Slovakia

Member Organizations

Member Organization Associate

  Slovenska Komora Auditorov

Legal and Regulatory Environment

  • Overview of Statutory Framework for Accounting and Auditing

    As a member of the European Union (EU), Slovakia is subject to the accounting, auditing and financial reporting requirements established in EU Regulations and Directives as transposed into national laws and regulations. Slovakia has fully aligned its legal framework with the EU acquis communitaire as it relates to accounting and auditing.

    Accounting Framework

    Act No. 431/2002 Coll. On Accounting (the Accounting Act) stipulates the requirements for the preparation of financial statements, including applicable accounting standards and financial reporting thresholds. In accordance with the law, the Ministry of Finance is responsible for enacting financial reporting standards in Slovakia.

    In accordance with the EU statutory framework, Regulation EC 1606/2002, as transposed into national legislation, listed entities are required to apply EU-endorsed IFRS Standards for consolidated financial statements. In addition, all other companies are permitted to apply IFRS for their consolidated financial statements.

    Slovakia also utilized an option under the framework to (i) require EU-endorsed IFRS in both consolidated and separate company financial statements of all public interest entities (PIEs); (ii) permit EU-endorsed IFRS in the separate company financial statements of all companies whose securities are traded in a regulated market that are non-PIEs; and (iii) require EU-endorsed IFRS as adopted by the EU in the consolidated statements of companies whose securities do not trade in a public market. IFRS for Small and Medium-sized Entities is not adopted in the jurisdiction, nor is it under consideration until the EU Accounting Directive changes.

    PIEs are defined in detail in Article 16 of the Act No. 423/2015 on Statutory Audit and include banks, financial institutions (e.g., asset management companies, pension funds), insurance companies, listed companies, health insurance companies, railways of the Slovak Republic, and accounting entities that prepare consolidated financial statements of central administration or accounting entities that are municipalities, towns, or town districts that meet the following conditions (i) total sum of assets exceeded EUR 100 million; and (ii) number of inhabitants exceeded 50,000.

    Auditing Framework

    European Union member states had until June 17, 2016 to transpose the European audit reform package, comprising the Directive 2014/56/EU on statutory audits of annual accounts and consolidated accounts and Regulation (EU) No 537/2014 on specific requirements regarding statutory audit of public interest entities, into their national legislation.

    Act No. 423/2015 on Statutory Audit specifies the auditing standards that should be applied in the conduct of audits. Article 19 stipulates that all statutory audits must be conducted in accordance with ISA as issued by IAASB. The Úrad pre dohl’ad nad vykonom auditu (UDVA) monitors compliance with these standards.

    Entities that are classified as PIEs, cooperatives, and companies created using share capital and that trade on a regulated market or meet two out of following three criteria—(i) total assets greater than EUR 1,000,000; (ii) net turnover of more than EUR 2,000,000; and (iii) average number of employees exceeding 30—are subject to statutory audit. From 2020, the limits are doubled: (i) total assets greater than EUR 2,000,000; (ii) net turnover of more than EUR 4,000,000; and (iii) average number of employees exceeding 30 (according to the update of the Act on Accounting approved 15 October 2019).

  • Regulation of Accountancy Profession

    Only Certified Auditors are regulated at the state level under Act No. 423/2015 on Statutory Audit. The legislation regulates auditors and the conduct of audits, and outlines the activities, rights, and duties of auditors, audit firms, and assistant auditors. It also establishes both initial and continuing professional development requirements for auditors; entry requirements to the auditing profession; professional standards that should be adhered to; the requirement for the implementation of quality assurance review mechanisms; and a requirement for an investigation and disciplinary arrangement.

    Act No. 423/2015 created the Úrad pre dohl’ad nad výkonom auditu (UDVA) as the independent audit oversight body, responsible for oversight over statutory auditors and audit firms; third-country auditors and third-country audit firms registered in Slovakia; the activities of the Slovenská Komora Audítorov (SKAU); public interest entities (PIEs); and large companies as defined in the Act.

