the function assigned to it, representing the institutions in hearing the disputes;
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13)provide information to the Authority of Audit and Accounting, state institutions according to the procedure established by this Law and other legal acts;
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14)publish in its Internet website the report and annual accounts..
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Article 59The Auditors’ Court of Honour
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1.The Auditors’ Court of Honour shall be formed in the Chamber of Auditors. The Auditors’ Court of Honour shall be composed of 7 members:
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1.The Auditors’ Court of Honour shall consist of 7 embers:
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1)2 members having an at least 5 years experience of work as auditor shall be appointed by the general meeting of the Chamber of Auditors;
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2)1 member each shall be appointed by the Ministry of Justice, the Ministry of Economy and the Ministry of Finance of the Republic of Lithuania;
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3)1 member shall be appointed by the organizations of businessmen upon the appeal of the Chamber of Auditors and by common consent;
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4)1 member shall be appointed by the organizations of scientists upon the appeal of the Chamber of Auditors and by common consent.
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2.The Auditors’ Court of Honour shall be entitled to bring disciplinary action against the auditor on the proposal of the Chamber of Auditors and, upon hearing it, impose penalties for non-compliance with the Code of Ethics of Professional Accountants and the duty laid down in paragraph 1 of Article 28 of this Law and the methodology set in subparagraph 8 of Article 58 of this Law. The Auditors’ Court of Honour shall have the right to impose the following penalties:
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1)a warning;
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2)a reprimand with an official publication thereof in the list of auditors.
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3.The penalties specified paragraph 2 of this Article shall be effective for one year.
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4.The Auditors’ Court of Honour having established violations of the Code of Ethics of Professional Accountants shall have the right to propose to the Chamber of Auditors to deprive the person of the auditor’s title on the grounds set in subparagraph 8 of paragraph 1 of Article 14 of this Law.
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5.Having decided to impose penalties specified in paragraph 2 of this Article, the Chamber of Auditors shall inform the Authority of Audit and Accounting according to the procedure harmonised with it. The Chamber of Auditors taking into account the decisions of the Auditors’ Court of Honour may carry out the review of quality of the audit carried out by auditor or audit firm or appeal to the Authority of Audit and Accounting with a request to perform an investigation.
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6.The Auditors’ Court of Honour shall act according to the Regulations of the Auditors’ Court of Honour. The Regulations shall be approved by the General Meeting of the Members of the Chamber of Auditors.
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Article 60Funds of the Chamber of Auditors
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1.The funds of the Chamber of Auditors shall be:
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1)membership fee provided in the Statute of the Chamber of Auditors;
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2)deductions of the audit firms for the functions set to be performed for the Chamber of Auditors and for the reviews of audit quality;
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3)income for the organization of quality development courses and auditors’ qualification examinations, the provided teaching services;
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4)grants received;
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5)other funds.
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2.Audit firms shall pay every year by June 30 for the functions set in this Law the sum of deductions to the Chamber of Auditors, amounting to 0.2 percent of income received for the audit carried out, but not less than 0.5 of the minimum monthly salary (hereafter referred to as MMS) that was valid on 1 January of that year. If the audit firm did not receive any income from audit, its deductions to the Chamber of Auditors shall amount to 0.5 of MMS. The audit firms of member states entered in the list of audit firms shall pay to the Chamber of Auditors only the amount of deductions from the income received for the audit carried out according to the procedure established by legal acts of the Republic of Lithuania. The Chamber of Auditors shall receive from the audit firms the information required for calculating the amount of deductions of audit firms.
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3.The audit firm, having performed the quality review of the audit carried out by the audit firm, shall within 30 calendar days from the day of receipt of the notification set in paragraph 11 of Article 34 of this Law pay the amounts of deductions to the Chamber of Auditors amounting to 3 MMS for the review of quality of audit carried out by one auditor according to the procedure established by the Chamber of Auditors.
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4.In case the audit firm fails to timely pay the amounts of deductions, interest shall be charged on sums not paid according to the procedure established by legal acts.
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Article 61Appealing against the Decisions of the Chamber of Auditors
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The decisions of the Chamber of Auditors may be appealed against according to the procedure established by legal acts within 30 calendar days from the service of the appropriate report.
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Article 62Reorganisation, Overhaul and Liquidation of the Chamber of Auditors
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The Chamber of Auditors shall be reorganized, overhauled and liquidated according to the procedure established by legal acts.
