Key Points:

  • Audit Requirement: In Estonia, companies must undergo audits if they meet certain size criteria (based on revenue, assets, number of employees etc.). An audit ensures that a company’s financial records are accurate and comply with regulations.
  • Consequences of Non-Compliance: If a company fails to complete an audit and submit an audited financial statement, it faces serious consequences, including being potentially stricken off the registry or fined.
  • Shortage of Auditors: There’s a current shortage of auditors in Estonia. This is due to an increase in the number of companies needing audits (partly due to inflation) and a decrease in the number of available auditors, some of whom have lost their licenses.
  • Magrat’s Solution: Magrat helps companies find auditors and prepare for audits. We have established relationships with audit firms and can assist in creating a quality audit file for a successful audit. We can also help you gain some additional time to complete the audit
  • Audit File Importance: A good audit file, containing all necessary documents and information, is crucial for a smooth audit process. Much of this file is prepared by the company itself.
  • Magrat’s Credentials: Magrat is a recognized accounting company with a strong market presence, part of a global network, and has a qualified team.
  • Cooperation with Current Accountants: Magrat can work alongside a company’s existing accountant to facilitate the audit process.

Please read on for more information:

the audit requirement

The Audit Requirement

Many Estonian companies are subject to audit requirements, which means their annual accounts are to be reviewed by an independent sworn auditor. The audit requirement depends on company size measured by revenue, value of assets, revenue, number of employees etc.. If you are not sure if your company is subject to audit requirement, you can check it using the audit calculator. An audit is like a detailed check-up for a company’s money matters. An auditor, who is like a financial detective, comes in to carefully examine the company’s financial records. They make sure everything is recorded correctly, follows the rules, and there’s no funny business like fraud. This process helps everyone know that the company’s financial health is good and everything is being reported honestly.

why is it important

Why is it important?

If your company is required to file an audited financial statement and you failed to complete the audit on time, you are in trouble, because then you will be unable to file the report as such. And then…

Your company may be stricken off from the registry

The law foresees that if you fail to submit your annual report on time, the e-Business registry may simply delete your company so it becomes legally non-existent. Many companies have already been deleted. Alternatively,

Your company or you personally can get a fine for failure to submit an annual report

Even if your company does not get deleted, it can be fined up to 3200 EUR. Sometimes the management board members get a personal fine. It all sounds like a good motivation to do the audit and submit an audited report on time, but…

There is not enough auditors

The trouble is there are more companies now who need an audit and less auditors who can provide the service. High inflation means that more companies’ financials hit the audit threshold (they are expected to change next year, but for 2022 and 2023 the situation remains the same). And the reason why there is less auditors than in the past is because some have lost their licenses due to stricter controls and others just stopped providing the service.

magrat can help you find an auditor

Magrat can help you find an auditor and complete the audit process faster

So what can be done about “the audit problem”’? It sounds simple. Make sure you have a qualified accountant, find a sworn auditor, prepare your accounts and go through the audit process on time. The reality is more complex. It is not easy to find an auditor, because they are all busy and many are reluctant to take new clients. And your accountant may be well qualified but if they do not have experience with audits, the process might not look straight forward. This is why we at Magrat have developed services to help entrepreneurs and their companies solve the audit problem.

Throughout the years we have developed solid working relationships with several audit firms in Estonia. They know us, we know them, they trust us and we know what they are looking for in an audit process. Even if it happens that all our partner firms are too busy we have developed a process of approaching new auditors, convincing them to take on a client and building new audit relationships. Therefore,

it might be easier for us to find you and auditor than for you doing it yourself

Once the auditor has been found and the audit agreement has been signed (and even before that!), we start preparing the audit file for your company.

A quality audit file ensures a successful and timely audit

An audit file is like a big folder that contains all the notes, papers, and evidence that auditors collect and use when they are checking a company’s financial records. It includes their plans on how to do the audit, any important information about the company, proofs they find, calculations they make, notes from meetings, and their final thoughts and advice. This file helps the auditors keep track of their work and shows others how they got their results. The secret is that a major part of the documents in an audit file is actually prepared by the company and the better the quality of the documents in the audit file, the more assurance you have that the audit will be completed successfully and on time. We will work with you and your accounting data to make sure that your audit is the best it can be.

We can also help you win time

If you have to submit an audited annual report, there are no other options. However, the law foresees certain conditions, which if present, exclude the possibility of a company being deleted from the registry. Our legal team can review your situation and see if something can be done to avoid a strike off and gain some additional time to complete the audit.

why choose magrat

Why choose Magrat?

  • We are a AEA Recognized Accounting Company – only 19 of 6000+ Estonian accounting firms are recognized
  • We are #3 on e-Residency Marketplace based on independent verified reviews
  • We are #14 in 2023 Äripäev Accounting Firms TOP – only 1% of Estonian firms make it to the TOP
  • We are a member of SFAI Global, a leading network of firms uniting 14000+ professionals in 115 countries, which means we comply not only with domestic accounting standard, but with international standards as well
  • We have been in the market since 2009
  • We have a team of 25 professionals, including 2 6th-level accountants (one of the highest accounting qualifications in Estonia) as well as experienced legal team


Do I have to change my accountant?

No you don’t. We will work with you and your current accountant to help you with the audit. If you are happy with your accountant, so are we! However, if you feel that your current accountant has not been able to keep pace with the growth of your business, we will be happy to discuss cooperation. No strings attached.

What is the cost of Magrat’s Service?

The minimum cost of Preparation of an Audit File service is EUR 900 (excluding VAT). The minimum fee does not include the auditor search service. If you would like us to both find an auditor for your company and prepare an audit file, the minimum fee is EUR 1500 (excluding VAT). We will not perform a search for an auditor if we are not also hired to prepare the audit file. We can prepare a tailor made offer for your company once we have studied your unique situation.

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