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Chamber of Hungarian Auditors

Member | Established: 1997 | Member since 1992

The MKVK was established in 2008 by the Act LXXV of 2007 on the Chamber of Hungarian Auditors, the Activities of Auditors, and on the Public Oversight of Auditors. The act prescribes that membership of the MKVK is mandatory for all auditors in the jurisdiction along with the institute’s responsibilities. The MKVK is responsible for (i) providing high-quality services and developing auditors’ professional knowledge and competence on a continuous basis; (ii) applying and observing national auditing standards and principles; (iii) adopting professional and ethical standards of behavior; (iv) issue certificates and register statutory auditors; (v) make arrangements for operating the system of quality assurance in connection with statutory audits; (vi) monitor the activities of auditors and audit firms and take the measures necessary upon learning of a registered statutory auditor or audit firm being engaged in any unlawful activity or conduct, or of any infringement of the Chamber’s statutes or the Chamber’s rules of self-governance; and (vii) promote public recognition of the profession, allowing auditors to help achieve Hungary’s economic objectives.  In addition to being an IFAC Member, the MKVK is also a member of Accountancy Europe. 

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Statements of Membership Obligation (SMO)

The Statements of Membership Obligations form the basis of the IFAC Member Compliance Program. They serve as a framework for credible and high-quality professional accountancy organizations focused on serving the public interest by adopting, or otherwise incorporating, and supporting implementation of international standards and maintaining adequate enforcement mechanisms to ensure the professional behavior of their individual members.

Last updated: 10/2023
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SMO Action Plan

Status of Fulfillment by SMO

  • SMO 1: Quality Assurance

    The Act LXXV of 2007 on the Chamber of Hungarian Auditors, the Activities of Auditors, and on the Public Oversight of Auditors establishes the creation of a quality assurance (QA) review system for all mandatory audits in the jurisdiction. The Auditors’ Public Oversight Authority (the Authority) carries out reviews for auditors of public interest entities every three years while inspections of non-PIEs are done every six years by the MKVK.

    The MKVK has operated its QA review system since 2003 and reports that it has adopted all relevant standards and to align with international best practices, it has reviewed, assessed, and updated its QA review system to align with SMO 1 requirements. Additionally, with the passage of the EU Audit Reform in 2016, the MKVK states that the QA review system has been further strengthened and linked to a larger range of possible sanctions.

    The MKVK has translated ISQM 1, 2, and ISA 220 (revised). The implementation date for these standards is January 1, 2024 and on-site inspections of systems of quality management will begin in 2025. MKVK expects to update current QA materials in accordance with the QM standards. To help members with implementation, training on QM standards has been included in the mandatory CPD program in 2022 and 2023, and further implementation guidance was prepared by MKVK’s Expert Committee and made available through the institute’s website.

    The institute has a Quality Control Committee that is responsible for the operations of the QA review system. The QCC prepares an annual QA plan that is then made publicly available on the MKVK’s website. After each cycle, the QCC will write and publish an annual report on the results and findings of the QA reviews. Based on these findings, the QCC will recommend training topics to the institute’s Education Committee for inclusion in educational materials and courses. The QCC will also prepare guidance to support the pre-inspection process, such as questionnaires, toolkits, a QA manual, as well as the post-inspection process with materials on common challenges and significant changes to standards.

    MKVK also has an electronic sample selection system and enhanced the data collection and analysis between its annual reporting system and the sample selection system. The new software supports the QA review process by storing electronic questionnaires and on-site inspection forms and can provide statistics and analytics to improve and target training and educational initiatives.

    In 2023, requirements for QA reviewers were updated. Reviewers must take an exam every 3 years and receive a score of at least 60%. The MKVK and the QCC will prepare reviewers for the exam at the mandatory, annual QCC conference. Additionally, the QCC will also interview potential reviewers as part of the evaluation and competency screening process. Further, at the request of the Authority, the QCC has also implemented a peer review of the inspection reports submitted by QA reviewers. The QCC evaluates the work of the QA reviewer and receive feedback from the Authority. If there are deficiencies identified, the reviewer may not be eligible to undertake future inspections. With the introduction of QM standards, reviewers will be provided with detailed training in 2024 and 2025.

    Current Status: Sustain

  • SMO 2: International Education Standards

    The Act LXXV of 2007 on the Chamber of Hungarian Auditors, the Activities of Auditors, and on the Public Oversight of Auditors establishes the initial and continuing professional development (IPD and CPD) requirements for auditors in Hungary. The MKVK’s Committee for the Qualification of Chartered Certified Statutory Auditors (OKKT) and the Education Committee are authorized by law to determine the requirements of and implement all aspects of educational programming (initial education, initial exams, final exams, and continuing education) that leads to the designation.

