When does a company in Latvia need a statutory audit?
By Artūrs Strazdiņš, Sworn Auditor
The question “does our company require a statutory audit or limited review?” often becomes relevant at year-end. The answer depends on the company’s size and status and is set out in the Law on the Annual Financial Statements and Consolidated Financial Statements. This guide explains the main cases and what to do if the thresholds are exceeded.
Updated July 2026. Thresholds and obligations reflect Sections 91 and 92 of the Law on the Annual Financial Statements and Consolidated Financial Statements. The applicable requirement also depends on the undertaking’s status and other statutory conditions.
When is a statutory audit required regardless of the thresholds?
Regardless of financial indicators, a statutory audit is mandatory for annual reports prepared by:
- medium-sized and large companies
- group parent companies
- companies listed on a regulated market
- capital companies of public entities, their subsidiaries and public-private capital companies
- companies applying international accounting standards
When does a small company require an audit?
A small company must be audited if its indicators exceed two of three thresholds for two consecutive years: balance sheet total EUR 1,000,000, net turnover EUR 2,000,000, average number of employees 50. The thresholds were increased by amendments adopted in October 2024. As a result, some companies may fall within the limited-review thresholds rather than the statutory-audit thresholds. Where the applicable requirement is unclear, the company’s status and all statutory conditions should be assessed together.
Below the thresholds — is that the end of it?
Not necessarily. If indicators exceed the lower thresholds (EUR 500,000 / EUR 1,000,000 / 25 employees), a limited review may be mandatory. We explain the differences in a separate article.
What to do if the thresholds are exceeded
Engage the auditor early, preferably before the financial year ends — this allows the work to be planned and deadlines agreed without haste.
Frequently Asked Questions
Do the thresholds have to be exceeded in both years?
Yes, the audit (or limited review) becomes mandatory when two of three thresholds are exceeded in two consecutive years.
Does a micro-company need an audit?
Generally neither is mandatory unless a special case applies, such as group parent company status.
Do associations have an audit obligation?
In certain cases, yes — depending on the applicable legislation, income and legal status. We can help assess.
Artūrs StrazdiņšSworn Auditor (certificate No. 228), board member of SIA RE Audit. Working in audit since 2008. More about the author →Not sure about your situation?
Contact us — we will assess your company’s indicators and suggest a solution.