Audit of financial statements of Croatian companies is regulated by The Accounting Law and The Audit Law. The obligors are determined by Accounting Law while the conditions and regulations of the audit process are determined by Audit Law. In case of any status changes of the company, mergers, acquisitions and divisions The Company Law determines the process.
Audit of financial statements implies verification and evaluation of annual financial statements and consolidated reports, data and methods used when compiling them and on that base shaping independent expert opinion on the matter. Article 20 of The Accounting Law determines the obligors of audit of financial statements with respect to size and their significance for the national economy. Thus, the obligation to audit individual and consolidated reports have:
· Medium and large entrepreneurs
· Companies of public interest, entrepreneurs established in accordance with Croatian regulations and whose shares are listed in regulated market
· Parent companies of medium and large groups
· Entrepreneurs who have applied for listing of its shares on regulated market
· Entrepreneurs who meet two of the three criteria for 2020 reports: assets HRK 15 million, revenues HRK 30 million and average of 25 employees. Although the small and micro entrepreneurs are not obligors of mandatory audit, if they too meet two of the three above mentioned criteria, they become obligors of mandatory audit.
· Entrepreneurs who participated in business merges or divisions as acquirers.
The auditor of the company is selected and appointed by assembly of the company no later than the end of September for the current year. Auditing company performing the services must have a work permit by the Ministry of Finance and the general auditor must meet all prescribed conditions for conducting the audit.
To conclude, for auditing services of financial statements for year 2021, the companies have the deadline to select the auditor until September 30th. All rights and obligations of both parties are regulated by written contract which is later reported to Ministry of Finance. The agreed amount of fee cannot be the subject of any form of conditioning as well as it must not depend or be associated with any other provided services to the audited entity.
For further information, please contact Petra Dzankic, Accountant and Payroll Assistant in Zagreb, at email@example.com
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