Kosovo

Accounting

The financial reporting framework in Kosovo is established under Law No. 06/L–032 on Accounting, Financial Reporting and Auditing. The law requires the application of international accounting and auditing standards for business entities, except for entities subject to the supervision of the Central Bank of the Republic of Kosovo (CBK). Banks, insurance companies, pension funds, and other financial institutions are additionally regulated under Law No. 03/L–209 on the Central Bank of the Republic of Kosovo. The CBK requires banks and insurance companies to apply full International Financial Reporting Standards (IFRS Accounting Standards).

Under Law No. 06/L–032, business organizations registered as limited liability companies or joint stock companies are required, depending on their size, to apply either full International Financial Reporting Standards (IFRS Accounting Standards) or the IFRS for Small and Medium-sized Entities (IFRS for SMEs) as translated into Albanian and approved by the Kosovo Council for Financial Reporting (KCFR). The KCFR maintains a cooperation arrangement with the National Accounting Council of Albania for the use of Albanian translations of IFRS Accounting Standards issued by the International Accounting Standards Board (IASB). As of the date of the assessment, the 2024 consolidated version of IFRS Accounting Standards and the 2015 version of the IFRS for SMEs are approved for application in Kosovo.

Law No. 06/L–032 establishes differentiated financial reporting requirements based on entity size. Large entities are those exceeding two of the following criteria: annual turnover of EUR 40 million, total assets of EUR 20 million, or an average of more than 250 employees during the financial year. Medium-sized entities are those that do not exceed at least two of the large entity thresholds. Small entities are those that do not exceed at least two of the following thresholds: annual turnover of EUR 8 million, total assets of EUR 4 million, or an average of more than 50 employees during the financial year. Micro-entities are those that do not exceed at least two of the following thresholds: annual turnover of EUR 700,000, total assets of EUR 350,000, or an average of 10 employees during the financial year.

Large entities are required to apply full IFRS Accounting Standards as approved by the KCFR. Medium-sized and small entities may apply either full IFRS Accounting Standards or the IFRS for SMEs. Micro-entities are required to apply simplified accounting requirements issued by the KCFR. Entities may also elect to directly apply IFRS Accounting Standards as issued by the IASB.

Auditing

Law No. 06/L–032 on Accounting, Financial Reporting and Auditing establishes statutory audit requirements in Kosovo. Medium-sized and large entities are required to have their financial statements audited.

Statutory audits are required to be conducted in accordance with International Standards on Auditing (ISA) and related pronouncements issued by the International Auditing and Assurance Standards Board (IAASB) and approved by the KCFR. The KCFR is responsible for reviewing translated standards and approving them for application in the jurisdiction. As of the date of the assessment, the auditing framework is based on the 2018 IAASB Handbook approved by the KCFR.

During 2025, the Society of Certified Accountants and Auditors of Kosovo (SCAAK), in cooperation with the Institute of Authorized Chartered Auditors of Albania (IEKA), completed Albanian translations of ISA 315 (Revised 2019), ISA 220 (Revised), and ISA 600 (Revised) and made them available to members. SCAAK and IEKA have also translated the International Standard on Auditing for Audits of Financial Statements of Less Complex Entities (ISA for LCE) and supported awareness and implementation activities. However, ISA for LCE has not yet been formally approved by the KCFR and is therefore not adopted for jurisdiction-level application.

Under Law No. 06/L–032 on Accounting, Financial Reporting and Auditing, the Kosovo Council for Financial Reporting (KCFR), operating under the Ministry of Finance, Labour and Transfers, is responsible for regulating the accountancy and audit profession in Kosovo. The law establishes a shared regulatory framework involving the KCFR, the Public Oversight Board (POB), and licensed professional accountancy organizations.

The responsibilities of the KCFR include approving accounting, auditing, and ethical standards; establishing professional education requirements for accountants and auditors; licensing statutory auditors and audit firms and maintaining public registers; and licensing and overseeing professional accountancy organizations. The law also defines the role of certified accountants and requires the financial statements of certain entities, including medium-sized and large entities, to be signed by a certified accountant.

Professional accountancy organizations licensed by the KCFR are delegated responsibility for administering professional certification programs for accountants and auditors. Licensed professional accountancy organizations are additionally responsible for establishing ethical requirements for their members based on the International Code of Ethics for Professional Accountants (including International Independence Standards) issued by the International Ethics Standards Board for Accountants and for operating investigative and disciplinary systems for their members.

