Society of Certified Accountants and Auditors of Kosovo
Member | Established: 2001 | Associate since 2003; Member since 2009
SCAAK is one of the oldest and well-recognized bodies in the region with a vast membership representing different sectors and institutions in Kosovo. SCAAK was established in May 2001 as an independent, self-regulated professional association of auditors, certified accountants, accounting technicians, and students. The SCAAK was recognized by the Kosovo Council for Financial Reporting as a licensed professional association in 2008 and until 2013 was the only recognized professional body. In addition to the certification of certified accountants, auditors, accounting technicians, the SCAAK certifies public sector accountants, insolvency specialists, and internal auditors.
SCAAK is a member of the IFAC, the Federation of Mediterranean Accountants (FCM), and the European Federation of Accountants and Auditors (EFAA). SCAAK is also represented in the IFAC PAO Development Committee, FCM Executive Committee, and EFAA Accounting Expert Group. Since 2006, SCAAK has been actively involved with the World Bank REPARIS program, which brings together the professional bodies, universities, audit regulators, standard-setters, and Ministries of Finance from the Western Balkans region. The society is also an active participant in the working groups of various public and independent institutions and organizations both nationally and internationally.
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
Although SCAAK has no direct responsibility for the development of a quality assurance (QA) review system, it plays an active role in promoting the establishment of such a system in the jurisdiction by cooperating with the Kosovo Council for Financial Reporting (KCFR)—which is responsible for QA reviews in the jurisdiction—to develop an approach to QA reviews that would be suitable for Kosovo circumstances and that complies with SMO 1 requirements.
In the absence of an operational QA review system, in 2008, SCAAK established a Quality Control Committee and since then, with the assistance of the Royal Nivra Institute (Netherlands), has proactively operated a pilot QA review system with a limited scope of audits of certain public interest entities (PIEs). Reviews of auditors of PIEs were completed in 2009, followed by review of the Small and Medium Practices (SMPs) in 2011, and individual statutory auditors in 2015. Overall, 15 audit firms were reviewed as of 2017.
In 2015, SCAAK established a QA Department for performing mandatory QA reviews for statutory auditors that are members of SCAAK. The review process commenced in 2016. The extent of compliance of the SCAAK’s system with the requirements of SMO 1 still needs to be established.
To prepare its members for the implementation of QA review system, since 2011, SCAAK has been continuously organizing site visits to local SMPs in cooperation with the Royal NBA senior experts. Based on the findings of the site visits, SCAAK organizes continuing professional development (CPD) for all its members that are subject to quality control regulations. Additionally, SCAAK reports it undertook a number of other activities related to quality control and QA, including: (i) disseminating to its members simplified guidance for SMPs developed in cooperation with the Albanian Institute of Certified Accountants and Royal NBA; (ii) assisting the KCFR and the Central Bank of Kosovo in developing quality control guidance; and (iii) providing CPD to support the implementation of quality control standards and requirements to its members.
SCAAK reports that, in-line with the SCAAK’s Strategy for 2015–2019, the institute will continue to focus on developing and improving the quality of work of its members, including the development of a sustainable system of QA review system. In this regard, SCAAK indicates that it actively promotes the adoption of the new corporate financial reporting law—which includes amendments that will provide a strong, legal foundation for the implementation of a QA review system—through participation in the Law Drafting Working Group and meetings with the Ministry of Finance. Most recently, in November 2016, SCAAK submitted to the government its proposals on the QA review system.
SCAAK is encouraged to continue to its collaborative work with other stakeholders to establish and operate a mandatory QA review system in the jurisdiction. SCAAK is also encouraged during the next round of its SMO Action Plan update to conduct an assessment of its QA review system against the requirements of SMO 1. If gaps in compliance exist, actions need to be considered and outlined within the Action Plan to bring the system in line with SMO 1.
SMO 2: International Education Standards
As a professional association of accountants and auditors licensed by the Kosovo Council for Financial Reporting (KCFR), SCAAK is responsible for certification of accountants and auditors and to this effect offers a professional education program developed in line with most IES requirements. In addition, SCAAK has established the first public sector certification for the supreme audit institution of Kosovo.
