Are Auditors at Fault for the Collapse of Financial Institutions in Lithuania?

• Main Authors: Kiršienė Julija, Misevičiūtė Gabrielė
• Format: Article
• Language: English
• Published: Sciendo 2016-12-01
• Series: Baltic Journal of Law & Politics
• Subjects: bankruptcy of banks; liability of auditors; regulation of audit market; insurance of auditors
• Online Access: https://doi.org/10.1515/bjlp-2016-0017

The experience of the global financial crisis revealed that while many financial institutions were allowed to take excessive risks, the auditors failed in their duties to reasonably evaluate those risks as well as to inform the investing public about them. The issues of statutory auditors' liability and their public role are particularly relevant in Lithuania, considering the fact that over just the past few years the third and the fourth largest banks in Lithuania turned out to be insolvent. Analysis of legal actions against auditors of these banks highlighted certain shortcomings in the audit market and auditors' liability regulation, related to the quality and transparency of audit reports, auditors' accountability and independence requirements, and insurance of auditors’ liability.