Introduction
The Public Oversight Board (POB) has approved a new regulation for quality control in statutory auditing, which replaces the existing regulation from 2018. This new regulation (Decision No. 44, dated September 30, 2025 covers the main requirements of the Public Oversight Board audit regulations 2025 and defines new procedures and the functioning of the quality assurance system for legal auditors (statutory auditors) and audit firms in Albania. The changes aim to strengthen the quality of audits, increase transparency, and better protect the public interest through higher professional standards.
In this blog, we explain what is happening with this new regulation, what the fundamental changes are compared to the previous framework, and why these changes have been made. The information is presented in an understandable way for both the public and clients (businesses subject to statutory audits), as well 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 main goal of the new regulation is to increase public trust in audits by strengthening quality control mechanisms. The Ministry of Finance has emphasized that the changes aim not only to enhance the quality of financial reporting, transparency, and accountability, but also to improve the monitoring of statutory auditors. The new regulation establishes clearer and stricter rules for the quality control process, specifying the roles and responsibilities of regulatory institutions and ensuring stronger adherence to auditing standards. This means that auditors and audit firms will be under stricter and more structured supervision, which is expected to translate into higher quality audits for businesses and the public.
New developments in the profession
The regulation addresses recent changes in the auditing profession, such as the introduction of assurance engagements for sustainability reports (ESG). The recently amended auditing law has introduced the obligation for statutory auditors to also provide assurance services on sustainability reporting for applicable companies. The new BMP regulation reflects this development by expanding the scope of quality control to include these new engagements, alongside traditional financial audits. Furthermore, new quality management standards (such as ISQM 1 & 2) have come into effect internationally, requiring changes in how quality control systems are organized within auditing firms. The new regulation ensures that practices in Albania are aligned with these contemporary standards.
Key changes in the new regulation
The new regulation contains a series of essential innovations and improvements compared to the previous act of 2018. Below are the key points you should know:
Internal Quality System (ISQM)
Every legal auditor and audit firm is obliged to establish and operationalize an internal audit quality assurance system, in accordance with the requirements of the law and international quality management standards. This means that audit firms must have written quality control policies and procedures, implementing new global standards (e.g., for risk assessment, engagement reviews, etc.). This was an aspect that was less emphasized in the old regulation, but now receives central attention.
Expansion of the scope of control (including sustainability reporting)
The BMP will oversee not only the quality of statutory financial statement audits but also assurance engagements for sustainability reports, where applicable. This is a major innovation as it addresses non-financial information (environmental, social, governance) which is becoming increasingly important to investors. Auditors providing assurance services on sustainability reports will be subject to the same high-quality standards and oversight as for financial audits.
Strictest rules for independence and ethics
The regulation details the requirements for complying with the code of ethics and maintaining auditor independence in every engagement. Statutory auditors, before accepting or continuing an audit engagement, must officially assess their independence – identifying any potential threats to independence and the corresponding safeguards. Furthermore, 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 strengthened and specified in more detail in the regulation, in line with legal changes and EU regulations.
New procedures for client admission and scheduling
The new regulation sanctions several basic pre-acceptance requirements for an audit engagement. In addition to assessing independence, the auditor must ensure they have the qualified staff, time, and resources necessary to perform the audit with quality, and that the audit engagement partner is registered with the public register (licensed). This will formalize the practice of auditors not taking on work beyond their capacity, potentially preventing low-quality audits due to overload or lack of experience.
Obligation to change auditor – transfer of information
A very important innovation is the legal obligation that when a statutory auditor or audit firm is replaced by another before the completion of the engagement, the predecessor auditor must provide the successor with access to all relevant information gathered during the audit up to that point. In simple terms, if a company terminates its contract with an auditor and engages another auditor during the process, the first auditor is obliged to share the client's file and work documentation with their successor. This rule avoids the audit starting “from scratch” and ensures the continuity of the process without compromising quality. For businesses, this means a smoother transition process when changing auditors; for the auditors themselves, it increases accountability for complete and accurate documentation of the work performed.
Audit report content and security report
The new regulation defines specific rules regarding the content of auditor reports. 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 instance, the audit report may be expected to contain all elements required by ISA standards (such as a 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 should be clearly reflected. This enhanced transparency gives stakeholders (investors, creditors, the public) more confidence and understanding of the auditor's work.