To be licensed by the KCFR, professional accountancy organizations must satisfy the requirements established under Law No. 06/L–032 and Administrative Instruction No. 01/2014 on the Criteria for Recognition of Professional Associations of Accountants and Auditors. Licensed professional accountancy organizations are required to operate as non-profit organizations acting in the public interest; comply with the IFAC Statements of Membership Obligations (SMOs); adopt the International Code of Ethics for Professional Accountants (including International Independence Standards); maintain investigation and discipline systems for their members; and achieve IFAC Associate membership within three years and IFAC membership within five years from the entry into force of the law.

As of the date of the assessment, three professional accountancy organizations are licensed by the KCFR: the Society of Certified Accountants and Auditors of Kosovo (SCAAK), the Institute for Accounting, Auditing and Finance (IKAF), and the AAB Institute for Certified Accountants and Auditors (IAAB). SCAAK is currently the only licensed professional accountancy organization that is a member of IFAC.

Candidates seeking qualification as certified accountants are required to hold a university degree, complete a minimum of three years of relevant practical experience, and successfully complete a professional certification program offered by a licensed professional accountancy organization. Law No. 06/L–032 requires professional education programs for certified accountants to align with the International Education Standards issued by IFAC. Certified accountants are required to maintain membership in a licensed professional accountancy organization.

To qualify as statutory auditors, candidates must complete professional education and examinations, obtain at least three years of practical experience under the supervision of a statutory auditor or audit firm, and maintain membership in a licensed professional accountancy organization, among other requirements established by law. Professional education requirements for statutory auditors are also required to align with the International Education Standards.

Law No. 06/L–032 additionally provides for the establishment of the Public Oversight Board as the independent public oversight mechanism for the audit profession. The POB operates within the institutional framework of the KCFR and is responsible for oversight of continuing professional development, quality assurance reviews, and investigative and disciplinary systems relating to statutory auditors and audit firms. The POB is also responsible for conducting quality assurance reviews of auditors and audit firms on a risk-based basis.

Law No. 06/L–032 on Accounting, Financial Reporting and Auditing establishes the legal framework for public oversight of the audit profession in Kosovo. The law approximates national legislation with the relevant European Union statutory audit framework and establishes the Public Oversight Board (POB) as the audit oversight mechanism for statutory auditors and audit firms.

The POB operates as the executive branch of the Kosovo Council for Financial Reporting (KCFR), which is established as the competent authority under the law. The KCFR is responsible for approving accounting, auditing, and ethical standards; licensing statutory auditors and audit firms; maintaining public registers; licensing and overseeing professional accountancy organizations; and issuing related sub-legal acts and guidance.

All statutory auditors and audit firms are subject to public oversight. The POB is responsible for oversight of continuing professional development, quality assurance systems, and investigative and administrative disciplinary systems. It is also responsible for quality assurance reviews of auditors and audit firms on a risk-based basis, with reviews conducted at least every three years for auditors and audit firms performing audits of larger and public interest entities and at least every six years in other cases.

The POB’s responsibilities include preparing inspection methodologies, inspection reports, follow-up reports, reporting methodologies, and periodic inspection programs for approval by the KCFR; approving and appointing inspectors for each inspection; and preparing six-month and annual inspection plans for KCFR approval. The POB is required to report regularly to the KCFR and publish an annual report on quality inspection results.

Law No. 06/L–032 on Accounting, Financial Reporting and Auditing provides for the licensing of professional accounting and auditing associations by the Kosovo Council for Financial Reporting (KCFR). Licensed associations are required to meet legal and regulatory criteria established by the KCFR, comply with IFAC requirements, ensure that members act in accordance with professional conduct and ethical requirements, and support professional education and certification.

Membership in a licensed professional association is mandatory for certified accountants and statutory auditors. As of the date of the assessment, three professional accountancy organizations are licensed in Kosovo: the Society of Certified Accountants and Auditors of Kosovo (SCAAK), the Institute for Accounting, Auditing and Finance (IKAF), and the AAB Institute for Certified Accountants and Auditors (IAAB).

Society of Certified Accountants and Auditors of Kosovo

The Society of Certified Accountants and Auditors of Kosovo (SCAAK) was established in 2001 as a non-governmental and non-profit professional accountancy organization. SCAAK was the first professional accountancy organization in Kosovo to provide accounting and auditing education and the first professional accountancy organization licensed by the KCFR. It remains the only licensed professional accountancy organization in Kosovo that is a member of IFAC.

SCAAK provides certification programs for accounting technicians, certified accountants, auditors, public sector accountants and auditors, and internal auditors. Its certification programs are accredited by the National Qualifications Authority. SCAAK supports the development of the profession through certification, continuing professional development, technical resources, ethics and quality-related activities, and cooperation with regulators, universities, public institutions, and international partners.

