Enhancing Audit Quality in Bosnia and Herzegovina_72016824RFI00002.pdf

Issue Date January 24, 2024 Closing Date and Time February 7, 2024

2:00 PM Sarajevo, BiH local time Submission must be sent to AHodzic@usaid.gov Activity Title Enhancing Audit Quality in Bosnia and Herzegovina SUBJECT Request for Information (RFI) #72016824RFI00002

To All Interested Parties:

USAID/Bosnia and Herzegovina is exploring potential partners to contribute to the development and implementation of a quality objective risk assessment tool for small and medium audit firms in Bosnia and Herzegovina. The focus is on aligning with the International Standards of Quality Management 1 (ISQM 1) and facilitating self-assessment for local audit firms. Additionally, capacity strengthening opportunities will be provided based on assessment results, including support for the Chamber of Auditors in the Federation of Bosnia and Herzegovina (CoA FBiH).

This RFI is issued solely for information and planning purposes. It is NOT a Request for Proposal (RFP) and in no way obligates the U.S. Government to issue an RFP and/or award a contract or pay for any information submitted as a result of this request.

If a solicitation is issued, all necessary information will be supplied at the time it is posted at SAM.gov.

Questions/requests for information will not be responded to until potential RFP issuance. Interested parties are advised to periodically monitor the above website and RFI number for updates concerning a potential procurement.

Submissions must be in English and submitted in Microsoft Word or Adobe PDF format, not exceeding three (3) pages in length in single-spaced.

Responses to this RFI must be submitted by email. Please submit your responses no later than February 7, 2024, 2:00PM Sarajevo, BiH local time, to Amila Hodzic, Acquisition and Assistance Specialist at ahodzic@usaid.gov with the email subject line and file name, “RFI Response:

Enhancing Audit Quality in Bosnia and Herzegovina.” Responses will be held confidential unless otherwise specified, but respondents are advised to refrain from sending proprietary information. USAID/Bosnia and Herzegovina reserves the right, but is not obligated, to incorporate any, some, or none of the comments received into any subsequent Request for Proposals (RFP).

Responses received after this deadline will not be read or considered. Submission via email is required;

phone calls or hard copy delivery will not be accepted. You may receive an electronic confirmation acknowledging receipt of your response.

USAID/Bosnia and Herzegovina values input from our potential partners, and we thank you for your interest and assistance in developing potential future programs.

Sincerely, Leona Sasinkova Supervisory Contracting Officer mailto:AHodzic@usaid.gov mailto:ahodzic@usaid.gov

I. INTRODUCTION

The United States Agency for International Development in Bosnia and Herzegovina (USAID/Bosnia and Herzegovina) is interested in organizations with experience and capacity working with the audit industry to:

• facilitate the self-assessment of the eight components in the International Standards of Quality Management (ISQM 1) for small and medium local audit firms in Bosnia and Herzegovina;

• provide subsequent capacity strengthening opportunities based on the aforementioned self-assessment results; and

• provide capacity strengthening to the Chamber of Auditors in the Federation of Bosnia and Herzegovina (CoA FBiH) to enable it to perform audit firm assessments based on ISQM-1 as issued by the International Auditing and Assurance Standards Board (IAASB) and train the Chamber to close gaps identified during assessments.

The envisaged capacity strengthening will be based on the International Standard on Quality Management 1, Quality Management for Firms that Perform Audits or Reviews of Financial Statements, or Other Assurance or Related Services Engagements (ISQM 1).

Audit entities, non-governmental organizations, academic institutions, and private sector organizations and associations are encouraged to respond. USAID is especially interested in US-based organizations that have not received more than $5 million from USAID in the past five years, and who have experience in capacity building in the auditing industry.

II. BACKGROUND

USAID and many other development partners have significant ongoing commitments of funding projects in Bosnia and Herzegovina and the neighboring non-EU countries. There is therefore a need to ensure that the development partners’ resources committed to Bosnia and Herzegovina are accounted for in a transparent manner and subjected to high quality independent external audits by audit firms whose systems of quality management meet international standards. Currently development partners rely on assessments of audit firm quality control under ISQC 1, the International Auditing and Assurance Standards Board’s (IAASB’s) former International Standard on Quality Control, Quality Control for Firms that Perform Audits and Reviews of Financial Statements and Other Assurance and Related Services Engagements.

