Bosnia and Herzegovina

Member Organizations

Member Organization Associate Other PAOs

  Association of Accountants and Auditors of Republic of Srpska
  Union of Accountants, Auditors and Financial Workers of Federation of Bosnia and Herzegovina

Legal and Regulatory Environment

  • Overview of Statuatory Framework for Accounting and Auditing

    The accounting, auditing, and financial reporting framework for Entities within Bosnia and Herzegovina—the Federation of BiH (FBiH) and the Republika Srpska—is defined by the Law on Accounting and Auditing of BiH No. 42/04 of 2004, with the Federation of BiH and the Republika Srpska each having adopted its parallel law on accounting and auditing that transposes the requirements of the BiH Law No. 42/04 of 2004.

    The BiH Law No. 42/04 requires application of IFRS or IFRS for SMEs, based on entity size, for the preparation of financial statements. Under the Law, the Accounting and Auditing Commission of Bosnia and Herzegovina (AACBiH) is responsible for the translation of the standards into the national languages of Bosnian, Croatian, and Serbian. The AACBiH has delegated the implementation aspects of its mandate in the Federation of BiH to the Union of Accountants, Auditors and Financial Workers of Federation of Bosnia and Herzegovina (UAAFWFBH) and in the Republika Srpska to Association of Accountants and Auditors of Republic of Srpska (AAARS) through its Decision on Translation and Publication Authorizations published in the Official Gazette of BiH No. 81/06.

    The BiH Law No. 42/04 also defines the types of companies that are subject to mandatory audit, which include large and middle-sized entities, publicly traded entities, and entities subject to obligatory auditing if it has been prescribed by their particular regulations defining their business operations. Small entities may choose to have their financial statements audited. Only audit firms that are licensed by the MoF in the respective Entities and members of the authorized accountancy are authorized to perform audits. All audits must be conducted in accordance with the IAASB standards and related pronouncements. ISA are adopted by reference and become effective as they are issued by the IAASB.

    Federation of BiH

    In the Federation of BiH, the Law on Accounting and Auditing of the FBiH of 2009 (FBiH A&A Law 2009) establishes the requirements for accounting and auditing.

    Accounting Framework

    Provisions of the FBiH A&A Law 2009 related to accounting apply to all business companies, including insurance, microcredit, leasing, investment funds, companies managing investment funds, broker-dealers, stock exchanges and banks, other financial organizations, cooperatives, among others. All enterprises need to prepare and file their financial statements.

    The Ministry of Finance is responsible for supervising bookkeeping and accounting systems and ensuring that legal entities comply with the provisions of the FBiH A&A Law 2009.

    In line with the requirements of the BiH Law No. 42/04, Article 33 of the FBiH A&A Law 2009 has established the requirement for all legal entities to apply either IFRS or IFRS for SMEs. Listed companies, insurance companies, banks, private pension funds, and other public interest entities (PIEs) must apply IFRS. Beginning in 2013, the following entities are eligible to apply full IFRS or IFRS for SMEs.

    • Large unlisted entities which meet at least two out of three of the following: 250 employees, total assets of KM4 million (approximately US$2.8 million) and total revenue of KM8 million (approximately US$5.6 million);
    • Medium-sized unlisted entities which meet at least two out of three of the following: between 50 and 250 employees, total assets between KM1 and KM4 million (approximately US$0.7 to 2.8 million) and total revenue between KM2 and KM8 million (approximately (US$1.4 to 5.6 million); and
    • Small-sized entities which are companies below the abovementioned sizes.

    Auditing Framework

    In line with the requirements of the BiH Law No. 42/04, Article 34 of the FBiH A&A Law of 2009 requires application of the IAASB standards and related pronouncements in all mandatory audits. In the Federation of BiH, the responsibility for translation and publication of the IAASB pronouncements is delegated to the UAAFWFBH.

    Republika Srpska

    At the Entity level in the Republika Srpska, the Law on Accounting and Auditing of the Republika Srpska No. 94/15 stipulates the requirements for accounting and auditing, and covers the preparation, presentation, and audit of financial statements.