SCAAK reports that its entry requirements for the program of professional education for accountants and auditors are in compliance with IES 1. To ensure access to and translation of training materials, SCAAK has entered into an agreement with BPP Professional Education in the UK, one of the leading providers of professional accounting and auditing education materials in Europe. These materials are updated on an annual basis to ensure that they are up to date with changes in accounting and auditing developments. Also, SCAAK signed a Memorandum of Understanding (MoU) in 2015 with Deloitte Kosovo to update the Tax and Law book in order to incorporate changes to the relevant legislative pronouncements.
The continuing professional development (CPD) requirement for Certified Auditors is prescribed by law and is subject to monitoring by the KCFR. SCAAK has also established voluntary CPD requirements, which are in line with IES 7–8, for Certified Accountants and Certified Accounting Technicians. SCAAK communicates the importance of CPD to members through its website and other means of communication. While SCAAK states that it monitors compliance with CPD requirements, non-compliance is not subject to sanctions.
SCAAK actively cooperates with other professional accountancy organizations, both regionally and internationally. As part of a MoU with the Albanian Institute of Certified Accountants (IEKA) signed in 2012, SCAAK organizes joint CPD training sessions. SCAAK also collaborates with the Association of Chartered Certified Accountants (ACCA), the Chartered Institute of Public Finance and Accountancy (CIPFA), and the Association of Accounting Technician (AAT) and other regional PAOs on mutual recognition of certification programs for their members. A mentoring/twinning initiative between PAOs was introduced by SCAAK and NBA Netherlands.
SCAAK indicates it is also actively involved with other stakeholders in the jurisdiction to promote the incorporation of the IES requirements and ensuring that the education of professional accountants in the jurisdiction is of high, internationally acceptable quality. To this effect, an important stream of SCAAK’s activities relates to its accreditation process of higher education institutions in Kosovo to ensure alignment of their programs with IES. The Education Standards Committee of SCAAK has drafted the criteria for higher education institutions, and the accreditation process is under the direct supervision of the SCAAK’s Council.
In 2013, SCAAK signed MoUs with the public and private universities in Kosovo and reviewed the content of the universities’ curriculum and assessment methods of each subject to determine their compliance with IES 2 and will continue working towards defining the relationships between the universities and the professional body’s education program.
Furthermore, SCAAK also participates in the World Bank Center for Financial Reporting Reform, Education Community of Practice to exchange experiences with other PAOs in the region in the areas related to SMO 2.
SCAAK is encouraged to develop plans to review the requirements of the revised IES and indicate the extent of alignment of national requirements with the international standards during the next round of its SMO Action Plan update, as well as to consider activities aimed at bringing the national requirements in line with those of IES. In addition, although SCAAK works to ensure that the CPD requirements are being fulfilled, stronger monitoring and a linkage to the I&D system are recommended.
SMO 3: International Standards on Auditing
With ISA adopted by law for application in all audits in Kosovo, SCAAK focuses on ensuring that the translated ISA are available to its members under formal agreements with the Albanian Institute of Certified Accountants (IEKA) and the Government of Kosovo as well as on supporting its members with the implementation of the standards.
In 2012, SCAAK formalized a translation agreement with IEKA and subsequently established a working group with IEKA, the Kosovo Council for Financial Reporting, the Central Bank of Kosovo, and universities, to produce an official common vocabulary for accounting and audit terminology to be applied in Kosovo. The Group appears to have established an ongoing translation process and, as of 2017, SCAAK reports that the 2015 IAASB Handbook has been translated, is being applied, with the latest new and revised ISA related to audit opinion (ISA 700, 701, 705, 706, 720) also translated and disseminated.
Between 2014–2016, SCAAK, in collaboration with IEKA, also translated and disseminated to its members the Albanian version of the IFAC Small and Medium Practices Committee’s Guide to Using International Standards on Auditing in the Audits of Small- and Medium-Sized Entities, Third Edition (both volumes).
To further support its members with the implementation of the auditing standards, SCAAK reports that it maintains an ongoing process of regularly updating the educational material (P6-Auditing & P10-Advanced Auditing and Assurance) with regards to new and amended IAASB standards and the new material has been provided to its students who are enrolled in the certification program. However, it is not clear whether the latest version of ISA has been incorporated.
