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Croatia Moves to Enhance Auditing Standards and Practices

The Croatian Audit Chamber (CAC) has announced several initiatives aimed at strengthening auditing standards and practices in the country, bringing them in line with international best practices and requirements.

Strengthening Auditor Qualifications

One key development is the CAC’s monitoring of candidates’ practical experience and verification of their experience with employers prior to permitting them to sit for the exam, consistent with International Education Standard (IES) 5. Additionally, auditors are required to fulfill 120 hours of Continuing Professional Development (CPD) over a three-year period, in accordance with IES 7.

Enhancing CPD and Competency Assessment

The CAC is also promoting the formal adoption of IES 8 to the Ministry of Finance’s CPD Rulebook and preparing to conduct post-CPD assessments for members to assess their competencies. Furthermore, the organization is proposing amendments to the Audit Law that would change the auditor qualification process and enhance incorporation of IES requirements.

International Collaboration

In a bid to advance these changes, the CAC has collaborated with professional accountancy organizations (PAOs) in Germany, Czech Republic, Slovenia, Slovakia, and has signed an Memorandum of Understanding (MoU) with the Association of Chartered Certified Accountants (ACCA-UK). The organization is also cooperating with the Faculty of Economics at the University of Zagreb to support university alignment with IES.

Strategy for Enhancing Auditing Standards

The CAC’s efforts are part of its broader strategy to enhance auditing standards and practices in Croatia, which includes:

  • Translating International Standards on Auditing (ISAs) into Croatian and promoting their adoption
  • Promoting the adoption of the 2022 International Code of Ethics for Professional Accountants, including International Independence Standards

Public Sector Accounting Standards

Meanwhile, the Ministry of Finance is responsible for setting public sector accounting standards in Croatia, with public interest entities (PIEs) required to apply International Financial Reporting Standards (IFRS) as endorsed and published by the European Commission. The country’s financial reporting requirements are stipulated in EU Directives and Regulations, which are then transposed into Croatian national laws.

Conclusion

The CAC’s initiatives aim to strengthen auditing standards and practices in Croatia, ensuring a more robust and transparent profession that serves the public interest.

Sources:

  • Croatian Audit Chamber (CAC)
  • Ministry of Finance
  • Accounting Act
  • Audit Act, 2017
  • Companies Act
  • Relevant publications

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