    Accounting Framework

    In line with the requirements of the BiH Law No. 42/04, the Law on Accounting and Auditing of the Republika Srpska requires all entities to prepare financial statements in accordance with either IFRS or IFRS for SMEs.

    There are differentiated reporting requirements based on the size and type of entities. Small entities are required to prepare only balance sheet and income statement, whereas medium-sized, large and public interest entities are required to prepare a full set of financial statements in accordance with the applicable standards.

    Small entities are defined as those meeting two of three criteria: (1) less than 50 employees; (2) average annual value of business assets below 1,000,000 BAM; and (3) total annual income of less than 2,000,000 BAM. Banks and non-bank financial institutions are classified as large regardless of size.

    In accordance with the EU Directive, the 2015 amendments to the Law on Accounting and Auditing of the Republika Srpska introduced the category of micro entities. Micro entities are defined as those meeting two of three criteria: (1) having fewer than five employees annually, (2) average annual value of business assets below 250,000 BAM, and (3) total annual income of less than 500,000 BAM.

    Medium-sized, large, and public interest entities are required to apply IFRS. In 2011, the Ministry of Finance issued a regulation that allows the use of IFRS for SMEs by non-listed entities and small companies that are required to prepare only balance sheets and income statements.

    Auditing Framework

    All large and public interest entities are required to have mandatory audits of their financial statements performed in accordance with the BiH Law No. 42/04 and the Law on Accounting and Auditing of the Republika Srpska No. 94/15. Micro, small- and medium-sized entities are not subject to mandatory audits. Audits must be conducted in accordance with ISA issued by the IAASB.

  • Regulation of Accountancy Profession

    The Accounting and Auditing Commission of Bosnia and Herzegovina (AACBiH) has direct responsibility for the education and certification of the accountancy profession in the country in accordance with the Law on Accounting and Auditing of Bosnia and Herzegovina No. 42/04 (BiH Law No. 42/04). The Law recognizes three categories of accountancy professionals: Authorized Auditors (AAs), Certified Accountants (CAs), and Certified Accounting Technicians (CATs). All three designations are protected under the BiH Law No. 42/04.

    The Law requires mandatory audit firm rotation after seven consecutive years, although exemptions may be granted to audit firms for an additional three years provided the auditors are rotated.

    The AACBiH has delegated the implementation of the education curriculum, examination, training and continuous professional development programs to the professional accountancy organizations in the Republika Srpska and the Federation of Bosnia and Herzegovina—Association of Accountants and Auditors of Republic of Srpska (AAARS) and the Union of Accountants, Auditors and Financial Workers of Federation of Bosnia and Herzegovina (UAAFWFBH), respectively.

    Federation of BiH

    The regulation of the accountancy profession in Federation of BiH is established under the Law on Accounting and Auditing of the FBiH of 2009 (FBiH A&A Law 2009), which transposes the requirements of the BiH Law No. 42/04.

    The FBiH A&A Law 2009 regulates attaining professional titles, qualifications, and licensing of the accountancy professionals in the Federation of BiH. Candidates who wish to acquire the professional titles of CA, AA, and CAT are required to meet specific requirements related to general education, practical experience, and the prescribed examinations under the Professional Accounting Education Program carried out by the UAAFWFBH.

    CAs must hold a University diploma, have two to four years of working experience in accounting and finance, and pass the exams necessary for this level. CATs must have four years of secondary education, three years of working experience in accounting and finance, and pass the exams in topics specific for the designation. Authorized Auditors must hold a University diploma, have three years of working experience in an audit firm after obtaining the title of CA, and pass the exams necessary for the designation. Once candidates meet these requirements, they must become members of the UAAFWFBH in order to practice.

    Additionally, FBiH accountancy qualifications are also open to persons who have acquired professional titles outside of the BiH, and foreign professional titles are recognized based on the Rulebook on the Recognition of Certificates. Persons who have relevant qualifications are only required to pass an examination on legal and tax regulations applicable in the BiH.

