Bosnia and Herzegovina

The accounting, auditing, and financial reporting framework in Bosnia and Herzegovina (BiH) is established by the Law on Accounting and Auditing of Bosnia and Herzegovina No. 42/04 and implemented at the entity level in the Federation of Bosnia and Herzegovina (FBiH) and Republika Srpska (RS) through their respective laws on accounting and auditing.

The framework requires the application of IFRS or IFRS for SMEs as issued by the IASB and translated into national languages, based on entity size, for the preparation of financial statements. Public interest entities, large entities, and entities preparing consolidated financial statements are required to apply full IFRS, while smaller entities may apply IFRS for SMEs.

Mandatory audits are required for large entities, publicly traded entities, and other entities as prescribed by law. All statutory audits must be conducted in accordance with International Standards on Auditing (ISA) and related pronouncements issued by the IAASB and translated into national languages.

At the entity level, Ministries of Finance are responsible for overseeing compliance with accounting and auditing requirements, while additional institutional arrangements support implementation. In the Federation of BiH, the Union of Accountants, Auditors and Financial Workers of the Federation of Bosnia and Herzegovina (UAAFWFBH) is responsible for the translation and publication of IAASB pronouncements, with the 2020 IAASB Handbook currently applicable. In Republika Srpska, IFRS and ISA are translated into Serbian, with the most recent translated version of ISA corresponding to the 2016–2017 IAASB Handbook.

The regulation of the accountancy profession in Bosnia and Herzegovina (BiH) is established by the Law on Accounting and Auditing of Bosnia and Herzegovina No. 42/04 and implemented through a decentralized framework at the entity level.

The Law defines requirements for entry into the profession, including education, practical experience, and final assessment, which are to be aligned with the International Education Standards (IES) and the EU Statutory Audit Directive. These requirements are established by the Accounting and Auditing Commission of Bosnia and Herzegovina (AACBiH) and implemented by the recognized professional accountancy organizations (PAOs): the Association of Accountants and Auditors of Republika Srpska (AAARS) and the Union of Accountants, Auditors and Financial Workers of the Federation of Bosnia and Herzegovina (UAAFWFBH).

The Law recognizes three protected professional designations—Authorized Auditors (AAs), Certified Accountants (CAs), and Certified Accounting Technicians (CATs)—with progressive requirements for education and professional experience. Entry requirements include a university degree and relevant practical experience for CAs and AAs, and secondary education with practical experience for CATs. Entities are not permitted to impose additional qualification requirements beyond those established at the jurisdictional level.

Regulatory responsibilities are shared between government authorities and PAOs. At the entity level, Ministries of Finance are responsible for licensing auditors and audit firms, maintaining registers, and monitoring compliance, including the authority to impose sanctions.

Professional accountancy organizations are responsible for administering professional education and certification programs, establishing continuing professional development requirements, and implementing investigation and disciplinary procedures for their members. Authorized auditors are required to be members of the relevant PAO to obtain or renew their audit license, while membership for other professional accountants may be voluntary depending on the entity.

Additional institutional arrangements support the regulatory framework. In the Federation of BiH, the Chamber of Auditors regulates auditors and operates under the oversight of the Public Oversight Board, while UAAFWFBH supports education, certification, and implementation of international standards. In Republika Srpska, the Ministry of Finance and AAARS operate a shared regulatory model, with AAARS playing a central role in education, certification, and disciplinary processes.

Audit oversight arrangements in Bosnia and Herzegovina are established at the entity level and differ between the Federation of Bosnia and Herzegovina (FBiH) and Republika Srpska (RS).

In the Federation of BiH, an independent audit oversight system is in place through the Public Oversight Board (POB), which was established in 2009 under the Law on Accounting and Auditing (as amended in 2021). The POB oversees the activities of the Chamber of Auditors of the Federation of BiH, which is responsible for regulating auditors, including registration, quality assurance, continuing professional development, and investigative and disciplinary processes. The POB is not a member of the International Forum of Independent Audit Regulators.

In Republika Srpska, there is no independent audit oversight authority. Oversight responsibilities are carried out by the Ministry of Finance under the Law on Accounting and Auditing (Nos. 94/15 and 78/20, as amended in 2020). The Ministry is responsible for licensing audit firms and Authorized Auditors, maintaining registers, monitoring audit activities, and conducting quality assurance reviews for statutory audits. It also has the authority to impose sanctions, including fines and license revocation, for non-compliance.

Authorized Auditors in Republika Srpska are required to be members in good standing with the Association of Accountants and Auditors of Republika Srpska and comply with its ethical and disciplinary requirements.

The Law on Accounting and Auditing of Bosnia and Herzegovina No. 42/04 prescribes the requirements for “authorized professional accountancy bodies,” including their recognition by the Accounting and Auditing Commission of Bosnia and Herzegovina (AACBiH).

