Do you need an audit or review? Check the thresholds!

Does your annual financial report require an audit or review? Check the thresholds early to avoid unexpected surprises.

Higher thresholds for mandatory audits and reviews have been in force in Estonia since January 2025. They also apply retrospectively to financial years beginning on or after 1 January 2024. Between 1 July 2025 and 30 June 2026, a total of 8,547 audits and reviews of annual financial reports were carried out in Estonia. There are 333 certified auditors and 113 audit firms in the country.

When does an Estonian company need an audit or review?

The requirement for an audit or review generally depends on three indicators: revenue, total assets and the average number of employees. An audit or review is required when at least two of the three indicators exceed the statutory thresholds.

Importantly, an audit or review may also become mandatory in Estonia if just one indicator exceeds a higher threshold. An audit is required if revenue exceeds €15 million, total assets exceed €7.5 million or the average number of employees exceeds 180.

A review is required if revenue exceeds €6 million, total assets exceed €3 million or the average number of employees exceeds 72, unless the company is already subject to a mandatory audit.

Where consolidated financial statements are required, the assessment must be based on consolidated figures.

Companies should not leave the assessment of their audit obligations until the final stages of preparing their annual financial reports. Monitoring the thresholds is particularly important for businesses experiencing rapid changes in performance, whether through growth or contraction.

For an initial assessment, you can use the Grant Thornton Baltic audit requirement calculator.

In addition to the calculator, companies must consider their legal form, ownership structure, consolidation requirements and any other applicable exceptions.

If a company is required to have a review, it may voluntarily choose an audit instead. An audit also fulfils the statutory review requirement. Companies that are not legally required to undergo either an audit or a review may still choose to have one voluntarily.

What is the difference between an audit and a review?

An audit provides a higher level of assurance that the financial statements are free from material misstatement. Among other procedures, the auditor examines the information presented in the financial statements, significant transactions and supporting evidence.

A review involves less extensive procedures, primarily analytical procedures and inquiries of management. It therefore provides a lower level of assurance than an audit.

What thresholds apply in Latvia and Lithuania?

Companies operating in other Baltic countries or with subsidiaries there must also consider local requirements. Audit thresholds vary between countries.

An audit or review is generally required when at least two of the indicators in the table exceed the applicable thresholds.

In Latvia, the thresholds must be assessed over two consecutive financial years. For newly established companies, the assessment is based on the first reporting year.

In Lithuania, other circumstances may also trigger a mandatory audit, such as receiving more than €500,000 in funding or grants from the state or a local government.

When is an audit mandatory regardless of company size?

Financial indicators alone do not always determine whether an audit is required. Certain legal entities must undergo an audit regardless of their revenue, total assets or number of employees.

In Estonia, an audit is mandatory for, among others:

• Public limited companies (aktsiaselts, AS) with more than two shareholders during the financial year.
• Foundations specified in subsection 91(4) and subsection 92(2) of the Auditors Activities Act.
• Local government authorities and legal persons governed by public law.
• Political parties receiving allocations from the state budget and companies in which the state holds at least decision-making control.

In Latvia, an audit is also mandatory for:

• Parent companies of groups, regardless of their size or whether they are required to prepare consolidated annual financial statements.
• Companies that have applied International Financial Reporting Standards (IFRS) to the recognition and measurement of certain financial statement items.
• Companies subject to audit requirements arising from the application of IFRS.

In Lithuania, an audit is mandatory for, among others:

• Public limited companies (AB).
• Public interest entities.

This means that even companies with very low revenue and only a few employees may need an audit.

For example, an Estonian public limited company with three shareholders must generally undergo an audit even if none of the standard audit thresholds are exceeded.

A company's legal form, ownership structure, group structure and accounting policies can therefore be just as important as its financial indicators.

Check your audit obligations before the financial year ends

Not sure whether your company or organisation needs an audit or review?

Contact Grant Thornton Baltic's auditors at info@ee.gt.com. We can help you determine your obligations and plan the next steps, ensuring a smoother process for preparing and submitting your annual financial report on time.