Slovenska Komora Auditorov (Slovak Chamber of Auditors)

The Act No. 423/2015 on Statutory Audit stipulates that statutory auditors and audit firms are subject to quality assurance (QA) reviews carried out by Úrad pre dohl’ad nad výkonom auditu (UDVA) for public interest entities (PIEs) and large companies and by the Slovenská Komora Audítorov (SKAU) for non-PIEs under UDVA’s oversight. SKAU reports that the QA review arrangements in Slovakia are in line with the requirements of SMO 1 and the European Union’s 8th Company Law Directive on Statutory Audit.

SKAU’s QA review system has been operational since 2002 and reports to continuously monitor and review developments related to best practices in QA review processes.

The institute supports auditors in improving their internal control systems by offering guides and training on internal control, new internal control questionnaires, and the methodology that reviewers use in the conduct of QA reviews. It offers training based on recommendations by quality assurance reviewers, such as workshops to assist auditors in improving their audit documentation. To ensure that its reviewers are up to date on review processes, SKAU reports that it participated in several workshops hosted by the Institute of Chartered Accountants of England and Wales between 2015-2019. Its participation in such workshops allowed SKAU QA reviewers to share experiences and knowledge with other QA reviewers in Europe. Additionally, audit quality and QA inspections are regularly discussed at the annual meetings of V4 audit chambers (Poland, Hungary, Czech Republic and Slovakia).

Given the recent effective date of IAASB’s quality management standards, SKAU has been providing training, webinars, and detailed guidance (e.g., illustrative manuals, examples of risks, responses) with an emphasis on supporting SMPs. SKAU has updated its ISQC 1 checklist to reflect ISQM 1 and the UDVA has also updated its checklists to incorporate ISQM 1. First results from UDVA’s inspections on QM will be published in 2024. SKAU and UDVA are exploring how to collaborate more regarding QA reviews. The SKAU itself prepares and distributes an annual report on its QA activities to UDVA and publishes the information on its website.

Current Status: Sustain

The initial and continuing professional development (IPD and CPD respectively) requirements are established for auditors in the Act No. 423/2015 on Statutory Audit and are implemented by universities, Úrad pre dohl’ad nad vykonom auditu (UDVA), and the professional organization for statutory auditors, the Slovenská Komora Audítorov (SKAU).

Per the legislation, candidates for Certified Auditor must first join the SKAU as an ‘assistant auditor’ (student) by possessing a second-level university degree; passing SKAU’s entry-level examination; and be free of any disciplinary measures and have an untarnished reputation. Individuals must then complete at least five years of practical experience in accountancy and with three of those years (3,000 hours) being in auditing (i.e., they need to work in these fields as auditors assistants). After completing practical experience, individuals must pass the final examination offered and organised by the UDVA and then register with the UDVA and the SKAU as a Certified Auditor. The exams represent a mix of questions to test theoretical knowledge and case studies to test practical experience). To remain a member of SKAU in good standing, auditors are required to complete CPD requirements that are stipulated in the Act. Members are required to complete at least 20 verifiable hours of CPD per year and 120 hours over a 3-year rolling period which aligns with the input-approach in IES 7.

SKAU reports that as of the date of the assessment, IPD and CPD requirements are aligned with the latest IES requirements at the jurisdiction level.

With shared responsibility for the implementation of educational requirements, SKAU focuses on providing relevant CPD courses and training opportunities to its members. The Commission of Education evaluates CPD fulfillment on an annual basis for its members in accordance with the requirements of the law. Non-compliance cases are relayed to SKAU’s Disciplinary Commission.

Its educational seminars and conferences cover technical accounting and auditing topics, updates on audit regulation and ISA, and the linkage between information technology and auditing. To reach more members and to facilitate wider access to educational material, the SKAU also offers e-learning courses. SKAU reports that in 2021, it organized for its members 31 webinars (288 training hours), 23 e-learning courses (156 training hours) and 1 annual technical conference (16 training hours) totaling to 460 training hours.

The IES Checklist developed by IFAC may be useful as well as the IFAC Accountancy Education E-Tool to review the IESs and share these requirements with key stakeholders like the UDVA.

Current Status: Sustain

Act No. 423/2015 on Statutory Audit specifies the auditing standards that should be applied in the conduct of audits. Article 19 stipulates that all statutory audits must be conducted in accordance with ISA as issued by IAASB. The Úrad pre dohl’ad nad výkonom auditu (UDVA) monitors compliance with these standards. As of 2023, the SKAU has translated the 2017 IAASB Handbook in its entirety and subsequently translated and adopted new and revised standards issued including ISA 250 (revised), ISA 540 (revised), ISA 315 (revised), ISQM 1, ISQM 2, ISA 220 (revised), and ISRS 4400. ISA 600 (effective December 2023) is being translated.

SKAU monitors new and amended standards, as well as other pronouncements issued by the IAASB, and coordinates feedback and comments on Exposure Drafts with UDVA. For example, it is following the status of the IAASB’s Audit for LCE standard. It updates members on an ongoing basis on new and revised audit regulations. Furthermore, it updates training courses to include revised standard-related topics.

SKAU hosts conferences on technical audit-related topics throughout the year to raise awareness and enhance members’ knowledge, and issues implementation guidance to members on a regular basis. In addition, it offers continuing professional development courses that cover technical audit issues. It also operates an online service to assist members with ISA-related queries and will then include answers to complex questions in subsequently published implementation guidance for auditors.

