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Following the end of the conflict in Kosovo, efforts to develop its economic system started in 1999, when the governance of Kosovo was organized in accordance with United Nations Security Council Resolution 1244.

A law establishing requirements for financial reporting and the licensing of auditors requirements and creating a regulatory/standard setting board in Kosovo (UNMIK 2001/30) was adopted by the provisional institutions of self Government and promulgated by the Special Representative of the Secretary General of the United Nations in 2001.

In 2006 the World Bank conducted a Report on the Observance of Standards and Codes in Accounting and Auditing (A&A ROSC) in Kosovo. This Report contained recommendations on how Kosovo could improve both its framework for financial reporting and auditing and the mechanisms for implementing this framework. In 2007 the European Agency for Reconstruction designed a two year technical assistance project to address a number of the recommendations of the ROSC, mostly aimed at capacity building within the KBSFR and SCAAK (see institutions).

In 2008 Kosovo declared independence and adopted a new constitution and governance structures. It set itself the strategic goal of joining the European Union, and is gradually implementing the EU acquis communautaire. In 2009 Kosovo became a member of the World Bank.

The present legal framework for financial reporting and statutory audit does not permit the recommendations to be implemented fully, and those involved in financial reporting in Kosovo have agreed that a more comprehensive law is required. Kosovo started the process of drafting a revised law in late 2009 and has participated actively in the REPARIS workshops in order to better understand from its peers in the region and CFRR experts how it might improve the draft law to achieve further alignment with the requirements of the EU acquis communautaire.

Kosovo is part of the following programs at the CFRR:

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Flag of Kosovo

Republic of Kosovo
Republika e Kosovës
Република Косово / Republika Kosovo
Kosovë / Kosova
Косово / Kosovo

Kosovo in Europe

Capital (and largest city):

Official language:
Albanian, Serbian

Contacts at the CFRR:
Jan Tyl
Tel: +381 11 3023 711


Economic and Business Background for Kosovo

Doing Business 2012"Doing Business" Results for Kosovo

The World Bank's annual "Doing Business" reports provide objective measures of the impact of business regulations and their enforcement in 183 economies across the world.

Source:, the World Bank Group

Download "Kosovo, Doing Business Report 2012"

Background Economic Indicators

Source: World Development Indicators (WDI), the World Bank Group


Gross Domestic Product (GDP, current US$)

CFRR Updates

Articles on REPARIS

Ministerial Conferences and Senior Officials' Workshops

Audit and Oversight Community of Practice (AOCoP)

Accounting Education Community of Practice (EduCoP)

Financial Reporting Community of Practice (FRCoP)

IFRS for Regulators


A&A ROSC for Kosovo

Executive Summary

Cover of A&A ROSC for KosovoThis report provides an assessment of accounting, financial reporting, and auditing requirements and practices within the enterprise and financial sectors in Kosovo. The report uses International Financial Reporting Standards (IFRS) and International Standards on Auditing (ISA), and draws on international experience and good practices in the field of accounting and audit regulation, including in European Union (EU) Member States, to assess the quality of financial information and to make policy recommendations.

Kosovo has an estimated population of 2 million and a gross domestic product (GDP) per capita of EUR 1,105 as of 2005. Kosovo was placed under temporary United Nations (UN) administration following the 1999 conflict, and its economy has begun to recover, recording positive growth since 2000. In November 2005, the UN appointed a Special Envoy for Kosovo with a mandate to initiate negotiations on the final status of Kosovo between the Government of Serbia and representatives of the Provisional Institutions of Self-Government (PISG) in Kosovo. These negotiations started in March, 2006, and are ongoing at the time of writing (June 2006). When concluded, these negotiations are expected to remove the uncertainty surrounding Kosovo's political status. This should contribute significantly to increased foreign direct investment.

Privately-owned enterprises make up the majority of the enterprise sector, both by number and economic output. Two classes make up the public enterprise sector in Kosovo: Publicly-Owned Enterprises (POEs) and Socially-Owned Enterprises (SOEs). Currently, 23 POEs and an estimated 400 to 500 SOEs exist in Kosovo. The United Nations Mission in Kosovo (UNMIK) established the Kosovo Trust Agency (KTA) in 2002 as an autonomous agency to continue UNMIK's regulation and management of all POEs and SOEs. Though the KTA has privatized a number of SOEs since 2003, no POEs have been privatized to date.

The banking sector plays a very limited role in the economy's financing, consisting primarily of retained earnings and informal, family-generated funding. Seed financing as an intermediate level of borrowing is also lacking. However, loans to the private sector are rapidly increasing—from 10 percent of GDP in 2003 to 23 percent of GDP in 2005. As of 2005, seven banks were operating in Kosovo, two of which are majority-owned by foreign banks and make up 66 percent of total banking assets.

As of the end of 2005, the non-banking financial sector consisted of eight licensed insurance companies, four of which are domestic and four of which are of foreign origin. Furthermore, six licensed supplementary pension funds were in existence by the end of 2005 with a recorded 4,197 participants. As yet, there is no capital market present in Kosovo.