    Per the legislation, candidates for Certified Auditor must first join the SKAU as an ‘assistant auditor’ by possessing a second-level university degree; passing SKAU’s entry-level examination; and be free of any disciplinary measures and have an untarnished reputation. Individuals must then complete at least five years of practical experience in accountancy and with three of those years (3,000 hours) being in auditing. After completing practical experience, individuals must pass the final examination offered by the UDVA and then register with the UDVA and the SKAU as a Certified Auditor. To remain a member of SKAU in good standing, auditors are required to complete CPD requirements.

    UDVA is tasked with (i) organizing the auditors’ final examinations; (ii) issuing audit licenses and certificates; (iii) suspending and withdrawing audit licenses and supervising SKAU’s enforcement system; (iv) maintaining a registry for statutory auditors and audit firms as well as third-country auditors and firms; (v) overseeing compliance with international auditing standards, the Auditors’ Code of Ethics, and provisions of the act; (vi) conducting quality assurance (QA) reviews of PIEs and large companies; (vii) overseeing auditors’ fulfillment of continuing professional development (CPD); (viii) participating in the international standard-setting process through cooperation with EU authorities; and (ix) collaborating with the Ministry of Finance when preparing accounting and auditing legislation in Slovakia.

    Meanwhile, the SKAU is authorized to: (i) issue the Auditor’s Code of Ethics in line with the IESBA Code of Ethics; (ii) conduct quality assurance reviews of auditors providing services to non-PIEs under the oversight of UDVA; (iii) provide CPD and enforce CPD requirements; (iv) maintain a registry for members; (v) operate an investigation & disciplinary system for members under the supervision of UDVA; and (vi) provide auditors with translations of standards.

  • Audit Oversight Arrangements

    Act No. 423/2015 on Statutory Audit establishes the Úrad pre dohl’ad nad výkonom auditu (UDVA) as the independent public audit oversight authority.

    In accordance with the law, entities subject to UDVA oversight are statutory auditors and audit firms; third-country auditors and third-country audit firms registered in Slovakia; the activities of the Slovenská Komora Audítorov (SKAU); public interest entities (PIEs); and large companies as defined in the legislation.

    UDVA is tasked with (i) organizing the auditors’ final examinations; (ii) issuing audit licenses and certificates; (iii) suspending and withdrawing audit licenses and supervising SKAU’s enforcement system; (iv) maintaining a registry for statutory auditors and audit firms as well as third-country auditors and firms; (v) overseeing compliance with international auditing standards, the Auditors’ Code of Ethics, and provisions of the act; (vi) conducting quality assurance (QA) reviews of PIEs and large companies; (vii) overseeing auditors’ fulfillment of continuing professional development (CPD); (viii) participating in the international standard-setting process through cooperation with EU authorities; and (ix) collaborating with the Ministry of Finance when preparing accounting and auditing legislation in Slovakia.

    The UDVA is a member of International Forum of Independent Audit Regulators.

  • Professional Accountancy Organizations

    Slovenská Komora Audítorov (SKAU)

    The SKAU is a professional accountancy organization established in 1992 that unites auditors and audit firms. It is subject to the regulations set out in the Act No. 423/2015 on Statutory Audit, which defines the organizational structure and duties of the organization. SKAU’s mandate is to: (i) issue the Auditor’s Code of Ethics; (ii) conduct quality assurance reviews of auditors providing services to non-public interest entities under the oversight of Úrad pre dohl’ad nad výkonom auditu (UDVA); (iii) conduct and enforce continuing professional development requirements; (iv) maintain a registry for members; and (v) operate an investigation & disciplinary system for members under the supervision of UDVA.

    In addition to being a member of IFAC, SKAU is a member of Accountancy Europe.

  • Projects or Other Information

Adoption of International Standards

  • Quality Assurance

    The Act No. 423/2015 on Statutory Audit stipulates that statutory auditors and audit firms are subject to quality assurance (QA) reviews carried out by Úrad pre dohl’ad nad výkonom auditu (UDVA) for public interest entities (PIEs) and large companies and by the Slovenská Komora Audítorov (SKAU) for non-PIEs under UDVA’s oversight.

