North Macedonia

The Trade Companies Law of 2004 establishes basic financial reporting and auditing requirements for all companies in the Republic of North Macedonia. The law sets out the accounting and financial reporting framework to be used; identifies responsible parties for the preparation, approval, and distribution of financial statements; and defines four classes of companies based on size: micro, small, medium, and large.

All companies, including micro-enterprises, are required to prepare financial reports in accordance with the standards issued by the Ministry of Finance as published in the Official Gazette of the Republic of North Macedonia. In April 2024, the Ministry of Finance published Official Gazette no.75/2024 adopting the 2023 IFRS translated into Macedonian as the applicable accounting standards for the following entities: large and medium-sized commercial companies; banks, insurance companies, pension funds, and financial institutions; listed companies; other commercial entities specified in by law; and all subsidiaries of the above. This will be applicable as of January 1, 2025. Additionally, regulated companies such as banks, insurance companies, listed companies, pension funds, and other financial institutions are subject to the supervision of their respective regulators—the National Bank of Republic of North Macedonia, the Insurance Supervisory Authority (InSA), the Securities and Exchange Commission, the Agency for Supervision of Fully Funded Pension Insurance, and the Ministry of Finance—which set out additional reporting requirements for entities under their supervision in accompanying Rulebooks (bylaws).

Finally, IFRS for Small- and Medium-sized Entities (SMEs) has been required for small companies, including micro-entities, since 2012. The World Bank’s 2014 Report on the Observance of Standards and Codes—Accounting and Auditing: Republic of Macedonia notes that in practice, these entities generally only prepare an “annual account” report, which comprises a balance sheet, income statement, and notes to the accounts using IFRS for SMEs as guidance.

The Trade Companies Law also sets thresholds for statutory audits. The following entities are subject to statutory audit: (i) large and medium-sized entities organized as joint-stock companies; (ii) listed companies, and (iii) large and medium-sized entities organized as limited liability companies. The Audit Law 2010 stipulates audits must be conducted in accordance with ISA as issued by the IAASB and published in the Official Gazette of the Republic of North Macedonia. The 2009 ISA were translated into Macedonian and gazetted in 2010 as the applicable auditing standards.

Audits of regulated companies are subject to additional requirements, such as mandatory audit rotation schedules, established by the respective regulators.

All professional accountants in North Macedonia are regulated based on their respective designations. Certified Auditors are regulated by the 2010 Audit Law, the Council for Advancement and Oversight of Audit (CAOA), and the Institute of Certified Auditors of the Republic of North Macedonia (ICARNM). Accountants and Certified Accountants—which includes all accountants employed in business, including bookkeepers as well as accountants working for accounting service provider companies—are regulated by the 2012 Law on Accounting Services (amended in 2022), the Ministry of Finance, and the Institute of Accountants and Certified Accountants (IACA).

Auditors

The 2010 Audit Law and its subsequent amendments govern the audit profession and is designed to align the audit framework of North Macedonia with the requirements of the EU Statutory Audit Directive. The law outlines the roles of the CAOA and the ICARNM; establishes initial and continuing professional development requirements (IPD and CPD, respectively); applicable auditing and ethical standards; and stipulates the creation of a quality assurance (QA) review system and investigative and disciplinary (I&D) measures.

The CAOA—the audit oversight authority—is responsible for: (i) issuing licenses to practice auditing; (ii) overseeing the work of ICARNM; and (iii) may investigate and discipline auditors where necessary. In turn, the ICARNM is responsible for: (i) maintaining registries of auditors, certified auditors, audit firms, certified auditors sole proprietors, and registries of revoked licenses; (ii) organizing and conducting examinations for auditors; (iii) issuing auditor’s certificates; (iv) developing and delivering CPD activities; (v) enforcing compliance with applicable auditing and ethical standards as well as CPD requirements; (vi) translating the ISA, IESBA Code of Ethics, and ISQC 1; (vii) initiating I&D procedures for members; (viii) carrying out QA reviews; and (ix) undertaking any other activities that promote high professional standards and improve the quality of auditing services.