    As part of maintaining an auditor’s qualification, in 2018, the MKVK increased CPD obligations for its members to 120 hours over three years in order to align with the IES 7. The annual CPD programming of the MKVK is approved by the Auditors’ Public Oversight Authority. The institute has implemented several mechanisms to ensure that members have a wide range of educational and training opportunities to fulfill their CPD requirements. First, it has established its own, separate training company, the Chamber’s Centre for Education Ltd. Two, the institute maintains a list of approved education providers from whom members can earn CPD credit. Lastly, the MKVK has introduced e-learning options as well to support long-distance learning. MKVK has enhanced its e-learning to include with short tests embedded within videos and written professional materials provided in PDF.

    The MKVK’s Education Committee reviews programming, preparation of materials, and tendering procedures to ensure quality training. The committee will also review feedback on lecturers and host train-the-trainer sessions. In 2021, the committee made changes to both education and examinators for auditors to assess and measure competencies – in line with the latest IES requirements. Previously candidates would prepare and defend an audit thesis as part of a final examination process. Moving forward, the MKVK has implemented a written and verbal competency exam. The written exam assesses the application of audit standards and requires candidates to prepare a practical example in 60 minutes using any technical tools, resources, publications, and/or standards. Subsequently, the candidate must present and explain to the examination committee regarding the practical example developed and the solution reached. The candidate must respond to questions of the committee related to audit activity and satisfactorily demonstrate theoretical and practical knowledge and other soft skills.

    Furthermore, MKVK indicates that it has specifically addressed recent revisions to IES 2, 3, 4, and 8 by developing 8 courses related to competency areas and learning outcomes in accordance with IES 2. Mainly these are:

    • importance of risk assessment in audit;
    • IT skills’ development in audit software and other supporting tools and methods; and
    • capability to understand and apply the new regulations in the audit work and comply with all the requirements.

    To address IES 3, MKVK expects auditors to obtain professional skills through both education and professional experience and demonstrate these skills in the final examination process as described above.

    MKVK carries out a strategic review of its education requirements and the IES requirements every 3 years.

    Current Status: Sustain

  • SMO 3: International Standards on Auditing

    Auditing standards outlined in Act LXXV of 2007 on the Chamber of Hungarian Auditors, the Activities of Auditors, and on the Public Oversight of Auditors are applicable in Hungary. Audits must be conducted in accordance with auditing standards that have generally been accepted internationally—further defined as ISA issued by the IAASB—that are prepared and issued by the Hungarian Chamber of Auditors (MKVK) with approval by the Auditors’ Public Oversight Authority. The MKVK has issued the Hungarian National Audit Standards (MNKS), which are Hungarian translations of ISA. The MKVK translated the 2020 IAASB Handbook, inclusive of ISA 315 (revised), ISQM 1, ISQM 2, ISA 220 (revised) and is translating ISA 600 (revised) (in the 2021 IAASB Handbook) in Q2 2023. ISQM, 1, 2 ISA 220, and ISA 600 will have an implementation date of January 1, 2024.

    In addition to the timely translation of standards, the MKVK organizes annual activities to support its members with the application and implementation of the standards. Through its website, the MKVK provides members with access to a multitude of resources, templates, and other guidance on application of the standards. The institute also issues a monthly Auditor’s Journal to further supplement website announcements. Finally, the MKVK regularly organizes trainings on the standards and hosts discussions between members and the Quality Control Committee to share experiences with the aim of improving members’ quality of audit work.

    Current Status: Sustain

  • SMO 4: Code of Ethics for Professional Accountants

    The Act LXXV of 2007 on the Chamber of Hungarian Auditors, the Activities of Auditors, and on the Public Oversight of Auditors stipulates that the Hungarian Chamber of Auditors (MKVK) may adopt the rules of professional ethics, taking into consideration the Code of Ethics of the IESBA. These rules are subject to the review and approval of the Auditors’ Public Oversight Authority. The MKVK has developed a Hungarian Code of Ethics which is harmonized with the IESBA Code of Ethics. The International Code of Ethics is to apply to any issues not covered by the MKVK’s Code of Ethics. The MKVK translated the 2018 International Code into Hungarian and published this in 2020. The MKVK is translating the 2022 International Code in Q3 2023 with an effective implementation date of January 1, 2024.

    In addition to the timely translation and publication of amendments to the IESBA Code of Ethics, the MKVK provides annual activities to support its members with the application and implementation of ethical requirements. It will incorporate any changes to the ethical requirements into its training materials and review its CPD programming with the goal of providing practical assistance to members.

