Croatia Moves Closer to International Accounting Standards

The Croatian Audit Chamber (CAC) has made significant progress in implementing international accounting standards, with several initiatives aimed at strengthening the country’s audit and accounting framework.

Progress in Implementing International Accounting Standards

According to a recent report by the CAC, the Ministry of Finance has adopted the International Standards on Auditing (ISA), with all standards applicable for audits on or after December 15, 2023, being translated and adopted. The CAC is also working on translating new and revised ISA on an ongoing basis.

Code of Ethics for Professional Accountants

The Ministry of Finance has introduced a Code of Ethics for Professional Accountants, which is based on the International Ethics Standards Board for Accountants (IESBA) Code of Ethics. This code applies to all auditors in Croatia and ensures that they adhere to high ethical standards.

Enhancing Professional Development

The CAC is preparing to conduct post-Continuing Professional Development (CPD) assessments for members to assess their competencies instead of relying solely on input methods. This move aims to enhance the professional development of accountants and auditors in Croatia.

Proposed Amendments to Audit Law

The Ministry of Finance has proposed amendments to the Audit Law for 2022-2023, which would change the auditor’s qualification process and incorporate international standards more effectively. The CAC is collaborating with PAOs in Germany, Czech Republic, Slovenia, and Slovakia, as well as signing an MoU with the ACCA-UK, to advance these changes.

Establishment of Court of Honor

The Ministry of Finance has established a Court of Honor to serve as a supplementary enforcement mechanism for auditing and accounting standards. The court will conduct proceedings for settling disputes arising between members and the CAC, as well as disputes between members themselves.

Recognition by International Organizations

Croatia’s progress in implementing international accounting standards has been recognized by several organizations, including the International Federation of Accountants (IFAC) and the World Bank. However, there are still areas where improvement is needed, such as the adoption of International Public Sector Accounting Standards (IPSAS).

Commitment to Strengthening Audit and Accounting Framework

Overall, Croatia’s efforts to adopt international accounting standards demonstrate its commitment to strengthening its audit and accounting framework and promoting transparency and accountability in business.