Chamber to Economic Affairs Committee: Increase Audit and Review Thresholds by 50 Percent

The Chamber proposed to the Riigikogu Economic Affairs Committee that audit and review thresholds should be raised by 50 percent, instead of the 25 percent currently proposed. The main goal of this increase is to reduce the burden and costs on companies and to address issues with the availability of auditing services.

In May 2023, the Chamber recommended to the Ministry of Finance to raise the audit and review thresholds. In response, the Ministry presented a draft in February this year proposing a 25 percent increase in thresholds, which the Chamber welcomes. However, the Chamber believes a 50 percent increase is more appropriate, a stance also supported by the Estonian Association of Accountants. Raising the thresholds to this extent is necessary to further alleviate the financial and administrative burden on companies and improve access to auditing services. Additionally, since the thresholds were last raised in early 2016, the consumer price index has increased by 57 percent.

New Thresholds Must Take Effect in 2024

In its letter to the Economic Affairs Committee, the Chamber stressed the importance of implementing the new audit and review thresholds within 2024. This timing would allow companies to apply the updated thresholds to annual reports for the 2024 fiscal year. If the proposed 25 percent increase, for example, were delayed until 2025, around 500 companies would remain subject to review obligations, delaying a reduction in business expenses of approximately €2 million by an additional year.

The proposed changes to increase audit and review thresholds are included in the draft bill amending the Accounting Act and other relevant legislation, currently under deliberation in the Riigikogu.