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. As the first professional accountancy organization licensed by the KCFR, SCAAK represents about seven thousand professionals, who are engaged in various sectors, in key institutions of the Republic of Kosovo, such as the Office of The Prime Minister, Ministries, Central Bank, National Audit Office, Kosovo Customs, Tax Administration of Kosovo, Municipalities as well as businesses and audit firms.
SCAAK is a member of the IFAC, the Federation of Mediterranean Accountants (FCM), and the European Federation of Accountants and Auditors (EFAA).
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 legal responsibility for the development of a quality assurance (QA) review system in the jurisdiction, it has played an active role in promoting the establishment of such a system and contributing to its development.
Under the Law No.06/L–032 on Accounting, Financial Reporting and Audit (Law No.06/L–032), the Public Oversight Board (POB), a branch of the Kosovo Council for Financial Reporting (KCFR), is authorized to perform mandatory QA reviews for the licensed statutory auditors and audit firms. However, as of 2022, the QA system has not been implemented.
Over the years, SCAAK worked with KCFR to establish a solid legal foundation for a QA review system that would be suitable for Kosovo circumstances and comply with SMO 1 requirements. SCAAK participated in the Working Group tasked with preparing proposals for the draft Law No.06/ l-032, which was subsequently adopted and became effective in 2019, to ensure it incorporates international best practices, including those formulated in SMO 1. It also has been assisting the KCFR and the Central Bank of Kosovo in developing quality control guidance and advising them on the results of SCAAK’s QA reviews.
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 (Royal NBA - Netherlands), has operated a 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. 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. Overall, 15 audit firms were reviewed as of 2017. According to the self-assessment conducted by SCAAK in 2020, its system fully complies with the requirements of SMO 1.
Preparing its members for the implementation of QA review system for auditors and increasing the quality of work of SCAAK members in general has been also a priority area for SCAAK since 2011. SCAAK reestablished the Quality Control Committee as the Committee for Quality Management of Compliance with Standards (QMCS Committee), and Department for Quality Management of Compliance with Standards (QMCS Department) superseded the Department for Quality Control. The committee assists statutory auditors that are SCAAK members in implementing and maintaining an appropriate system of quality management of compliance with standards, through reporting of annual activities, site visits to local SMPs in cooperation with the Royal NBA senior experts, QA reviews, organizing continuing professional development (CPD), and disseminating simplified guidance for SMPs developed in cooperation with the Albanian Institute of Certified Accountants and Royal NBA. As of 2022, SCAAK reports that translations of quality management standards are in a final stage of review.
QMCS and QMCSD also conduct and publish research on compliance of audit reports with ISAs and compliance of financial statements with IAS/IFRS. These reports have been shared with Kosovo decision makers and the third iteration of the reports is expected to be published in 2021.
In addition, SCAAK’s 2020-2024 Strategy envisions establishment of a formal QA review system for its members who are qualified as certified accountants. The Strategy also envisions digitalization of QA annual reporting.
SCAAK’s contribution to the development of a QA review system in the jurisdiction is commendable. SCAAK has demonstrated that, within the scope of its authority, it is committed to meet the SMO 1 obligations and has established processes to review and improve the approach on an ongoing basis. SCAAK is encouraged to continue offering its expertise to the KCFR and to ensure that the resulting QA review system incorporates best practices as formulated in SMO 1, and to this effect report on the extent of compliance of the POB’s system with SMO 1 in the next round of updates. The new suite of Quality Management standards that will become effective in 2021-22 will require significant change management for regulators and firms. To prepare auditors in the jurisdiction for the implementation of the standards, SCAAK is encouraged to closely follow the developments and publication of implementation support materials, raise awareness of its members and regulators about the forthcoming change, and update its educational programming to ensure that its members are sufficiently prepared for the application of the standards once they become effective.
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 IES requirements as required by the Law No. 06/L–032 on Accounting, Financial Reporting and Auditing of 2019. Further, SCAAK offers other accountancy-related certifications such as Accounting Technician, Internal Auditor (since 2016, based on the materials and syllabus of Institute of Internal Auditors); licensed Forensic and Tax Expert (2017).
SCAAK reports that its professional education program was fundamentally redesigned in 2008 and has been continuously updated to include international developments and the requirements of IES leveraging its agreement with BPP Learning Media, under which SCAAK has exclusive right to use and translate educational materials in the core subjects. The 2019 IES Handbook and other supporting materials issued by the IAESB have been translated and disseminated. In 2021, SCAAK plans to incorporate the revised IESs 2, 3, 4, and 8 that became effective in 2021 into its educational programming. Additionally, SCAAK signed a Memorandum of Understanding (MoU) in 2015 with Deloitte Kosovo to update the Tax and Law book to incorporate changes to the relevant legislative pronouncements.