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Annex to the Law on Audit of the Republic of Lithuania IMPLEMENTED LEGAL ACTS OF THE EU 1. 78/660/EEC: fourth Council Directive of 25 July 1978 based on article 54 (3) (g) of the treaty on the annual accounts of certain types of companies 2. 83/349/EEC: seventh Council Directive of 13 June 1983 based on the article 54 (3) (g) of the treaty on consolidated accounts 3. Commission Recommendation of 16 May 2002 - Statutory Auditors' Independence in the EU: A Set of Fundamental Principles (Text with EEA relevance) (notified under document number C(2002) 1873) 4. Directive 2003/51/EC of the European Parliament and of the Council of 18 June 2003 amending Directives 78/660/EEC, 83/349/EEC, 86/635/EEC and 91/674/EEC on the annual and consolidated accounts of certain types of companies, banks and other financial authorities and insurance undertakings (Text with EEA relevance) 5.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 (Text with EEA relevance)”
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Article 2Final provisions
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1.This Law shall enter into force on 1 September 2008.
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2.The Government of the Republic of Lithuania or the authorities authorised by it, the Chamber of Auditors, the Institute of Accounting of the Republic of Lithuania shall draft and approve by 1 October 2008 the legal acts assigned to it to approve according to their competence required for implementing this Law and shall coordinate other legal acts, except the procedure set forth in Article 1 of this Law paragraph 5 of Article 17 of the Law on Audit of the Republic of Lithuania, which shall be drafted and approved by 1 December 2009.
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3.In 20008 the audit firms shall submit the information established in subparagraph 6 of Article 30 of the Law on Audit of the Republic of Lithuania set forth in Article 1 of this Law to be submitted to the Chamber of Auditors within 30 days calendar days from the day of entry into force of this Law.
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4.When carrying out the audit of financial statements of the reporting period starting before 1 January 2009 the national auditing standards prepared by the Chamber of Auditors and approved by the general meeting of the members of the Chamber of Auditors or the international auditing standards shall apply, also the Code of Ethics of Professional Auditors approved by the general meeting of the members of the Chamber of Auditors shall apply and the monitoring of compliance with them according to this Law shall be carried out according to that of international auditing standards and of the Code of Ethics of Professional Accountants. When carrying out the audit of financial statements starting on 1 January 2009 and later the international auditing standards and the Code of Ethics of Professional Accountants shall apply.
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5.The Chamber of Auditors shall translate into the Lithuanian language and publish by 1 January 2009 the Code of Ethics of Professional Accountants and the International Auditing Standards.
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6.The Chamber of Auditors shall by 1 September 2008 translate into the Lithuanian language and publish the International Quality Control Standard.
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7.Preparing the session of qualification examinations of auditors for 2008 which will end by 31 December 2008, the Examination Committee composed before the entry into force of this Law shall function, for which the Chamber of Auditors shall provide conditions to appropriately fulfil the assigned functions and the subjects set before the entry into force of this Law shall be in effect in which the auditors’ qualification examinations shall be held, the examination rules and the amount of the examination fee. The new composition of the Examining Committee shall be approved by 31 December 2008, the term of office whereof shall start on 1 January 2009. After the approval the term of office it shall be considered the first term of office of the members of the Examining Committee.
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8.The procedure for implementing in the Chamber of Auditors quality assurance of the carried out audit shall be approved before the entry into force of this Law taking into account the requirements set in Article 1 of Chapter Seven of the Law on Audit of the Republic of Lithuania.
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9.Until the entry into force of this Law the qualification examinations of the auditor passed by persons, except for persons deprived of the title of the auditor, shall count. The title of the auditor granted prior to the entry into force of this Law and not revoked shall be valid.
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10.From the entry into force of this Law the provision of subparagraph 4 of paragraph 3 of Article 5 of the Law of the Republic of Lithuania on Audit set forth in Article 1 of this Law shall be applied to audit firms carrying out the audit of public interest entities. Carrying out the audit of financial statements for the period starting on 1 January 2009 and later the provision shall be applied to all audit firms.
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11.The periods specified in Article 1 of this Law set in paragraph 4 of Article 5 of the Law of the Republic of Lithuania on Audit shall count in the financial year which commenced before the entry into force of this Law for the audit whereof the audit contract of financial statements has been concluded.
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I promulgate this Law passed by the Seimas of the Republic of Lithuania PRESIDENT OF THE REPUBLIC VALDAS ADAMKUS