To become a certified auditor in North Macedonia, the Audit Law stipulates that a candidate must have a bachelor’s degree in economics, law, or other relevant area; complete a professional education program; pass the professional exam offered by ICARNM; have at least three years of practical experience in audit, at least two of which must be under the supervision of a practicing auditor; and have a clean professional record. Once certified by ICARNM, auditors are then issued practicing licenses by the CAOA and may offer statutory audit and related assurance services. The law also provides for the acknowledgment of foreign qualifications and authorizes ICARNM to recognize professional qualifications that were obtained abroad for individuals who wish to practice in North Macedonia.

Additionally, auditors of banks and insurance companies are subject to the additional requirements established by the respective regulators. Requirements for auditors of banks are specified in the Banking Law. Auditors of banks and insurance companies must have at least three years’ audit experience and must not have provided consulting services to the financial institution over the previous two years or been subject to disciplinary measures by the ICARNM over the last three years.

Accountants

In 2012, a regulatory framework was instituted for Accountants and Certified Accountants The law was subsequently updated in 2022. In accordance with the Law on Accounting Services, accountants can receive an Accountant’s certificate to prepare and sign the annual accounts of sole proprietors and non-profit organizations having completed a secondary education along with one to three years of practical experience depending on the level of accounting education obtained. Certified Accountants may obtain a Certified Accountant certificate and are permitted to prepare and sign the annual accounts and/or financial statements of any legal entity if they have a university degree and at least three years of experience in accounting. Candidates for both designations must apply to be a member of IACA, which will issue the appropriate certificate within thirty days of the application submission.

Under the law, IACA is responsible for (i) keeping a register of Accountants, Certified Accountants, sole proprietors-accountants, sole proprietors-certified accountants, and of companies doing accounting work; (ii) organizing and conducting exams for both qualifications; (iii) issuing and revoking certificates for of Accountants, Certified Accountants, sole proprietors-accountants, sole proprietors-certified accountants, and of companies doing accounting work; (iv) organizing CPD; (v) enforcing the implementation of the IESBA Code of Ethics; and (vi) translating the IFRS and IFRS for SMEs.

Additionally, auditors of banks and insurance companies are subject to the additional requirements established by the respective regulators. Requirements for auditors of banks are specified in the Banking Law. In particular, auditors of banks and insurance companies must have at least three years’ audit experience and must not have provided consulting services to the financial institution over the previous two years or been subject to disciplinary measures by the ICARM over the previous three years.

The Audit Law of 2010 established the Council for Advancement and Oversight of Auditing (CAOA) with a mandate to perform independent public oversight of the audit profession. CAOA is not a member of the International Forum of Independent Audit Regulators. The principal duties of CAOA detailed in Article 8 of the Audit Law of 2010 include: (i) issuing licenses to practice auditing; (ii) overseeing the work of the Institute of Certified Auditors of Republic of North Macedonia (ICARNM); and (iii) may investigate and discipline auditors where necessary. The Regulation section describes the ICARNM’s responsibilities with respect to auditors.

Institute of Accountants and Certified Accountants (IACA)

The Law on Accounting Services, first issued in 2012 and updated in 2022, mandated the establishment of a professional accountancy organization to serve professional accountants (non-auditors). In November 2012, IACA was established as a professional association with mandatory membership for Accountants and Certified Accountants. The IACA is responsible for the following areas: (i) keeping a register of Accountants, Certified Accountants, sole proprietors-accountants, sole proprietors-certified accountants, and of companies doing accounting work; (ii) organizing and conducting exams for both qualifications; (iii) issuing and revoking certificates for Accountants and Certified Accountants and licenses for sole proprietors-accountants, sole proprietors-certified accountants, and of companies doing accounting work; (iv) organizing continuing professional development (CPD); (v) enforcing the implementation of the IESBA Code of Ethics; and (vi) translating the IFRS and IFRS for SMEs.