Institute for Accounting, Auditing and Finance

The Institute for Accounting, Auditing and Finance (IKAF) was established in 2005 and licensed by the KCFR as a professional accounting and auditing association in 2013. IKAF provides professional education, certification, and training programs in accounting, auditing, finance, internal audit, tax, valuation, and related areas.

AAB Institute for Certified Accountants and Auditors

The AAB Institute for Certified Accountants and Auditors (IAAB) was established in 2016 as a non-governmental and non-profit professional association for accounting and auditing. IAAB is licensed by the KCFR and accredited by the National Qualifications Authority. It provides professional education and certification programs for accounting and auditing professionals and is a member of the Federation of Mediterranean Accountants.

The quality assurance (QA) review system in Kosovo is established under Law No. 06/L–032 on Accounting, Financial Reporting and Auditing. The law establishes the Kosovo Council for Financial Reporting (KCFR) as the competent authority for regulating auditors and audit firms and the Public Oversight Board (POB) as the body responsible for oversight of QA systems and inspections.

The POB is mandated to conduct QA reviews of auditors and audit firms on a risk-based basis, at least every three years for auditors and audit firms auditing larger and public interest entities and at least every six years in other cases. However, the POB QA review system has not yet been fully operationalized. In practice, the Society of Certified Accountants and Auditors of Kosovo (SCAAK) has conducted QA reviews of its members providing audit services since 2016 and certified accountants responsible for preparing and signing financial statements since 2020.

The jurisdiction-level QA framework is established and aligned with several SMO 1 requirements, but it is not yet fully operational through the public oversight authority for all mandatory audits.

The applicable quality management standard remains International Standard on Quality Control 1 under the 2018 IAASB Handbook. International Standard on Quality Management (ISQM) 1 and ISQM 2 have been translated and disseminated by SCAAK, but no evidence was identified that they have been formally adopted by the KCFR.

Current Status: Partially Adopted

Initial and continuing professional development requirements for certified accountants and statutory auditors in Kosovo are established under Law No. 06/L–032 on Accounting, Financial Reporting and Auditing. The Kosovo Council for Financial Reporting (KCFR) is responsible for establishing professional education requirements and overseeing implementation, while professional certification programs are administered by licensed professional accountancy organizations.

Candidates for the certified accountant designation are required to hold a university degree, complete a minimum of three years of practical experience, and successfully complete a professional certification program. Candidates seeking qualification as statutory auditors are additionally required to complete professional examinations and obtain practical experience under the supervision of a statutory auditor or audit firm.

Continuing professional development requirements for statutory auditors are prescribed by law and subject to oversight by the KCFR. The Society of Certified Accountants and Auditors of Kosovo (SCAAK) additionally establishes continuing professional development requirements for its members, including certified accountants and accounting technicians.

SCAAK reports that its certification and continuing professional development programs are aligned with the 2019 International Education Standards Handbook and are regularly updated to reflect revisions to the International Education Standards, including recent revisions relating to information and communications technologies and sustainability competencies.

The jurisdiction-level framework incorporates many of the requirements of the International Education Standards for regulated segments of the profession. However, information demonstrating full alignment with the latest International Education Standards across all licensed professional accountancy organizations and all professional accountants was not identified. Accordingly, adoption of the International Education Standards is assessed as Partially Adopted.

Current Status: Partially Adopted

Law No. 06/L–032 on Accounting, Financial Reporting and Auditing requires statutory audits in Kosovo to be conducted in accordance with International Standards on Auditing (ISA) and related pronouncements issued by the International Auditing and Assurance Standards Board (IAASB), as approved by the Kosovo Council for Financial Reporting (KCFR).

The applicable standards are based on the Albanian translation of the 2018 Handbook of International Quality Control, Auditing, Review, Other Assurance, and Related Services Pronouncements, translated by the Institute of Authorized Chartered Auditors of Albania and the Society of Certified Accountants and Auditors of Kosovo (SCAAK).

SCAAK reports that the 2021 IAASB Handbook has been translated and disseminated to members. In addition, SCAAK, in cooperation with the Institute of Authorized Chartered Auditors of Albania, completed Albanian translations of International Standard on Quality Management 1, International Standard on Quality Management 2, ISA 220 (Revised), ISA 315 (Revised 2019), ISA 600 (Revised), and the International Standard on Auditing for Audits of Financial Statements of Less Complex Entities (ISA for LCE). However, no evidence was identified that these pronouncements have been formally approved by the KCFR for jurisdiction-level application.

Current Status: Partially Adopted

Law No. 06/L–032 on Accounting, Financial Reporting and Auditing requires licensed professional accountancy organizations in Kosovo to adopt the International Code of Ethics for Professional Accountants (including International Independence Standards) issued by the International Ethics Standards Board for Accountants (IESBA) for application by their members. Membership in a licensed professional accountancy organization is mandatory for certified accountants and statutory auditors, and the Kosovo Council for Financial Reporting (KCFR) is responsible for approving the codes of licensed associations and enforcing compliance by statutory auditors.