    Selection of entities is risk-based and is carried out (i) once every three years in the case of audits of an entity that is a PIE or large company as defined in Article 2(15)(f)); and (ii) every six years in the case of other statutory auditors and audit firms.

    Inspectors are required to share outcomes of QA reviews with UDVA’s Committee for Statutory Audit Quality Assurance and SKAU’s Supervisory Board.

    SKAU reports that the QA review arrangements in Slovakia are in line with the requirements of SMO 1 and the European Union’s Directives.

    Current Status: Adopted

  • International Education Standards

    The initial and continuing professional development (IPD and CPD respectively) requirements are established for auditors in the Act No. 423/2015 on Statutory Audit and are implemented by universities, Úrad pre dohl’ad nad vykonom auditu (UDVA), and the professional organization for statutory auditors, the Slovenská Komora Audítorov (SKAU).

    Per the legislation, candidates for Certified Auditor must first join the SKAU as an ‘assistant auditor’ by possessing a second-level university degree; passing SKAU’s entry-level examination; and be free of any disciplinary measures and have an untarnished reputation. Individuals must then complete at least five years of practical experience in accountancy and with three of those years (3,000 hours) being in auditing. After completing practical experience, individuals must pass the final examination offered by the UDVA and then register with the UDVA and the SKAU as a Certified Auditor. To remain a member of SKAU in good standing, auditors are required to complete CPD requirements that are stipulated in the Act. Members are required to complete at least 20 verifiable hours of CPD per year and 120 hours over a 3-year rolling period which aligns with the input-approach in IES 7.

    SKAU reports that the national requirements have taken into consideration the 2015 revisions to the IES requirements; however, indicates that examinations test theoretical knowledge. There are now revisions to IES 2, 3, 4, and 8 which became effective as of January 2021. The revisions to these standards reflect the need for competency-based approaches as well as the increasing demand for accountants skilled in information and communications technologies and place further emphasis on professional skepticism skills and behaviors.

    Current Status: Partially Adopted

  • International Standards on Auditing

    Act No. 423/2015 on Statutory Audit specifies the auditing standards that should be applied in the conduct of audits. Article 19 stipulates that all statutory audits must be conducted in accordance with ISA as issued by IAASB. The Slovenská Komora Audítorov (SKAU) reports that, accordingly, all ISA are transposed and effective in Slovakia immediately.

    Current Status: Adopted

  • Code of Ethics for Professional Accountants

    According to Act No. 423/2015 on Statutory Audit, the Slovenská Komora Audítorov (SKAU) is responsible for issuing the Auditor’s Code of Ethics for auditors under the oversight of the Úrad pre dohl’ad nad vykonom auditu (UDVA).

    Article 2(18) stipulates that the Auditor’s Code of Ethics issued by SKAU, must be compliant with the International Code of Ethics for Professional Accountants as issued by IESBA. The translation of the Code of Ethics into Slovak must be approved by the SKAU General Assembly before it can be effective. SKAU has translated and approved the 2018 International Code of Ethics for Professional Accountants as issued by IESBA.

    Current Status: Adopted

  • International Public Sector Accounting Standards

    The Ministry of Finance is responsible for accounting standard-setting for public sector entities under the Act No. 431/2002 Coll. on Accounting (the Accounting Act). SKAU reports that the National Public Sector Standards (NPSSs), which are based on accrual basis IPSAS, constitute the current financial reporting framework. However, as of the date of the assessment, the NPSS are not fully aligned with the latest IPSAS. According to the CIPFA/IFAC 2020 International Public Sector Financial Accountability Index, the reporting basis is partial-accrual and it is envisioned that by 2025, the reporting basis will be full accrual with national standards using IPSAS as a reference point.

    Current Status: Partially Adopted

  • Investigation and Discipline

    The Act No. 423/2015 on Statutory Audit requires the establishment of an investigation and disciplinary (I&D) system for auditors.

