New EU rules on statutory audit reform were adopted by the Council of the EU in April 2014. The changes affect all areas of audit regulation, including market competition, auditor oversight, audit quality and application of standards, audit reporting, corporate governance related to auditors, auditor selection and auditor independence. The purpose of this study is to examine the current state and expected changes in the Latvian audit market within the context of
EU audit reform. The research methods are respectively systematic, logical and comparative analysis, analysis of secondary data, as well as expert methods. The principal results of the study provide evidence of the high level of market concentration of Latvia’s audit firms/networks, the dominant share of non-audit revenue in total revenue for the four biggest players on the market, the auditing oligopoly in the PIE market, the impact of EU audit reform on auditor-client relationships, and the activities of audit committees in the banking sector. The results of the study indicate that Latvia’s audit firms are not fully transparent. Based on the findings and results of the study, the author proposes a set of recommendations aimed at making the Latvian audit market more transparent and less concentrated.
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Ludmila Rozgina holds a PhD in Economics from the University of Latvia. She has over 20 years of experience providing internal audit, risk advisory and management consulting services in the banking industry.
She served as Chair of the Audit Committee of Baltic International Bank from 2015 to 2017. As a visiting lecturer at RISEBA University, she lectured on Introduction to Money and Banking, and Financial Markets.
She is the author of a number of articles on Banking, Risk Management and Personnel Management. Her current research project focuses on the market for audit and non-audit services in the PIE sector.