Introduction
The Public Oversight Board (BMP) has adopted a new regulation on quality control in statutory audits, replacing the existing 2018 regulation. This new regulation (Decision No. 44, dated September 30, 2025 establishes the new procedures and the way of operating the quality assurance system for statutory auditors and audit firms in Albania. The changes aim to strengthen audit quality, increase transparency, and better protect the public interest through higher professional standards.
In this blog, we explain what's happening with this new regulation, what fundamentally changes compared to the previous framework, and why these changes were made. The information is presented in an accessible way for both the public and clients (businesses subject to statutory audit), as well as serving as a practical guide for statutory auditors and other professionals in the field.
Why was the new regulation approved?
Harmonization with European standards
The new regulation comes as part of legal reforms aimed at aligning with best international practices and the EU acquis. During 2024, amendments to the Law “On Legal Auditing…” were approved with the goal of improving the legal framework and enhancing the quality of financial reporting. These legal changes also required updating the sub-legislative regulations so that the Albanian regulatory framework reflects the EU directives on auditing. As a result, the new BMP regulation fulfills the new legal obligations and addresses the recommendations of the EU's progress reports for this sector.
Increasing quality and transparency
The primary objective of the new regulation is to increase public confidence in audits by strengthening quality control mechanisms. The Ministry of Finance has emphasized that the changes aim not only to increase the quality of financial reporting, transparency, and accountability, but also to improve the oversight of statutory auditors. The new regulation establishes clearer and stricter rules for the quality control process, clarifying the roles and responsibilities of regulatory institutions and ensuring stronger enforcement of auditing standards. This means that auditors and audit firms will be under stricter and more structured oversight, which is expected to translate into higher-quality audits for businesses and the public.
New developments in the profession
The regulation addresses the latest developments in the auditing profession, such as the introduction of assurance engagements on sustainability (ESG) reports. The recently amended audit law has introduced a requirement for statutory auditors to also provide assurance services on sustainability reporting for companies to which it applies. The new BMP regulation reflects this development by extending the scope of quality control to these new engagements alongside traditional financial audits. Likewise, at the international level, new quality management standards have come into effect (such as ISQM 1 & 2) that require changes in how quality control systems are organized within audit firms. The new regulation ensures that practices in Albania are in compliance with these contemporary standards.
Key changes in the new regulation
The new regulation contains a series of essential innovations and improvements compared to the 2018 predecessor act. Below are the key points you need to know:
Internal Quality System (ISQM)
Every statutory auditor and audit firm is required to establish and operate an internal system for ensuring audit quality, in accordance with legal requirements and international quality management standards. This means that audit firms must have written quality control policies and procedures in place, implementing the new global standards (e.g., for risk assessment, engagement review, etc.). This was an aspect that was less emphasized in the old regulation, but now it takes center stage.
Expansion of the scope of control (including sustainability reporting)
The BMP will oversee not only the quality of statutory audits of financial statements but also assurance engagements on sustainability reports, where applicable. This is a major innovation, as it addresses non-financial information (environmental, social, governance) that is becoming increasingly important to investors. Auditors providing assurance services on sustainability reports will be subject to the same high standards of quality and oversight as financial audits.
Stricter rules on independence and ethics
The regulation details the requirements for complying with the code of ethics and maintaining the auditor's independence in every engagement. Legal auditors, before accepting or continuing an audit engagement, must formally assess their independence—identifying any potential threats to independence and the appropriate protective measures. Also, the provision of certain non-audit services to audit clients is prohibited, in accordance with the principles set forth in the law and the Code of Ethics. These requirements were part of existing rules, but are now reinforced and specified in the regulation in greater detail, in implementation of the legal changes and the EU regulation.
New procedures for client intake and scheduling
The new regulation imposes certain basic requirements before accepting an audit engagement. In addition to assessing independence, the auditor must ensure that they have the qualified staff, time, and resources necessary to perform the audit in a timely and high-quality manner, and that the lead audit partner is registered on the public register (licensed). This will formalize the practice of auditors not taking on work beyond their capacities, potentially preventing low-quality audits due to overload or lack of experience.
