Chamber of Authorized Auditors of Serbia

In accordance with the Law on Auditing of 2019, audit firms are required to establish and maintain a system of quality control in line with International Standard on Quality Control 1 (ISQC 1). The Chamber of Authorized Auditors of Serbia (KoR) is tasked by law with carrying out quality assurance (QA) reviews for its members, which include all statutory auditors and audit firms in the jurisdiction. The QA review system operated by KoR is subject to the oversight of the Securities Commission (SEC), the Audit Public Oversight Board (APOB), and the Ministry of Finance (MoF).

The MoF has final authority to approve QA review reports prepared by KoR inspectors, which are submitted to APOB for review and subsequently forwarded to the MoF. Based on proposals submitted by KoR and cleared by APOB, the MoF issues decrees for appropriate corrective and disciplinary measures. The SEC also reviews KoR’s QA review findings.

KoR reports that its established QA review system is operational and that it has made progress in addressing previously identified gaps, including strengthening the independence of review teams and reinforcing the linkage between QA findings and the investigative and disciplinary framework. KoR began implementation of the system in 2012 using a phased approach that culminated in on-site reviews and the referral of cases requiring corrective or disciplinary actions to APOB and the MoF. Between 2016 and 2020, APOB and the MoF approved 41 corrective measures arising from QA reviews, which have been made publicly available on KoR’s website.

KoR also supports implementation through the development of technical guidance and ongoing training for its members. It has delivered regular training on ISQC 1, ISA 220, and the most frequent issues identified during QA reviews of audit firms. In addition, although the quality management standards are not yet legally adopted in the jurisdiction, KoR has proactively provided training to its members, including small and medium practices, on International Standard on Quality Management 1 (ISQM 1).

KoR also reports active participation in policy discussions with the MoF, directly and through APOB and other stakeholders, regarding proposed legislative amendments related to auditor licensing, accounting standards, and future public oversight arrangements. It also incorporates risk analysis and developments in the Serbian business environment into its QA planning cycle.

KoR has demonstrated that it is actively reviewing and improving its fulfillment of SMO 1 within the scope of its mandate. To further strengthen alignment with SMO 1 requirements, KoR is encouraged to continue coordinating with the MoF, SEC, and APOB to support the legal adoption and implementation of ISQM 1, ISQM 2, and ISA 220 (Revised), and to continue updating its SMO Action Plan with recent examples of activities, outcomes, and improvement measures in this area.

Current Status: Review & Improve

The initial professional development and continuing professional development (CPD) requirements for statutory auditors are established under the Law on Auditing of 2019 and are implemented through universities and the Chamber of Authorized Auditors of Serbia (KoR) under the oversight of the Audit Public Oversight Board (APOB) and the Ministry of Finance (MoF).

To qualify as a statutory auditor, an individual must obtain a bachelor’s degree, complete at least three years of practical experience in an audit firm, complete the professional education program administered by KoR, pass KoR’s professional examination, obtain a license from the MoF, and fulfill mandatory CPD requirements.

KoR reports that it is actively updating its curriculum and examination processes to reflect the latest International Education Standards (IES) requirements and competency-based learning approaches. The assessment framework has been strengthened to include case studies and other tools designed to demonstrate professional competence. The CPD requirements remain aligned with IES 7, requiring 120 hours over a three-year rolling period.

KoR also reports that it operates a monitoring system for both initial professional development, particularly the practical experience component, and CPD requirements for its members. In addition, it monitors developments arising from international education standard-setting activities.

Given its shared responsibility in this area, KoR continues to cooperate with the Faculty of Economics, University of Belgrade, and other education providers to support the alignment of academic and professional pathways with the IES and to help ensure an appropriate pipeline of candidates for the profession.

KoR is encouraged to continue implementing its plans to strengthen competency-based approaches in line with the latest IES requirements, particularly the revisions to IES 2, 3, 4, and 8, which emphasize learning outcomes, information and communications technologies competencies, and professional skepticism. KoR may also consider using IFAC’s IES Checklist and Accountancy Education E-Tool to further assess alignment and support engagement with universities, members, and the MoF.

Current Status: Execute

The Law on Auditing of 2019 requires the application of International Standards on Auditing (ISA) for statutory audits in Serbia, as translated into Serbian and promulgated by the Ministry of Finance (MoF). As of the latest publicly available information, the 2016–2017 International Auditing and Assurance Standards Board (IAASB) Handbook remains the version formally promulgated by the MoF for application in the jurisdiction.

The Serbian Association of Accountants and Auditors (SAAA) is responsible for the translation of auditing standards in line with IFAC’s Translation Policy and has translated several IAASB Handbook versions over the years.

The Chamber of Authorized Auditors of Serbia (KoR), while having no direct responsibility for the adoption of ISA, supports the implementation of the standards through the education and training of its members. KoR organizes and delivers courses on ISA to strengthen members’ understanding and application of the standards. It also reports having processes in place to ensure that both initial professional development (IPD) and continuing professional development (CPD) materials incorporate topics related to new and revised standards.

Through its quality assurance review system, KoR identifies common issues in the application of ISA and uses these findings to design targeted CPD programs to support members in addressing deficiencies and strengthening audit quality.

The 2022 IAASB Handbook includes significant revisions, including updates to ISA 540, ISA 315, the quality management standards, and ISA 600 (Revised). Although KoR is not responsible for translation or promulgation, given that its membership consists solely of auditors, it is encouraged to continue advocating, where possible, for the timely translation and approval of the latest standards by the MoF.