    The Ministry of Finance of the Federation of BiH, the Public Oversight Board (POB), the Chamber o Auditors, and the authorized accounting professional organization, the UAAFWFBH, share the responsibility for the regulation of the profession.

    The UAAFWFBH was granted the status of an authorized professional accounting body in 2005 by the AACBiH. Its functions include to: (i) certify and license CAs and CATs; (ii) enforce initial professional development requirements and carry out continuous professional education; (iii) ensure compliance with the Code of Ethics, auditing, and accounting standards; (iv) develop and improve education in the field of accounting in accordance with international standards; (v) contribute to alignment of the accounting and auditing curriculum at all universities in the Federation of BiH with the internationally recognized standards; (vi) provide and conduct training, testing, certification and licensing of accountants in Federation of BiH according to the guidelines issued by the International Federation of Accountants and the United Nations Conference on Trade and Development; (vii) cooperate with other associations and other organizations in the field; and (viii) monitor, translate and publish standards and all supporting instructions, explanations and guidelines of the IFAC and the International Accounting Standards Board (IASB).

    The Ministry of Finance is responsible for licensing statutory auditors and audit firms, and keeping the register of statutory auditors based on the data provided by the UAAFWFBH.

    Additionally, auditors in the Federation of BiH are regulated by the Chamber of Auditors of the Federation of BiH, which was established under Article 61 of the FBiH A&A Law 2009. Although the Chamber was established in 2009, it did not become operational until 2011.

    The responsibilities of the Chamber of Auditors provided in Article 61 of FBiH A&A Law 2009 include to: (i) support and maintain the reputation of the auditing profession; (ii) develop minimal methodology for quality assurance reviews of audit firms and statutory auditors; (iii) supervise the quality of audit firms and statutory auditors, conduct proceedings as required and take necessary measures to eliminate and sanction identified irregularities, notifying the Ministry of Finance thereof every six months; and (iv) adopt the Code of Professional Ethics for Auditors.

    The activities of the Chamber of Auditors are overseen by the POB, which was established under Article 66 of the FBiH A&A Law 2009. The POB became operational in 2014. The POB oversees: (i) the registration of audit firms; (ii) the adoption of standards of professional ethics, internal quality control of audit firms and auditing; (iii) implementation of permanent training, quality assurance, and a system of discipline; and (iv) the different aspects of the Chamber of Auditors.

    Republika Srpska

    In the Republika Srpska, the Law on Accounting and Auditing of the Republika Srpska No. 94/15 establishes requirements for the regulation of the accountancy professionals that are in line with those established by the BiH Law No. 42/04. The Ministry of Finance (MoF) of Republika Srpska and the authorized accounting professional organization, the AAARS, share the responsibility for the regulation of the profession.

    The Ministry of Finance licenses audit firms and Authorized Auditors who wish to conduct audits, while the AAARS licenses CAs and CATs. Only audit firms can conduct statutory audits, and the MoF maintains registers of licensed audit firms and Authorized Auditors, which are publicly available on the MoF’s website. Articles 51 and 52 of the Law on Accounting and Auditing of the Republika Srpska No. 94/15 grants authority to the MoF to monitor the performance of auditors, audit firms, and accounting professionals. The Ministry can impose fines and revoke licenses for non-compliance with the requirements of the Law, including conducting audits without proper certification and licenses.

    The AAARS has the authority to issue the relevant certificates to members of the profession in Republika Srpska upon completion of the required education and training. Authorized Auditors must be members in good standing with the AAARS to receive or renew their audit license with the Ministry of Finance. The AAARS also has the authority to adopt and implement quality assurance review regulations for monitoring the conduct of audits and to implement investigation and disciplinary procedures to ensure that its members comply with professional standards and the Code of Ethics.