Obligation to change the auditor – transfer of information
A very important innovation is the establishment of a legal obligation that when a statutory auditor or audit firm is replaced by another before the completion of the engagement, the predecessor auditor must grant the successor access to all relevant information collected during the audit up to that point. In simple terms, if a company terminates its contract with an auditor and hires another during the process, the first auditor is required to share the file and work documentation for that client with the successor. This rule avoids starting the audit from scratch and ensures continuity of the process without compromising quality. For businesses, this means a smoother transition when changing auditors; for auditors themselves, it increases the responsibility to fully and accurately document the work performed.
Contents of the audit report and the assurance report
The new regulation establishes specific rules on the content of the reports issued by the auditor. This includes both financial audit reports (individual and consolidated) and assurance reports for sustainability reports. The aim is for these reports to be as informative as possible and in line with international auditing and assurance standards. For example, the audit report can be expected to contain all the elements required by the ISA standards (such as the description of responsibilities, opinions, key audit matters for public interest entities, etc.), while in the case of ESG assurance reports, the level of assurance provided (e.g., limited or reasonable assurance opinion) and the criteria used are clearly reflected. This increased transparency gives stakeholders (investors, creditors, the public) greater confidence and understanding of what the auditor has done.
Communication with the audit committee
Another aspect of the regulation is the establishment of detailed rules for the auditor's reporting to the Audit Committee of economic units where one exists. Auditors now have a formal obligation to communicate to the audit committee (for public interest entities) the key findings, internal control weaknesses, independence issues, etc. This improves corporate governance, as audit committees are better informed about the quality of the audit and the issues encountered during the process.
Follow-up checks and re-evaluation
BMP will carry out follow-up controls after quality inspections of auditors. This means that once an audit firm has been inspected and has received the report with recommendations, BMP may return to verify the implementation of those recommendations within specified timeframes. Based on the results of the follow-up inspection, the BMP is entitled to revise the quality assessment of the auditor or the firm. In practice, if an auditor has not implemented the required improvements, their quality rating or classification may be lowered, or other measures may be taken. This fosters a cycle of continuous improvement, as auditors will have a strong incentive to address any deficiencies identified in a timely manner.
Changes and other technical details also include restrictions on task delegation by the BMP – e.g. BMP cannot delegate decision-making on quality controls or disciplinary measures without its own decision, nor improvements to the sanctions system, but for practical purposes we focus on the main points above.
How does this regulation affect companies and customers?
For audited companies, especially those that are public interest entities (e.g., banks, listed companies, financial institutions, large enterprises), the new regulation is expected to have a positive impact on ensuring a higher-quality audit. Here's what this means in practice for businesses:
Higher-quality and more reliable audits
Under the new rules, your auditors will follow more rigorous quality control procedures—both within their firm and through BMP inspections. This is expected to make audit reports more reliable. As a result, third parties who read your financial statements (investors, banks, regulators) will have greater confidence in them, lowering the cost of financial uncertainty.
More focus on compliance and ethics
Your auditor will carefully investigate any conflict of interest or other service that could compromise independence. This may mean that your company may be asked for additional information when the audit is accepted (e.g., a list of other consulting services you receive from the auditor, to ensure there are no breaches of the restrictions). Also, if irregularities or violations are discovered in your company during the audit, the regulation requires the auditor to address them with the appropriate seriousness. This raises management's awareness to correct issues such as internal control weaknesses, legal violations, etc., since it is known that even the BMP may ask for accountability on these matters.
More informative audit report
As a company, you will receive an improved audit report at the end of the process. For example, if you are a large company, the audit report will broadly include the key audit issues, the treatment of sustainability matters (if assurance applies to them), and statements on the auditor's independence, in accordance with the new requirements. This information makes your company's financial and non-financial reports more transparent. Investors and the public will better understand what has been assessed and attested by the auditor.
Switching to new auditors becomes easier.
If for any reason you decide to change auditors during the process (it rarely happens, but it's not impossible), the regulation protects you so that the work done is not lost. The former auditor is required to share all documentation with the new auditor, so your company won't have to start over from scratch. This saves time and costs, ensuring a smooth transition without compromising audit quality.
Prepare for the sustainability report audit.
If you are a large company that will be reporting on sustainability in the future (environment, social issues, governance), Be aware that from 2026–2027 the implementation of these requirements is expected to begin in Albania as well, and by the end of 2028 the BMP will have established quality control mechanisms over these engagements. This means that, when the time comes, your sustainability report will be subject to assurance by auditors licensed and supervised by the BMP, just as financial statements are. For you as a business, this is an incentive to prepare early: to secure ESG data collection systems and reliable reporting processes, since these too will be carefully assessed by external auditors.
