Institute of Certified Public Accountants of Bulgaria

ICPAB shares responsibility for the quality assurance review system in Bulgaria with the Commission for Public Oversight of Statutory Auditors (CPOSA) and is responsible under the Independent Financial Audit Act of 2016 for quality assurance reviews of audits of non-public interest entities.

ICPAB has been actively supporting the implementation of the QA review system since its establishment. Each year, training is provided to CPOSA inspectors and ICPAB reviewers on quality management standards and other aspects of quality assurance reviews prior to inspections. ICPAB collaborates with CPOSA to support a robust QA review system that continues to meet the requirements of SMO 1 and, where appropriate, participates in joint review activities. ICPAB also provides its annual QA review report to CPOSA.

ICPAB supports its members’ understanding and implementation of quality management standards and their ability to perform high-quality audits through its continuing professional development program. The institute distributes the annual QA review plan and offers training, including in collaboration with the Institute of Chartered Accountants in England and Wales, on quality management standards and quality assurance processes. It also provides implementation guidance and has translated IFAC’s Guide to Quality Management for Small- and Medium-Sized Practices to support consistent application.

ICPAB has entered into an agreement with the Institute of Chartered Accountants in England and Wales to translate and publish quality assurance guidance to further support audit firms and sole practitioners in implementing policies and procedures aligned with quality management standards. These materials are made available to members.

Since 2021, ICPAB has translated the new quality management standards and organized training on auditors’ responsibilities under ISQM 1 and ISQM 2. The Quality Review Committee continues to enhance reviewer training, including a focus on evaluating firms’ systems of quality management.

Current Status: Sustain

ICPAB reports that it strives to ensure that national education requirements comply with the International Education Standards (IES), EU Directives, and national legislation. The Independent Financial Audit Act of 2016 outlines the requirements for initial professional development (IPD) and continuing professional development (CPD) for certified public accountants and registered auditors.

Responsibility for IPD is shared between Bulgarian universities, as stipulated in the Higher Education Act, and ICPAB under the oversight of the Commission for Public Oversight of Statutory Auditors (CPOSA). IPD requirements include completion of a university degree, relevant professional experience, a professional accountancy education program, and successful completion of professional examinations administered by ICPAB. ICPAB’s Education and Methodological Committee, comprising university professors and ICPAB members, is responsible for developing educational programming for candidates. ICPAB has also established cooperation agreements with international professional accountancy organizations, including ICAEW and ACCA, and is working with ICAEW and the University of National and World Economy to introduce a joint accreditation program aimed at strengthening competency-based professional education.

Practical experience requirements are monitored through a combination of candidate self-declarations, submission of documented experience to ICPAB, assessments by mentors or employers, and a structured mentoring system.

CPOSA oversees ICPAB in organizing and administering CPD for certified public accountants and registered auditors. ICPAB has established CPD requirements of 40 hours annually and maintains CPD Rules and Procedures aligned with IES 7 (2015). ICPAB reports that it offers between 60 and 70 CPD courses annually and collaborates with external training providers to expand available learning opportunities. Compliance with CPD requirements is monitored through individual electronic records and annual reporting by members, with sanctions applied in cases of non-compliance, including fines, suspension of practicing rights, and removal from the register in cases of repeated violations.

ICPAB has translated the IES, and the 2017 Handbook is available in Bulgarian. However, further actions are needed to demonstrate full alignment with the latest IES in effect as of the time of the assessment.

ICPAB is encouraged to continue reviewing its education framework against the latest IES requirements, including the revisions to IES 2, 3, 4, and 8 effective from the 2019 Handbook, and to strengthen the incorporation of competency-based approaches, information and communications technology skills, and professional skepticism into IPD and CPD programs. ICPAB may also consider completing the IFAC IES Checklist, utilizing the IFAC Accountancy Education E-Tool, and translating the most recent IES Handbook to support ongoing alignment and implementation.

Current Status: Review & Improve

According to Article 9 of the Independent Financial Audit Act of 2016, audits must be conducted in accordance with International Standards on Auditing (ISA) and other pronouncements issued by the International Auditing and Assurance Standards Board (IAASB). ICPAB supports the implementation of ISA through ongoing translation and dissemination of IAASB standards and pronouncements and maintains a formal translation process. As of the time of the assessment, ICPAB reports that the most recent version of the standards has been translated and made available to its members.

ICPAB provides continuing professional development activities on ISA-related topics, offering approximately 17 to 20 courses annually. These activities include courses and seminars focused on new and revised standards, as well as practical implementation support for members.

Through its established processes for translation, dissemination, and training, ICPAB maintains ongoing support for the effective implementation of ISA and continues to fulfill its obligations under SMO 3.

