Audits

An audit means the examination of your company’s accounting, financial statements, other documents and administration. Separate audits are carried out for each financial year. The purpose is to ensure that your company’s operations are lawful and that there are no essential errors in the financial statements.

The audit is performed by an auditor authorised by the Finnish Patent and Registration Office. The auditor prepares an auditors’ report, i.e. a written report of his or her work at the end of the audit. The report may have a standard or adopted format.

An auditors’ report is a public document. It is used to ensure that the financial statements provide an accurate and sufficient picture of your company’s profits and losses, and financial status.

An audit is typically performed at the end of a financial year. However, it may be started already during the financial year. Make sure that the audit has been performed in good time before the approval of the annual financial statements. The financial statements must be adopted within six months since the conclusion of the financial year.

If you are a private trader, your company does not have to perform an audit.

The audit is mandatory if you have a limited liability company, a limited partnership, a general partnership or a cooperative, and if your company meets two of the following conditions during the concluded financial year and the financial year before that:

• your company’s turnover is over EUR 200,000
• your company’s balance sheet total is over EUR 100,000
• your company employs over three people on average

You may select an auditor for your company even if you do not meet the conditions set by legislation. In this case, you can include a provision of the designated auditor in the company’s Articles of Association, rules, shareholders' or members' agreement. If the provision has been entered in the documents, you must comply with it.

The benefits brought by an audit are typically bigger than the costs it causes for your company. It is a good idea for your company to select an auditor voluntarily if your company is growing at a fast speed and you anticipate that your company will meet the criteria for the auditing obligation in the near future. Sometimes financiers also require audited financial statements.

Only auditors or auditing communities meeting the requirements of the Accounting Act and authorised by the Finnish Patent and Registration Office may perform an audit. Companies often select auditors who have passed the HT examination, a basic qualification in the auditing industry.

The auditor must remain unbiased through the entire period that the financial statements cover. Being unbiased means that the auditor is not, and also appears not to be, in any way connected to you, your family, and your company. For example, the auditor may not be your relative or a member of the board of your company.

If your limited liability company has one auditor, which is not an auditing community, you must also select at least one deputy auditor.

You can search for a suitable auditor, for instance, using the auditor register of the Finnish Patent and Registration Office. Remember to notify the trade register of the auditor.

The main decision-making organ of your company, for example the general meeting in a limited liability company, makes the final decision of appointing an auditor.