In general, for honest and transparent businesses, these changes bring added value because they increase the quality of the audit service you receive. A higher-quality audit can uncover weaknesses or errors that you can correct, and provide greater assurance to your partners that the financial information (and soon sustainability information as well) is accurate. Of course, you should keep in mind that auditors may become somewhat more demanding and procedural in their work (e.g., they may request additional documentation, ask more questions, or spend more time on testing), but this is done to meet the new standards and is in your company's long-term interest.
What should legal auditors keep in mind?
The new regulation directly affects statutory auditors and audit firms, imposing additional requirements and changing how they plan and document their work. Some key points for professionals:
Implementation of the new quality system
Auditors, and especially large firms, must review their quality manuals in accordance with the new regulation. The establishment of an internal quality management system that complies with the law's provisions and international standards is required. In practice, this means, for example, drafting new quality control policies, appointing individuals responsible for monitoring the system, conducting risk assessmentAnnual review of audit quality within the firm, etc. Firms will need to demonstrate to the BMP that this system is working (possibly with evidence that ISQM 1 and ISQM 2 are being implemented).
Documentation of client's independence and acceptance
Attention must be paid to the client engagement acceptance documents. The regulation requires auditors to formally document their assessment of compliance with the requirements of Article 33 of the law (the article addressing independence) and Article 8 of the new regulation. This includes listing any threats to independence and the safeguards taken. Auditors will need to maintain files with checklist-a a specific form for this purpose, because during a BMP quality inspection they may request evidence of these assessments. Also, auditors must ensure they have the appropriate capacity and staff before taking on a client – this can encourage firms to specialize and avoid taking on work beyond their capacity, in order to prevent issues during inspections.
Update of audit reports
Auditors will need to adapt the format and content of their reports to the new requirements. For example, in the audit reports on annual financial statements, auditors may need to include references as to whether they are licensed to provide sustainability reporting assurance (a new legal requirement for 2024), or to provide additional details in accordance with changes to the ISA standards. For sustainability assurance reports, auditors will develop new reporting templates, following the ISAE/ISA standards for assurance of non-financial information. It is recommended that auditors follow the guidelines of IFAC and IEKA (Institute of Authorized Accounting Experts) regarding these reports, as IEKA is expected to provide training or standard templates. A properly prepared report not only fulfills the requirements but also protects the auditor in the event of a BMP review.
Adherence to deadlines and new obligations
According to the transitional provisions, auditors must pay attention to several important deadlines: (a) New obligation for annual reporting to the BMP. The regulation appears to require auditors to submit annual information (possibly client statements, continuing education hours, or similar). – this will begin for the first time on January 30, 2026, so auditors need to have this information ready at the start of 2026. (b) In-process quality controls: if a quality control by the BMP was initiated before the new regulation took effect, it will be completed under the old Regulation No. 7/2018. This means that for any ongoing inspection (if any), auditors should still apply the old rules until the process is closed. (c) Deadline for quality controls of sustainability engagements: BMP will not inspect assurance engagements for sustainability reports until several years later – specifically, these controls will apply to reporting periods closed on December 31, 2028, and thereafter. This gives auditors a window of time to train and become accredited in this new field. However, auditors planning to offer assurance services for ESG should start familiarizing themselves now with the relevant standards (ISAE 3000, EFRAG standards for sustainability reporting, etc.). and ensure they obtain the necessary licensing when the time comes (the law has already provided for a specific register or approval for auditors of these reports).
Collaboration with BMP and IEKA
Under the new regulation, BMP emphasizes certain aspects of public oversight that are not delegated elsewhere, meaning it will retain direct control over, for example, quality inspections and disciplinary measures. This implies more frequent and formal communication with BMP. Auditors must respond carefully to BMP's requests, reply to correspondence within the deadlines, and take a proactive stance in addressing the issues raised. On the other hand, the role of IEKA (as the professional organization) remains important in training and assisting members in implementing these rules. The Regulation also applies to the professional organization of statutory auditors, which means that IEKA itself will be subject to BMP oversight regarding how it manages, for example, the quality control scheme it organizes for its members or the continuing education process. Auditors should await guidance from IEKA regarding the practical implementation of the new regulation and participate in any training or seminar organized on this topic.