Institute of Certified Auditors of Republic of North Macedonia (ICARNM)

The ICARNM was established under the Audit Law of 2005. ICARNM’s mandatory membership is comprised solely of auditors, certified auditors, audit firms, and certified auditors–sole proprietors. The responsibilities of the Institute are stated in the Audit Law of 2010 as the following: (i) maintaining registries of auditors, certified auditors, audit firms, and certified auditors – sole proprietors as well as registries of those whose license have been revoked; (ii) organizing and conducting examinations for auditors; (iii) issuing auditor’s certificates; (iv) developing and delivering CPD activities; (v) enforcing compliance with applicable auditing and ethical standards; (vi) translating the ISA, IESBA Code of Ethics, and ISQC 1; (vii) initiating I&D procedures for members; (viii) carrying out QA reviews; and (ix) undertaking any other activities which promote high professional standards and improve the quality of auditing services.

ICARNM became an IFAC Member in 2013 after being an Associate since 2010.

The Road to Europe: Program of Accounting Reform and Institutional Strengthening (REPARIS) was a regional program aimed at creating a transparent policy environment and effective institutional framework for corporate reporting within South Central and Southeast Europe, implemented by the CFRR beginning in 2008. Since REPARIS started, North Macedonia has participated in the program and its iterations – EU-REPARIS (2015 – 2019) and REPARIS for SMEs (2019 – present).

As of 2023, ICARNM reports that Ministry of Finance is considering amendments to the Audit Law of 2010. Many of the provisions would not become applicable until North Macedonia is a member of the EU – a timeline which is not firmly established. Proposed amendments include dividing responsibility for quality assurance reviews between the Council for Advancement and Oversight of Auditing (CAOA) (PIE reviews) and the ICARNM (non-PIE reviews). More information on the proposals, passage of the law, and impacts on the profession are still to be determined in the latter half of 2023.

The 2010 Audit Law stipulates that a quality assurance (QA) review system for all audits be established and operated by the Institute of Certified Auditors of Republic of North Macedonia (ICARNM) subject to the oversight of the Council for Advancement and Oversight of Auditing of the Republic of North Macedonia.

The scope of the QA program covers all audits and other assurance engagements. Reviews are conducted at both the firm and partner-level and selections for review are based on both a risk-based and a cyclical approach, with both firms and partners being reviewed at least once every three years. Amendments to the Audit Law in 2014 introduced additional requirements such as qualification criteria for QA inspectors.

ICARNM reports the QA review system is operational and is aligned with the SMO 1 requirements, except that the quality control standards adopted are the 2009 ISQC 1 and ISA 220 as translated into Macedonian and officially published in the Official Gazette of the Republic of North Macedonia by the Ministry of Finance. ICARNM has translated ISQM 1, 2 and ISA 220 (revised) issued by the IAASB, but no recent translations have been approved and published by the MoF.

Current Status: Partially Adopted

Initial and continuing professional development requirements (IPD and CPD, respectively) for professional accountants are stipulated in national legislation. The 2010 Audit Law outlines the requirements for auditors while the Law on Accounting Services (first established in 2012 and updated in 2022) establishes requirements for accountants and certified accountants.

The Institute of Certified Auditors of Republic of North Macedonia (ICARNM), under the oversight of the Council for Advancement and Oversight of Auditing, and universities are responsible for implementing the IPD and CPD requirements for auditors. Auditor candidates must have a bachelor’s degree in economics, law, or other relevant area; complete a professional education program; pass the professional exam offered by ICARNM; have three years of practical experience in audit, two of which must be under the supervision of a practicing auditor; and have a clean professional record. According to the World Bank 2017 Accountancy Education: Benchmarking Study Master’s programs benchmarked well against IES (2015). Improvements in financial accounting and reporting and IT learning outcomes would result in further alignment. Both undergraduate and master’s programs would benefit from additional courses on Public Sector Accounting. Additionally, practical experience (IES 5) is met only based on the length of time employed with an audit firm (rather than competencies or skills demonstrated).

ICARNM’s education program and syllabus are largely based on ACCA’s programming. The World Bank study notes that learning outcomes for professional skills and professional values, ethics, and attitudes, are not prescribed per the IES revised in 2015. In 2022, ICARNM reports that its syllabi were improved to further meet ACCA’s benchmark with 8 out of 13 exam exemptions granted.

