Compliance Responses and Action Plans

  • Compliance Responses and Action Plans

    IFAC members and associates have provided self-assessment information about the regulatory and standard-setting framework in their countries (Part 1) and their organizations' activities in addressing IFAC's membership requirements (Part 2) as described in the Statements of Membership Obligations. Based on an analysis of this information, they are developing SMO Action Plans for continuous development and improvement.

    Some organizations have qualified to submit SMO Action Plans on a biennial basis by meeting eligibility criteria. These organizations are indicated with an asterisk (*).

    In the interest of transparency and providing information to the profession, regulators, and other stakeholders, all responses and SMO Action Plans are accessible below.

    The Chamber of Financial Auditors of Romania

     

    Introduction

    The information below has been submitted as part of the IFAC Member Body Compliance program. The Program has two components:

    Part 1: Assessment of the Regulatory and Standard-Setting Framework (provides information about regulatory requirements and standard-setting processes in member body countries); and
    Part 2: Assessment of Compliance (provides information on compliance by member bodies with the Statements of Membership Obligations). Part 2 of the Compliance Program will begin later this year, and the results will also be posted to the website.

    The responses to Part 1 are provided below. IFAC staff has reviewed the responses and, where necessary, validated them with external knowledgeable parties. A list of key terms is available to assist readers in understanding the responses.

    The purpose of this Part 1 Assessment is to collect information on the roles of IFAC member bodies and other organizations (including government, regulatory or other appointed authorities) with respect to:

    1. Setting auditing, accounting, ethics, public sector and education standards; and
    2. Regulating the accountancy profession.

    Sections 1 and 2 of Part 1 contain an introduction and instructions for member body respondents. For this reason, they are not included here, and the responses begin with Section 3.

    Questions or comments may be sent to complianceassessment@ifac.org.


    Section 3 -- Member Body General Information

    1. Country:

      ROMANIA


    2. Name of member body:

      Or please specify name:
      CHAMBER OF FINANCIAL AUDITORS FROM ROMANIA



    3. Individual responsible for preparation:
      CORNELIA STANESCU


    4. Date member body became a member of IFAC:
      Note: Please enter a numeric date (e.g., 12/2001, Month/Year)

      11 / 2004



    Questions 5 - 22 are for internal use only


    Section 3G -- Affiliations


    23. Please list those regional organizations to which your organization belongs (e.g., FEE, CAPA, ECSAFA, IAA, etc.):
      Chamber of Financial Auditors from Romania started the process of joining Federation des Experts Comptables Europeens.



    Section 4 -- Statutory Framework


    Responses to this section will provide a description of the legal framework governing the commercial aspects of auditing and financial reporting in your country.

    Section 4A -- The Companies Act or Commercial Code


    The following questions concern the Companies Act (the Act) or Commercial Code (the Code) or similar Legal authority in your country. If no Legal authority exists, or the Legal authority does not address particular questions, please indicate "N/A" for Not Applicable.

    24. What is the full name of:
      a). the Act or the Code: Company Law no. 31/1990, republished
      b). the Enacting body: Romanian Parliament
      c). date the Act or Code came into force: 11 / 1990


    25. How can IFAC obtain a copy of the Act or Code?
      By request. Note: For information in this Section see also response of the other Romanian IFAC member - CECCAR.


    26. Is the Act or Code available in English?
      Yes   No


    27. What are the types of entities covered by the Act or the Code?
      Please check all that apply.
      Listed entities   Other (please specify):
      Private companies   Other (please specify):
      Governmental   Other (please specify):
      Not-for-profit   Other (please specify):