Pursuant to the Law, AACBiH has recognized the Union of Accountants, Auditors and Financial Workers of the Federation of Bosnia and Herzegovina (UAAFWFBH) and the Association of Accountants and Auditors of Republika Srpska (AAARS) as authorized professional accountancy organizations in their respective entities.

Federation of Bosnia and Herzegovina (FBiH)

Chamber of Auditors of the Federation of Bosnia and Herzegovina

The Chamber of Auditors, established under the Law on Accounting and Auditing in the Federation of Bosnia and Herzegovina (as amended in 2021), is responsible for regulating statutory auditors and operates under the oversight of the Public Oversight Board. Membership is mandatory for all auditors in public practice licensed by the Ministry of Finance.

The Chamber is responsible for quality assurance reviews of audit firms and auditors, monitoring compliance with ISA, establishing continuing professional development requirements for auditors, adopting ethical requirements, and conducting investigative and disciplinary procedures.

Union of Accountants, Auditors and Financial Workers of the Federation of Bosnia and Herzegovina

UAAFWFBH, established in 2003 and recognized as an authorized PAO by AACBiH in 2005, is a non-governmental, non-profit professional association with mandatory membership for Authorized Auditors, Certified Accountants, and Certified Accounting Technicians.

The organization is responsible for professional education and certification, continuing professional development, supporting compliance with accounting, auditing, and ethical standards, and contributing to the alignment of education programs with international standards. UAAFWFBH also supports the translation and dissemination of international standards.

UAAFWFBH is a member of IFAC, Accountancy Europe, and the International Valuation Standards Council.

Republika Srpska (RS)

Association of Accountants and Auditors of Republika Srpska (AAARS)

AAARS, established in 1996, is the authorized professional accountancy organization in Republika Srpska and operates under the oversight of the Ministry of Finance. Its membership includes Authorized Auditors, Certified Accountants, and Certified Accounting Technicians.

AAARS is responsible for administering professional education and certification programs, licensing Certified Accountants and Certified Accounting Technicians, establishing continuing professional development requirements, and implementing investigation and disciplinary procedures for its members. Authorized Auditors are required to be members in good standing with AAARS to obtain or renew their audit license, while membership for other professional accountants is voluntary.

The organization collaborates with regional and international partners to support the development of the profession and the translation and implementation of international standards, including IFRS, IFRS for SMEs, IPSAS, ISA, and the IESBA Code of Ethics. AAARS is a member of IFAC and Accountancy Europe and is a founding member of the Southeastern European Partnership on Accountancy Development.

A legal framework for a quality assurance (QA) review system has been established in Bosnia and Herzegovina; however, the system is not yet fully operational across all mandatory audits and does not fully meet the requirements of SMO 1.

In the Federation of Bosnia and Herzegovina, the Law on Accounting and Auditing (Official Gazette No. 15/21) provides the legal basis for a mandatory QA review system for auditors and audit firms. The Chamber of Auditors of the Federation of BiH is responsible for the design and implementation of QA reviews under the oversight of the Public Oversight Board. While the Chamber has adopted a Rulebook on Oversight and Quality Control aligned with the Law, a fully operational QA review system has not yet been established.

In Republika Srpska, the legal foundation for QA reviews is established through the Standards Act on Quality Control in Accounting and Auditing Profession (2015) and the Law on Accounting and Auditing (as amended in 2020). The Ministry of Finance is responsible for conducting QA reviews for statutory audits. However, implementation of a fully operational QA system remains in progress, and the framework currently relies on earlier versions of quality management standards (ISQC 1 and ISA 220 based on the 2016–2017 IAASB Handbook).

Overall, while QA review systems have been established in law in both entities, they are not yet fully operational or aligned with the most recent IAASB standards. Accordingly, QA is assessed as Partially Adopted. Responsibility for QA rests with government authorities and audit oversight bodies; AAARS does not have direct responsibility for the design or implementation of the QA review system.

Current Status: Partially Adopted

The Accounting and Auditing Commission of Bosnia and Herzegovina (AACBiH) is responsible for establishing education and certification requirements for the accountancy profession under the Law on Accounting and Auditing of Bosnia and Herzegovina No. 42/04. The Law requires that these requirements be aligned with the International Education Standards (IES). In 2006, AACBiH formally adopted the IES and mandated their incorporation into national education requirements across both entities.

AACBiH has delegated the implementation of initial professional development (IPD), examinations, practical experience, and continuing professional development (CPD) to the recognized professional accountancy organizations: the Association of Accountants and Auditors of Republika Srpska (AAARS) and the Union of Accountants, Auditors and Financial Workers of the Federation of Bosnia and Herzegovina (UAAFWFBH). A coordinated framework is in place to support consistency of education and training requirements across the jurisdiction.