As members of ICARNM, auditors are subject to 120 hours of CPD over a three-year period. In the same benchmarking study, the World Bank notes that adopting an output-based approach aligned to the requirements of IES 8 is also necessary.

The Institute of Accountants and Certified Accountants (IACA) carries out the requirements for other professional accountants. Accountants need a secondary education and one to three years of practical experience based on the level of education obtained to offer services to sole proprietors and non-profit organizations. Certified Accountants are required to have a university degree and three years of accounting experience to prepare and sign financial statements of any legal entity. Candidates must apply with this information to the IACA, which will then issue the appropriate certificate. IACA members must also fulfill CPD requirements. The extent of alignment of these educational and CPD requirements with the latest IES (2019) remains to be clarified.

Current Status: Partially Adopted

According to the 2010 Audit Law, audits must be conducted in accordance with ISA as issued by the IAASB, translated by the Institute of Certified Auditors of Republic of North Macedonia (ICARNM), and published in the Official Gazette of the Republic of North Macedonia.

As of 2024, the 2009 ISA are considered the official applicable auditing standards in North Macedonia and were published in the Official Gazette in 2010. ICARNM has translated the 2022 Handbook of International Quality Management, Auditing, Review, Other Assurance, And Related Services Pronouncements, which is available for members’ reference via its website, but it is not yet published in the gazette and, therefore, not legally applicable. ICARNM is in discussion with the Ministry of Finance on these legality issues.

Current Status: Partially Adopted

All professional accountants in the Republic of North Macedonia are required to abide by the IESBA Code of Ethics as stipulated in the respective laws: the 2012 Law on Accounting Services and the 2010 Audit Law.

The 2010 Audit Law mandates the adoption of the Code of Ethics as issued by the IESBA, translated by the Institute of Certified Auditors of Republic of North Macedonia (ICARNM), and published in the in the Official Gazette of the Republic of North Macedonia. ICARNM reports that the 2009 version of the IESBA Code is officially published for application.

The Institute of Accountants and Certified Accountants (IACA), in accordance with the Law on Accounting Services, is responsible for enforcing Accountants’ and Certified Accountants’ compliance with the IESBA Code of Ethics as published in the Official Gazette of the Republic of North Macedonia. IACA members therefore also adhere to the 2009 IESBA Code of Ethics.

The ICARNM has translated the 2020 International Code of Ethics, which is available for members’ reference via its website, but it is not yet published in the gazette and, therefore, not legally applicable. ICARNM is updating its translation to the 2023 Handbook of The International Code of Ethics for Professional Accountants and is in discussion with the Ministry of Finance on these legality issues.

Current Status: Partially Adopted

According to the 2020 IFAC/CIPFA Public Sector Financial Accountability Index, the World Bank/CFRR’s 2020 Stocktaking of Public Sector Accounting and Reporting Environment in PULSAR Beneficiary Countries: North Macedonia, and the World Bank/CFRR’s 2022 Book on Public Sector Accounting Reforms Implementation Status in PULSAR Countries, the current federal/central governmental institutions follow the Law on Accountancy of the Budget and Budget Beneficiaries which stipulates cash basis, national standards, while state owned entities follow national standards based on IFRSs. The 2022 World Bank reports a transition to modified accrual-basis standards and adoption of IPSAS is part of the Ministry of Finance’s Public Financial Reform Strategy for the period 2022-2025.

A North Macedonian translation of cash-basis IPSAS (the Rulebook on Financial Reporting) was published in the Official Gazette No. 116, December 29, 2005, by the Ministry of Finance. Subsequently, a Macedonian translation of the 2012 Handbook of International Public Sector Accounting Pronouncements was translated by the Centre of Excellence in Finance.

Current Status: Not Adopted

In accordance with the 2010 Audit Law, the Institute of Certified Auditors of Republic of North Macedonia (ICARNM), under the oversight of the Council for Advancement and Oversight of Auditing (CAOA), is responsible for establishing an investigative and disciplinary (I&D) mechanism for auditors.

