Corporations and foundations must appoint an auditor and conduct an audit in accordance with the Auditing Act, Accounting Act and any acts applicable to the corporation or foundation in question. The smallest corporations are exempted from the statutory audit obligation.
An audit covers the audit of the accounting records, financial statements and the administration of a corporation or a foundation. After having conducted an audit, the auditor issues an auditor’s report. More detailed provisions on the content of an audit and the obligations of an auditor are contained in the Accounting Act.
Auditing is an essential instrument in ensuring the accuracy and transparency of financial reporting and the reliability of capital markets. Auditing is also an important part of companies’ administrative and management systems. The credibility of financial information disclosed by auditors is important not only to companies subject to public trading but also to other corporations. Even though auditors primarily perform their duties on behalf of the corporation’s owners or members, auditing also benefits other stakeholders, such as debtors and authorities.
Regulation of auditing
The current Auditing Act (1141/2015) entered into force on 1 January 2016. On the same date the oversight of auditing was transferred from the Finland Chamber of Commerce to the Finnish Patent and Registration Office. The Auditor Oversight approves new chartered auditors (HT and KHT) and chartered public finance auditors (JHHT) and maintains a register of approved auditors. In accordance with chapter 7, section 2 of the Auditing Act, the Auditor Oversight is responsible for the general direction and development of auditing and the oversight of auditors.
The Auditing Act was amended by the Act 622/2016 which entered into force on 19 August 2016. The amendments implemented the changes made to the Audit Directive and a decree concerning the matter.
The Ministry of Economic Affairs and Employment is responsible for developing auditing legislation and it also makes a proposal to the Government for the composition of the independent Auditing Board operating as part of the Audit Oversight. The board chair and deputy chair are appointed on the ministry’s proposal. The board is appointed for a term of three years.
The entry into force of the new legislation also means that the State Auditing Board of the Ministry of Economic Affairs and Employment was dissolved. The board was responsible for the overall steering, development and supervision of audit activities.
- The Auditing Act (1141/2015) entered into force on 1 January 2016 and replaced the old Auditing Act (459/2007).
- Act on Public Finance Auditing (1142/2015)
- Government Decree on Auditing (1377/2015)
- Decree of the Ministry of Economic Affairs and Employment on Approval Requirements for Auditors (1442/2015)
- Act on Annual Fees Charged by Auditors and Quality Control Fees (1512/2015)
- Directive 2006/43/EC of the European Parliament and of the Council on statutory audits of annual accounts and consolidated accounts, amending Directives 78/660/EEC and 83/349/EEC and repealing Council Directive 84/253/EEC (eighth Company Law Directive, Statutory Audit Directive)
- Directive 2014/56/EU of the European Parliament and of the Council amending Directive 2006/43/EC on statutory audits of annual accounts and consolidated accounts
- Regulation (EU) No 537/2014 of the European Parliament and of the Council on specific requirements regarding statutory audit of public-interest entities and repealing Commission Decision 2005/909/EC
- Commission Recommendation on Statutory Auditors’ Independence in the EU: A Set of Fundamental Principles (2002/590/EC)
- Commission Recommendation on external quality assurance for statutory auditors and audit firms auditing public interest entities (2008/362/EC)
- Commission Recommendation concerning the limitation of the civil liability of statutory auditors and audit firms (2008/473/EC)
Further information: nadine.hellberg-lindqvist(at)gov.fi