The Law establishes three protected professional designations—Authorized Auditors (AAs), Certified Accountants (CAs), and Certified Accounting Technicians (CATs)—with requirements for education, practical experience, and final assessment. Entry requirements include a university degree and relevant experience for CAs and AAs, and secondary education with practical experience for CATs.

At the entity level, PAOs are responsible for administering education programs and CPD requirements. Both AAARS and UAAFWFBH require their members to complete 120 hours of CPD over a three-year period, consistent with the input-based approach under IES 7.

However, while national requirements are broadly aligned with earlier versions of the IES, gaps remain with respect to the latest IES (2019 Handbook and subsequent revisions). In particular, education frameworks are not fully based on a competency-based approach, and learning outcomes related to ethics, professional values, governance, risk management, and internal control are not comprehensively embedded. Findings from the World Bank’s 2016 Accountancy Education Benchmarking Study also indicate areas for improvement in aligning curricula and qualification programs with IES requirements.

Current Status: Partially Adopted

The Law on Accounting and Auditing of Bosnia and Herzegovina No. 42/04 requires the application of International Standards on Auditing (ISA) and related pronouncements issued by the IAASB for all mandatory audits, as translated into national languages. The Accounting and Auditing Commission of Bosnia and Herzegovina (AACBiH) is responsible for implementing, translating, and publishing the standards and has delegated these functions to the recognized professional accountancy organizations: the Union of Accountants, Auditors and Financial Workers of the Federation of Bosnia and Herzegovina (UAAFWFBH) and the Association of Accountants and Auditors of Republika Srpska (AAARS).

At the entity level, ISA are required to be applied in all statutory audits. In the Federation of Bosnia and Herzegovina, UAAFWFBH has published the 2020 IAASB Handbook, incorporating more recent standards such as ISQM 1 and 2, ISA 220 (revised), and ISA 315 (revised 2019).

In Republika Srpska, the most recent translated version of ISA corresponds to the 2016–2017 IAASB Handbook. As a result, currently effective revisions to ISA have not yet been fully adopted and implemented across the jurisdiction.

Accordingly, while ISA are required by law and more recent standards have been adopted in part of the jurisdiction, not all currently effective ISA are fully adopted and applied in all mandatory audits. Therefore, ISA are assessed as Partially Adopted. Responsibility for implementation is shared between AACBiH and the professional accountancy organizations.

Current Status: Partially Adopted

The Law on Accounting and Auditing of Bosnia and Herzegovina No. 42/04 requires the application of the International Code of Ethics for Professional Accountants (including International Independence Standards) issued by the IESBA, as translated into national languages. The Accounting and Auditing Commission of Bosnia and Herzegovina (AACBiH) is responsible for the translation and publication of the Code and has delegated implementation to the recognized professional accountancy organizations: the Union of Accountants, Auditors and Financial Workers of the Federation of Bosnia and Herzegovina (UAAFWFBH) and the Association of Accountants and Auditors of Republika Srpska (AAARS).

At the entity level, the IESBA Code is required to be applied by all professional accountants. In the Federation of Bosnia and Herzegovina, UAAFWFBH published the 2022 International Code of Ethics in March 2023, incorporating the most recent revisions issued by the IESBA.

In Republika Srpska, the 2018 International Code of Ethics has been translated and is currently in effect. While this meets the minimum threshold for adoption under the IFAC Compliance Program definitions, more recent revisions to the Code have not yet been fully adopted across the jurisdiction.

Accordingly, while the IESBA Code is adopted and applied in both entities, not all currently effective revisions have been fully incorporated. Therefore, the Code is assessed as Partially Adopted. Responsibility for implementation is shared between AACBiH and the professional accountancy organizations.

Current Status: Partially Adopted

The Law on Accounting and Auditing of Bosnia and Herzegovina No. 42/04 establishes the requirement to apply International Public Sector Accounting Standards (IPSAS) in the public sector. The Accounting and Auditing Commission of Bosnia and Herzegovina (AACBiH) is responsible for translating and publishing IPSAS; however, implementation is carried out at the entity level by government authorities.

At the entity level, Ministries of Finance are responsible for the implementation of public sector accounting standards. In the Federation of Bosnia and Herzegovina, public sector accounting is based on national standards derived from IFRS and applied on a modified accrual basis. According to the World Bank’s 2020 stocktaking report, reforms are underway to transition toward accrual-based accounting using IPSAS as a reference framework. The Federation’s Public Finance Management Reform Strategy 2021–2025 outlines a phased approach to IPSAS implementation.

In Republika Srpska, IPSAS have been adopted in law and are applied in practice using a combination of accrual and modified accrual approaches, depending on the reporting framework. However, the most recent translated version of IPSAS corresponds to the 2013 Handbook, and more recent updates to IPSAS have not yet been fully incorporated.