To further strengthen alignment with SMO 3, KoR is encouraged to focus on supporting the timely legal adoption of the post-2018 ISA Handbook, continue developing targeted training and implementation guidance on the latest revised standards, and reflect these advocacy and member-support efforts more explicitly in its SMO Action Plan, including examples of outreach with the MoF and SAAA and follow-up actions arising from QA review findings.

Current Status: Execute

The Law on Auditing of 2019 authorizes the Chamber of Authorized Auditors of Serbia (KoR) to establish ethical requirements for statutory auditors, either through the adoption of the International Code of Ethics for Professional Accountants (including International Independence Standards) issued by the International Ethics Standards Board for Accountants (IESBA) or through its own requirements.

KoR has adopted the latest version of the IESBA Code for application by its members and maintains established processes to update its ethical requirements in line with revisions issued by IESBA.

KoR supports implementation through regular inclusion of ethics-related topics in its continuing professional development offerings and through targeted communication to members on international and national developments in the area of ethics and independence.

Compliance with the Code is monitored and enforced through KoR’s quality assurance review system and its investigative and disciplinary framework. Members of KoR’s Ethics Board are updated annually on revisions to the Code and related developments.

KoR maintains well-established and ongoing processes to support implementation, monitoring, and continuous updating of ethical requirements and therefore is assessed as Sustain for SMO 4.

Current Status: Sustain

Cash-basis International Public Sector Accounting Standards (IPSAS) were adopted in Serbia through government decision, and the Ministry of Finance (MoF) is leading the jurisdiction’s transition toward accrual-based IPSAS by 2030. This reform trajectory is reflected in the IFAC/CIPFA International Public Sector Financial Accountability Index and the World Bank Centre for Financial Reporting Reform (CFRR) PULSAR reports.

The Chamber of Authorized Auditors of Serbia (KoR) has no direct responsibility for the adoption or implementation of IPSAS in Serbia.

KoR reports that it has considered ways to support the objectives of SMO 5 and, where opportunities arise, may engage in policy dialogue and promote awareness of IPSAS to relevant government institutions through presentations and meetings. However, given its mandate, membership composition, and the legal and regulatory framework in Serbia, KoR does not consider a more direct role in public sector accounting matters to be feasible at this time.

Given the nature of its mandate and the absence of direct responsibility in this area, KoR is assessed as Sustain for SMO 5.

Current Status: Sustain

Under the Law on Auditing of 2019, as amended, the Chamber of Authorized Auditors of Serbia (KoR) is involved in the investigative and disciplinary (I&D) framework for statutory auditors, together with the Ministry of Finance (MoF) and the Audit Public Oversight Board (APOB).

The law requires KoR to inform APOB, the MoF, the Police, the Public Prosecutor, and the Ministry of Justice regarding the involvement of its members in crimes and other offenses.

KoR has established a dedicated Investigation and Discipline Committee, which conducts investigations and makes disciplinary recommendations to the Council for approval. The MoF retains final authority to impose corrective and disciplinary measures on licensed statutory auditors and audit firms.

KoR reports that it has processed more than 30 cases, with disciplinary measures referred to APOB and the MoF where required.

KoR has been operating its I&D system since 2013 and has made significant improvements following its assessments against SMO 6 in 2015 and 2018. Previously, complaints were handled through the Ethics Committee and quality assurance findings were escalated separately through the Quality Assurance Committee. KoR has since strengthened the framework by establishing distinct and separate investigation and disciplinary committees, formally linking quality assurance review findings to disciplinary procedures, and enhancing public interest considerations within the process.

KoR reports that committee membership currently consists solely of KoR members. While this does not yet fully align with SMO 6 best practice, particularly regarding the inclusion of non-professionals, KoR has demonstrated meaningful progress in strengthening the effectiveness and credibility of its I&D framework.

To further strengthen alignment with SMO 6, KoR is encouraged to continue reviewing ways, where legally feasible, to incorporate non-professional participation into its I&D mechanisms, such as the inclusion of legal or independent public interest representatives on an ad hoc or standing basis. Continued engagement with the MoF to further align procedures with international best practices is also encouraged.

Current Status: Review & Improve

The Ministry of Finance (MoF) is responsible for the adoption, promulgation, and translation of accounting standards in the Republic of Serbia in accordance with the Law on Accounting of 2019. The MoF has adopted International Financial Reporting Standards (IFRS), as translated into Serbian, for the preparation of the financial statements of large entities and public interest entities (PIEs) as defined in the law. It has also adopted IFRS for Small and Medium-sized Entities (IFRS for SMEs) for application by small and medium-sized entities, while medium-sized entities may elect to apply full IFRS.

The Chamber of Authorized Auditors of Serbia (KoR) reports that it is an active participant in policy dialogue relating to corporate sector accounting standards in Serbia, including engagement with the MoF, the Chamber of Commerce, and universities, and provides comments on draft accounting legislation.

KoR also contributes to the IFRS and IFRS for SMEs translation process through its participation in the MoF’s translation review committee.

In addition, KoR supports implementation of the standards through its initial professional development (IPD) and continuing professional development (CPD) programs. It also provides regular updates to members on international developments in financial reporting and changes to the standards.

The latest IFRS Accounting Standards include subsequent revisions and updates beyond the versions currently formally translated and effective in the jurisdiction.

As feasible, and as part of its role on the MoF translation committee, KoR is encouraged to continue advocating for and supporting the timely translation and promulgation of the latest IFRS Standards, while continuing to strengthen implementation support for members. KoR may also consider including more recent and specific examples of its implementation support activities, technical guidance, and advocacy efforts within its SMO Action Plan to further demonstrate progress in this area.

Current Status: Review & Improve