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 IESs. 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.
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 CPD requirements for its other members, which are in line with IES 7–8, according to SCAAK. SCAAK implements a 40-hour minimum requirement of CPD hours for accountants and auditors. Auditors are required to complete at least 24-hours of verifiable CPD and no less than 40-hours of CPD in total. Accountants have a minimum of 18 verifiable hours and annual total of 40 hours. SCAAK communicates the importance of CPD to members through its website and other means. While SCAAK states that it monitors compliance with CPD requirements, non-compliance is not subject to sanctions.
One of the SCAAK’s focus activities is to develop tools and methods to help students and members throughout the certification program. SCAAK has put significant focus and effort on information technology and is working on digitalizing the whole system of delivering education for members.
SCAAK also 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.
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. Under SCAAK’s 2020-2024 Strategy, SCAAK is planning to create a Center of Excellence for the profession and a Center for Research, Support and Advocacy, further strengthening regional and international cooperation.
SCAAK’s contribution to bringing educational practices in Kosovo in line with international standards are commendable. SCAAK has demonstrated that, within the scope of its authority, it is committed to meet the SMO 2 obligations and has established processes to review and improve the approach on an ongoing basis. At the PAO level, although SCAAK works to ensure that the CPD requirements are being fulfilled, stronger monitoring and a linkage to the I&D system are recommended. Within the jurisdiction, SCAAK is encouraged to further promote incorporation of IES requirements into national educational system for professional accountants and offer its expertise in the area to other stakeholders in the jurisdiction. As the revised IES requirements are being incorporated in SCAAK’s programming, the Accountancy Education E-Tool developed by IFAC may be useful to identify implementation support materials.
SMO 3: International Standards on Auditing
ISA are adopted by the Law No. 06/L–032 on Accounting, Financial Reporting and Auditing of 2019 for application in all audits in Kosovo as promulgated by the Kosovo Council for Financial Reporting (KCFR). Therefore, SCAAK focuses on ensuring that the translated ISA are available to the profession 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 KCFR, 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. As of 2022, the Albanian translation of the 2018 IAASB Handbook is being applied; however, SCAAK indicates that ISA 315 (revised) will be translated & adopted by end of 2022 – cumulatively the 2020 IAASB Handbook. SCAAK will offer CPD on ISA 315 in November 2022.
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 with regards to new and amended IAASB standards. In 2021, SCAAK reported plans to update its educational materials.
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 CPD sessions.
SCAAK also informs its members about the latest developments and disseminates IAASB exposure drafts to SCAAK members to submit comments.
SCAAK has demonstrated that, within the scope of its authority, it is committed to meet the SMO 3 obligations and has established ongoing processes to maintain compliance. SCAAK is encouraged, if deemed pertinent, to consider participating in the international standard-setting by providing comments to the IAASB Exposure Drafts and other public consultations, possibly as part of a joint effort at the regional level.
SMO 4: Code of Ethics for Professional Accountants
As a licensed association of accountants and auditors, SCAAK is required by the Law No. 06/L–032 on Accounting, Financial Reporting and Auditing of 2019 to adopt the IESBA Code of Ethics for application by its members.
SCAAK signed an agreement in January 2012 with the Albanian Institute of Certified Accountants to provide an updated, Albanian translation of the Code to its members. The 2021 International Code of Ethics for Professional Accountants has been translated and SCAAK is adopting it for application by its members.
To support its members with the implementation of the ethical requirements, SCAAK reports that it regularly updates its initial professional development and continuing professional development (CPD) courses to incorporate latest developments. In 2019, SCAAK organized CPD on the NOCLAR standard and a workshop to raise awareness of importance of ethics in professional development of accountancy professionals. In 2020, a significant focus was on ethical considerations in digitalization and cybersecurity.
SCAAK indicates that compliance with the Code is reviewed as part of quality assurance reviews with the Kosovo Council for Financial Reporting (KCFR) overseeing the process. KCFR is ultimately responsible for enforcing compliance with the Code by auditors. The society also reports conducting 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 a 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 enforcing ethical requirements.
