Accounting standards are part of legally binding corporate reporting framework.
Law on Accounting
The relevance of the acquis communautaire for Albania is twofold. First, it represents a high-quality model for the regulation of accounting and auditing, which may be applied to countries of differing characteristics. Second, the adoption of the acquis communautaire, relating to accounting and auditing, supports Albania’s strategy to become part of the European Union.
In this regard, two factors have influenced the NSC in developing this strategy and action plan. firstly, with regard to enforcement, it is anticipated that Albania will need to demonstrate that it has not only adopted the acquis communautaire in law (statutory framework) but secondly, also that Albania has taken measures to ensure the acquis communautaire is actually implemented (institutional framework).
Constructing a high-quality regulatory and institutional framework for accounting and auditing requires reforms to Albania’s legal framework, institutions, and accounting profession, as well as changes in its accounting, auditing, and business culture. This country strategy and action plan set out a number of reform activities developed in a holistic manner with due regard to Albania’s ability to carry out such activities (both in terms of capacity and resources). In some instances, a relatively lenient rule that is robustly and consistently enforced is preferable to a good, rigorous one that is unenforceable, as the lenient rule can be progressively made more rigorous as circumstances allow. As a result, the NSC has decided to set forth reform activities that, while challenging, can be carried out in the short to medium term.
International Accounting Standards (IASs) were issued by the antecedent International Accounting Standards Council (IASC), and endorsed and amended by the International Accounting Standards Board (IASB).
The International Accounting Standards Committee (IASC) was founded in June 1973 in London and was replaced by the International Accounting Standards Board on 1 April 2001. It was responsible for developing the International Accounting Standards and promoting the use and application of these standards.
The IFRS Foundation is a not-for-profit, public interest organisation established to develop a single set of high-quality, understandable, enforceable and globally accepted accounting standards (IFRS Standards) and to promote and facilitate adoption of the standards. International Financial Reporting Standards (IFRS) are a set of international accounting standards stating how particular types of transactions and other events should be reported in financial statements. IFRS are issued by the International Accounting Standards Board, and they specify exactly how accountants must maintain and report their accounts. IFRS were established in order to have a common accounting language, so business and accounts can be understood from company to company and country to country.
International Federation of Accountants is the global organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. IFAC is comprised of over 175 members and associates in more than 130 countries and jurisdictions, representing almost 3 million accountants in public practice, education, government service, industry, and commerce.
National Accounting Standards are accounting standards compiled by the National Accounting Council, which are applicable only for companies that operate and report in Albania.
Generally Accepted Accounting Principles, also called GAAP or US GAAP, is the accounting standard adopted by the U.S. Securities and Exchange Commission (SEC), which are a common set of accounting principles, standards, and procedures that companies must follow when they compile their financial statements. GAAP is a combination of authoritative standards (set by policy boards) and the commonly accepted ways of recording and reporting accounting information. In addition, GAAP improves the clarity of the communication of financial information.