In addition, SCAAK is an active participant of the World Bank’s Center for Financial Reporting Reform Training of Trainers (ToT) for auditing, and has incorporated ISA tools and materials delivered during these ToT sessions into its own continuing professional development (CPD) sessions.
SCAAK also informs its members about the latest developments in the international standard-setting and disseminates IAASB exposure drafts to SCAAK members in order to submit comments.
With the new auditor reporting standards effective, SCAAK is encouraged to ensure that its IPD and CPD programs incorporate the new requirements.
SMO 4: Code of Ethics for Professional Accountants
As a professional association of accountants and auditors, SCAAK is required by the Law No.04/L–014 on Accounting, Financial Reporting and Audit (Law No.04/L–014) to adopt a Code of Ethics, which should be in line with the IESBA Code. In line with this requirement and regulations of the Kosovo Council for Financial Reporting (KCFR), SCAAK adopted the IESBA Code for application by its members.
SCAAK signed an agreement in January 2012 with the Albanian Institute of Certified Accountants to provide an updated version of the code translated into Albanian to its members. As of 2017, SCAAK has disseminated an Albanian version of the 2015 IESBA Code of Ethics, with plans under way to translate and disseminate the 2016 Handbook between 2018–2019.
To support its members with the implementation of the ethical requirements, SCAAK reports that it maintains an ongoing process of regularly updating its initial professional development and continuing professional development (CPD) courses to incorporate latest developments in the international standard-setting area. With the NOCLAR standard becoming effective in July 2017, SCAAK reports that in 2016 its CPD programming included NOCLAR-related topics and the 2017 programs will also cover the subject.
SCAAK indicates that compliance with the Code is being reviewed as part of quality assurance reviews, with KCFR overseeing the process. The society also reports to conduct public outreach activities (seminars, media coverage) to ensure that public and business community are aware that SCAAK members are operating in the public interest under an mandatory code of ethics. SCAAK is a member of the Chamber of Commerce in Kosovo, and as such promotes to the business community the importance of enforcement of the ethical requirements.
Finally, SCAAK states that it uses its best endeavors to promote the IESBA Code of Ethics as the basis for national ethical requirements and is involved in the development of the new corporate financial reporting law that is expected to clarify the respective roles of SCAAK and KCFR in the area of enforcing ethical requirements.
SCAAK is encouraged to work with other stakeholders in the jurisdiction to clarify the respective roles of professional associations and the KCFR in regards to enforcing compliance with ethical requirements. Also, indicating specific actions within the SMO Action Plan that are undertaken to ensure compliance with the Code, if any, is recommended. Finally, the society could consider plans on how to support the implementation of the NOCLAR requirements.
SMO 5: International Public Sector Accounting Standards
As only cash-basis IPSAS are presently adopted for application Kosovo, SCAAK reports to be promoting the incorporation of accrual-basis IPSAS into the national requirements through regular dialogue with the government. For example, during 2016-2017, SCAAK reports to have organized meetings for increasing the awareness of public sector financial management agenda.
SCAAK has also worked to incorporate IPSAS into its educational and continuing professional development requirements and SCAAK reports to continue to provide translated IPSAS and other IPSASB pronouncements to members and to the Government. The society also reports to provide its comments to the IPSASB exposure drafts.
Of special notice is SCAAK’s involvement in the education of accountants providing services in the public sector. In 2009, SCAAK signed a Memorandum of Understanding (MoU) with the Ministry of Finances for certification of civil servants and according to this memorandum, SCAAK received the right of exclusivity to be the sole authorized body to train, organize exams, and certify candidates for qualification in the field of public sector accounting in Kosovo.
In 2009-2011, SCAAK and the Ministry of Finance established the Public Financial Management (PFM) Training Program with the aim of equipping financial officers in the public sector with necessary skills to improve the financial management and reporting in the public sector. Subsequently, in November 2015, SCAAK signed an MoU with the Chartered Institute of Public Finance and Accountancy (CIPFA) for a joint PFM certification scheme to strengthen public financial management capacity in the country. The organizations work together to develop and implement a co-branded professional training program for public servants in Kosovo and for a new generation of interested students to eventually become professionally qualified members with both SCAAK and CIPFA. A series of Train the Trainer workshops and the translation of the training materials were completed in 2016 and in 2016 the certification program was implemented, with the first Kosovars becoming full members of CIPFA.