SCAAK is committed to fulfilling its obligations under SMO 4 within the scope of its responsibility and has established processes to review and improve compliance on an ongoing basis. SCAAK is encouraged to consider enhancing its activities to support implementation of the Code by its members as well as more robust agenda in raising awareness of the profession and business community. If deemed pertinent, SCAAK may also consider participating in the international standard-setting by providing comments to the IESBA Exposure Drafts and other public consultations, possibly as part of a joint effort at the regional level.
SMO 5: International Public Sector Accounting Standards
As only cash-basis IPSAS are presently adopted for application in 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 to increase awareness on public sector financial management.
SCAAK has also worked to incorporate IPSAS into its initial and continuing professional development requirements and reports to provide translated IPSAS and other IPSASB pronouncements to members and to the Government. The society also reports to provide its comments to IPSASB exposure drafts.
Of note 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 Finance for certification of civil servants and accordingly, SCAAK is the sole authorized body to train, organize exams, and certify candidates 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 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 MoU was further extended in 2020. The joint CIPFA program consists of two levels (i) Accounting Technician and (ii) Public Sector Certified Auditor. 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.
Another important initiative has been the establishment of a new certification scheme for Public Sector Auditors of the National Audit Office (NAO) in November 2016 in coordination with the Office of the Auditor General. In 2019, SCAAK reached agreement with NAO for delivering CPDs for their staff on IPSAS and ISSAIs.
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. Cooperation is also planned with the Macedonian Chamber of Accountants.
To address the needs of stakeholders, SCAAK has created a specialized program for forensic accounting. The purpose of this program is to help fight corruption and pave the way for economic development by building investigative capacity in the field of economic crimes. As part of this program, officials from government institutions such as the Prosecution, Kosovo Police, Customs, Financial Intelligence Unit, Anti-Corruption Agency, and BIRN investigative journalists completed the training and examinations for this program.
SCAAK has demonstrated that, within the scope of its authority, it is committed to meet the SMO 5 obligations and has established ongoing processes to maintain compliance. SCAAK is encouraged to provide an update in its SMO Action Plan on the specific initiatives undertaken to promote the adoption of accrual-basis IPSAS in the jurisdiction.
SMO 6: Investigation and Discipline
As a licensed accounting and auditing association recognized 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. 06/L–032 on Accounting, Financial Reporting and Auditing of 2019 and must report on its findings and disciplinary procedures for auditors 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. SCAAK reports to be closely cooperating with KCFR on enhancing the I&D system in the jurisdiction, including providing technical advice and input to the development of secondary regulations following the adoption of the new law in 2019.
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. The Committee cooperates closely with other committees within SCAAK and the main goal of this cooperation is to ensure that its members, while performing their professional tasks, are showing professional values and offering assurance of their delivered services. The Committee ensures that members are informed about recent updates of the Code of Ethics through CPD and roundtables. In addition, a fifteen minutes’ introduction for awareness about Code of Ethics and the investigative and discipline process for each new group of students is organized on an ongoing basis.
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, except for 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. In the 2020 update to the self-assessment, SCAAK reported enhanced compliance with SMO 6, but is still lacking a process for the independent review of complaints on which there was no follow-up.
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 association has demonstrated that, within the scope of its authority, it is committed to meet the SMO 6 best practices and has made progress in bringing its I&D system in line with the requirements. At the jurisdiction level, SCAAK is encouraged to raise awareness about best practices in investigation and discipline of professional accountants, including those formulated in SMO 6, of other stakeholders such as the KCFR and other professional associations, and to work with the stakeholders to establish an I&D system for all professional accountants in the jurisdiction.
SMO 7: International Financial Reporting Standards
To date, the 2022 version of IFRSs and 2015 IFRS for SMEs as translated in Albanian are approved by the Kosovo Council for Financial Reporting (KCFR) and are being applied in the jurisdiction. SCAAK actively promoted the revision of the corporate financial reporting framework in the jurisdiction to account for public interest considerations. As part of these efforts, it established a dialogue and worked closely with the KCFR to assist the Corporate Financial Law Working Group to make changes in the scope and applicability of IFRSs in Kosovo. The institute introduced a concept of a public interest entity, recommended appropriate accounting framework for non-public interest entities, and translated and disseminated the IFRS for SMEs, which have been applicable since 2015.
Having progressed with the adoption of standards, SCAAK indicates that it supports its members with implementation by maintaining and updating its continuing professional development (CPD) and educational programs to ensure that the latest IASB pronouncements are included. In 2021, SCAAK reports plans to update its educational materials.
Additionally, SCAAK 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.
SCAAK has demonstrated that, within the scope of its authority, it is committed to meet the SMO 7 obligations and has established ongoing processes to maintain compliance.
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