Institute of Authorized Chartered Auditors of Albania
Member | Established: 1997 | Member since 2000
Institute of Authorized Chartered Auditors of Albania (IEKA) is a body of statutory auditors recognized by Law No. 10091 of 2009, Statutory Auditing and Organization of the Accounting Profession. IEKA is established under the status of a nonprofit association that groups together the authorized Chartered Auditors who exercise their profession in public practice independently under the status of a physical person or as part of an auditing firm. Membership in IEKA is mandatory for practicing auditors. IEKA is empowered to regulate the auditing profession under the oversight of the Public Oversight Board by conducting quality assurance reviews for non-public interest entities, translating and adopting International Standards on Auditing, and establishing an investigation and discipline system and ethical requirements for auditors.
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.
- SMO 1: Quality Assurance
Until 2016 IEKA shared the responsibility for conducting quality assurance (QA) reviews with the Public Oversight Board (POB), which had reviewed the quality of work of auditors of public interest entities (PIEs). However, with the changes introduced to the Law No. 10091 in 2016, the responsibility for conducting QA reviews was passed entirely to the POB, which may delegate the QAs for non-PIEs to IEKA.
IEKA has established and implemented a QA review system and has worked to bring the system in line with the requirements of SMO 1. In 2013, IEKA undertook a review of its QA system to ensure it complies with SMO 1 (revised 2012) and is linked to the quality control system. In 2013-2014 IEKA’s focus was on producing new requirements on quality control set in accordance with ISQC 1 and with the Law No. 10091. The quality control regulations were further updated in 2015. In 2016, as part of its SMO Action Plan update process, IEKA reported full compliance with SMO 1 and demonstrated that it has established processes to review and improve existing procedures on an ongoing basis. In 2016, IEKA also plans to further update its quality control and quality assurance regulations in line with the requirements of the amended Law No. 10091.
The institute also reports that it provides support to its members with the implementation of quality control standards and has also developed tools and conducted trainings for the reviewers to better understand QA review procedures and implement them in practice.
IEKA is encouraged to indicate in its SMO Action Plan the number of reviews conducted in the past several years, actions, if any, undertaken based on the results of the reviews. An update on the final set-up of the QA reviews in the jurisdiction resulting from the revision of the Law No. 10091 would also be beneficial.
- SMO 2: International Education Standards
IEKA, which oversees the implementation of the educational requirements for auditors that are established by law, reports that the requirements of IES have in general been adopted and actions are being undertaken to bring the educational requirements fully in line with those of IES.
IEKA has been especially proactive in working with universities to review the accounting professional education curricula. In the first quarter of 2014, as part of one of the components of the World Bank Road to Europe: Program of Accounting Reform and Institutional Strengthening project, IEKA, in cooperation and consultation with various interested parties and education stakeholders, prepared a framework for the education of accountants. The requirements for such a framework are reflected in the latest amendments to the Law No. 10091 and the challenge now lies in its effective implementation. The framework is based on the approach of IES, EU Statutory Audit Directive and ACCA. A program of study for all candidates entering the audit profession was completed in December 2015 and is pending implementation as of 2016. Other important initiatives are in the process of being implemented.
Following the completion of projects ongoing as of 2016, IEKA is encouraged to review the educational requirements for auditors in Albania against those of the revised IES and report on the conclusions of the review in its SMO Action Plan. It should also consider the need to participate in the international standard setting process by responding to Exposure Drafts issued by the IAESB and participating in other public consultations.
- SMO 3: International Standards on Auditing
With ISA adopted by law in Albania, IEKA, under a translation copyright agreement, translated and published the 2010 version of ISA and as of 2016 almost finalized the translation of the full set of ISA in existence as of December 2015.
IEKA continues to review and improve the ongoing processes to ensure timely translation of new and revised ISA. To join the forces and to improve the translation process, a joint committee was set up between IEKA and Society of Certified Accountants and Auditors of Kosovo with the main objective to implement the translation process of new or revised ISA as they become available. In addition, the committee has also translated both parts of the ISA Guide for SMEs.
