Hungary

As a member of the European Union (EU), Hungary is subject to accounting, auditing, and financial reporting requirements established in EU Regulations and Directives as transposed into national laws and regulations. The national framework reflects alignment with the EU acquis communautaire in the areas of corporate reporting, statutory audit, and public oversight.

The financial reporting framework in Hungary is primarily established under Act C of 2000 on Accounting (the Accounting Act), which constitutes Hungarian Generally Accepted Accounting Principles (Hungarian GAAP). The Ministry for National Economy (MNE) is responsible for issuing implementing regulations and ensuring alignment with EU requirements. Under this framework, entities whose securities are admitted to trading on a regulated market are required to prepare consolidated financial statements in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union. The application of EU-endorsed IFRS has been extended to certain individual financial statements, including those of financial institutions, listed entities within the European Economic Area, and entities subject to statutory audit. Other entities apply Hungarian GAAP, although the use of IFRS is permitted in limited circumstances as a supplementary framework. IFRS for Small- and Medium-sized Entities has not been adopted.

The statutory audit framework is established under Act LXXV of 2007 on the Chamber of Hungarian Auditors, the Activities of Auditors, and on the Public Oversight of Auditors (the Audit Act), which incorporates the requirements of the EU Statutory Audit Directive and related audit reform measures. Statutory audits are required for public interest entities and for entities exceeding prescribed size thresholds based on revenue and number of employees. Public interest entities include listed companies, credit institutions, insurance undertakings above defined thresholds, and certain investment service providers.

Audits are required to be conducted in accordance with International Standards on Auditing (ISA) as issued by the International Auditing and Assurance Standards Board. The Hungarian Chamber of Auditors (MKVK) is responsible for translating and issuing ISA for application in the jurisdiction, subject to approval by the public oversight authority. ISA have been applied in Hungary since 2011, with an established process for ongoing translation and incorporation of new and revised standards.

Statutory auditors must be licensed by the public oversight authority and registered with the Hungarian Chamber of Auditors to perform audits. The regulatory framework reflects a shared model in which standard-setting and professional support functions are undertaken by the professional accountancy organization, while licensing, oversight, and enforcement responsibilities are exercised by the public oversight authority in line with EU requirements.

Only statutory auditors are regulated at the state level in Hungary. The profession is governed by Act LXXV of 2007 on the Chamber of Hungarian Auditors, the Activities of Auditors, and on the Public Oversight of Auditors (the Audit Act), which establishes the legal framework for the approval, registration, supervision, and discipline of statutory auditors and audit firms. Public oversight is exercised by the Auditors’ Public Oversight Authority (APOA), which operates under the Ministry of Finance and was formally established in 2013 to carry out independent oversight functions.

The statutory auditor designation is a protected title in Hungary. Entry into the profession is regulated under the Audit Act and related regulations. Candidates are required to complete higher education, obtain a minimum of three years of initial practical experience, and pass professional competence examinations. This is followed by a period of supervised practical training as an apprentice auditor under a member of the Hungarian Chamber of Auditors (MKVK). Upon successful completion of the qualification process, individuals must obtain a license issued by APOA and register with MKVK. Both licensing and registration are required to perform statutory audits.

APOA is responsible for licensing statutory auditors, maintaining public oversight of the profession, and conducting quality assurance reviews and investigative and disciplinary procedures for auditors of public interest entities. It also supervises the activities of MKVK and monitors key regulatory processes, including registration procedures, standard-setting activities, continuing professional development requirements, and disciplinary systems.

MKVK operates as the statutory professional accountancy organization for auditors and performs a range of regulatory and professional functions as delegated by law. These responsibilities include maintaining the register of auditors, supporting the development and implementation of auditing and related professional standards, organizing and administering initial and continuing professional development, conducting quality assurance reviews for non-public interest entity auditors, and operating investigative and disciplinary mechanisms for its members. MKVK is also responsible for adopting ethical requirements for auditors, taking into consideration the International Code of Ethics for Professional Accountants, and monitoring compliance with these requirements.

