Albanian Experiences on Public Oversight Elton Haxhi, POB Albania 12-th FCM Annual Conference, Tirana November 2013
The need of public oversight of audit Three major benefits: • Improves audit quality and thus enhances economic growth • Meets international best practice and expectations • Directs and assists further development of the audit profession 12-th FCM Annual Conference, Tirana November 2013
Enacted by the Law on Auditing, POB formally established in September 2009 POB composition and appointment process • Public Oversight Board is a collegial body comprising 7 members nominated by the Minister of Finance. • Chairman and 3 members of the Board must be non- practitioners. • 3 other members of the Board may exercise their profession in public practice. 12-th FCM Annual Conference, Tirana November 2013
POB responsibilities • Supervise sole audit practitioners and audit firms either directly or through the supervision of the professional body of audit profession (IEKA). • The main objective of POB is to increase the confidence that statutory audits and other professional services in accounting and financial reporting are conducted in a transparent, supervised and prudent manner and serve the public interest. 12-th FCM Annual Conference, Tirana November 2013
Key missions of POB • Ensure compliance with Code of Ethics for Professional Accountants • Oversight of Quality Controls • Oversight of investigation & discipline and carrying out investigation when necessary • Cooperation at the EU level and other domestic and international exchanges. 12-th FCM Annual Conference, Tirana November 2013
POB accomplishment of its key missions Quality Control • Strategy: a limited no. of direct inspections of PIEs + reviewing IEKA inspections of other auditors • December 2011 - First inspection of audit firms finalized by the POB. Findings: Professional Scepticism and sufficency of audit evidence. Investigations • Several investigations initiated by the POB resulting in 1 penalty imposed to an audit firm and several recommendations given 12-th FCM Annual Conference, Tirana November 2013
CFREP World Bank Project 2011-2014 The assessment report identified several finding and recommendations/challenges • POB should become a legal person • POB Funding options: funded entirely from state budget; ü funded from a levy on companies (PIEs); ü funded from a levy on registered audit firms; ü mix of funding ü • POB Members ü Majority non-accountants 12-th FCM Annual Conference, Tirana November 2013
CFREP World Bank Project 2011-2014 The assessment report identified several finding and recommendations/challenges (continued) • Quality Control ü Focus on strengthening professional organizations quality control i. Strengthening IEKA system of quality control ii. Quality control of PIEs can be delegated to IEKA under the close supervision of POB iii. Direct inspection by POB for selected PIEs • Investigation & Discipline ü Disciplinary commission 12-th FCM Annual Conference, Tirana November 2013
POB challenges • Drafting of revised audit legislation in the light of EU acquis alignment amendments proposed • Support to audit institutional framework. POB short term and long term capacity building • Continue to improve overall audit quality with particular attention to: ü Focus on audit quality (efficency vs quality) ü Professional scepticism ü Auditors independence and ethical issues ü Audit of financial institutions 12-th FCM Annual Conference, Tirana November 2013
Quality is never assumed – it is demostrated by auditors doing the right thing each and every day Thank you! 12-th FCM Annual Conference, Tirana November 2013
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