Member | Established: 2003 | Associate 2010; Member 2016
The UAAFWFBH is a non-governmental, non-profit, professional association that was established by three professional associations in 2003. Membership in the union is mandatory for all certified professional accountants. UAAFWFBH members provide a variety of services in the fields of accounting, finance, audit, tax advising, and appraisal of economic value of property. The UAAFWFBH was granted the status of an authorized professional accountancy body in 2005 by the Accounting and Auditing Commission of the BiH. In addition to being a member of IFAC, the UAAFWFBH since December 2015 is a member or Accountancy Europe.
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
UAAFWFBH has no direct responsibility for the implementation of the quality assurance (QA) review system for auditors. Nevertheless, prior to the adoption of a QA review system by the Chamber of Auditors, UAAFWFBH actively promoted the importance of establishing a QA review system amongst relevant authorities, and the work plans of all UAAFWFBH committees required promoting such a system. Now that the system has been designed, UAAFWFBH focuses on providing support to their members on the quality control standards and translating international standards on quality control. The 2018 IAASB Handbook was translated into Croatian by the Croatian Audit Chamber (CAC) in cooperation with the UAAFWFBH and made publicly available on the union’s website. The union has also translated and published the Guide to Quality Control for Small and Medium-Sized Practices, Third Edition.
In addition to contributing to the establishment of the QA review system for auditors, the union cooperates with six other professional organizations in the region to design and introduce a QA review system for accountants. To this effect, a regional working group, Quality Assurance Network, Accountancy Services Providers was established in September 2014 under the mentoring guidance of the Institute of Chartered Accountants in England and Wales (ICAEW). In addition to exchanging best practices between PAOs from the region and learning from ICAEW, the group promotes establishment of QA review system(s) throughout the Western Balkans region. As of 2019, several meetings, in addition to the Accountancy Profession Strategic Forum (APSF), have been conducted and the basic relevant documentation and supporting materials for the launch of a voluntary scheme in 2019 have been developed.
In 2018–2019, the union focused on preparation for the launch of the system at the jurisdiction level through further developing documentation, manuals, building the capacity of the QA review teams, and engaging with stakeholders to raise awareness about the initiative.
The union has also been promoting introduction of a legal requirement for all accountants in public practice to be subject to QA reviews through working with the Ministry of Finance on drafting the new Law on Accounting and Auditing, which is expected to contain the above-mentioned requirement. The envisioned system will be based on ISQC 1 and the Code of Ethics for Professional Accountants developed by the IESBA. UAAFWFBH actively participates in the process of public consultation and introduction of the system is one of the union’s top strategic priorities. A two-year pilot implementation of QA for practitioners is expected to commence in 2019.
UAAFWFBH is encouraged, if deemed necessary and feasible, to work with other stakeholders to fully operationalize the QA review system for auditors. The union is also encouraged to conduct a self-assessment of the QA system for accountants against the requirements of SMO 1 and report on the results.
SMO 2: International Education Standards
The requirements for education and certification of the accountancy profession in the country are established at the jurisdictional level by the Accounting and Auditing Commission of Bosnia and Herzegovina (AACBiH), in accordance with the Law on Accounting and Auditing of the FBiH of 2009. UAAFWFBH is responsible for the implementation of the requirements in the Federation of BiH, which by law must be in line with IES. UAAFWFBH translated the IES of 2015 and made it available on its website. The union also provides expert support to the AACBiH.
In compliance with the legal requirements, UAAFWFBH has been working to bring its programs for education, certification, and continuing professional development (CPD) in line with IES. UAAFWFBH reports that although significant progress has been made, there continue to be some gaps against the 2015 IES as the requirements are not fully competence-based.
UAAFWFBH has promoted the importance of IES for the accounting and auditing profession through formal communications, outreach activities with relevant stakeholders, and publications. The legal requirement to align educational programming in the jurisdiction with the IES was one of its major achievements.
