Abstract
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.
In the first part of the paper the case analysis of Ernst & Young Baltic’s responsibility for Snoras bankruptcy as well as Deloitte’s responsibility for Ūkio bankas’ insolvency, and discussion of the cases, are presented. The second part of the paper deals with the changes in regulation of the audit market in Lithuania and Europe, and issues left outside the reform.