In 2010, the CAC, under the oversight of the Audit Public Oversight Committee, established a quality assurance (QA) review system that fulfils the requirements of SMO 1 and has established processes to ensure that...

In 2010, the CAC, under the oversight of the Audit Public Oversight Committee, established a quality assurance (QA) review system that fulfils the requirements of SMO 1 and has established processes to ensure that compliance is maintained. Since 2011, the CAC has been conducting full monitoring visits and detailed reviews of the audit work carried out by registered audit firms and independent auditors. At the end of June 2015, the CAC finished its fourth annual QA plan, as well as the first three-year review cycle of QA reviews of audit firms that perform audits of financial statements of public interest entities (PIEs). During these four years, the CAC’s QA team reviewed the quality of work of 223 audit firms, including 80 audit firms providing services to PIEs.

The CAC has established ongoing processes to review the effectiveness of the implementation of the QA review system. In its 2015 SMO Action Plan update, the CAC reports that, during the five-year period of active QA work and detailed analysis of QA findings, weaknesses, and strengths of the current QA system, it identified further activities to enhance the QA methodology and the efficiency of the system.

The CAC develops and presents training modules for its members and the QA reviewers about the most significant and most frequent issues identified during the QA reviews of audit firms. The CAC’s continuing professional development program covers the requirements of ISQC 1 and relevant ISA.

With Croatia implementing the new Audit Directive, the CAC is encouraged to work with other stakeholders to ensure that the resulting QA system continues to be aligned with the requirements of SMO 1.

The CAC’s objective in this area is to achieve full compliance with the requirements of IESs and has already incorporated the main elements of the IESs into the educational program for auditors, such as continuing...

The CAC’s objective in this area is to achieve full compliance with the requirements of IESs and has already incorporated the main elements of the IESs into the educational program for auditors, such as continuing professional development for auditors, a practical experience requirement, and professional examinations. With the assistance of the Association of Chartered Certified Accountants, the CAC has been working on developing the structure and content of its three-year initial professional development syllabus—necessary for meeting pre-qualification requirements—in order to align it with the IES requirements. The implementation of the plan has, however, been delayed to December 2016. The CAC also plans to have the revised IESs translated by June 2016. As well, the CAC is working with the Audit Public Oversight Committee on an analysis of the differences between IESs and national education requirements, with the aim of developing proposals for amending certain aspects of its education requirements.

The CAC is encouraged to proceed with its plans to review the national educational requirements against those of the revised IESs with a view to close the remaining gaps.

ISA are adopted by law in Croatia, with the overall responsibility of implementing and translating the standards lying with the CAC, under the oversight of Audit Public Oversight Committee. Although the CAC has...

ISA are adopted by law in Croatia, with the overall responsibility of implementing and translating the standards lying with the CAC, under the oversight of Audit Public Oversight Committee. Although the CAC has established processes to incorporate new and revised ISA on an ongoing basis, a time lag exists between the issuance of new and revised ISA and their translation for application in Croatia.

The CAC proactively assists its members with the implementation of auditing standards by organizing courses and workshops to educate certified auditors about ISA and new auditing requirements. In addition, since 2010, the CAC has been holding annual symposiums on ISA topics to promote proper understanding of how to use ISA in practice. The CAC also ensures that initial and continuing professional development programs incorporate the most recent amendments to the international pronouncements and that the implementation of ISA is a subject of quality assurance reviews.

The CAC is encouraged to consider ways to reduce the time lag between the issuance of new IAASB pronouncements and their translation for application in Croatia. The CAC may also consider participating in the international standard-setting process through public consultations initiated by the IAASB and providing comments on IAASB Exposure Drafts.

Under the Audit Act, all auditors in Croatia are required to abide by the IESBA Code of Ethics as translated by the CAC. The CAC adopted and translated the 2010 IESBA Code of Ethics. The adoption of the subsequent...

Under the Audit Act, all auditors in Croatia are required to abide by the IESBA Code of Ethics as translated by the CAC. The CAC adopted and translated the 2010 IESBA Code of Ethics. The adoption of the subsequent version of IESBA Code of Ethics, originally planned for November 2014, has been deferred to April 2016.

The CAC reports that it works with auditors to assist them in the consistent application of the Code to promote ethical conduct in all aspects of business and management levels. The CAC reports that it organizes panels on the implementation of European Union requirements, initiates panels and discussions with representatives of the accounting profession and the relevant institutions on ethical issues, and ensures that Initial and continuing professional development programs incorporate the most recent amendments to the international pronouncements. Additionally, compliance with ethical requirements is a subject of quality assurance reviews and a consideration when investigating complaints.

The CAC is encouraged to take steps to reduce the delays in the translation of the most recent versions of the IESBA Code and to consider, if deemed relevant, more active involvement in the international standard-setting process by participating in the public consultations initiated by the IESBA and providing comments on IESBA Exposure Drafts. Indicating specific activities planned in the identified areas would also improve the quality of CAC’s SMO Action Plan.

Although it has no responsibility for the adoption of public sector accounting standards, the CAC’s objective is to promote the adoption of IPSAS to the government through presentations and meetings with the Ministry...

Although it has no responsibility for the adoption of public sector accounting standards, the CAC’s objective is to promote the adoption of IPSAS to the government through presentations and meetings with the Ministry of Finance and the State Audit Office. In 2011–2012, a number of meetings and consultations were held with the relevant stakeholders. No information on subsequent actions is available.

The CAC should consider, if deemed applicable, working with the government and other stakeholders to raise awareness about IPSAS and to promote the adoption of the standards for application in Croatia. To this effect, a strategy and a work program need to be developed.

In 2011, the CAC established an investigative and disciplinary (I&D) system based on the requirements of SMO 6 and has been operating the system, with around 20 cases reviewed per year. All final disciplinary...

In 2011, the CAC established an investigative and disciplinary (I&D) system based on the requirements of SMO 6 and has been operating the system, with around 20 cases reviewed per year. All final disciplinary decisions are published on the CAC web site. The CAC reports that it is considering amending the existing I&D requirements to change the subject of the current I&D system from audit firms to individual practitioners in the firms.

The CAC’s SMO Action Plan suggests that there may be some areas where further improvements in its I&D system are needed. The CAC is encouraged to analyse the extent of compliance of CAC’s I&D system with the revised requirements of SMO 6 and share the results and plans to address any gaps in its Action Plan with IFAC’s Compliance staff.

Having no direct responsibility for the adoption of accounting standards, the CAC nevertheless actively participates in the public consultations at the jurisdictional level and collaborates with the Ministry of Finance...

Having no direct responsibility for the adoption of accounting standards, the CAC nevertheless actively participates in the public consultations at the jurisdictional level and collaborates with the Ministry of Finance (MoF), the Financial Reporting Standards Board (FRSB), and the Croatian Association of Accountants and Financial Experts (CAAFE) on reviewing changes to EU legislation and making consequent changes to the national legislation.

To support its members and the accountancy profession as a whole with the implementation of accounting standards, the CAC organizes (in collaboration with CAAFE) roundtables, workshops, and conferences on current IFRS-related topics. Since 2010, the CAC has been updating annually its guidance on the public disclosure of financial statements. This guidance is intended to provide auditors with technical assistance in the implementation of the Accounting Act and regulations regarding the content of financial statements. In cooperation with the MoF, FRSB, and CAAFE, the CAC is also involved in conducting studies that examine the effect of the implementation of particular standards and interpretations for use in the EU. It also promotes the inclusion of IFRS in the curricula for continuing professional development courses.