Even though there’s still plenty of time before the financial year-end, it’s a smart move to start prepping for audit season now. While statutory audits are required for certain companies under Lithuanian law, every business can benefit from taking proactive steps to keep their financial records accurate, organized, and in top shape. Getting ahead of the game will save you time, reduce stress, and make the whole audit process go much more smoothly.
Audit Requirements in Lithuania
In Lithuania, some companies are required to have an audit if they meet certain thresholds, including:
Private limited liability companies that meet at least two of the following: net revenue exceeds €4.5 million, assets exceed €2.5 million, or the company has over 50 employees.
Public companies and certain other entities, like non-profits, may also need an audit under specific circumstances.
Some companies might also need an audit if shareholders demand it or based on other regulatory requirements (for example, upcoming audit requirements for CASPs under MiCA regulations).
Even if your company doesn’t meet these thresholds, being audit-ready is a great sign of strong financial health and governance.
How to Prepare Now for a Smooth Audit
Here are a few simple steps you can take before the end of the year to make sure your accounting records are spotless and ready for the audit:
Reconcile All Accounts Regularly
Make sure all your bank accounts, credit cards, loans, and other financial accounts are reconciled on a monthly or quarterly basis. This will help keep your financial data accurate and up to date.
Review Revenue and Expense Categories
Categorizing your revenue and expenses the right way will make life easier for the auditors and keep things moving. Misclassified transactions? They’ll only slow you down and might even increase audit costs.
Clean Up Your Accounts Payable and Receivable
Auditors will definitely be looking for any outstanding liabilities or receivables. Take some time to review these accounts, make sure they’re accurate, and chase up those unpaid invoices and obligations.
Update and Review Fixed Asset Register
Keep your fixed asset register up to date with any new purchases or disposals, and double-check your depreciation schedules. You’ll want everything accurate and tidy for the audit.
Review Payroll and Employment Records
Payroll is often a big area of focus during audits. Make sure all employee contracts, salaries, bonuses, and benefits are properly documented, and that your payroll taxes are correctly calculated and recorded.
Document Your Internal Controls
Auditors are going to check how strong your internal controls are. Now’s a good time to review your processes for authorizing transactions, segregating duties, and preventing fraud. Ensure all the documentation is clear and easy to find.
Stay Compliant with Lithuanian Tax Law
It’s crucial to stay on top of all relevant tax laws in Lithuania. Ensure VAT, corporate income tax, and other tax filings are correct and submitted on time. Review your tax positions and make sure everything is properly documented.
Let numberminded Help You Get Audit-Ready
At numberminded, we specialize in offering accounting services that keep your company ahead of financial reporting requirements. That way, when the auditors roll in, your financial records are clear, concise, and ready to go. Need help getting audit-ready? Drop us a line at hello@numberminded.com, and we’d love to chat about how we can help!