  • Audit Oversight Arrangements

    Federation of BiH

    The Public Oversight Board (POB) was established under Article 66 of the Law on Accounting and Auditing of the FBiH of 2009 (the FBiH A&A Law 2009) and became operational in 2014. The POB oversees: (i) the registration of audit firms; (ii) the adoption of standards of professional ethics, internal quality control of audit firms and auditing; (iii) implementation of permanent training, quality assurance, and a system of discipline; and (iv) the different aspects of the Chamber of Auditors, which regulates the auditors. The POB is not a member of the International Forum of Independent Audit Regulators.

    The Chamber of Auditors of the Federation of BiH was established under Article 61 of the FBiH A&A Law 2009 but did not become operational until 2011.

    The responsibilities of the Chamber of Auditors provided in Article 61 of FBiH A&A Law 2009 include to: (i) support and maintain the reputation of the auditing profession; (ii) develop minimal methodology for quality assurance reviews of audit firms and statutory auditors; (iii) supervise the quality of audit firms and statutory auditors, conduct proceedings as required and take necessary measures to eliminate and sanction identified irregularities, notifying the Ministry of Finance thereof every six months; and (iv) adopt the Code of Professional Ethics for Auditors.

    Republika Srpska

    There is no independent audit oversight arrangement in Republika Srpska. In accordance with the Law on Accounting and Auditing of the Republika Srpska No. 94/15, the Ministry of Finance is responsible for licensing audit firms and Authorized Auditors who wish to conduct audits, maintaining registers of licensed audit firms and Authorized Auditors, and monitoring the performance of auditors, audit firms, and accounting professionals. The Ministry can impose fines and revoke licenses for non-compliance with the requirements of the Law, including conducting audits without proper certification and licenses. Authorized Auditors are also required to be members in good standing with the Association of Accountants and Auditors of Republic of Srpska and adhere to its rules and requirements.

  • Professional Accountancy Organizations

    The Law on Accounting and Auditing of BiH No. 42/04 of 2004 prescribes the requirements for “authorized professional bodies,” including the need for their recognition by the Accounting and Auditing Commission of the BiH (AACBiH).

    Through the Law, in the FBiH, AACBiH issued “authorized professional body” status to the Union of Accountants, Auditors and Financial Workers of Federation of Bosnia and Herzegovina (UAAFWFBH), while in the Republika Srpska the authorized professional body is the Association of Accountants and Auditors of Republic Srpska (AAARS).

    The Association of Accountants and Auditors Republika Srpska (AAARS)

    The AAARS was established in 1996 and its membership is comprised of Authorized Auditors, Certified Accountants (CA), and Certified Accounting Technicians (CAT). Approximately one third of its members provide services in the public sector, and Authorized Auditors must be members in good standing with AAARS to receive or renew their audit license with the Ministry of Finance of Republika Srpska. Its activities are overseen by the Ministry of Finance.

    The association’s mission is to develop and improve the profession, and it aims to fulfill its mission by assisting with the education, examination, training, certification, and continuing professional development of its members, as well as translating, publishing, and implementing professional and technical standards.

    The AAARS has the authority to issue the relevant certificates to members of the profession in Republika Srpska upon completion of the required education and training. The AAARS also has the authority to adopt and implement quality assurance review regulations for monitoring the conduct of audits and to implement investigation and disciplinary procedures to ensure that its members comply with professional standards and the Code of Ethics. It also collaborates with other regional professional accountancy organizations on the advancement of the profession. Within a framework of regional cooperation, the AAARS works with the Association of Accountants and Auditors of Serbia and the Institute of Certified Accountants of Montenegro to translate IFRS, IFRS for SMEs, IPSAS, ISA, and the IESBA Code of Ethics. The AAARS is a founding member of the South Eastern European Partnership on Accountancy Development and in December 2015, the AAARS became a full member of the Fédération des Experts-comptables Européens (FEE).

    Union of Accountants, Auditors and Financial Workers of Federation of Bosnia and Herzegovina (UAAFWFBH)

    The UAAFWFBH is a non-governmental, non-profit, professional association that was established by three professional associations in 2003. Membership in the union is mandatory for CATs, CAs, and Authorized Auditors. UAAFWFBH members provide a variety of services in the fields of accounting, finance, audit, tax advising, and appraisal of economic value of property.