The union closely collaborates with the AASBiH in the area of education and in 2019 contributed to the update of the curricula for acquisition of professional qualifications, which incorporates many, but not all, of the competency areas and professional skills of the 2015 IES.
The union has made significant advancements to its CPD program over the years. It provided 75 CPD courses to its members in 2017, 72 in 2018, including related learning materials. Since April 2013, CPD compliance has been monitored via an electronic register.
In addition, the UAAFWFBH has established a quality control mechanism for the delivery of its CPD programs. UAAFWFBH permits its CPD to be organized and delivered by educational providers who fulfill certain criteria and then submit their planned educational programming. After the UAAFWFBH’s CPD Committee reviews and approves the programs, its members can take their CPD courses at these institutes. The union’s Education Performance Monitoring Committee, comprised of 15 practitioners, conduct monitoring visits and prepare evaluation reports to ensure the program is operating as proposed. Through this mechanism, UAAFWFBH is committed to ensuring high quality educational programs for its members. At the end of 2018, special teams carried out monitoring of 60 different CPD programs.
The Union also signed an Agreement with the Tax Authority of the Federation of BiH to provide support to its staff through CPD training, to exchange information and best practices, and to promote ethical behavior of the profession. UAAFWFBH is also working on developing a new qualification of a Tax Advisor.
The union is active in working with universities in the Federation of BiH to promote and incorporate IES. For example, the union reports that the Faculty of Economics Mostar included IESs in syllabi for Principle of Accounting and Advanced Accounting. The UAAFWFBH reports that it provides the Faculties of Economics’ libraries with access to all of its publications and is supporting on an ongoing basis annual meeting of the Accounting and Auditing Departments of the Faculties of Economics from countries in the region (BiH, Croatia, Serbia, Montenegro, Macedonia, and Slovenia). In addition, UAAFWFBH promotes the accounting profession to university students of economics through participation in student-organized conferences and career days.
UAAFWFBH is encouraged to review national requirements and indicate the extent of their alignment with the revised IES. If gaps exist, a strategy could be considered, possibly in collaboration with other stakeholders in the jurisdiction, to bring national educational programming fully in line with IES.
SMO 3: International Standards on Auditing
Given its mandate to translate and publish the IAASB pronouncements for application in the Federation of BiH, UAAFWFBH cooperates with the Croatian Audit Chamber (CAC) in translating the IAASB Handbook in Croatian and also translates the materials into Bosnian, albeit with a time lag. The 2018 IAASB Handbook was translated into Croatian by the CAC in cooperation with the UAAFWFBH and made publicly available website.
The union has also translated the Guide to Using International Standards on Auditing in the Audits of Small and Medium-Size Entities into Bosnian language and subsequently, worked with the CAC to translate and publish the Guide into Croatian in December 2015. The UAAFWFBH monitors revisions and developments to ISA and informs its members about the changes through seminars, journals, and publications.
The union collaborates with the universities and academia to ensure awareness about international standards through establishing joint expert and advisory groups; active involvement of academia in strategic planning, IPD curriculum management, among other areas.
UAAFWFBH continues to assist its members with the implementation of ISA through seminars and trainings. For example, in 2019 a number of trainings on the application of ISA 250, ISA 800, ISA 805, ISA 810 were conducted. It also participates in the activities of the Accountancy Europe Audit and Assurance Policy Group and collaborates with other PAOs in the region to share best practices and experiences in in the implementation of ISA.
If deemed relevant and necessary, the union could consider participating in the international standard-setting process by providing comments on Exposure Drafts and other IAASB pronouncements.
SMO 4: Code of Ethics for Professional Accountants
As the entity responsible for the translation and dissemination of the Code of Ethics for professional accountants in the FBiH, the UAAFWFBH works to provide translations of the IESBA Code for application by its members in cooperation with other regional professional accountancy organizations—the Association of Accountants and Auditors of Republic of Srpska (AAARS) and the Croatian Audit Chamber (CAC).