The regulatory framework reflects a shared model in which statutory oversight, licensing, and enforcement for public interest entity auditors are exercised by APOA, while MKVK plays a central role in professional regulation, standard-setting support, education, and oversight of non-public interest entity auditors.

Independent public oversight of the audit profession in Hungary is established under Act LXXV of 2007 on the Chamber of Hungarian Auditors, the Activities of Auditors, and on the Public Oversight of Auditors (the Audit Act), which provides the legal framework for the regulation and supervision of statutory auditors and audit firms.

The Audit Act designates the Auditors’ Public Oversight Authority (APOA), operating under the Ministry of Finance, as the independent public oversight authority for the audit profession. APOA was formally established in 2013 to carry out its oversight functions in line with European Union requirements on public oversight of statutory auditors.

APOA is responsible for supervising the activities of statutory auditors and audit firms, with a particular focus on auditors of public interest entities. Its responsibilities include conducting quality assurance inspections, carrying out investigative and disciplinary procedures, and overseeing the regulatory activities of the Hungarian Chamber of Auditors. The authority also monitors key elements of the regulatory framework, including auditor registration processes, standard-setting activities, continuing professional development systems, and disciplinary mechanisms.

APOA operates within the European public oversight framework and cooperates with international counterparts. It is a member of the International Forum of Independent Audit Regulators, which promotes cooperation and consistency in audit oversight practices across jurisdictions.

The oversight framework reflects a system in which independent public oversight is exercised by APOA, while certain operational responsibilities are delegated to the Hungarian Chamber of Auditors, subject to APOA supervision and review.

Hungarian Chamber of Auditors (MKVK)

The Hungarian Chamber of Auditors (MKVK) is the statutory professional accountancy organization for auditors in Hungary. It was established under Act LXXV of 2007 on the Chamber of Hungarian Auditors, the Activities of Auditors, and on the Public Oversight of Auditors, which entered into force on January 1, 2008. Membership in MKVK is mandatory for statutory auditors, and the organization operates under a legal mandate within Hungary’s public oversight framework.

MKVK performs both public-interest and professional functions assigned by law. Its public tasks include licensing, registering auditors and audit firms, publishing official registers, and organizing examinations connected with the qualification and certification of independent auditors. Other responsibilities include establishing and publishing national auditing standards, organizing mandatory training, managing quality control arrangements, issuing and enforcing ethical rules, and issuing professional rulings.

MKVK therefore plays a central role in the regulation and development of the audit profession in Hungary. In addition to its statutory responsibilities, it supports the continuous professional development of auditors and contributes to the implementation of professional, ethical, and quality management requirements applicable in the jurisdiction.

In addition to its national role, MKVK is a member of the International Federation of Accountants and Accountancy Europe. Hungary also has other professional bodies for accountants on a voluntary basis, but MKVK is the principal legally established professional body for statutory auditors.

The quality assurance (QA) review system in Hungary is established under Act LXXV of 2007 on the Chamber of Hungarian Auditors, the Activities of Auditors, and on the Public Oversight of Auditors (the Audit Act), which provides the legal basis for mandatory QA reviews of all statutory audits. Under this framework, the Auditors’ Public Oversight Authority (APOA) is responsible for QA reviews of auditors and audit firms that perform audits of public interest entities, while the Hungarian Chamber of Auditors (MKVK) conducts QA reviews of other statutory auditors and audit firms. Public interest entity auditors are reviewed on a three-year cycle and other statutory auditors are subject to review on a six-year cycle.

The framework is operational and applies across all mandatory audits. Hungary’s system therefore reflects a jurisdiction-level QA framework aligned with the main requirements of Statement of Membership Obligations 1, including coverage of all statutory audits, differentiated review cycles for public interest entity and non-public interest entity auditors, and linkage to public oversight.