    The UAAFWFBH’s functions include to: (i) certify and license CAs and CATs; (ii) enforce initial professional development requirements and carry out continuous professional education; (iii) ensure compliance with the Code of Ethics, auditing, and accounting standards; (iv) develop and improve education in the field of accounting in accordance with international standards; (v) contribute to alignment of the accounting and auditing curriculum at all universities in the Federation of BiH with the internationally recognized standards; (vi) provide and conduct training, testing, certification and licensing of accountants in Federation of BiH according to the guidelines issued by the International Federation of Accountants (IFAC) and the United Nations Conference on Trade and Development; (vii) cooperate with other associations and other organizations in the field; and (viii) monitor, translate and publish standards and all supporting instructions, explanations and guidelines of the IFAC and the International Accounting Standards Board (IASB). In December 2015, the UAAFWFBH became a full member of the FEE.

  • Projects or Other Information

    As of May 2016, the Ministry of Finance of the Federation of BiH is in the final stages of drafting a new Law on Accounting and Auditing which would transpose the new EU Audit Directives into national legislation.

Adoption of International Standards

  • Quality Assurance

    Federation of BiH: Partially Adopted

    The FBiH Law on Accounting and Auditing of 2009 (FBiH A&A Law 2009) created the framework for establishment of quality assurance (QA) review system for auditing firms as well as for statutory auditors. Under Article 65 of the Law, the Chamber of Auditors of the Federation of BiH is responsible for the design and the implementation of QA reviews both for auditors of public interest entities (every three years) and for other auditors (every six years).

    In 2014, the Chamber of Auditors adopted the Rulebook on Oversight and Quality Control for audit firms and statutory auditors and in 2015 commenced preparations for the QA review system by distributing questionnaires and conducting several on-site visits to auditing firms. In 2016, the Chamber began QA reviews and has intensified oversight activities.

    The Public Oversight Board (POB) oversees internal quality control of audit firms and the quality assurance system under Article 66 of the FBiH A&A Law 2009. The UAAFWFBH reports that the POB is developing an analysis of the Rulebook’s compliance with Directive 2014/56/EU and Regulation (EU) No 537/2014 and will also review the adopted regulations in regards to fulfillment of international standards and requirements. Although the system has been established and become operational, it is unclear if the system fully aligns with the requirements of SMO 1.

    Republika Srpska: Adopted

    The Standards Act on Quality Control in Accounting and Auditing Profession in Republic of Srpska of 2012 provides the legal foundation for the establishment of the mandatory QA system. Certified auditors, certified accountants, certified accounting technicians, audit firms and firms performing accounting services are subject to QA reviews. Under the Act, the responsibility for the implementation of the QA review system rests with Association of Accountants and Auditors of Republic of Srpska (AAARS), under oversight by the Ministry of Finance through its Commission for monitoring, implementation, and implementation control of regulations in the field of accounting and auditing. The 2013 version of ISQC 1 and ISA 220 have been adopted.

    The AAARS reports that it has been working on the initial design and implementation of the system since 2012 in cooperation with the French professional accountancy organizations and by the end of 2015, six audit firms were subjects of quality control. AAARS reports that its QA review system complies with all the requirements of SMO 1. In 2016, the AAARS plans to review the implementation and effectiveness of the existing system for the first time.