Communication with the audit committee
Another aspect of the regulation is the establishment of detailed rules for auditor reporting to the Audit Committee of economic units where one exists. Auditors now have a formalized obligation to communicate to the audit committee (for public interest entities) key findings, internal control deficiencies, independence issues, etc. This improves corporate governance, as audit committees are better informed about the quality of the audit and issues encountered during the process.
Follow-up checks and re-evaluation
BMP will implement follow-up controls after quality inspections of auditors. This means that after an audit firm has been inspected and received a report with recommendations, BMP may return to verify the implementation of those recommendations within specified deadlines. Based on the results of the follow-up inspection, BMP has the right to revise the quality assessment for the auditor or firm. Practically, if an auditor has not made the required improvements, their quality score or rating may be lowered, or other measures may be taken. This encourages a continuous improvement cycle, as auditors will have a strong motivation to address any identified deficiencies 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
With the new regulations, your auditors will follow more rigorous procedures for quality control—both within their firm and through BMP inspections. This is expected to lead to more reliable audit reports. As a result, third parties reading your financial statements (investors, banks, regulators) will have more confidence in them, reducing the cost of financial uncertainty.
More focus on compliance and ethics
Your auditor will carefully investigate any conflicts of interest or other services that could compromise independence. This may mean that your company could be asked for additional information during the audit engagement (e.g., a list of other consulting services you receive from the auditor, to ensure there are no violations of 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 increases management's awareness to correct issues such as internal control weaknesses, legal violations, etc., as it is known that the BMP (presumably referring to a regulatory body or similar entity) may also hold parties accountable for these matters.
More informative audit report
As a company, you will receive an enhanced audit report at the end of the process. For example, if you are a large company, the audit report will extensively cover key audit matters, the handling of sustainability matters (if assurance is applied to them), and statements on auditor independence, in accordance with 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 assured by the auditor.
Switching to new auditors becomes easier.
If for any reason you decide to change auditors during the process (it happens rarely, but it's not impossible), the regulation protects you so that the work done is not lost. The old auditor is obliged to share all documentation with the new auditor, so your company will not have to repeat everything from the beginning. This saves time and cost, ensuring a smooth and risk-free transition for the quality of the audit.
Prepare for the sustainability report audit
If you are a large company that will be reporting on sustainability (environmental, social, governance) in the future, know that the implementation of these requirements is expected to begin in Albania from 2026-2027, and by the end of 2028, the BMP will have established mechanisms for quality control over these commitments as well. This means that when the time comes, your sustainability report will be subject to assurance by licensed auditors and supervised by the BMP, just as financial statements are. For you as a business, this is an incentive to prepare early: ensure ESG data collection systems and reliable reporting processes, as these will also be carefully evaluated by external auditors.
In general, for honest and transparent businesses, these changes bring added value because they increase the quality of the audit services you receive. A higher quality audit can uncover weaknesses or errors that you can correct, and it gives greater assurance to your partners that the financial (and soon sustainability) information is accurate. Of course, you should consider 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 new standards and is in the long-term interest of your company.
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 fulfills the articles of the law and international standards is required. In practice, this means, for example, drafting new quality control policies, appointing individuals responsible for system monitoring, and 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 should be paid to client engagement acceptance documents. The regulation requires auditors to formally document the assessment of compliance with the requirements of Article 33 of the law (the article on 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 quality inspection, BMP can request proof of these assessments. Auditors must also ensure they have the proper capacity and staff before taking on a client – this can prompt firms to specialize and not take on work beyond their capacity, to avoid problems in inspections.
Update of audit reports
Auditors will need to adapt the format and content of their reports according to new requirements. For example, in audit reports of annual financial statements, they may need to add references regarding whether the auditor is licensed for sustainability reporting (a new legal requirement for 2024), or provide additional details according to changes in ISA standards. For sustainability assurance reports, auditors will draft new report templates, following ISAE/ISA standards for non-financial information assurance. It is recommended that auditors follow the guidelines of IFAC and IEKA (Institute of Certified Public Accountants) regarding these reports, as IEKA is expected to provide training and standard templates. A properly prepared report not only fulfills obligations but also protects the auditor themselves in case of review by the BMP.
Adherence to deadlines and new obligations
According to the transitional provisions, auditors must pay attention to several important deadlines: (a) The new annual reporting obligation to the BMP. The regulation appears to foresee auditors submitting annual information (perhaps client declarations, continuing education hours, or similar) – this will commence for the first time on January 30, 2026, so auditors must be ready with this data by early 2026.
