Albanian Experiences on Public Oversight Elton Haxhi, POB Albania - - PowerPoint PPT Presentation

12-th FCM Annual Conference, Tirana November 2013

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

• f 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

• f 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:

ü

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

• 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!