The Society of Certified Accountants and Auditors of Kosovo (SCAAK), a licensed professional accountancy organization and IFAC member, has adopted the 2023 International Code of Ethics for Professional Accountants for application by its members.

SCAAK confirmed that all licensed professional accountancy organizations are legally required to adopt the Code, but it does not have direct evidence confirming the specific edition or version currently adopted or applied by the Institute for Accounting, Auditing and Finance and the AAB Institute for Certified Accountants and Auditors.

Current Status: Partially Adopted

Public sector accounting standards in Kosovo are established by the Ministry of Finance, Labour and Transfers. Kosovo applies cash-basis International Public Sector Accounting Standards (IPSAS), with annual financial statements presented on a basis consistent with cash-basis IPSAS requirements.

According to the World Bank Centre for Financial Reporting Reform, Kosovo has applied cash-basis IPSAS since 2004. A transition to accrual-basis IPSAS has been identified as a long-term reform objective.

The jurisdiction-level framework incorporates cash-basis IPSAS but has not adopted accrual-basis IPSAS for application by all public sector entities. Accordingly, IPSAS adoption is assessed as Partially Adopted.

Current Status: Partially Adopted

Law No. 06/L–032 on Accounting, Financial Reporting and Auditing of 2019 authorizes the Kosovo Council for Financial Reporting (KCFR) to impose sanctions for non-compliance by statutory auditors and audit firms. KCFR Administrative Instruction No. 01/2022 on Investigation and Discipline Procedures establishes the Commission for Investigation and Discipline of the KCFR, which is responsible for investigating and disciplining licensed professional accountancy organizations, audit firms, and statutory auditors.

Licensed professional accountancy organizations are also required to establish investigation and discipline (I&D) systems for their members and report outcomes to the KCFR. The Society of Certified Accountants and Auditors of Kosovo (SCAAK) has established an I&D system for its members and reports that it is aligned with the requirements of SMO 6.

However, there are two other professional associations licensed by the KCFR. The Institute for Accounting, Auditing and Finance, which is not an IFAC member organization, appears to have a policy on I&D for its members; however, it is not clear whether the system is operational and is aligned with the requirements of SMO 6. Lastly, information on the AAB Institute for Certified Accountants and Auditors (IAAB), which is also not a member organization of IFAC, is unavailable.

Current Status: Partially Adopted

Law No. 06/L–032 on Accounting, Financial Reporting and Auditing requires business organizations registered as limited liability companies or joint stock companies to apply International Financial Reporting Standards (IFRS Accounting Standards) or the IFRS for Small and Medium-sized Entities (IFRS for SMEs), depending on entity size. Large entities are required to apply full IFRS Accounting Standards as approved by the Kosovo Council for Financial Reporting (KCFR), while other entities may elect to apply full IFRS Accounting Standards. Banks and insurance companies are also required by the Central Bank of the Republic of Kosovo to apply full IFRS Accounting Standards.

The KCFR has an agreement with the National Accounting Council of Albania to use Albanian translations of IFRS Accounting Standards issued by the International Accounting Standards Board. As of the date of the assessment, the 2024 consolidated version of IFRS Accounting Standards is applied in Kosovo.

The 2015 IFRS for SMEs is also adopted and applied in Kosovo for eligible small and medium-sized entities

Current Status: Adopted

Relevant Organizations

AAB Institute for Certified Accountants and Auditors (IAAB)Central Bank of the Republic of Kosovo (CBK) Institute for Accounting, Auditing and Finance (IKAF)Institute of Authorized Chartered Auditors of Albania (IEKA)Kosovo Council for Financial Reporting (KCFR)Public Oversight Board (POB)Society of Certified Accountants and Auditors of Kosovo (SCAAK)World Bank Centre for Financial Reporting Reform (CFRR)

Relevant Legislation

Administrative Instruction No. 01/2014 on Criteria for Recognition of Professional Associations of Accountants and AuditorsAdministrative Instruction No. 01/2022 on Investigation and Discipline ProceduresLaw No. 03/L–209 on the Central Bank of the Republic of KosovoLaw No. 06/L–032 on Accounting, Financial Reporting and Auditing

Relevant Publications

2023 International Code of Ethics for Professional Accountants (including International Independence Standards), Albanian Translation 2018 Handbook of International Quality Control, Auditing, Review, Other Assurance, and Related Services Pronouncements, Albanian Translation IFRS Foundation Jurisdiction Profile – Kosovo World Bank CFRR Publication – Kosovo’s Journey to IPSAS and GFS