The Statutory Framework, including applicable Accounting and Auditing Standards

UNMIK Regulation 2001/30 on the Establishment of the Kosovo Board on Standards for Financial Reporting (KBSFR) and a Regime for Financial Reporting in Business Organizations ("the Law on Financial Reporting") establishes the regulatory structure for accounting and auditing in Kosovo. The structure is appropriate but is not working effectively. Limited technical and financial resources have resulted, with institutional weaknesses in several areas. There is a desire to address the existing weaknesses. The proposed amendments to the Law aim to improve the existing framework through strengthening the oversight of the accounting and audit profession and clarifying further the roles and responsibilities of the regulatory institutions. These improvements are unlikely to work unless the institutional weaknesses described below are dealt with.

The Law requires the KBSFR to issue Kosovo Accounting Standards (KAS) that comply with IFRS after taking into consideration the business environment in Kosovo.

The Law requires all corporations (except "small corporations"), POEs, and SOEs to prepare their financial statements in conformity with KAS or IFRS. Applying simplified standards for smaller enterprises is a logical approach. However, adoption of a three-tiered financial reporting structure with public interest entities (PIEs) eventually applying IFRS; SMEs applying simplified financial reporting requirements; and micro enterprises continuing to apply tax-based rules would remove the problem of applying KAS or IFRS in relatively small organizations for which they were not designed or intended. The Law is in the process of being amended (hereinafter Draft Law) and this would provide an opportunity to address this issue.

Corporations (other than small corporations), POEs, and SOEs are required submit their (audited) financial statements to the business registry and the Ministry of Economy and Finance. However, the financial statements filed with the business registry are not publicly available. This may hinder the decision making abilities of stakeholders and may also inhibit the market incentive for greater compliance with accounting and audit requirements.

Banks and insurance companies are required to prepare financial statements in compliance with IFRS and the accounting requirements set forth by the Banking and Payments Authority of Kosovo (BPK). The recognition and measurement principles as well as the disclosure requirements set out by the BPK differ from "full IFRS." Compliance with BPK requirements takes precedence, which precludes successful implementation of IFRS in the banking and insurance sectors.

The Law requires the KBSFR to issue auditing standards in conformity with ISA after taking into account the business and economic environment in Kosovo. In 2002, the KBSFR published an Administrative Decision in Albanian, which made application of ISA mandatory for licensed auditors carrying out statutory audits. The ISA adopted in 2002 were the 1999 Albanian language translation of ISA. No subsequent review or updates have been carried out or mandated by the KBSFR.

The Law requires the financial statements of all corporations (other than small corporations), POEs and SOEs to be audited. The scope of statutory audit requirements is too broad, considering the stage of development of the audit profession in Kosovo and the rationale for such a requirement mandated by statute. The Draft Law provides an opportunity to address this issue.


Institutions of Interest in Kosovo

Society of Certified Accountants and Auditors in Kosovo (SCAAK)

The Society of Certified Accountants and Auditors in Kosovo (SCAAK) was formed in 2001 with the aim of capacity building and developing the profession of accountants and auditors in Kosovo. SCAAK became an Associate Member of the International Federation of Accountants (IFAC) in 2003, and, with the support of the donor community including the World Bank, has developed a professional education program for accountants and auditors. SCAAK has received delegated authority from the KBSFR to set and implement the education standards for licensed auditor candidates. Between 2007 and 2009, SCAAK adopted a new strategic plan which aimed at upgrading its professional education program to meet the professional education requirements for statutory auditors under the EU's Statutory Audit Directive, and to implement the IFAC Statements of Membership Obligations. SCAAK became a full member of the International Federation of Accountants in 2009.

Kosovo Board for Standards for Financial Reporting (KBSFR)

The KBSFR board is approved by the Ministry of Finance and comprises representative stakeholders from the Central Bank, Chamber of Commerce, Ministry of Finance and the profession, amongst others. Under a proposed new law under consideration by the Assembly of Kosovo, it is envisaged that the Board would assume public oversight responsibility, in accordance with the principles of public oversight contained in the Statutory Audit Directive


Jan Tyl

Jan TylJan Tyl is a Senior Financial Management Specialist with nearly 20 years of experience in accounting, auditing, consulting and standard-setting. Jan is the technical leader for the Road to Europe Programme of Accounting Reform and Institutional Strengthening, takes a key role inthe Financial Reporting Technical Assistance Program for new EU member countries and works on Reports on the Observance of Standards and Codes.

His specializations include the introduction and implementation of International Financial Reporting Standards, International Standards on Auditing, strengthening of the professional accountancy bodies, and development of professional accounting education. Jan worked on accounting and auditing reform programs in the Czech Republic, Russia, Ukraine, Poland, Slovakia and Kosovo. Jan is a Chartered Accountant (Canada), retired Czech statutory auditor and co-founding member of Society of Certified Accountants and Auditors of Kosovo. Jan holds economics and accounting degrees from the University of Alberta and also studied at the Prague School of Economics. He speaks Czech, English, and intermediate German, Russian, Polish and Slovak.

Contact information

Tel: +43 1 2170727


Kosovo Country Office

For information on other World Bank activities in Kosovo contact the World Bank Country office:

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