Progress of the Financial Reporting Technical Assistance Project ANNUAL MEETING SWISS-LATVIAN COOPERATION PROGRAMME April 2015 – March 2016 Riga, 21 April 2016

Activities implemented during the reporting period Enhancing institutional capacity to implement ISA Report «Oversight and Quality Assurance in Latvia: Observance» (May 2015) AOC (MoF) IT System for Auditing (LASA) (Sep 2015) 20 SMEs of Sworn Auditors Enhancing the relationship between tax and accounting PwC`s report - Study report on relationship between Tax and Financial Reporting (May 2015) MoF Mazar`s report – Tax reporting rules (May 2015) Training for tax inspectors (Oct 2015) 21 (SRS, MoF, T) Study visit «Law to implement Base Erosion and Profit Shifting –relating transfer pricing requirements» (Jan 2016, 2d, Vienna) 2 (MoF) ROSC Accounting & Auditing report (Oct 2015) MoF – Ministry of Finance SRS – State Revenue Service T – Treasury AOC – Audit Oversight Commission 2019.05.07.

Enhancing institutional capacity to implement ISA Planned activities Enhancing institutional capacity to implement ISA IT System for the Oversight of Sworn Auditors (MOF) Objective Strengthen the oversight of statutory auditors (who audit public interest entities) Improve the performance of observance of requirements for the auditing services quality control carried out by MoF The system will provide on risk based approach at quality control inspections as database will comprise information on disciplinary and administrative proceedings, results of inspections, recommendations, customers, reports, certificates, etc. User IT system will be used by the MoF as the competent authority Implementation Dec 2016 Seminar on risk based tax assessment (study trip to the Netherlands) Jun 2016 MOF – Ministry of Finance 2019.05.07.

Planned activities (new) Enhancing institutional capacity to implement IFRS Guide on accounting organization and documents issued Limited liability companies that correspond to micro company category according to the Annual Accounts and Consolidated Annual Accounts Law Enhancing institutional capacity to implement ISA Guide to applying administrative violations principles. Competent authority (MoF) in administrative proceeding cases where sworn auditors are involved in Report on quality and competitiveness of Latvian auditing market in 2015 (data processing, analysis, development of proposals for risks decreasing) in Latvian and English Competent authority (MoF) Development of content including outline of annual report which will be submitted to the competent authority by the sworn auditors auditing PIEs Guide for municipalities in order to enhance cooperation with the sworn auditors during the financial and performance audits. Local municipalities 2019.05.07.

Planned activities (new) Enhancing institutional capacity to implement ISA Guide to financial and performance auditing also including the guide for verifying whether: the expenditures of local municipality is made in accordance with its budget and estimated costs and law financial activities of municipality`s officials are lawful and appropriate the financial resources, movable and immovable property are managed in accordance with council decisions and in favour of inhabitants the budget of local municipality is drawn up and spent in accordance with law and council decisions Auditors Update of sworn auditor qualification examination programs for the candidates LASA Development of training program for the candidates so as to prepare for the sworn auditor qualification exams Guide on establishing, operating and oversight of public interest entitiy`s (PIE) audit committee FCMC, Nasdaq Baltic, PIEs Enhancing the relationship between tax and accounting Methodology for evaluating the size of shadow economy in industry MoF LASA – Latvian Association of Sworn Auditors FCMC - Financial and Capital Market Commission 2019.05.07.

Thank you for attention! Ministry of Finance of the Republic of Latvia 1 Smilšu Str. Riga, LV – 1919 Phone.: +371 67095517 E-mail: Jana.Salmina@fm.gov.lv