New and Significant Approaches in 2025
The audit methodology and the application of International Standards on Auditing (ISA), International Financial Reporting Standards (IFRS), and the International Code of Ethics, alongside International Standards on Quality Management (ISQM 1 and ISQM 2), are internally developed and remain the exclusive intellectual property of SFAI Montenegro and its principals. During 2025, SFAI Montenegro initiated the in-depth integration of the new ISQM 1 and ISQM 2 standards. The strategic focus is on transitioning from static quality control to a dynamic system of quality risk management. Although the full implementation process is ongoing, key elements of these standards are already being applied within our current audit cycles, thereby ensuring an enhanced level of service reliability.
We would like to emphasize that, although it is not a regulatory requirement, we have initiated the Pilot Implementation of Audit Quality Indicators (AQIs). This implementation follows the methodology developed by the Center for Audit Quality (CAQ) in the United States.
The significant influence of the EU’s legislative and regulatory agenda is transforming the scope of auditing in Montenegro, as a candidate country. Independent external reviews and the provision of assurance services for non-financial information—including Environmental, Social, and Governance (ESG) factors—alongside data and Artificial Intelligence (AI) systems, have been introduced into EU legislation. These serve as essential tools to ensure the proper implementation of the core building blocks of the Green Deal and the Digital Agenda, which also represents the strategic direction of Montenegro.
ccordingly, the demand for auditing is expanding into new domains, particularly sustainability reporting and algorithmic systems. Audit firms are transforming and evolving from financial information experts into new areas of expertise for certifying ESG information and the compliance of AI data and systems for major digital platforms, in line with the requirements of the EU Digital Services Act (DSA) and the Digital Markets Act (DMA). In the same way that financial audits contribute to building trust for the proper functioning of a market economy, these new types of audits will serve the public interest and play a key role in addressing challenges related to the development of more sustainable and ethical digital economies. The auditor's contribution to society will now extend beyond investors to embrace consumers and citizens.
This paradigm shift for audit firms will inevitably impact the audit market in ways that may not have been foreseen. Is the EU audit ecosystem properly structured to accommodate these new dimensions? Will the structure of the EU audit market create unexpected risks and consequences? These are questions that only the development of future events can answer. SFAI Montenegro is committed to being an active and constructive contributor and participant on this strategic path.
Our experience in the pilot phase and the subsequent practical application within the audit cycle—specifically in documenting audit working papers for individual clients during the previous year—has fully met our expectations. This success is directly attributed to the proper implementation of this highly beneficial and high-quality approach to using Automated Tools and Techniques (ATT) throughout the audit process.
In 2025, SFAI Montenegro was extensively involved in the publication of professional editions in collaboration with the iLearn d.o.o. publishing house. We expanded our scope to include the fields of Applied Artificial Intelligence (AI), Digital Transformation, the Psychology of Influence, as well as Contemporary Social and Family Dynamics.
Based on years of experience in enhancing quality control and following consultations with our colleague Paul Thompson, CPA , as well as Professor Edin Glogić, PhD—Dean at FINRA University in Bosnia and Herzegovina, a Certified Auditor, Certified Internal Auditor, and Forensic Auditor—we have decided to continue our collaboration with Professor Glogić in the position of Director of Internal Quality Control.
In the same vein, a decision has been made to extend our collaboration with Associate Professor Ivana Ljutić, PhD, a leading expert in corporate law and governance. She continues to serve as a Non-Executive Director specializing in Corporate Governance and International Taxation.
The internal continuing professional development (CPD) segment for all members of the assigned audit teams in the 2025 calendar year was organized through 96 training units, each with a total duration of 60 minutes.
Following the initial testing phase, during 2025, we transitioned to the measured practical application of AI tools in the automation of specific audit procedures. We primarily utilize AI for identifying anomalies in large datasets and accelerating routine analytical tasks, thereby freeing up resources for complex professional audit judgments, always under indispensable human oversight.
We support the activities of the International Center for Sustainable Reporting and Governance and actively engage as a partner and leader of initiatives.