    Current Status: Partially Adopted

  • International Education Standards

    In accordance with the Law on Accounting and Auditing of Bosnia and Herzegovina No. 42/04 (BiH Law No. 42/04), the Accounting and Auditing Commission of Bosnia and Herzegovina (AACBiH) is responsible for setting initial professional development (IPD) and continuing professional development (CPD) requirements for the accountancy profession in both Entities. The Law stipulates that the requirements for educational qualifications, practical experience and training, continuing education and testing theoretical knowledge should take into account the requirements of the Statutory Audit Directive and be in line with IES. The responsibility for administering the professional examination lies with the AACBiH, although the Law allows it to delegate activities related to administering the examination to one or more professional bodies, with the AACBiH closely monitoring the implementation of these activities. In the Federation of Bosnia and Herzegovina this responsibility has been delegated to the Union of Accountants, Auditors and Financial Workers of Federation of Bosnia and Herzegovina (UAAFWFBH) and in the Republika Srpska to the Association of Accountants and Auditors of Republic of Srpska (AAARS).

    Translation of the revised IES is in progress as of 2016, led by the UAAFWFBH. Following the completion of the translation, the existing system for the education of professional accountants in the jurisdiction will be harmonized at the Accounting and Auditing Commission of Bosnia and Herzegovina level.

    Federation of BiH: Adopted

    In the Federation of BiH, the responsibility for the education and training of professional accountants is shared between the UAAFWFBH, the Chamber of Auditors, and the Public Oversight Board (POB).

    The UAAFWFBH reports that it has incorporated the IES since its founding into its programs for education, certification, and CPD. In cooperation with the Croatian Audit Chamber (CAC), UAAFWFBH translated and published the Handbook of International Education Pronouncements 2009 Edition. The union has translated the 2015 edition and as of 2016 is awaiting IFAC’s approval in order to officially publish it on its website.

    The Chamber of Auditors is responsible for developing an annual education and training plan for the specialized training of auditors, which must meet the criteria stipulated by the AACBiH. The Chamber of Auditors must submit the plan to the UAAFWFBH in order to be evaluated by the union’s CPD Committee. The POB oversees the implementation of the Chamber’s education program.

    Republika Srpska: Adopted

    The AAARS is responsible for the education, certification, and CPD of its members and reports that the requirements of IES have been incorporated in the Entity.

    Current Status: Adopted

  • International Standards on Auditing

    The Law on Accounting and Auditing of BiH No. 42/04 of 2004 (BiH Law No. 42/04) defines the types of companies that are subject to mandatory audit and establishes mandatory application of the IAASB standards and related pronouncements. ISA are adopted by reference and become effective as they are issued by the IAASB.

    The Accounting and Auditing Commission of Bosnia and Herzegovina (AACBiH), a non-governmental independent professional body, was established under the BiH Law No. 42/04 with the responsibility for implementing auditing standards and the translation and publication of standards of the standards into the national languages of Bosnian, Croatian, and Serbian, among other functions. The AACBiH has delegated the implementation aspects of its mandate in the Federation of BiH to the Union of Accountants, Auditors and Financial Workers of Federation of Bosnia and Herzegovina (UAAFWFBH), and in the Republika Srpska to Association of Accountants and Auditors of Republic of Srpska (AAARS) through its Decision on Translation and Publication Authorizations published in the Official Gazette of BiH No. 81/06.

    Federation of BiH: Adopted

    The 2009 Handbook of International Quality Control, Auditing, Review, Other Assurance, and Related Services Pronouncements, which was translated to Bosnian and Croatian, has been applied since 2012. No modifications have been made to the Handbook and the translation was performed in line with the IFAC Translation Policy. UAAFWFBH reports that in cooperation with the Croatian Audit Chamber (CAC) the latest IAASB Handbook is expected to be translated by September 2016 and published at the end of 2016. Upon CAC’s completion of the translation, UAAFWFBH indicates it will submit a request to IFAC to receive a sub-license to use the new translated edition.

    Republika Srpska: Adopted

    The AAARS has entered into a formal agreement with the professional accountancy organizations in Serbia and Montenegro for a common translation of the standards into Serbian. The 2013 version has been translated and issued.