MKVK has adopted the new quality management standards as part of the Hungarian National Auditing Standards framework. Official MKVK publications confirm that International Standard on Quality Management 1 (ISQM 1), International Standard on Quality Management 2 (ISQM 2), and International Standard on Auditing 220 (Revised) were issued in Hungarian and became effective on January 1, 2024. MKVK also maintains the current quality management standards and related implementation materials on its standards and knowledgebase pages.

Accordingly, the QA system is assessed as Adopted under the 2026 definitions. ISQM 1 and ISQM 2 have been adopted and are effective in Hungary as of January 1, 2024.

Current Status: Adopted

Initial and continuing professional development requirements for statutory auditors in Hungary are established under Act LXXV of 2007 on the Chamber of Hungarian Auditors, the Activities of Auditors, and on the Public Oversight of Auditors and are implemented by the Hungarian Chamber of Auditors (MKVK). The framework applies to statutory auditors, who are the regulated segment of the profession.

The qualification framework includes higher education, a structured professional education program, practical experience requirements, and final professional examinations. Candidates are required to complete initial practical experience, followed by a period of supervised training as an apprentice auditor, before obtaining a license and registration. MKVK is responsible for organizing and administering the professional education program, examinations, and qualification process in accordance with legal requirements.

Continuing professional development requirements are established and monitored at the jurisdiction level. MKVK requires its members to complete a minimum of 120 hours of continuing professional development over a rolling three-year period, in line with International Education Standards (IES) 7. The continuing professional development program is subject to oversight by the Auditors’ Public Oversight Authority.

The framework for initial professional development, practical experience, assessment, and continuing professional development is comprehensive and applies to all statutory auditors. Available evidence indicates alignment with the revised 2019 IES in effect at the time of the assessment.

Current Status: Adopted

Statutory audit requirements in Hungary are established under Act LXXV of 2007 on the Chamber of Hungarian Auditors, the Activities of Auditors, and on the Public Oversight of Auditors, which requires audits to be conducted in accordance with auditing standards generally accepted internationally. In practice, International Standards on Auditing (ISA) as issued by the International Auditing and Assurance Standards Board (IAASB) are translated and issued for application in Hungary by the Hungarian Chamber of Auditors (MKVK), subject to approval by the public oversight authority.

MKVK applies Hungarian National Auditing Standards based on ISA and maintains an established process to translate and incorporate new and revised standards. The 2022 IAASB Handbook, including International Standard on Auditing 315 (Revised), International Standard on Quality Management 1, International Standard on Quality Management 2, and International Standard on Auditing 220 (Revised), has been translated and made effective in Hungary, with additional revisions such as International Standard on Auditing 600 (Revised) effective from January 1, 2024.

However, more recent standards and revisions issued by the IAASB, including those incorporated in the 2023–2024 and 2025 Handbook cycles, such as International Standard on Auditing 570 (Revised 2024) and International Standard on Auditing 240 (Revised), are not yet effective or adopted in the jurisdiction. Accordingly, ISA are assessed as Partially Adopted under the 2026 definitions.

International Standard on Auditing for Audits of Financial Statements of Less Complex Entities has been adopted for use in eligible engagements.

Current Status: Partially Adopted

Ethical requirements for statutory auditors in Hungary are established under Act LXXV of 2007 on the Chamber of Hungarian Auditors, the Activities of Auditors, and on the Public Oversight of Auditors, which authorizes the Hungarian Chamber of Auditors (MKVK) to adopt rules of professional ethics subject to approval by the public oversight authority. MKVK publishes the applicable ethical requirements, including the Hungarian translation of the International Code of Ethics for Professional Accountants (including International Independence Standards).

The 2022 edition of the Code was translated and published by MKVK in 2023 and became effective in Hungary on January 1, 2024. Subsequent revisions, including the technology-related revisions, are in the process of being translated and implemented, with certain provisions expected to become effective from January 1, 2025. However, as the most recent version of the Code in effect at the time of the assessment has not yet been fully adopted and made effective in the jurisdiction, the Code is assessed as Partially Adopted under the 2026 definitions.