ICARNM has established a Disciplinary Committee and a Managerial Board responsible for the implementation of its I&D procedures. The Disciplinary Committee conducts investigations, conducts hearings, and will make recommendations to the Managerial Board regarding the basis of initiating disciplinary procedures and a proposed sanction. In turn, the Managerial Board imposes disciplinary measures based on the recommendation of the Disciplinary Committee. ICARNM conducted a review of its I&D procedures and reports that it aligns with the SMO 6 requirements.

The CAOA may also conduct I&D procedures when deemed necessary and in accordance with the 2010 Audit Law. The CAOA may revoke the practicing license of an auditor.

The Institute of Accountants and Certified Accountants, in accordance with the 2012 Law on Accounting Services, may revoke certificates for Accountants and Certified Accountants and licenses for sole proprietors-accountants, sole proprietors-certified accountants, and of companies doing accounting work in cases of non-compliance. However, as of the date of the assessment, the institute’s I&D Rulebooks are not yet prepared and published.

Current Status: Partially Adopted

According to the Trade Companies Law 2004, the Minister of Finance (MoF) is authorized to prescribe applicable corporate accounting standards. All companies, including micro-enterprises, are required to prepare financial reports in accordance with the standards issued by the MoF as published in the Official Gazette of the Republic of North Macedonia.

In April 2024, the Ministry of Finance published Official Gazette no.75/2024 adopting the 2023 IFRS translated into Macedonian as the applicable accounting standards for the following entities: large and medium-sized commercial companies; banks, insurance companies, pension funds, and financial institutions; listed companies; other commercial entities specified in by law; and all subsidiaries of the above. This will be applicable as of January 1, 2025.

The Gazette also reconfirmed the adoption of IFRS for Small- and Medium-sized Entities as of 2011 for all other entities.

Under the Law on Accounting Services (updated in 2022), the responsibility for translating IFRS and IFRS for SMEs is under the remit of the Institute of Accountants and Certified Accountants (IACA). IACA has become operational in 2023 and it is expected IACA with the Ministry of Finance will begin translating updated versions of IFRS.

Current Status: Adopted

Relevant Organizations

• Institute of Certified Auditors of the Republic of North Macedonia (ICARNM)
• Council for Advancement and Oversight of Auditing (CAOA)
• Ministry of Finance

Relevant Legislation

• Audit Law
• Official Gazette no. 75/2024, Rulebook on the Manner of Accounting
• IFRS for Small- and Medium-sized Entities translated into North Macedonian, 2011
• Statute of the Institute of Certified Auditors of the Republic of North Macedonia
• Trade Companies Law, 2004

Relevant Publications

• Ecovis, Doing Business in North Macedonia, December 2021.
• Gjelova – Stojanova, Sonia, “Council for Advancement and Oversight of the Audit of the Republic of North Macedonia.” PowerPoint presentation, 22 May 2013.
• Gjelova – Stojanova, Sonia, “Council for Advancement and Oversight of the Audit of the Republic of North Macedonia.” PowerPoint presentation, 10 June 2015.
• ICARNM, SMO Action Plan, 2022.
• IFRS Foundation, “IFRS Application Around the World, Jurisdictional Profile: North Macedonia,” 16 June 2016.
• PricewaterhouseCoopers, Guide to Doing Business and Investing in North Macedonia, 2016.
• --, The Way Towards IFRS, 2014.
• World Bank, Book on Public Sector Accounting Reforms Implementation Status in PULSAR Countries, 2022.
• World Bank, Stocktaking of Public Sector Accounting and Reporting Environment in PULSAR Beneficiary Countries: North Macedonia, 2020.
• World Bank, Knowledge Paper: Key Accounting and Auditing Reforms, 2017.
• World Bank, Accountancy Education: A Collection of Good Practices, 2017.
• World Bank, Accountancy Education: Benchmarking Study, 2017.
• World Bank, Report on the Observance of Standards and Codes (ROSC), Accounting and Auditing: Republic of North Macedonia, September 2014.
• World Bank, Report on the Observance of Standards and Codes (ROSC), Accounting and Auditing: Republic of North Macedonia, 2003.