Strengthening Quality of Auditing and Reporting, Albania, Phase III

Corporate Financial Reporting (CFR) has an important role in underpinning business confidence, increasing transparency and accountability, as well as supporting economic growth and development. High-quality financial reporting is also recognized as the cornerstone of a well-functioning market economy and as the bedrock of a robust financial system. Albania has to further improve its CFR framework and enforcement. The Albanian Government has updated its Country Strategy and Action Plan on CFR reforms (2021-2023). The Albanian regulations and enforcement shall be brought in line with EU requirements and international CFR-standards.

The Project aims that private and State-owned enterprises in Albania benefit from an improved business environment, higher transparency and better access to finance, through high quality Corporate Financial Reporting following international standards and practices.

It further aims to strengthen the capacities of government institutions, regulators, judiciary and accountancy professions to ensure continuous improvement, application and enforcement of the corporate financial reporting framework in Albania.

National Accounting Council (NAC) and Public Oversight Board (POB) are adequately equipped and able to satisfactorily perform their duties in the area of standards setting, audit oversight and professional examinations.

The Albanian profession is better equipped to export accounting services internationally, while strengthening the workplace and related jobs in Albania.

The general public is better aware of good Corporate Financial Reporting, the importance of integrity, objectivity and competence, and the benefits for and impact on the formal and informal economy.

Accountability, controls and transparency in State-Owned Enterprises (SOEs) are improved and SOEs’ financial performance is better monitored.

Judges, prosecutors and other relevant stakeholders are equipped with adequate knowledge related to disclosure and transparency in respect of corporate financial reporting- the profession benefits from a forensic accounting certificate program.

Expected results:  

Risk based methodology and specialized structure developed to support the National Accounting Council to monitor financial statements.

Efficient system developed with Public Oversight Body for investigation and disciplinary procedures

Tailored training program designed for the Institute of Certified Accountants (IKM)

SOEs’ accountants and finance staff, and relevant staff from Ministries are equipped with adequate knowledge on National Accounting Standards (NAS) and International Financial Reporting Standards (IFRS) application.

Forensic accounting certificate developed (duration 2-3 months)

Assessment of needs for judges, prosecutors, attorneys and judicial police- training program established, including Training of Trainers (ToT) approach

Specific gender issues are analyzed in all project components

Sustainability issues addressed and exit strategy formulated (including measures to be taken) as part of the design of future reforms in the CFR area

Results from previous phases:  

External Evaluation of Corporate Financial Reporting Reforms in Albania (2011-2019) – Main Results and Lessons Learned (a selection):

A coherent and permanent CFR system has been created, where all the individual institutions involved are brought to work together.

The National Accounting Council has established the technical capacity in producing financial reporting standards, in line with EU requirements or adopts IFRS for SMEs.

The statutory framework for corporate financial reporting has improved in recent years, with the amendment of the Audit Law in 2016 and enactment of the new Accounting Law in 2018.

The Public Oversight Body (POB) is successfully leading the public oversight of the audit profession, through satisfactory audit quality inspection, reviewing reports on Quality Assurance, and follow-up decisions duly taken.

The quality of academic education in accounting and financial reporting from pilot universities is improved.