The UAAFWFBH translated the 2015 IESBA Code of Ethics and published it on its website in 2016 and delivered to all union’s members and libraries of schools of business and economics. In 2018, the union translated and published the standard on Responding to Non-compliance with Laws and Regulations (NOCLAR) and introduced a requirement for its members to sign a statement that they have read and understood NOCLAR and that they will abide by it. The standard has also been incorporated into initial and continuing professional development programming. In 2019, the 2018 version of the IESBA Code of Ethics has been translated by the UAAFWFBH into Bosnian in compliance with the IFAC Translation Policy.
The union reports that it works to ensure that the requirements of the IESBA Code are incorporated into education and training programs and supports its members with the implementation of the Code. It has formed a Committee dedicated to addressing adherence to the Code of Ethics and provided guidelines regarding the implementation of the Code. These guidelines often inform the topics of workshops that the union organizes for its members. The Committee also works closely with the Quality Assurance Committee on developing materials related to compliance with ethical requirements.
UAAFWFBH reportedly organizes seminars and shares implementation guidance via journals and other publications and works with universities to ensure that students are exposed to ethical matters early on in their careers. For example, the master programmes of the Sarajevo University Faculty of Economics include a mandatory course on professional ethics of accountants and auditors (30 hours). The IESBA Code of Ethics published by the Union is used as literature for the course. Ethics-related topics are also now included in the undergraduate courses on financial accounting and audit.
The union also indicates that in 2019 it is working to improve its system for monitoring compliance with the Code and ensure it is linked to its investigative and discipline system.
The UAAFWFBH is also involved in the Accountancy Europe (AE) Professional Ethics and Competences Working Party.
If deemed relevant and necessary, the union could consider participating in the international standard-setting process by providing comments on Exposure Drafts and other IESBA pronouncements.
SMO 5: International Public Sector Accounting Standards
The UAAFWFBH does not have a direct role in the process of adoption of IPSAS, which have been formally adopted by law at the jurisdiction level but as of 2019 have not been implemented due to lack of technical and financial capacity of the Government, which is responsible for the promulgation of the standards.
The union reports that it has been actively involved in the public discussions leading to the formal adoption of IPSAS and sees its role as partner in the future implementation process.
In anticipation of further reforms, the UAAFWFBH is building its capacity and expertise to be able to support both the Government and its members who provide services in the public sector (21% as of 2019).
IPSAS and public sector accounting have been included in the initial and continuing professional development programming, and seminars on the subject are being offered.
It also collaborates on an ongoing basis with other professional organizations in the region to exchange experiences related to implementation of IPSASs and participates in the World Bank PULSAR project, which conducted an IPSAS ToT in October 2019, with the second ToT to be held in December 2019 in Sarajevo. The union raises awareness of the Ministry of Finance about the developments in the public sector accounting area and has involved its representatives in the work of Accountancy Europe Public Sector Group.
UAAFWFBH is encouraged to continue to support the Ministry of Finance in the reform of public sector accounting and to prepare its members for the future implementation of the international standards.
SMO 6: Investigation and Discipline
UAAFWFBH has direct responsibility for the investigation and discipline (I&D) of its members (all professional accountants in the jurisdiction must be members of the UAAFWFBH). In 2012, the union adopted the Book of Regulation on Disciplinary Liability and appointed members of its Prosecutorial Council and Discipline Review Body in April 2013. The union reports that, according to the text of the Regulation, it has been developed in accordance with the requirements of SMO 6.
In 2016, the union conducted a self-assessment against the requirements of SMO 6 as part of its SMO Action Plan update and further updated the self-assessment in 2019. The areas identified as those that require attention in 2016 continue to include linking its I&D system with the results of QA reviews, establishing appropriate process for liaison with outside bodies on possible involvement in serious crimes and offences, and establishing processes of reviewing the existing system on an ongoing basis. In 2019, the union reported that actions have been undertaken to link the I&D system with the QA review system for accounting services that was launched in 2019, the process of coordinating with other authorities has improved, and the review of the I&D system is one of the union’s current strategic objectives.
