The development objective of the Strengthening Quality of Auditing and Reporting Project for Republic of Albania (SQARP) is to strengthen relevant stakeholder’s capacity to improve, apply and enforce corporate financial reporting in line with good international standards and practices in Albania. The Project will provide a necessary underpinning for the continued reform and will contribute to better enforcement of corporate financial reporting in Albania. It will follow up on the Corporate Financial Reporting Enhancement Project (CFREP, phase I) and Enhancing the Quality of Financial Reporting Project (EQFINREP, phase II) by building on and reinforcing previous reform work, support the implementation of improved laws and bylaws and other priority reforms reflected in the updated Country Action Plan (CAP).

The design of the proposed activities, supported by a new and follow-up SECO Trust Fund follow a programmatic approach of supporting government strategy in phases and Capacity Development Results Framework. The theory of change applied includes raising awareness and building commitment for change, designing appropriate legal instruments, and create institutional capacity for compliance and enforcement. The intervention logic is based on programmatic approach using as a basis the CAP. The SQARP will continue support areas that are critical, and the reform efforts need more attention and time (audit public oversight, national accounting standards setter), and will also cover other areas that are part of the CAP, but earlier interventions did not support (i.e., capacity of judiciary system in financial reporting and auditing and strengthening the capacity of regulators to monitor SOEs’ performance). The focused support to State-owned Enterprises (SOEs) will be provided under the complementary Bank-executed activities also financed under the new SECO Trust Fund.

The key components of the SQARP are (all Recipient-executed):

Component 1: Strengthening Standards Setting, Oversight and Enforcement. It will focus on:

1. Supporting a set of activities to strengthen the capacity for standard setting and accounting oversight, including, inter alia: (a) providing technical assistance to the National Accounting Council (NAC) for its development and implementation of a risk-based financial statements review methodology; and (b) providing technical assistance and trainings to the Public Oversight Board (POB) to improve its capacities with regard to quality assurance inspection, investigative and disciplinary actions, and monitoring of professional accountancy organizations.
2. Provision of Training to the Bank of Albania and the Financial Supervisory Authority on International Financial Reporting Standards (IFRS) and the use of e-tools to review IFRS financial statements.
3. Providing technical assistance to the National Business Center's implementation of the extensible Business Reporting Language to continue improving the filing and publication of IFRS-based financial statements.

Component 2: Improving Capacity to Comply with Corporate Financial Reporting Requirements, Development of Accountancy Services and Public Awareness. It will focus on:

1. Support Examination Commission to improve testing and examination processes for candidates to become qualified accountants and auditors, based on good international practices.
2. Strengthening the accounting profession in Albania by providing technical assistance and capacity building activities to the Institute of Certified Accountants and the Ministry of Finance and Economy (MoFE).
3. Carrying out public awareness activities on: (a) benefits and impact of good Corporate Financial Reporting (CFR), and the importance of audit quality and the audit committee's role; and (b) impact of good CFR practices on the formal and informal economy in Albania.

Component 3: Strengthening Accountancy Profession and Capacity Building in the Judicial System will focus on:

1. Provide technical assistance to selected professional accounting organizations to build their capacity to develop forensic accounting as a separate service area for accounting organizations in Albania.
2. Support the Albanian courts (district, appeal, supreme/high), general prosecutor office, and officers of judicial police on accounting techniques, legislation, and standards.

Component 4: Project Management, Strengthening Reform Capacity, and Monitoring and Evaluation will focus on providing technical assistance to the MoFE and National Steering committee on Project management, monitoring and evaluation activities, and CFR reform capacity.

In addition, the Bank-executed activities will provide implementation support to the Recipient-executed activities and conduct of knowledge-related activities. These activities include providing policy advice to the beneficiaries, providing support and capacity building activities on improving monitoring of SOEs’ financial performance, reviewing the project outputs, and offering guidance and support on a needs basis.

Project activities started in 2022 and will be delivered by end 2025.