    Current Status: Adopted

  • Code of Ethics for Professional Accountants

    The Law on Accounting and Auditing of BiH No. 42/04 of 2004 (BiH Law No. 42/04) requires mandatory application of the IESBA Code of Ethics for all professional accountants. The Accounting and Auditing Commission of Bosnia and Herzegovina (AACBiH), a non-governmental independent professional body, under the BiH Law No. 42/04 is responsible for the translation and publication of the Code of Ethics into of the standards into the national languages of Bosnian, Croatian, and Serbian. The AACBiH has delegated the implementation aspects of its mandate in the Federation of BiH to the Union of Accountants, Auditors and Financial Workers of Federation of Bosnia and Herzegovina (UAAFWFBH), and in the Republika Srpska to the Association of Accountants and Auditors of Republic of Srpska (AAARS) through its Decision on Translation and Publication Authorizations published in the Official Gazette of BiH No. 81/06.

    Federation of BiH: Adopted

    The adoption of professional ethics standards in the FBiH is done under the supervision of the Public Oversight Board (POB) in accordance with the FBiH A&A Law 2009.

    The UAAFWFBH has translated the 2010 version of the IESBA Code without modifications and has required adherence to the Code since 2012. As of 2016, the UAAFWFBH has completed the translation of the 2015 IESBA Code of Ethics into Bosnian in compliance with the IFAC Translation policies and is awaiting IFAC approval to publish the Code on its website. The Code is expected to be applied by the union’s members effective June 2016.

    Republika Srpska: Adopted

    The AAARS entered into a cooperation agreement for a common translation of the IESBA Code of Ethics with the professional accountancy organizations in Serbia and Montenegro. Under this agreement, the 2015 version of the IESBA Code of Ethics has been translated into Serbian, in accordance with the IFAC Translation Policy, and is being applied.

    Current Status: Adopted

  • International Public Sector Accounting Standards

    The Law on Accounting and Auditing of BiH No. 42/04 of 2004 (BiH Law No. 42/04) requires application of IPSAS. The Accounting and Auditing Commission of Bosnia and Herzegovina (AACBiH), a non-governmental independent professional body, was established under the BiH Law No. 42/04 with the responsibility for implementing auditing standards and the translation and publication of standards of the standards into the national languages of Bosnian, Croatian, and Serbian, among other functions.

    The AACBiH has delegated the implementation aspects of its mandate in the Federation of BiH to the Union of Accountants, Auditors and Financial Workers of Federation of Bosnia and Herzegovina (UAAFWFBH, and in the Republika Srpska to Association of Accountants and Auditors of Republic of Srpska (AAARS) through its Decision on Translation and Publication Authorizations published in the Official Gazette of BiH No. 81/06.

    Federation of BiH: Partially Adopted

    Article 33 of the FBiH A&A Law of 2009 transposed the requirement to apply IPSAS. Until the translation of IPSAS becomes available, the public sector in the FBiH will apply IFRS but the Ministry of Finance requires specific forms for financial auditing of the public sector, and a different layout of chart of accounts.

    The UAAFWFBH had established a project with the Croatian professional accountancy organization (PAO) to translate IPSAS in accordance with its mandate. However, the implementation of the project to translate IPSAS has been delayed for several years due to the withdrawal of the Croatian PAO from the joint translation activities given the accession of Croatia to the EU. UAAFWFBH reports that in 2016 it will seek the support of the Ministry of Finance to continue with the activities concerning translation of IPSAS. At the time of the assessment, there is no further update regarding the translation or implementation of IPSAS.

    Republika Srpska: Adopted

    The Law on Accounting and Auditing of Republika Srpska No. 94/15 of 2015 states that IPSAS are to be applied in the Republic by all levels of government. Under the Law, the Ministry of Finance of Republika Srpska is responsible for overseeing the implementation of this requirement. The Association of Accountants and Auditors of Republic of Srpska indicates that accrual-basis IPSAS are being applied. The 2013 version of The Handbook of International Public Sector Accounting Pronouncements as translated by the Serbian Association of Accountants and Auditors has been made publicly available in the Republika Srpska.

