Changes in the Financial Environment in Albania

Pages: 17 (5873 words) Published: May 7, 2013
Annales Universitatis Apulensis Series Oeconomica, 13(1), 2011

CHANGES IN FINANCIAL AND ACCOUNTING ENVIRONMENT IN ALBANIA AND THE IMPACT ON PRACTITIONERS. Rezarta Shkurti (Perri)1 Brikena Leka (Gjoni)2 Rovena Bahiti3 Elfrida Manoku (Gishto)4 ABSTRACT: This paper presents a theoretical discussion about the organization of the professions of accounting and auditing in Albania and the most recent changes that have encompassed the Albanian financial and accounting landscape after the implementation of new accounting standards, the increased requirements for electronic financial and tax reporting and the ongoing improvement and adaptation of the higher education curricula. All these factors present major challenges for the field practitioners in accounting and auditing. We try to identify which are the most prominent challenges faced by the practitioners today and identify that the ICT impact, ethical values and the globalization trend in accounting and financial reporting are some of the most emergent ones. These factors make the work of the practitioners more and more demanding and as it seems difficult to remain competitive in such a dynamic environment, we conclude with the recommendations that the curricula of the financial and accounting higher education should be adapted to include topics such as IAS/IFRS, ICT, Code of Ethics and that the professional accountancy and auditing organizations in Albania should provide ongoing training and qualification sessions on the same topics to the existing practitioners.

Keywords: accounting, auditing, accounting software, tax reporting. JEL codes: M40

Introduction During the last twenty years since Albania opened to the free market economy in 1990 a lot of changes have encompassed all the dimensions of its economy. Along with the radical transformation of the overall economic system, the necessity to create new legal and institutional infrastructure capacities was also strongly encouraged. This infrastructure would be critical for the new economic system in achieving success (or experiencing failure). Therefore in the early 90s’ a lot of changes were made in the legal framework for regulating the new market regime according the rules of the open market economy and extensive efforts were made on building the necessary infrastructural capacities through deep reforms and innovative measures in many sectors. Accounting, finance and auditing were among the many disciplines that experienced fundamental changes. The introduction of the independent accounting and auditing professions came naturally after the changes experienced in the political, social and economic life of Albania after the 90’s. Developments such as implementing a new open economy after the free market rules, the transformation of the state-owned enterprises into private companies, the establishment of new private entrepreneurships and the need for exercising appropriate and expert supervision and management of the private property required the coming into existence of several new professions, including the independent accountants and auditors. All the changes experienced by the Albanian economy after the 90’s would have not been successful without the support of the services offered from qualified experts, among which accountants and auditors played a very important role. 1 2

Tirana University, Faculty of Economy, Albania, e-mail:, Tirana University, Faculty of Economy, Albania, e-mail: 3 Tirana University, Faculty of Economy, Albania, e-mail: 4 Sevasti and Parashqevi Qiriazi University, Faculty of Economy, Albania, e-mail:


Annales Universitatis Apulensis Series Oeconomica, 13(1), 2011

During the last twenty years the independent accounting and auditing professions in Albania have gone through a lot of changes and efforts to improve the quality of services offered to the...

References: 1. Hoxha E., Bollano J., 2009. Accounting Standards in Albania: Challenges of first time application of AS in Albania, International Conference “Economic Policy and EU Integration”, organized by the Durres University, November 2009. 2. Nachescu, et al. , 2010. Report on the development of the audit profession in Balkans after 1990, 2nd Conference of Balkans and Middle Eastern Countries, September 2010. 3. Perri R., Zani B., 2008. Risk of legislation changes as part of political risk – the case of bankruptcy law in Albania, 1st International Conference of the Albanian Center for Risk Studies, November 2008. 4. Rieger R. J., 2007. South East Europe Implementing and Enforcing International Standards for Financial Reporting and Auditing. Discussion paper. Available online at 5. Shkurti R., Leka B., 2010 . Development of the profession of accounting in Albania in the new century, Working paper, University of Tirana, January 2010. 6. Shkurti R., Naqellari J., 2010. Quality of financial and accounting information in Albania as perceived by the practicing accountants, Journal of Accounting and Finance, no 47, p. 110122, July. 7. Law 10091, date 02.03.2009 “On Legal Auditing, and the Organization of the Profession of Chartered Auditors and Certified Accountants” – 8. Law 9228, date 29.04.2004 "On Accounting and Financial Statements” – 9. Ministry of Finance and Economy of Albania, 1993. General Accounting Plan. 10. National Accounting Standards, available online at 11. Transparency International. “Report on corruption perceptions index 2009” and “Report on corruption perceptions index 2010”. Available online at 12. World Bank (WB), 2006. Report on the Observance of Standards and Codes on Accounting and Auditing (A&A ROSC) in Albania.
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