Another important development has been the establishment of a new certification scheme for Public Sector Auditors of the National Audit Office in November 2016 in coordination with the Office of the Auditor General. The new scheme is based on the International Standards of Supreme Audit Institutions (ISSAI), issued by the International Organization of Supreme Audit Institutions (INTOSAI). As of 2017, 100 public sector auditors in Kosovo have been certified. Moreover, the development of the public sector certification program has attracted the interest of other countries in the region. The Albanian State Supreme Audit Institution (AL-SAI) and the SCAAK have signed an MoU to develop a strategy for the implementation of the certification scheme for Albanian SAI auditors. SCAAK expects to progress with this partnership in 2017 and the collaboration will play an important role for the development of AL-SAI auditors in the public sector.
SCAAK is encouraged to provide an update in its SMO Action Plan on the specific initiatives undertaken to promote the adoption of IPSAS in the jurisdiction.
SMO 6: Investigation and Discipline
As a professional accounting and auditing association licensed by the Kosovo Council for Financial Reporting (KCFR), SCAAK is responsible for the investigation and discipline (I&D) of its membership under the Law No.04/L–014 on Accounting, Financial Reporting and Audit (Law No.04/L–014) and must report on its findings and disciplinary procedures regularly to the KCFR. The KCFR, in turn, is the entity responsible for carrying out the I&D of licensed associations, audit firms, and statutory auditors.
Accordingly, SCAAK has established an Investigation and Disciplinary Committee tasked with developing procedures, imposing disciplinary measures, and liaising with the KCFR. According to the Statute of SCAAK, the Council reviews all regulations and procedures on annual basis, with the latest update approved by the Council in May 2016. However, while the system seems to have been established, it does not appear to be fully operational. For example, in 2016 no cases were heard by the Committee.
In 2017, SCAAK undertook a self-assessment against the requirements of SMO 6 and reported that most of the requirements are embedded in its I&D system, with the exception of separate disciplinary and investigative bodies, including non-accountants in the committee, establishing an independent review of complaints on which no disciplinary actions have been taken, and making the results of the proceedings publicly available.
SCAAK reports that in general it promotes awareness of I&D through continuing professional development programming, its webpage, seminars, and communicates the consequences of non-compliance.
The SCAAK is encouraged to consider establishing a plan to address the gaps in compliance with the requirements of SMO 6 and incorporate it in its SMO Action Plan during the next round of updates. It is also recommended that SCAAK consider sharing the revised SMO 6 requirements with other stakeholders that are involved in the investigation and discipline of the profession, such as the KCFR and other professional associations, in order to promote compliance at the jurisdiction level, and consider facilitating collaboration to establish a unified I&D system.
SMO 7: International Financial Reporting Standards
With IFRS and IFRS for SMEs adopted in the jurisdiction, SCAAK indicates that it supports its members with the implementation of the standards by maintaining and updating its continuing professional development (CPD) and educational programs to ensure that all up-to-date IASB pronouncements are included. Additionally, SCAAK also informs its members about the latest pronouncements of the IASB and continues its efforts to ensure that updated and approved translations of IASB standards are available to all stakeholders.
To this effect, SCAAK formalized a cooperation agreement with the Institute of Authorized Chartered Auditors of Albania to ensure availability of translated pronouncements. As of 2017, the 2016 version of IFRS translated in Albanian was approved by the Kosovo Council for Financial Reporting (KCFR) and is being applied.
SCAAK has translated and disseminated the IFRS for SMEs as a basis for developing a long-term framework for non-PIEs, and promoted the adoption of the standard to the relevant authorities. With the final adoption of IFRS for SMEs effective January 1, 2015, SCAAK reports that its focuses on assisting its members with the implementation of the standard through CPD.
SCAAK also notes that it works to promote the revision of the corporate financial reporting framework in the jurisdiction to take into account public interest considerations. As part of these efforts, it established a dialogue and works closely with the KCFR to assist the Corporate Financial Law Working Group to make changes in the scope and applicability of IFRS in Kosovo. The institute has introduced a concept of a public interest entity and recommended appropriate accounting framework for non-public interest entities. It expects that new amendments to the law will be adopted in 2017.
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