Current Status: Partially Adopted

Public sector accounting requirements in Hungary are established by the Ministry of Finance through national laws and regulations, including reforms introduced under Government Decree 4/2013 and related implementing requirements. Hungary’s public sector financial reporting framework is based on national standards rather than International Public Sector Accounting Standards (IPSAS).

According to the International Public Sector Financial Accountability Index developed by the International Federation of Accountants and the Chartered Institute of Public Finance and Accountancy, Hungary applies national public sector accounting requirements on a partial-accrual basis at the central government level. Available evidence indicates that IPSAS have not been formally adopted in the jurisdiction and are not applied as the basis for public sector financial reporting.

Current Status: Not Adopted

The investigative and disciplinary (I&D) system in Hungary is established under Act LXXV of 2007 on the Chamber of Hungarian Auditors, the Activities of Auditors, and on the Public Oversight of Auditors, which sets the legal framework for enforcement in respect of statutory auditors and audit firms. The applicable legal framework is available in the Audit Act.

The system reflects a shared model. The Auditors’ Public Oversight Authority (APOA) is responsible for oversight of enforcement and handles cases related to auditors and audit firms of public interest entities, while the Hungarian Chamber of Auditors (MKVK) operates the disciplinary system for non-public interest entity auditors and audit firms, subject to APOA oversight. IFAC’s member and jurisdiction profiles state that both enforcement systems meet the Statement of Membership Obligations 6 best practices.

MKVK has established a Disciplinary Committee to receive complaints and conduct disciplinary proceedings. IFAC reports that the disciplinary commissioner investigates possible violations and enforces the relevant legal and self-governance requirements within the MKVK framework.

Based on the available evidence, the jurisdiction-level framework is aligned with the main requirements of SMO 6 and remains operational for the regulated segment of the profession in Hungary. Accordingly, the I&D system is assessed as Adopted under the 2026 definitions.

Current Status: Adopted

Financial reporting requirements in Hungary are established under Act C of 2000 on Accounting and the European Union framework applicable to member states. As a member of the European Union (EU), Hungary requires International Financial Reporting Standards (IFRS) as adopted by the EU for the consolidated financial statements of all domestic companies whose debt or equity securities trade on a regulated market. The EU profile of the IFRS Foundation confirms that this requirement applies to all such companies and that EU-endorsed IFRS are incorporated into law through the IAS Regulation.

IFRS as adopted by the EU are IFRS as issued by the International Accounting Standards Board (IASB) except for limited European Union modifications. These standards are required for the consolidated financial statements of all EU and European Economic Area companies whose securities trade on a regulated exchange, and Hungary permits broader use of EU-endorsed IFRS for certain other entities and financial statements under national law.

Under the 2026 definitions, the key test is whether IFRS in effect at the time of the assessment are required for all domestic publicly accountable entities in consolidated general purpose financial statements. Based on the European Union framework applicable in Hungary, that condition is met at the jurisdiction level and therefore assessed as Adopted.

International Financial Reporting Standard for Small and Medium-sized Entities has not been adopted.

Current Status: Adopted

Relevant Organizations

Auditors’ Public Oversight Authority

Hungarian Chamber of Auditors

International Forum of Independent Audit Regulators

Relevant Legislation

Act C of 2000 on Accounting (Hungary Accounting Act)

Act LXXV of 2007 on the Chamber of Hungarian Auditors, the Activities of Auditors, and on the Public Oversight of Auditors

Government Decree 4/2013 on public sector accounting reforms

Relevant Publications

IFAC/CIPFA International Public Sector Financial Accountability Index

IFIAR Member Directory IFRS Foundation Jurisdictional Profile – European Union Hungarian Chamber of Auditors – Continuing Professional DevelopmentHungarian Chamber of Auditors – Disciplinary CommitteeHungarian Chamber of Auditors – IESBA Code of EthicsHungarian Chamber of Auditors – Hungarian National Auditing StandardsHungarian Chamber of Auditors – ISA for LCE Hungarian translation