In 2021, SKAU launched e-learning course program with videos for 46 standards on individual ISA, ISRE, ISAE and ISRS. It also organizes and delivers courses based on the results of the annual quality assurance results. SKAU has recently offered targeted training on ISA 315 (revised) for members, focusing on IT controls.

Current Status: Sustain

Slovenská Komora Audítorov (SKAU) is responsible for issuing the Auditor’s Code of Ethics for auditors under the oversight of the Úrad pre dohl’ad nad vykonom auditu (UDVA). Article 2(18) stipulates that the Auditor’s Code of Ethics issued by SKAU, must be compliant with the IESBA Code of Ethics as issued by IESBA.

SKAU reports that it has ongoing processes in place to monitor changes to the IESBA Code of Ethics in order to complete new translations for promulgation. SKAU reports that the 2018 IESBA Handbook with International Code of Ethics was translated and made available on the SKAU’s website in November 2019 after being approved by the General Assembly. SKAU is translating the 2022 International Code of Ethics for Professional Accountants which it expects to be adopted by end of 2023. SKAU also intends to translate and approve revisions related to PIEs by December 2024.

To further support the effective implementation of the Code, SKAU: (i) raises awareness of the Code among regulators, universities, judiciary and legislative powers, and government; (ii) disseminates information to relevant stakeholders about the changes to its Code and new, proposed, and revised provisions of the IESBA Code of Ethics; and (iii) includes ethical requirements in its training programs in collaboration with UDVA.

The SKAU participates in the international standard-setting process by providing comments on IESBA Exposure Drafts.

SKAU is encouraged to continue timely translation efforts in this area to ensure that professionals can implement the upcoming revisions to the International Code of Ethics once effective.

Current Status: Sustain

The Ministry of Finance is responsible for accounting standard-setting for public sector entities under the Act No. 431/2002 Coll. on Accounting (the Accounting Act). SKAU reports that the National Public Sector Standards (NPSSs), which are based on accrual basis IPSAS principles, constitute the current financial reporting framework.

On an ongoing basis and as part of applying its best endeavours, SKAU organizes and offers seminars, along with the Ministry of Finance, on IPSAS and on the preparation of public sector financial statements. It also prepares publications, some jointly with the MoF, on auditing in the public sector. Lastly, SKAU has made available an online expert to answer questions on IPSAS.

SKAU is encouraged to continue its advocacy and support toward accrual-basis IPSAS. Adoption and implementation of accrual IPSAS as issued by the IPSASB would ensure application of global best practice.

Current Status: Sustain

The Act No. 423/2015 on Statutory Audit requires the establishment of an investigation and disciplinary (I&D) system for auditors. Slovenská Komora Audítorov (SKAU) operates an I&D system for its members under the supervision of Úrad pre dohl’ad nad vykonom auditu (UDVA). It is required under law to report all complaints received to UDVA on an annual basis (Article 40). SKAU reports that the existing I&D arrangements in the jurisdiction are aligned with SMO 6 requirements.

SKAU’s Supervisory Board comprises five members that are approved by the General Assembly to serve four-year terms. It is responsible for investigating members and sending proposals for disciplinary action to the SKAU Disciplinary Commission. The Disciplinary Commission may impose sanctions outlined in Article 49 of the law not later than within three years after the date when the breach took place. Sanctions may be appealed by the individual subject to disciplinary action within 15 days after the delivery of the decision. Members in both the Supervisory Board and Disciplinary Commission may be re-elected for a maximum of two consecutive terms.

SKAU assessed its I&D policies and processes against the requirements of SMO 6 and reports that they are aligned with the best practices. SKAU reports that it reviews its procedures on an ongoing basis to maintain alignment.

The institute reports that it raises both member and public awareness of the I&D procedures. SKAU has developed a channel for the public to make a complaint via its website. In its annual report, SKAU also includes a section on the disciplinary actions that have been taken throughout the year.

In the interest of transparency and raising public awareness, the institute also indicated that it details the results of all disciplinary proceedings on the UDVA website.

Current Status: Sustain

The Ministry of Finance (MoF) is responsible for the adoption of accounting standards in Slovakia in accordance with Act No. 431/2002 Coll. On Accounting (the Accounting Act). In accordance with the EU statutory framework, Regulation EC 1606/2002, as transposed into national legislation, EU-endorsed IFRS Standards are required for the consolidated financial statements of European companies whose securities trade in a regulated securities market. As further documented by the IFRS Foundation, Slovakia also utilized an option under the framework to (i) require EU-endorsed IFRS in both consolidated and separate company financial statements of all public interest entities (PIEs); (ii) permit EU-endorsed IFRS in the separate company financial statements of all companies whose securities are traded in a regulated market that are non-PIEs; and (iii) require EU-endorsed IFRS as adopted by the EU in the consolidated statements of companies whose securities do not trade in a public market. IFRS for Small and Medium-sized Entities is not adopted in the jurisdiction, nor is it under consideration until the EU Accounting Directive changes.

SKAU supports implementation of EU-endorsed IFRS in Slovakia by organizing and delivering training on IFRS via annual conferences and seminars in collaboration with other stakeholders (e.g., PwC, KPMG). It also provides members with online courses and online access to an IFRS expert and its Accounting Standards Committee. Additionally, SKAU reports that it updates its members on IASB activities and pronouncements by posting relevant information on its website. A SKAU representative serves on the UDVA Accounting Standards Committee where IFRS and related issues are additionally discussed. SKAU also raises awareness of the IFRS for SMEs, even though the standards are not adopted, by posting them on its website.

Current Status: Sustain