Internal Audit Consulting Firms

An effective internal audit is concerned with evaluating and improving the effectiveness of risk management, control and governance processes in an organization. Organizations are increasingly leveraging internal audit as a strategic resource, recognizing that internal auditors’ broad and deep perspective of operations, risks and potential opportunities can help inform business decision-making.

All organisations are subject to fraud risks and there have been several instances when frauds have disgraced organisations as a whole. With increased regulatory focus and widespread negative impact of frauds, the managements and senior executives are increasingly concerned about the vulnerability and exposure of their businesses/organisations to frauds and whether or not they are adequately protected. This emphasizes the need of internal audit in fraud risk management.

Mandatory Requirement For Internal Audit in Albania

Law No. 114/2015 "On Internal Audit in the Public Sector" is a legal requirement for a number of institutions and entities in the public sector. This law defines the entities that must have internal audit units, the functions and responsibilities of internal auditors, the independence of the audit unit, as well as rules for reporting and monitoring.

In the private sector, internal audit is strongly recommended for large companies. However, for some categories of businesses it may be required. According to Law No. 9901/2008 "On traders and commercial companies", certain classes of companies are required to appoint an internal auditor to carry out the internal audit functions and activities. These classes are further described in the instructions issued by the Ministry of Finance.

The following class of companies will be required to appoint an internal auditor:

• Listed companies: Mandatory if two out of the following three criteria are met for two consecutive years.
• Unlisted public companies and private companies: Mandatory if two out of the following three criteria are met for two consecutive years.

*To be checked for the preceding financial year.

However, a company can also on sole discretion opt for internal audit even if it does not qualify for the mandatory requirements due to several benefits stated above.

There are several entities that are subject to mandatory auditing, regardless of their size:

• Joint-stock companies (in some cases even when they do not meet the above criteria)
• Public interest entities (e.g. banks, insurance companies, investment funds)
• Companies that manage mutual funds
• Companies listed on the stock exchange
• Companies that apply for special licenses (energy, telecom, etc.)
• Companies that have contractual obligations for auditing (e.g. financial partners, investors, banks)

Our Approach and Methodology

Our audit methodology includes making recommendations for improvement, not just to express numbers and ensure compliances. The recommendations are realistic because we want you to implement them. We also ensure our clients are updated throughout the year on accounting, financial and regulatory developments that may impact their business.