Accordingly, while IPSAS have been adopted in principle and implementation is progressing, the standards are not fully applied on a consistent accrual basis across the jurisdiction and are not aligned with the most recent IPSAS pronouncements. Therefore, IPSAS are assessed as Partially Adopted. Responsibility for implementation rests with government authorities, and AAARS does not have direct responsibility for IPSAS adoption or implementation.

Current Status: Partially Adopted

Investigative and disciplinary (I&D) systems for professional accountants in Bosnia and Herzegovina are established through a combination of legal requirements and professional accountancy organization (PAO) frameworks, with responsibilities shared between government authorities and PAOs.

At the entity level, multiple bodies are responsible for the investigation and discipline of professional accountants. In the Federation of Bosnia and Herzegovina, the Chamber of Auditors—under the oversight of the Public Oversight Board—operates an I&D system for statutory auditors, while the Union of Accountants, Auditors and Financial Workers of the Federation of Bosnia and Herzegovina (UAAFWFBH) is responsible for I&D procedures for other professional accountants. Both systems are established under the Law on Accounting and Auditing and related regulations.

In Republika Srpska, the Ministry of Finance has authority to monitor and discipline auditors and audit firms under the Law on Accounting and Auditing. In parallel, the Association of Accountants and Auditors of Republika Srpska (AAARS) operates an I&D system for its members and is required to report on its activities to the Ministry.

While I&D systems are in place across the jurisdiction, gaps remain in full alignment with SMO 6 requirements. In particular, PAO-based systems do not fully incorporate features such as the separation of investigative and disciplinary functions and independent review mechanisms. In addition, processes are fragmented across multiple institutions, which may affect consistency in application.

Accordingly, although I&D mechanisms are established and operational, they are not fully aligned with all SMO 6 best practices. Therefore, I&D is assessed as Partially Adopted. Responsibility for implementation is shared between government authorities and professional accountancy organizations.

Current Status: Partially Adopted

The Law on Accounting and Auditing of Bosnia and Herzegovina No. 42/04 requires the application of International Financial Reporting Standards (IFRS) and IFRS for SMEs, as issued by the IASB and translated into national languages, based on the size and type of entity. The Accounting and Auditing Commission of Bosnia and Herzegovina (AACBiH) is responsible for the translation and publication of the standards and has delegated implementation to the recognized professional accountancy organizations: the Union of Accountants, Auditors and Financial Workers of the Federation of Bosnia and Herzegovina (UAAFWFBH) and the Association of Accountants and Auditors of Republika Srpska (AAARS).

At the entity level, IFRS are required for public interest entities and large companies, while smaller entities may apply IFRS for SMEs. In the Federation of Bosnia and Herzegovina, IFRS are regularly translated and updated under an agreement with the IFRS Foundation; however, implementation of certain recent standards, such as IFRS 17 Insurance Contracts, has been delayed beyond its effective date.

In Republika Srpska, IFRS and IFRS for SMEs are required by law; however, the most recent translated versions correspond to the 2019 IFRS and the 2015 IFRS for SMEs, respectively. As a result, more recent amendments and new standards issued by the IASB have not yet been fully incorporated.

According to the IFRS Foundation’s jurisdictional profile for Bosnia and Herzegovina, IFRS are required for the preparation of financial statements; however, the standards are not fully up to date across the jurisdiction. Accordingly, while IFRS are adopted in principle, not all current standards are fully implemented. Therefore, IFRS are assessed as Partially Adopted. Responsibility for adoption and implementation rests with government authorities, and AAARS does not have direct responsibility for IFRS adoption.

Current Status: Partially Adopted

Relevant Organizations

• Accounting and Auditing Commission of Bosnia and Herzegovina (AACBiH)
• Association of Accountants and Auditors of Republika Srpska (AAARS)
• Chamber of Auditors of the Federation of Bosnia and Herzegovina
• Ministry of Finance of the Federation of Bosnia and Herzegovina
• Ministry of Finance of Republika Srpska
• Public Oversight Board of the Federation of Bosnia and Herzegovina
• Union of Accountants, Auditors and Financial Workers of the Federation of Bosnia and Herzegovina (UAAFWFBH)

Relevant Legislation

• Law on Accounting and Auditing of Bosnia and Herzegovina No. 42/04
• Law on Accounting and Auditing of Republika Srpska (Nos. 94/15 and 78/20)

Relevant Publications

• IFRS Foundation, “IFRS Application Around the World, Jurisdictional Profile: Bosnia & Herzegovina,” April 2025.
• World Bank, Stocktaking of Public Sector Accounting and Reporting Environment in PULSAR Beneficiary Countries—Bosnia & Herzegovina (2020)
• World Bank / CFRR, Public Sector Accounting Reforms Implementation Status in PULSAR Countries (2022)
• World Bank, Accountancy Education Benchmarking Study (2016)