IEKA continuously supports its members with the implementation of the standards by issuing implementation guidance, developing training activities, and disseminating information on the developments in the international standard-setting area. The institute so far has not participated in the IAASB public consultation process.
IEKA is encouraged to establish ongoing processes to ensure that the most recent ISA are applied in the country. It could also consider realizing its plans to participate in the international standard-setting process through providing comments to the IAASB exposure drafts and other public consultations.
- SMO 4: Code of Ethics for Professional Accountants
With the 2011 version of the IESBA Code adopted for application by IEKA members, IEKA plans to compare the existing Code with the revised IESBA Code of Ethics effective in 2015 and translate it for application in Albania. The implementation of the review, however, has been delayed, with the expected completion date of September 2014 moved to September 2016.
IEKA reports that it planned to introduce courses on ethical requirements into its initial professional development program to support its members; however, a decision was made to require a three-hour course instead. Ethical requirements are incorporated into training and examination materials and are included in the continuing professional development program.
IEKA is encouraged to consider establishing processes to minimize the time lag in the adoption of the most recent version of the IESBA Code, to consider providing more detailed information on the actions undertaken to support its membership with achieving and maintaining compliance with the Code of Ethics, and ways that international developments are disseminated to its membership. If deemed pertinent, IEKA may also consider participating in the international standard-setting by providing comments to the IESBA Exposure Drafts and other public consultations.
- SMO 5: International Public Sector Accounting Standards
With no responsibility for the adoption of public sector accounting standards in the country, IEKA reports that it supports the adoption of IPSAS in the jurisdiction and disseminates information on IPSAS to relevant authorities, although no formal plan has so far been established. The institute informs the Ministry of Finance (MoF) on the latest activities of the IPSASB, new IPSAS issued, and on trends in public sector accounting. It also provides training of public administration accounting staff in response to the MoF’s request. In addition, IEKA publishes information on the developments occurring in the field of public sector accounting via its website and the magazine. The institute also contributed to the translation of IPSAS into Albanian in 2007–2008.
IEKA is encouraged to consider its role in promoting the adoption of IPSAS to the regulators, and, if deemed relevant and practical, establish a formal plan to promote the adoption IPSAS to the relevant stakeholders.
- SMO 6: Investigation and Discipline
With the establishment of the Public Oversight Board (POB), the disciplinary function for auditors, including IEKA’s members, has been assigned to the POB. Prior to 2016, IEKA administered and I&D system since 2011, when it prepared a new regulation on the Disciplinary Committee which incorporated some of the requirements of SMO 6 in effect at the time and those of the Law No. 10091. Actions were undertaken to improve the system and in 2015, as part of its SMO Action Plan update process, IEKA reported full compliance with SMO 6.
In its 2016 SMO Action Plan, IEKA indicates that it disseminates information on the outcomes of the disciplinary actions undertaken by the POB through its website and annual reports and will work to review the I&D system following the changes introduced by the amendments to the Law No. 10091.
IEKA is encouraged to clarify the extent of compliance of the new system administered by the POB with requirements of SMO 6 as well as the role the institute will now play in the I&D of auditors. The institute should also consider promoting the establishment of the I&D system for the accountancy profession in general, including accountants, that is in line with the requirements of SMO 6.
- SMO 7: International Financial Reporting Standards
As IEKA has no direct responsibility for the adoption of accounting standards, it focuses on assisting the National Accounting Council (NAC)—the entity responsible for the setting accounting standards—in the process of adoption of national standards as well as translation and implementation of IFRS, which have been adopted for application in Albania for public interest companies, through its representation on the council.
In 2009, IEKA issued a convergence statement whereas it declared its intent to promote the adoption of IFRS without modification and to support the NAC in its standard-setting activities. In an ongoing manner, IEKA disseminates information on the international developments in the area, provides comments on the IASB Exposure Drafts, assists the NAC in drafting national accounting standards and circulating NAC’s Exposure Drafts, and contributes to the translation of IFRS, when needed.
IEKA also supports IFRSs implementation by its members by providing training, organizing seminars, and publishing articles in its magazine on the new and revised National Accounting Standards (NASs) and differences between the NASs and IFRS.
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