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Areas of Activity

National Audit Office of Lithuania focuses its activities on the main goals:

  • to supervise the lawfulness and effectiveness of the management and use of the State finance and other property as well as the execution of the State budget;
  • to promote positive and effective public audit impact on public finance management and control system and public management.

Activities of the National Audit Office of Lithuania:
Public audits mandated by laws and other legal acts.
Public audits planned to promote positive and effective impact on the public management oriented towards results and public needs.

Cooperation
Dissemination of best practice 

 

PUBLIC AUDIT

National Audit Office of Lithuania conducts financial (compliance) and performance audits following:

  • Public Auditing Requirements;
  • International Standards on Auditing set by the International Auditing and Assurance Standards Board of the International Federation of Accountants;
  • International Standards of Supreme Audit Institutions: financial audit (ISSAI 1000-1810), compliance audit (ISSAI 4000) and performance audit (ISSAI 300, 3100, 3200).

 

FINANCIAL (COMPLIANCE) AUDIT

The aim of public financial (compliance) audit is to evaluate if the sets of annual (consolidated) financial and budget execution statements of audited entities are free from material misstatements and the funds and property are managed, used and disposed of legally as well as used for the purposes set by laws. Having completed financial audits, public auditors issue independent opinions on the fairness of sets of financial and budget execution statements of audited entities. Generally, independent opinion on compliance is not issued.

National Audit Office of Lithuania conducts financial (compliance) audit in audited entities on sets of annual (consolidated) statements of which it has to issue audit report and opinion in accordance with laws and other legal acts.

National Audit Office of Lithuania carries out financial (compliance) audit of the sets of the State consolidated statements and State budget execution, set of national financial statements including the report on public debt, debt management as well as audit of regularity and the use according to the purposes prescribed by laws of the management, use and disposal of the State funds and property allocated by the Office of the Government to the public establishment Foundation for Disposal of Goodwill Compensation for the Real Estate of Jewish Religious Communities.

Financial (regularity) audit of the following reserve funds is also conducted:

  • Compulsory Health Insurance Fund;
  • State Social Insurance Fund;
  • State-owned enterprise Ignalina Nuclear Power Plant Decommissioning Fund;
  • Privatisation Fund;
  • Guarantee Fund;
  • Reserve (Stabilisation) Fund;
  • Long-term Employee Benefits Fund.

One more essential function of the National Audit Office of Lithuania is the audit of the European Union structural assistance that Lithuania has to conduct in accordance with the European Council and Commission Regulations. This audit aims to submit to the European Commission an opinion on the efficiency of the management and control system for the EU structural assistance and the eligibility of funds declared to the European Commission.
 

Auditor’s responsibilities in financial (compliance) audit

We conduct our audits following the Public Auditing Requirements, International Standards on Auditing and International Standards of Supreme Audit Institutions, and in all audits, we use our professional judgement and scepticism.

We also:

  • Identified and assessed the risks of material misstatement of the (consolidated) financial statements, whether due to fraud or error, planned and performed audit procedures as a response to those risks, and obtained audit evidence that is sufficient and appropriate to provide a basis for the auditor’s opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omission, misrepresentations or the override of internal control;
  • obtained an understanding of internal control relevant to the audit to plan audit procedures that are appropriate in the circumstances, but not to express an opinion on the effectiveness of the entity’s (group of entities) internal control;
  • evaluated the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management;
  • evaluated the overall presentation, structure and content of the (consolidated) financial statements, including the disclosures, and whether the (consolidated) financial statements represent the underlying transactions and events in a manner that achieves fair presentation

When conducting a group audit, we also obtained sufficient appropriate audit evidence regarding the financial information of the entities and activities within the group to express an opinion on the group consolidated financial statements. We took responsibility for the direction, supervision and performance of the group audit. We remain solely responsible for the auditor’s opinion.

We, among other matters, communicate with those charged with governance regarding the scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identified during the audit.

We identify most significant matters in our audit of financial statements that we consider the key audit matters in the information that we provide to those charged with governance.
 

PERFORMANCE AUDIT

Performance audit aims to evaluate if an audited entity conducts its activities in accordance with the principles of economy, efficiency and effectiveness as well as identify performance improvement opportunities.