    Current Status: Partially Adopted

  • Investigation and Discipline

    Federation of BiH: Partially Adopted

    All professional accountants in the Federation of BiH are subject to investigative and disciplinary (I&D) procedures. In accordance with the FBiH Law on Accounting and Auditing of 2009 (FBiH A&A Law 2009) and the union’s Statute, the Union of Accountants, Auditors and Financial Workers of Federation of Bosnia and Herzegovina (UAAFWFBH) is responsible for establishing an I&D system for its members for a breach of ethical requirements and professional standards. Under Article 61 of the FBiH A&A Law 2009, the Chamber of Auditors is responsible for establishing an I&D system for auditors, which also include UAAFWFBH members. The Public Oversight Board is responsible for overseeing the Chamber in implementing its I&D system in respect to auditors.

    The union reports that the Chamber has only just established its I&D system in 2015 and the design of the system is mostly in line with SMO 6 requirements.

    In March 2012, the union adopted the Book of Regulation on Disciplinary Liability, which established the Prosecutorial Council and Discipline Review Body. The requirements of the Book are mostly in-line with those of SMO 6; however, the UAAFWFBH intends to improve the I&D system to be more compliant with the SMO 6 requirements as one of its strategic objectives moving forward.

    As of May 2016, the Ministry of Finance is in the final stages of drafting a new Law on Accounting and Auditing which is expected to clarify the I&D responsibilities of organizations involved in the process.

    Republika Srpska: Partially Adopted

    The Law on Accounting and Auditing of Republika Srpska No. 94/15 grants authority to the Ministry of Finance of Republika Srpska to monitor and discipline audit firms and members of the audit profession for failure to comply with the accounting and auditing requirements in that law.

    In addition, the Association of Accountants and Auditors of Republic of Srpska (AAARS) also implemented an investigative and disciplinary system for its members in 2002 with the publication of the association’s Rules on Disciplinary Procedures, which were amended in 2005. The AAARS conducted an assessment of its I&D system against the requirements of SMO 6 and identified gaps that it plans to address. The AAARS is legally required to report to the Ministry of Finance on its I&D activities.

    Current Status: Partially Adopted

  • International Financial Reporting Standards

    The Law on Accounting and Auditing of BiH No. 42/04 of 2004 requires mandatory application of IFRS and IFRS for SMEs for all legal entities, depending on their size. The Accounting and Auditing Commission of Bosnia and Herzegovina (AACBiH), a non-governmental independent professional body, under the BiH Law No. 42/04 is responsible for the translation and publication of the standards into the national languages of Bosnian, Croatian, and Serbian.

    The AACBiH has delegated the implementation aspects of its mandate in the Federation of BiH to the Union of Accountants, Auditors and Financial Workers of Federation of Bosnia and Herzegovina (UAAFWFBH) and in the Republika Srpska to the Association of Accountants and Auditors of Republic of Srpska (AAARS) through its Decision on Translation and Publication Authorizations published in the Official Gazette of BiH No. 81/06.

    Federation of BiH: Adopted

    The FBiH Law on Accounting and Auditing of 2009 transposed the requirement of the BiH Law No. 42/04 to apply international standards. However, there is a time lag in the translation of IFRS in the FBiH, with the 2010 version of IFRS being applied in the Federation of BiH as of 2016. The UAAFWFBH reports that, as of July 2016, it has published the consolidated version of the IFRS for SMEs, which incorporates all amendments and has signed a new contract with the IFRS Foundation to start the translation of the 2016 IFRS. In addition, the union has completed the translation of the new terminology list for IFRS.

    Republika Srpska: Adopted

    The Law on Accounting and Auditing of the Republika Srpska of No. 94/15 transposed the requirements of the BiH Law No. 42/04. Medium-sized, large, and public interest entities are required to apply IFRS. There is a time lag in the translation of IFRS, with the 2009 version of IFRS being applied in the Republika Srpska. In 2011, the Ministry of Finance issued a regulation that allows the use of IFRS for SMEs by non-listed entities and small companies that are required to prepare only balance sheets and income statements.

    Current Status: Adopted

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Methodology

Methodology
Last updated: 06/2016
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