Surveys carried out around the world have shown that there is a strong correlation between the economic wealth of countries and the number and experience of auditors there. “Auditors are like the cleaners of the financial world, who make sure that the worst crap is cleaned out of financial statements,” says Mart Nõmper, Partner and Head of Audit Services at Grant Thornton Baltic, not the most delicately perhaps, but aptly, when describing the nature and purpose of the work of auditors.
In three decades, the purpose of their work hasn’t changed, but the methods and tools of the trade are very different today compared to a few decades ago. This is due to both technological developments, including the move from paper to computer accounting, and the alignment of Estonia’s financial accounting with international rules. Then, of course, there is the ever-inflating volume of laws and regulations: a quarter of a century ago, the auditing rules that guided the activities of auditors were less than a few dozen pages in length, while the current Auditing Act, with its international standards, runs to thousands of pages.
Mati Nõmmiste and Eva Veinberg obtained their auditor’s licences in December 1992 and started providing audit services at Rimess in 1993, initially the only sworn auditors in their company. Veinberg recalls that one of Rimess’ first clients was a large fuel company in Southern Estonia. “Back then, people were very enthusiastic about what they were doing,” she recalls. “The managers of this company also spoke enthusiastically and at length about their business, so Mati and I started to sneakily check the time: our departure for Tallinn was being pushed further and further back!” She says clients have always appreciated the fact that the audit firm’s partners visit them and take the time to listen. “We’re entrepreneurs, like them, just in a different sector,” explains Veinberg. Incidentally, the principle that partners are involved in every client’s audit process still applies.
Looking back on the nineties, Veinberg says that the work of an auditor was very different in both form and substance at the time. “The audit process and audit documentation were like chalk and cheese compared to nowadays!” she laughs. “There was no systematic approach; we just did what we could. The business environment in the 1990s was also different: there were rules, but they could be bent. That’s not to say the law was broken, but some companies did walk on pretty thin ice. But there were also those who clearly deviated from what was allowed and also expected the auditor to turn a blind eye or to tell them how to change the documents afterwards so that everything looked like it was compliant. One time, the head of a large company said that if I didn’t do what he wanted, I’d no longer be his auditor.” Client, thy will be done: he and Rimess parted ways. Fortunately, this was a story from the ‘exception that proves the rule’ series, because most of the time, clients look to their auditor as reassurance that the books are in order and the company is protected from fraud and misstatements.
In the past, it was not uncommon for clients to ‘set the table’ for the auditors’ arrival. Mati Nõmmiste and Artur Suits, the latter of whom obtained his auditor’s licence in 1999, remember that once, when they went to audit the Tallinn shipyard, they were greeted at nine o’clock in the morning by accountants in formal dress who kindly asked them to sit at a table. “They offered us homemade potato salad, fresh pastries and even cognac!” Nõmmiste laughs. “We didn’t get a lot of work done!” In quite a few companies with a predominantly Russian-speaking workforce, it was common practice to treat auditors to something nice before they started working.