Performance audit is an independent non-periodic examination. During it, independent public sector performance analysis and evaluation are carried out. Performance audit may identify performance problems of audited entities earlier than they can affect an entity’s performance; therefore, performance audit allows to determine not only the existing but also likely problems. Consequently, it is a significant measure of prevention.

Performance audit may evaluate activities of one or several bodies as well as some part of activities of an individual body (bodies) or the implemented programmes. Therefore, performance audit can be divided into the following subgroups:

  • organisational audit (during it, it is evaluated if a body uses the State resources allocated to it in an economical, effective and efficient way and how it carries out the mandated functions);
  • system audit (during it, the management of certain public sector area (system) including the activities of bodies operating in the system and having common objectives is evaluated);
  • programme audit (during it, it is assessed if programmes financed with the State funds are implemented in an economical, efficient and effective way).

Since 2006, the National Audit Office of Lithuania has conducted information systems audit. Since information systems have become an integral part of activities of every institution or one of the key tools of activities, the aim of the information systems audit is to evaluate the efficiency and control of an entity’s information systems as well as application software and information systems developed in that entity. The overall goal of this is to improve the information systems management of public bodies and strengthen their internal control.

In performance audits, the National Audit Office of Lithuania assists audited entities and encourages them to improve their performance results; provides reliable and public information to the society, taxpayers about the use of the State resources. 


COOPERATION

In carrying out its functions, the National Audit Office of Lithuania cooperates with various institutions: Parliament, Ministry of Finance, Municipal Association of Ombudsmen and others. The cooperation with the Parliament is an essential part of the State property oversight. In conducting the parliamentary oversight of the executive branch, the Parliament uses public audit results as part of the parliamentary control system and seeks to ensure the implementation of public audit recommendations by entities audited by the National Audit Office of Lithuania.

National Audit Office of Lithuania maintains relations with the Parliament and its Committees. The most active cooperation is with the Committee on Audit, which regularly considers public audit reports. National Audit Office of Lithuania conducts an external review of audits performed by municipal controllers. The cooperation with the Ministry of Finance aims to introduce innovative budget management and internal control methods in the public sector; with the Institute of Internal Auditors, Municipal Association of Ombudsmen and Lithuanian Chamber of Auditors – to develop the legislation regulating audit and accounting, public sector audit methodology, and to share the experience. National Audit Office of Lithuania has concluded cooperation agreements with the Ministry of Finance, General Prosecutor’s Office, Public Procurement Office, Special Investigation Service, Financial Crime Investigation Service, Faculty of Economics of Vilnius University, Mykolas Romeris University, Institute of Internal Auditors, Municipal Association of Ombudsmen, Lithuanian Chamber of Auditors, and the Bank of Lithuania. National Audit Office of Lithuania regularly cooperates with various bodies when drafting legal acts; issues opinions, observations and proposals on draft laws and draft legislation; examines and draws up opinions on draft Government Resolutions.

National Audit Office of Lithuania maintains relations with international partners – other Supreme Audit Institutions. One of the forms of this cooperation is a joint international audit. National Audit Office of Lithuania is an active member of International Organisation of Supreme Audit Institutions (INTOSAI) and European Organisation of Supreme Audit Institutions (EUROSAI), is involved in committees and working groups of these international organisations. More on this cooperation in International Relations.


DISSEMINATION OF BEST PRACTICE

National Audit Office of Lithuania is not an institution which conducts assessments. Public audit is a means of collecting best practice (and information about the systemic errors) of the public sector. Therefore, not only errors of audited entities are identified; information about best practice is also disseminated. In other words, the National Audit Office of Lithuania aims to become the conveyor of best practice for audited entities and organisations. The publicised experience of public sector bodies – not only errors but also best practice examples – is beneficial for other authorities and organisations: by seeing particular cases, they may evaluate the potential threats and risks in their area, correct mistakes and avoid them in the future.

Responsible for the information Responsible for the information Communication Division
Last updated on 6 August 2018

National Audit Office of Lithuania

Pamėnkalnio St 27, LT-01113 Vilnius, Phone: + 370 5 266 6793, + 370 5 266 6752, Email: nao@vkontrole.lt.