In general, preparation is key. Auditors operating in accordance with international standards will welcome these changes, as the new regulation simply institutionalizes good professional practices. There may be a short-term increase in administrative burden (e.g., completing additional documentation, drafting new internal policies), but in the long run this consolidates the quality and reputation of the profession. For auditors who until now have been less rigorous, the new regulation serves as a call to raise the bar – the BMP will monitor closely, and failure to meet the new requirements may result in penalties or disciplinary measures.
Entry into force and next steps
The new regulation has not yet formally come into effect at the time of this blog's publication. According to the BMP decision, the act takes effect upon publication in the Official Gazette. This is expected to happen soon, since the decision was made on September 30, 2025. After official publication, all new provisions will be legally enforceable.
In summary, these are the key time points to keep in mind:
30.09.2025
Date of approval of the regulation by the BMP (Decision No. 44, 2025). As of this date, the old 2018 regulation is considered repealed (effective upon the new one's entry into force).
Publication in the Official Gazette (expected: October 2025)
The new regulation takes legal effect within 15 days of its official publication. Audit firms must therefore begin adapting to its requirements immediately, as subsequent BMP inspections will be conducted on the basis of this act.
January 2026
The first submission of annual information by auditors to the BMP (on January 30, 2026) under the new requirement. Auditors will likely report data for the year 2025 (this remains to be clarified in the relevant guidance, but the date is in the regulation).
two thousand twenty-six–two thousand twenty-seven
Auditors and audit firms continue to offer assurance services for sustainability reports (for those companies that choose or are required to by international bodies), but the BMP will not inspect these engagements until after 2028. Now is the time to get ready: train personnel, internalize ESG standards, and develop in-house methodologies for these services.
After 2028
BMP will officially extend its quality inspections to its sustainability safety commitments, beginning with the fiscal year 2028 reports and beyond. This aligns with the expectation that sustainability reporting will have become mandatory in Albania as well (perhaps initially for the largest public interest companies, in line with EU directives). From this point on, auditors will have two main areas under supervision: financial audits and non-financial assurances.
In addition to the regulation itself, BMP is expected to issue guidelines or manuals for practical implementation. Additionally, IEKA and other bodies may issue guidelines to their members on meeting the requirements (especially regarding quality systems and new report formats). Auditors and firms should remain vigilant for these notices.
On the other hand, audited companies will benefit from being informed as well: a good idea would be for chief financial officers (CFOs) or members of audit committees to read the summary of the regulation to understand what to expect from their auditors. Some companies may need to update their engagement letters with auditors to align them with the new terms (e.g., adding an information-sharing clause in the event of contract termination, etc.).
Conclusion
The new BMP regulation on quality control marks an important step toward strengthening the audit infrastructure in Albania. In summary, it enhances the existing framework by introducing clearer rules, expands the scope of oversight to new areas such as sustainability auditing, and raises professional requirements for auditors to maintain independence, manage the quality of their work, and communicate more effectively with stakeholders. These changes are a direct response to legal and market developments – on the one hand, alignment with EU standards, and on the other, the evolution of the audit profession itself in an increasingly complex world.
For businesses and the public, this development should be welcomed: higher-quality, strictly supervised audits will mean more accurate accounts, greater financial transparency, and a higher level of market confidence. For auditors, the regulation undoubtedly brings implementation challenges, but at its core it helps them improve their practices, enhance quality, and align with their colleagues in Europe.
Like any significant regulatory change, the success of this regulation depends on its implementation. In the months and years ahead, we will see the BMP implemented on the ground – with inspections, evaluation reports, and (if necessary) disciplinary measures. We will also see auditors adopting the new quality policies and businesses benefiting from a more structured audit.
In conclusion, the main message is: quality in auditing is being strengthened. The new regulation ensures that quality controls are not merely a formality but a genuine process that delivers value to the economy. All stakeholders – auditors, companies, regulators, and the public – share a common interest in enhancing the reliability of financial reporting. This new initiative by the Public Oversight Board is a concrete step in this direction, consolidating confidence in the auditing profession and in the financial and non-financial information provided to the public.
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