Improvements and New Amendments to the Legal Audit Law
The latest amendments to the legal audit law represent a significant step toward modernizing practices and aligning with international standards. This law introduces a stronger focus on transparency, professionalism, and harmonization with global requirements, impacting several key areas of this profession.
Importance of Legal Amendments
The recent review of the law aims to:
- Strengthen professional organizations and audit firms to meet new standards.
- Improve the quality of preparation and testing for new auditors.
- Clearly define the economic entities required to undergo legal audits.
- Establish clearer rules for the organization of audit firms.
Changes for Professional Organizations and Audit Firms
Expansion of Responsibilities for Professional Organizations
Professional organizations of statutory auditors (IEKA) now play a more active role in training auditors on sustainability reporting and adapting practices to international standards for non-financial reports.
Update of the Public Register
The public register of statutory auditors and audit firms now includes:
(a) The approval status of auditors for sustainability reporting.
(b) Information on the authorities responsible for oversight and quality control.
Quality Control
The Public Oversight Board (BMP) has acquired new responsibilities, including:
- Delegating quality control for non-public interest entities to professional organizations.
- Maintaining overall supervision to ensure standards compliance.
Preparation of Statutory Auditors
Structured Professional Practice
New auditors are required to meet specific criteria during their three-year professional practice:
- Half of the time must focus on auditing annual and consolidated financial statements.
- Eight months must be dedicated to sustainability reporting.
- The majority of the practice must take place under a recognized and registered auditor in Albania.
Review of Exemptions
Individuals holding international titles such as CPA or ACCA are no longer exempt from professional practice, ensuring equal standards for all candidates.
Professional Exams
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Introduction of New Disciplines
The exam program now includes knowledge of sustainability reporting legislation, analysis, and due diligence processes related to sustainability. -
Tests for International Harmonization
Candidates with foreign certifications must pass additional tests to demonstrate their knowledge of Albanian regulations and relevant standards.
Criteria for Statutory Audit
Definition of Entities Required to Undergo Audit
In addition to public interest entities, statutory audits are also required for entities meeting two of the following three criteria:
- Assets exceeding 50 million ALL.
- Annual revenue exceeding 100 million ALL.
- More than 50 employees on average during a year.
Rules for Audit Firms
Designation of Key Partners
Audit firms must appoint a key partner for sustainability audits. This individual must:
- Meet the criteria for professional independence.
- Possess sufficient resources and staff to effectively perform their duties.
Client and Service Registration
Audit firms are now required to maintain records that include:
(a) Detailed information about clients.
(b) Applicable service fees.
(c) Comprehensive documentation on audit processes and assurance activities.
The amendments to the legal audit law represent a significant step forward in modernizing this profession and aligning with global requirements. These improvements not only enhance transparency and accountability but also provide a stronger foundation for the professional development of statutory auditors and audit firms in Albania.