    Current Status: Sustain

  • SMO 5: International Public Sector Accounting Standards

    In 2013, the Hungarian Ministry of National Economy (MNE) issued Government Order No. 74/2013 to begin reforming public sector accounting. The legislation introduced new amendments and regulations to accompany the standards outlined in within Act C of 2000 on Accounting (the Accounting Act) for public sector entities. The reforms intended to transition public sector entities to an accrual-based accounting system that, according to the European Commission, aligns with the IPSAS. Public sector entities currently report on a partial-accrual basis using national standards. However, the Hungarian Chamber of Auditors (MKVK) states that the Hungarian government has no plans to directly adopt IPSAS.

    With no legal authority to adopt standards in this area, the MKVK reports that it promotes the benefits of IPSAS adoption to the MNE and includes the topic within its annual conference and online courses. The institute also indicates that it will inform the MNE about work undertaken by the IPSASB and stands ready to offer support should the MNE decided to adopt and implement IPSAS.

    Current Status: Sustain

  • SMO 6: Investigation and Discipline

    The Act LXXV of 2007 on the Chamber of Hungarian Auditors, the Activities of Auditors, and on the Public Oversight of Auditors outlines the roles of the audit oversight entity—the Auditors’ Public Oversight Authority (the Authority)—and the professional accountancy organization—the Hungarian Chamber of Auditors (MKVK) in regards to investigative and disciplinary (I&D) procedures of auditors. The MKVK’s I&D procedures are applicable for non-PIE auditors & firms and are subject to the oversight of the Authority. The Authority handles cases related to auditors and firms of PIEs. The MKVK states that both enforcement systems in the jurisdiction meet the SMO 6 best practices.

    The MKVK has established a Disciplinary Committee that receives complaints of any violations or misconduct. In disciplinary proceedings, the MKVK is represented by the disciplinary commissioner. The disciplinary commissioner is vested with responsibilities to enforce the provisions of the relevant legal regulations, and the provisions of the Chamber’s statutes and rules of self-governance. The disciplinary commissioner conducts—possibly involving other experts if necessary—the investigation. Upon completion of the investigation process, the disciplinary commissioner reviews the evidence and decides whether to initiate the disciplinary proceedings. Acting on the disciplinary commissioner’s initiative, the President of the Chamber orders the opening of the disciplinary proceedings in writing. The Disciplinary Committee will conduct the disciplinary proceeding and impose sanctions as necessary. The disciplinary commissioner has no voting right in the decision-making process of the Disciplinary Committee. Individuals may appeal any decisions to the Presidium of the Chamber. If an appeal at this level is unsuccessful, individuals may bring the decision to an ordinary court within 30 days.

    The MKVK’s Disciplinary Committee will regularly publish decisions, observations, and resolutions throughout the year on its website in order to raise awareness of members’ responsibilities and consequences of non-compliance as well as strengthen public trust in the regulation of the profession. MKVK’s enforcement system has address over 70 cases in 2021 and 2022 – mostly related to non-compliance with CPD and poor QA review results.

    Current Status: Sustain

  • SMO 7: International Financial Reporting Standards

    Accounting and bookkeeping regulations are contained within Act C of 2000 on Accounting (the Accounting Act) and its statutes as issued by the Ministry for National Economy (MNE). The Accounting Act is in effect Hungarian GAAP. The MNE has harmonized accounting regulations with the EU regulations that require the application of IFRS as endorsed by the European Commission (EU-endorsed IFRS) for financial statements of companies whose securities trade in a regulated securities market, for individual accounts of Hungarian companies, such as financial institutions, companies whose securities trade in the European Economic Area, and companies subject to mandatory audits, and permitted optional application of EU-endorsed IFRS for consolidated accounts of all companies within the scope of the Accounting Act that do not trade in the regulated market.

    With no legal authority to adopt accounting standards in this area, the MKVK indicates that it cooperates with the MNE regarding IFRS adoption and implementation issues. For example, the MKVK had representatives participate in working groups that led to the 2015 resolution expanding IFRS application in the jurisdiction.

    The institute also reports that it raises awareness of the standards and supports implementation by including IFRS within its continuing professional development programs, its annual conference, and online course materials. The MKVK will also include IFRS-related technical issues and news within its Auditor’s Journal. Lastly, the MKVK has included a selection of “IFRS Experts” within its Committee of Technical Experts that can help address IFRS technical inquiries as they are raised by MKVK members.

    Current Status: Sustain


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