UAAFWFBH reports that it continues collaborating with regional professional accountancy organizations regarding best practices in the field of I&D and indicates that the Regional Working Group of Accountancy Service Providers will hold several workshops next year regarding I&D.
The union appears to be actively cooperating with the Ministry of Finance and Financial-Intelligence Agency (FIA), providing both agencies the information on certified accountants and authorized auditors on a regular basis. This information is also made available to Tax Administration.
UAAFWFBH reports that it is also involved with the implementation of the EU Twinning project Support to the Fight against Money Laundering that commenced in 2017. The Chairman of QA Committee participated in workshops organized within the project.
In addition to providing AML-related CPD options for its members, the UAAFWFBH supports organisation of conferences/workshops and other forms of education on AML/CFT and actively participates in the reform process and donor projects. An example of such project is EU Twinning project Support to the Fight against Money Laundering that was implemented between 2017–2019. The UAAFWFBH representatives disseminated information on AML risks to the project team and provided proposals for developing specific risk indicators. QA committee participated in three workshops as part of the project, where the experts from Austria and Slovenia shared their experiences and best practices. The new guidelines on implementation of AML/CFT requirements have also been prepared and disseminated to the members.
Recognizing that improvement of the existing I&D system continues to be one of the UAAFWFBH’s strategic objectives, staff reiterate its previous recommendation to consider the areas for improvement as identified through a self-assessment exercise and to develop a strategy, with a definite timeframe, to address the gaps of the union’s I&D system with the international best practices formulated in SMO 6. In addition, UAAFWFBH is encouraged to raise awareness of other stakeholders involved in the I&D of professional accountants in the Entity about best practices in the I&D of professional accountants with a view to bring the overall I&D system in the jurisdiction in line with the international best practices. During the next round of update, the UAAFWFBH is requested to conduct an assessment of the overall I&D system in the jurisdiction as well as the plan to address the gaps, if any, and share it with the staff.
SMO 7: International Financial Reporting Standards
In accordance with its mandate to translate IFRS and IFRS for SMES for application in the Federation of BiH, the UAAFWFBH has established ongoing processes to translate the standards as they become available, including the effective dates. Although a time lag existed in the past between the issuance of new and revised IFRS and their application in the entity, the union has established processes to ensure availability of the latest standards to the profession within the timeframe envisioned in IFRS.
The UAAFWFBH reports that in 2016 it published the consolidated translated version of the IFRS for SMEs (with amendments as of January 2017) as well as the 2016 IFRS translated into Bosnian under the copyright agreement with the IFRS Foundation. In 2017, IFRS 9, IFRS 15 (with clarifications), and IFRS 16 were published, and in 2018 a number of other IFRS were translated and made publicly available. In addition, the union has completed the translation of the new terminology list for IFRS. As of 2019, the 2019 IFRS were translated into Bosnian and made publicly available on the union’s website.
In addition to translation activities, the union continues to support its members in implementing IFRS and IFRS for SMEs by providing trainings, seminars, and including IFRS into initial and continuing professional development programming. In 2017–2018, the Union organized trainings on new standards, with emphasis on IFRS 9, IFRS 15, and IFRS 16.
In Q1 2020, the UAAFWFBH plans to translate and publish IFRS 17 Insurance Contracts and to hold consultations with the FBiH Association of Insurance Companies related to application of the standard.
The UAAFWFBH is also cooperating with the Faculties of Economics to raise awareness about the importance of IFRS amongst students and to include IFRS into the curricula. For example, at the Sarajevo University Faculty of Economics, IFRS are included in courses on Financial Accounting and Financial Accounting and Reporting. At the Mostar University Faculty of Economics, IFRS are taught as part of the courses on Financial Accounting and Advanced Financial Reporting.
The union also collaborates with regional professional accountancy organizations in order to exchange best practices on promoting and improving the application of IFRS and IFRS for SMEs.
If deemed relevant and necessary, the union could consider participating in the international standard-setting process by providing comments on the IASB Exposure Drafts and other pronouncements.
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Kneza Višeslava b.b.
Bosnia and Herzegovina