The regulation of auditing for privately held firms varies across the world. While countries suchas the United States and Canada impose no general audit requirement for private firms, manyEuropean Union (EU) Member States mandate audits even for small entities. The EU Accounting Directive (2013/34/EU) sets minimum thresholds for audit exemptions but allows MemberStates to adopt stricter national rules, creating variation across the EU. This paper reviews theoretical and empirical literature on the regulation of private-firm auditing. It explores justifications for audit mandates for small private firms, including externalities, behavioral considerations related to tax compliance and financial misconduct, and costs and benefits of voluntaryauditing. In addition, the study reviews legal frameworks for statutory audits in selected EUcountries and highlights how national policies and risk assessments shape audit thresholdsand enforcement strategies. The review concludes by identifying gaps in the literature and suggesting areas for future research.