Current Status: Sustain

Article 10 of the Independent Financial Audit Act of 2016 requires application of the International Code of Ethics for Professional Accountants (including International Independence Standards) as issued by the International Ethics Standards Board for Accountants (IESBA) for registered auditors. The Code is adopted and implemented by the Institute of Certified Public Accountants in Bulgaria (ICPAB) under the oversight of the Commission for Public Oversight of Statutory Auditors (CPOSA). Furthermore, ICPAB requires its members, including both registered auditors and certified public accountants, to comply with the Code.

ICPAB’s Ethics Council has established an ongoing process for reviewing, translating, and adopting new and revised pronouncements issued by the IESBA. As of the time of the assessment, the latest version of the International Code of Ethics for Professional Accountants has been adopted and is applied to all professional accountants in the jurisdiction.

ICPAB monitors new and revised pronouncements issued by the IESBA and seeks to ensure timely translation and dissemination to its members. It also engages members in the review process by obtaining feedback on new and revised requirements to assess their impact on implementation.

To support implementation, ICPAB organizes continuing professional development activities and training programs on ethics, including dedicated sessions on professional ethics and independence for candidates seeking the registered auditor qualification. Additional implementation guidance is made available to members through its internal platforms.

Through these established processes for adoption, translation, and member support, ICPAB maintains ongoing fulfillment of its obligations under SMO 4.

Current Status: Sustain

The Ministry of Finance is responsible for establishing public sector accounting standards in Bulgaria and has adopted partial accrual-based national accounting standards for application in the public sector. Public sector financial reporting is therefore based on national standards rather than International Public Sector Accounting Standards (IPSAS).

ICPAB does not have direct responsibility for the adoption of public sector accounting standards. Within the scope of its mandate, ICPAB supports the advancement of public sector financial reporting by advocating for the adoption of IPSAS through engagement with the Ministry of Finance and participation in public consultations. ICPAB has also contributed to discussions on public sector accounting reforms through collaboration with national stakeholders, including participation in initiatives with the Ministry of Finance and the National Audit Office to assess the existing accounting framework and accrual approaches.

ICPAB has undertaken activities to support awareness and understanding of IPSAS. It established a working group within its Education and Methodology Committee to support translation efforts and has translated the Conceptual Framework for General Purpose Financial Reporting by Public Sector Entities into Bulgarian. The working group includes representatives from the profession, academia, and government.

ICPAB continues to use its best endeavors to fulfill its obligations under SMO 5 and is encouraged to continue its advocacy and support for the adoption and implementation of accrual-basis IPSAS. Further actions could include progressing the translation of the most recent IPSAS Handbook and continuing to leverage available IFAC resources to support awareness-raising and capacity building.

Current Status: Sustain

ICPAB shares responsibility for investigation and discipline (I&D) of the profession with the Commission for Public Oversight of Statutory Auditors (CPOSA). In accordance with the Independent Financial Audit Act of 2016, CPOSA has established an I&D system for registered auditors, with the support and cooperation of ICPAB. ICPAB cooperates with CPOSA in relation to disciplinary actions involving its members.

With respect to its direct responsibilities, ICPAB has established an I&D system for its members. Cases identified by the Ethics Council, the Quality Control Committee, or the Supervisory Board are referred to the Disciplinary Council, with notification to ICPAB’s Board. Disciplinary procedures and sanctions are defined in the Independent Financial Audit Act of 2016 and ICPAB’s by-laws. ICPAB reports that its system incorporates most of the requirements of SMO 6; however, a gap remains in relation to the composition of the disciplinary committee, which consists solely of professional accountants.

ICPAB periodically reviews its I&D mechanisms and communicates relevant processes and procedures to its members.

To progress toward full fulfillment of SMO 6, ICPAB is encouraged to consider including non-professional accountants in its disciplinary council to strengthen public interest representation and enhance perceptions of independence, which are important to maintaining public confidence in the system.

Current Status: Review & Improve

The Accountancy Act of 2015 stipulates the accounting standards applicable in Bulgaria and requires the application of International Financial Reporting Standards (IFRS) as endorsed by the European Union (EU) and published in the EU Official Journal. As of January 1, 2017, all public interest entities are required to apply EU-endorsed IFRS, while other entities are required to apply National Accounting Standards established by the Ministry of Finance.

ICPAB does not have authority over the adoption of IFRS in Bulgaria. Within the scope of its mandate, it supports the implementation of IFRS among its members and candidates by disseminating information on new and revised standards through continuing professional development activities, publications, and its website. ICPAB reports that it organizes approximately 20 to 22 training courses and seminars annually on IFRS-related topics. It has also entered into an agreement with the IFRS Foundation to support the translation of IFRS into Bulgarian.

ICPAB is also working toward strengthening monitoring of members’ application of IFRS through its quality assurance review system.

Through these ongoing activities, ICPAB supports the effective implementation of IFRS and maintains fulfillment of its obligations under SMO 7. ICPAB may also consider engaging with the Ministry of Finance on the potential adoption of IFRS for SMEs to further support financial reporting by small and medium-sized entities in the jurisdiction.

Current Status: Sustain