Accounting and Audit in Latvia

Since 1 January 1993 the accounting system in Latvia has experienced a radical transition from the so called ‘soviet accounting system’ to European and worldwide accepted accounting practice. Since then two laws regulating the accounting system in the Republic of Latvia have been adopted and enforced; namely ‘On Accounting’ and ‘On Company Annual Reports’. Both laws are based on the EU Directives 4 and 7, as well as other EU Directives. The motive for adopting the laws has been to facilitate the integration of Latvia into the EU, for which harmonisation of legislation with the EU has to be accomplished.