The New Public Oversight Board Regulation / What It Means for Statutory Auditors and Businesses
The Public Oversight Board (POB) has introduced a new regulation concerning the quality control of statutory audits, replacing the prior 2018 framework. This updated regulation (Decision No. 44, September 30, 2025) establishes updated procedures and mechanisms for how the audit quality assurance system must operate in Albania. Its aim is to strengthen audit integrity, enhance openness, and better safeguard public interest through higher professional benchmarks.
Why the New Regulation Was Adopted
Alignment with European Standards
The regulation responds to recent legislative updates in the “Statutory Audit” law (2024) designed to bring Albanian regulation closer to European norms. The changes necessitated parallel updates in subordinate rules so that the regulatory system aligns with EU directives. The new POB regulation fulfills some of these newer legal obligations.
Boosting Quality and Transparency
A primary goal is to bolster public trust in audit outcomes by tightening quality-monitoring mechanisms. The Ministry of Finance has emphasized that the changes intend not only to lift financial reporting standards but also to heighten accountability and oversight of statutory auditors. The updated rules clarify roles and responsibilities and make compliance with auditing norms more enforceable.
Responding to Evolving Audit Practice
Because auditing practice is shifting especially with the growing importance of sustainability (ESG) reporting this new regulation expands oversight into those areas. Additionally, new international quality management standards (such as ISQM 1 & ISQM 2) have come into effect, which demand structural changes in how audit firms run their internal quality control systems. The new regulation ensures that Albania’s practices keep pace with the global profession.
Key Changes Brought by the New Regulation
Internal Quality Management System
Every statutory auditor and audit firm must establish and operate an internal quality assurance system in line with both the law and international standards. That means firms must have documented policies and procedures governing audit quality, risk assessment, review procedures, and more. Compared to the old regulation, this aspect now gets much greater emphasis.
Expanded Scope — Including Sustainability Assurance
Previously, oversight primarily dealt with financial statement audits. The new regulation extends quality control to assurance services over sustainability reporting (where applicable). In other words, when auditors issue an assurance opinion on ESG-type nonfinancial disclosures, those engagements will also fall under POB oversight.
Stricter Requirements for Independence and Ethics
Before taking on or continuing an engagement, auditors must formally analyze and document threats to their independence and propose safeguards. Certain non-audit services to audit clients are prohibited under detailed criteria. While such principles existed before, now they are more rigorously defined and enforced.
New Client Acceptance & Planning Requirements
Before accepting an audit, the auditor must confirm that they have the right personnel, time, and other resources to execute the work properly. Also, the lead audit partner must be registered in the public registry. This prevents auditors from taking on more work than they can competently handle, thereby safeguarding quality.
Mandatory Transfer of Audit Work When Changing Auditors
One significant novelty: if a client switches auditors during an engagement, the outgoing auditor is legally required to hand over all relevant audit documentation to the incoming auditor. This ensures continuity in the audit process and prevents the successor from having to redo efforts from scratch.
Enhanced Reporting — Audit & Assurance Reports
The regulation sets stricter criteria about what should be included in audit and assurance reports. This includes both financial audits and sustainability assurance opinions. Reports must be more detailed and in line with relevant international standards (e.g. ISA / ISAE), clarifying auditor responsibilities, independence statements, key audit matters, and levels of assurance given. This increased transparency helps stakeholders better understand what the auditor has done.
Communication With the Audit Committee
Auditors must formalize reporting to clients’ audit committees (where they exist, especially in public interest entities). This includes sharing major findings, internal control weaknesses, independence issues, and other critical matters during or after the audit.
Follow-up Inspections & Reassessment
The POB will conduct follow-up inspections: after an audit firm is examined and given recommendations, the POB may return later to check whether improvements have been made. If deficiencies persist, POB can downgrade the audit quality rating or take other corrective or disciplinary measures. This mechanism promotes continuous improvement rather than one-time reviews.
Implications for Audited Entities (Businesses)
More Reliable & Trustworthy Audits
Under the new rules, audits will follow more rigorous quality control both internally within firms and through POB oversight. As a result, third parties investors, lenders, regulators may place greater reliance on audited financials.
Stronger Emphasis on Compliance & Ethics
Your auditor may scrutinize possible conflicts of interest more closely, ask for documentation of other services you receive from them, or evaluate whether it’s appropriate for them to take on certain engagements. You may experience more questions or demands for supporting evidence during the acceptance or audit phases.
More Informative Audit Reports
Your final audit report may include additional disclosures such as key audit matters, independence declarations, and (if applicable) sustainability assurance elements. This makes the audit output more transparent and informative for users of the reports.
Smoother Auditor Transitions
If for some reason you decide to change auditors mid-engagement, the new regulation helps ensure that work done so far is transferred, avoiding duplication or discontinuities. This saves costs and preserves continuity.
Need to Prepare for Sustainability Assurance
For larger firms that fall under sustainability disclosure obligations, the new regulation means you should begin preparing systems and data collection processes now. From 2026–2027 onward, sustainability assurance may become more common, and POB is scheduled to begin inspections in that area by around 2028.
What Auditors Need to Do
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Implement or upgrade the internal quality system. Review existing quality manuals and procedures to align with the new regulation and international norms.
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Properly document independence and acceptance decisions. Keep records of threat assessments, safeguards, and capacity checks for each client.
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Adapt audit and assurance reports. Update report templates to reflect the new content and disclosure requirements.
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Observe new deadlines and obligations. For example, auditors must start submitting an annual report to POB (expected first due January 30, 2026) with details about clients, continuing education hours, etc.
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Cooperate actively with POB and IEKA. Respond to POB inquiries, maintain open lines of communication, and engage in training or guidance provided by IEKA.
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Plan ahead for sustainability engagements. Even though POB will delay full inspections until after 2028, auditors should begin familiarizing themselves with ESG assurance standards, obtaining credentials, and preparing processes accordingly.
Timeline & Next Steps
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September 30, 2025 — Approval date of the new regulation (Decision No. 44). From that date, the 2018 regulation is considered obsolete.
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October 2025 (expected) — Publication in the Official Gazette; the regulation will become legally binding within ~15 days of publication.
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January 2026 — First submission of the required annual data from auditors to POB (e.g. client lists, continuing education metrics).
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2026–2027 — Auditors may start offering assurance over sustainability reports, though POB inspections in that area are deferred.
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After 2028 — POB expands its inspections to include sustainability assurance services, not just financial audit engagements.
POB, IEKA, and other relevant authorities are expected to issue practical guidance and templates to facilitate implementation. Audit firms and businesses should stay alert to those releases.
The new POB regulation marks a major step in strengthening audit supervision in Albania. It establishes clearer rules, extends oversight to sustainability assurance, and heightens demands on auditor ethics, independence, and quality systems. For businesses, it promises audits of greater reliability and transparency. For auditors, it introduces additional obligations and administrative burden, but ultimately helps bring local practices closer to international benchmarks.