Effective as of December 15, 2022, IAASB released its revised suite of quality management standards, including ISQM 1. While ISQC 1 specified policies and procedures audit firms were required to establish and maintain as part of their system of quality control, ISQM 1 introduces a proactive, risk-based approach to the system of quality management, requiring audit firms to identify: quality objectives, risks to meeting quality objectives, and responses to mitigate risks identified. Unlike its predecessor, ISQM 1 promotes ongoing improvement through monitoring of the design, implementation, and operating effectiveness of the system of quality management and remediation of identified deficiencies.

Audit Firms in Bosnia and Herzegovina As many audit firms, particularly Small and Medium-sized Practices (SMPs) faced challenges in implementing ISQC1 under the former quality control approach it is envisaged to face even more and greater challenges under the new quality management approach which requires a risk-based approach and much more resource commitment. With one or a few partners and limited staff members in the firm, SMPs may not have sufficient time and in-house capacity to focus on implementing the ISQM standards.

This puts forward an innovative requirement to ensure that audit firms in Bosnia and Herzegovina that are responsible for auditing entities/ institutions that receive development partner resources, are assessed and trained in standards on quality management.

The Chamber of Auditors in the Federation of Bosnia and Herzegovina (CoA FBiH) The CoA FBiH is a professional organization of auditing companies and authorized auditors, operating in the territory of the Federation of Bosnia and Herzegovina, which has the status of a legal person and carries out the responsibilities assigned to the Chamber by the Law on Accounting and Auditing in the Federation of Bosnia and Herzegovina. The Chamber is self-sustainable and independent in its work and is subject to public oversight by the Public Oversight Board in accordance with the Law. Members of the Chamber are Audit Firms and Certified Auditors who are licensed by the Federal Ministry of Finance (hereinafter the “Ministry”).

The Chamber has jurisdiction to perform tasks in the area of auditing services and other professional areas related to auditing. Specifically, the Chamber:

• establishes membership fees and other revenues;

• guards the reputation of audit profession;

• establishes minimum methodology of the quality supervision of work performed by the Audit

Companies and authorized auditors;

• supervises the quality of work performed by the Audit Companies and authorized auditors; if necessary, it takes proceedings and conducts measures required to remove and sanction the observed irregularities which it reports to the Ministry every six-month period.

As the Chamber supervises the quality of work performed by the Audit Companies and authorized auditors in the Federation of Bosnia and Herzegovina its capacity to conduct assessments and training of audit firms in the standards on quality management is of the utmost importance to give assurance to the development partners including USAID that their resources are in all cases audited by firms that comply with the requirements of the quality management standards.

III. SPECIFIC CAPACITIES SOUGHT

USAID/Bosnia and Herzegovina seeks information on organizations with capacity working with the audit industry to:

1. Develop audit assessment tools and/or conduct assessments of audit firms for compliance with the ISQM 1.

2. Provide briefings and produce reports to share assessment findings and conclusions.

3. Design approaches to train and strengthen capacity of the assessed audit firms, including in implementation of ISQM 1.

4. Support Professional Accountancy Organizations (PAOs) to update/develop templates, processes, systems, and documentation to carry out audit quality monitoring to align with the new international quality management standards.

5. Provide training/capacity strengthening to PAOs to perform audit firm assessments and training on the ISQM standards.

6. Possess language skills or procure a translator, including reading, writing, and speaking proficiency in English and one or more of the following languages:

a. Bosnian

b. Serbian

c. Croatian.

IV. QUESTIONS

USAID/Bosnia and Herzegovina asks that interested respondents submit short written responses to the questions outlined below. Respondents are encouraged to review the questions and respond to only those that are relevant to their experience and capabilities. Responses to all questions are not required but encouraged as applicable.

1. Point of contact name:

2. Point of contact title:

3. Organization name (if applicable):

4. Location where you are based or registered (City, Country):

5. Email address:

6. What is your organization type?

a. Independent consultant/self-employed

b. Private sector firm/Limited Liability Company

c. Non-governmental organization/civil society organization

d. Academic institution/university professor

e. Other [please describe]

7. Provide your organization’s past experience and technical capacities to develop audit assessment tools and conduct assessments of audit firms on compliance with ISQM 1.

8. Summarize your organization’s past experience and technical capacities to provide briefings and produce reports to share assessment findings and conclusions.

9. Please speak to your (or your organization’s) past experience and technical capacities to train and strengthen the capacity of the assessed audit firms to comply with ISQM 1.

10. Please speak to your (or your organization’s) past experience and technical capacities to work with Professional Accountancy Organizations (PAOs) to update/develop templates, processes, systems and documentation to carry out audit quality monitoring to align with the new international quality management standards.

11. Please speak to your (or your organization’s) past experience and technical capacities to provide training/capacity strengthening to PAOs to perform audit firm assessments and training on the ISQM standards.