    Slovenská Komora Audítorov (SKAU) operates an I&D system for its members under the supervision of Úrad pre dohl’ad nad vykonom auditu (UDVA). It is required under law to report all complaints received to UDVA on an annual basis (Article 40). The UDVA carries out I&D procedures for auditors of public interest entities.

    SKAU’s Supervisory Board comprises five members that are approved by the General Assembly to serve four-year terms. It is responsible for investigating members and sending proposals for disciplinary action to the SKAU Disciplinary Commission. The Disciplinary Commission may impose sanctions outlined in Article 49 of the law not later than within three years after the date when the breach took place. Sanctions may be appealed by the individual subject to disciplinary action within 15 days after the delivery of the decision. Members in both the Supervisory Board and Disciplinary Commission may be re-elected for a maximum of two consecutive terms.

    UDVA’s Enforcement Committee is mandated by law to examine SKAU’s I&D processes; initiate proceedings according to Article 64; decide on the imposition of a sanction according to Article 64; and decide on the release of the obligation to maintain confidentiality according to Article 32(3). UDVA’s Committee may impose sanctions outlined in Article 64 when it detects deficiencies during a QA review, or if it receives a proposal from SKAU.

    SKAU reports that the existing I&D arrangements in the jurisdiction are aligned with SMO 6 requirements.

    Current Status: Adopted

  • International Financial Reporting Standards

    The Ministry of Finance (MoF) is responsible for the adoption of accounting standards in Slovakia in accordance with Act No. 431/2002 Coll. On Accounting (the Accounting Act).

    In accordance with the EU statutory framework, Regulation EC 2014/102/ of November 2014 , as transposed into national legislation, listed entities are required to apply EU-endorsed IFRS Standards for consolidated financial statements. In addition, all other companies are permitted to apply IFRS for their consolidated financial statements. EU-endorsed IFRS have slight modifications from IFRS (e.g., temporary 'carve-out' from IAS 39 Financial Instrument: Recognition and Measurement and a temporary extension of the scope of applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts) but according to the IFRS Foundation, the majority of companies can state full compliance with the IFRS.

    Slovakia used an option under the framework to (i) require EU-endorsed IFRS in both consolidated and separate company financial statements of all public interest entities (PIEs); (ii) permit EU-endorsed IFRS in the separate company financial statements of all companies whose securities are traded in a regulated market that are non-PIEs; and (iii) require EU-endorsed IFRS as adopted by the EU in the consolidated statements of companies whose securities do not trade in a public market.

    PIEs are defined in detail in Article 16 of the Act No. 423/2015 on Statutory Audit and include banks, financial institutions (e.g., asset management companies, pension funds), insurance companies, listed companies, health insurance companies, railways of the Slovak Republic, and accounting entities that prepare consolidated financial statements of central administration or accounting entities that are municipalities, towns, or town districts that meet the following conditions (i) total sum of assets exceeded EUR 100 million; and (ii) number of inhabitants exceeded 50,000.

    IFRS for Small and Medium-sized Entities is not adopted in the jurisdiction, nor is it under consideration until the EU Accounting Directive changes.

    Current Status: Adopted

Disclaimer

IFAC bears no responsibility for the information provided in the SMO Action Plans prepared by IFAC member organizations. Please see our full Disclaimer for additional information.

 

Methodology

Methodology
Last updated: 11/2021
We welcome feedback. Please email membership@ifac.org

 

Thank you for your interest in our publications. These valuable works are the product of substantial time, effort and resources, which you acknowledge by accepting the following terms of use. You may not reproduce, store, transmit in any form or by any means, with the exception of non-commercial use (e.g., professional and personal reference and research work), translate, modify or create derivative works or adaptations based on such publications, or any part thereof, without the prior written permission of IFAC.

Our reproduction and translation policies, as well as our online permission request and inquiry system, are accessible on the Permissions Information web page.

For additional information, please read our website Terms of Use. ALL RIGHTS RESERVED.

Agree