(b) Quality controls during the process: If a quality control by BMP has commenced before the new regulation comes into force, it will be concluded according to the old regulation no. 7/2018. This means that for any ongoing inspection (if any), auditors should still consider the old rules until the process is closed.
(c) Timeline for quality controls of sustainability engagements: BMP will not inspect assurance engagements for sustainability reports until after a few years - specifically, these controls will apply to reporting periods closed on December 31, 2028, and thereafter. This gives auditors a timeframe to train and become accredited in this new field. However, auditors planning to offer ESG assurance services should start familiarizing themselves with the relevant standards (ISAE 3000, EFRAG sustainability reporting standards, etc.) now 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
With the new regulation, BMP emphasizes several aspects of public oversight that are not delegated elsewhere, meaning they will retain control themselves, e.g., 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 deadlines, and maintain a proactive stance in addressing raised issues.
On the other hand, the role of IEKA (as a professional organization) remains important in training and assisting members in implementing these rules. The regulation also applies to the professional organization of statutory auditors, meaning that IEKA itself will be subject to oversight by BMP regarding how it manages, for example, the quality control scheme it organizes for its members or the continuing professional development process.
Auditors should expect guidance from IEKA on the practical implementation of the new regulation and should participate in any training or seminar organized on this topic.
In general, preparation is key. Auditors acting 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 term, this consolidates the quality and reputation of the profession. For auditors who have been less rigorous until now, the new regulation constitutes a call to raise the bar – 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 entered into force at the time of this blog post's publication. According to the BMP decision, the act enters into force after publication in the Official Gazette. This is expected to happen soon, as the decision was made on September 30, 2025. After official publication, all new provisions will be legally enforceable.
In summary, these are the key timelines 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 based on 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 auditing firms continue to provide assurance services for sustainability reports (for those companies that choose to or are required to by international groups), but the BMP will not yet inspect these engagements until after 2028. This is the time to get ready: train people, adopt ESG standards, and develop internal methodologies for these services.
After 2028
BMP will officially expand its quality inspections to include sustainability assurance engagements, starting with the fiscal year 2028 reports and beyond. This aligns with the expectation that sustainability reporting will become mandatory in Albania as well (perhaps initially for larger public interest entities, in line with EU directives). From this point forward, auditors will have two main areas under their oversight: financial audits and non-financial assurances.
In addition to the regulation itself, BMP is expected to issue practical implementation guidelines or manuals. Furthermore, IEKA and other bodies may issue guidelines to their members regarding the fulfillment of requirements (especially for quality systems and new reporting formats). Auditors and firms should remain vigilant regarding these announcements.
On the other hand, audited companies will benefit from being informed as well: a good idea would be for Chief Financial Officers (CFOs) or audit committee members 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 with the new terms (e.g., a clause for information sharing in case of contract termination, etc., may be added).
Conclusion
The new BMP quality control regulation marks a significant step towards strengthening Albania's audit infrastructure. In summary, it improves the existing framework by introducing clearer rules, expands the scope of supervision to new areas such as sustainability auditing, and increases the professional requirements for auditors to maintain independence, manage the quality of their work, and communicate better with stakeholders. These changes are a direct response to legal and market developments – on one hand, alignment with EU standards, and on the other, the evolution of the auditing profession itself in a world with increasingly complex demands.
For businesses and the public, this development should be welcomed positively: higher quality and strictly supervised audits will mean more accurate accounts, greater financial transparency, and a higher level of security in the market. For auditors, the regulation undoubtedly brings implementation challenges, but fundamentally helps them improve their practices, increase quality, and be on par with their colleagues in Europe.
Like any significant regulatory change, the success of this regulation depends on implementation. In the months and years ahead, we will see the BMP implementing it on the ground – with inspections, assessment reports, and (if necessary) disciplinary measures. We will also see auditors adopting new quality policies and businesses benefiting from more structured auditing.
In conclusion, the main message is that quality in auditing is being strengthened. The new regulation ensures that quality controls are not just a formality, but a genuine process that brings value to the economy. All stakeholders – auditors, companies, regulators, and the public – have common interests in increasing the reliability of financial reporting. This new initiative by the Public Oversight Board is a concrete step in this direction, consolidating trust in the auditing profession and in the financial and non-financial information provided to the public.
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