    28. Is there a requirement for the following entities to prepare annual statutory financial statements? If YES, please describe the financial reporting requirements including the accounting standards to be followed.
      Please check all that apply.
        No Yes (If YES, please describe)
      Listed entities JOINT ORDER OF THE MINISTRY OF PUBLIC FINANCE AND PRESIDENT OF THE ROMANIAN NATIONAL SECURITIES COMMISSION NO. 1742/106/2002 ON THE APPROVAL OF THE ACCOUNTING REGULATIONS HARMONISED WITH THE EUROPEAN DIRECTIVES AND INTERNATIONAL ACCOUNTING STANDARDS
      Private companies ORDER OF THE MINISTRY OF PUBLIC FINANCE NO. 94/2001 AND ORDER NO. 306/2002 ON THE APPROVAL OF THE ACCOUNTING REGULATIONS HARMONISED WITH THE EUROPEAN DIRECTIVES AND INTERNATIONAL ACCOUNTING STANDARDS
      Governmental ORDER OF THE MINISTRY OF PUBLIC FINANCE NO. 1746/2002
      Not-for-profit ORDER OF THE MINISTRY OF PUBLIC FINACE NO. 1829/2003
      Other (please describe) JOINT ORDER OF THE MINISTRY OF PUBLIC FINACE AND GOVERNOR OF NATIONAL BANK OF ROMANIA NO.1982/5/ 2001
      Other (please describe) JOINT ORDER OF THE MINISTRY OF PUBLIC FINANCE AND PRESIDENT OF COMMISSION FOR INSURANCE SUPERVISION NO.2328/2390/2001


    29. Is there a statutory requirement for the following entities to be audited? If YES, describe the requirement including the auditing standards to be followed:
      Please check all that apply.
        No Yes (If YES, please describe)
      Listed entities BY JOINT ORDER OF THE MINISTRY OF PUBLIC FINANCE AND PRESIDENT OF THE ROMANIAN NATIONAL SECURITIES COMMISSION NO.1742/106/2002. ON THE APPROVAL OF THE ACCOUNTING REGULATIONS HARMONISED WITH THE EUROPEAN DIRECTIVES AND INTERNATIONAL ACCOUNTING STANDARDS , AND THE AUDITING STANDARDS TO BE FOLLOWED ARE INTERNATIONAL STANDARDS ON AUDITING OF IFAC, FULLY ADOPTED BY THE CHAMBER
      Private companies ORDER OF THE MINISTRY OF PUBLIC FINANCE NO. 94/2001 AND ORDER NO. 306/2002 ON THE APPROVAL OF THE ACCOUNTING REGULATIONS HARMONISED WITH THE EUROPEAN DIRECTIVES AND INTERNATIONAL ACCOUNTING STANDARDS , AND THE AUDITING STANDARDS TO BE FOLLOWED ARE INTERNATIONAL STANDARDS ON AUDITING OF IFAC, FULLY ADOPTED BY THE CHAMBER
      Governmental
      Not-for-profit
      Other (please describe) JOINT ORDER OF THE MINISTRY OF PUBLIC FINACE AND GOVERNOR OF NATIONAL BANK OF ROMANIA NO.1.982/5/ 2001, AND THE AUDITING STANDARDS TO BE FOLLOWED ARE INTERNATIONAL STANDARDS ON AUDITING OF IFAC, FULLY ADOPTED BY THE CHAMBER
      Other (please describe) JOINT ORDER OF THE MINISTRY OF PUBLIC FINANCE AND PRESIDENT OF COMMISSION FOR INSURANCE SUPERVISION NO.2328/2390/2001, AND THE AUDITING STANDARDS TO BE FOLLOWED ARE INTERNATIONAL STANDARDS ON AUDITING OF IFAC, FULLY ADOPTED BY THE CHAMBER


    30. Are the auditors ("statutory auditors") that are appointed for audits required by the Act or Code ("statutory audits") appointed for a specific period?
      Yes   No
      If YES, please indicate the term of appointment: Year(s)


    31. Who appoints the statutory auditors?
      Please check all that apply.
      Shareholders   Management
      Board of directors   Other (please specify):
      Audit committee   Other (please specify):
      Government agency   Other (please specify):


    32. Does the Act or Code require joint auditors for the statutory audit?
      Yes   No
      If yes, please describe the requirement:


    33. Does the Act or Code require the rotation of the auditors or audit firms performing statutory audits?
      Yes   No
      If yes, please describe the requirement:



    Section 4B -- Securities Market Regulations


    Responses to this section will provide a description of the financial reporting and auditing requirements for listed entities in your country.

    34. What are (a) the major items of Legal authority for such requirements, (b) the Enacting body(ies) and (c) the latest amendment date? Please identify the specific articles or sections that pertain to auditing and financial reporting:
    1. the major items of Legal authority for such requirements

      The legal framework on establishment and functioning the undertakings for collective investments in transferable securities that regulates establishment and functioning for financial instruments markets, with specific institutions and operations for these markets, is:
      - E.G.O. nr. 26/2002 on undertakings for collective investments in transferable securities , approved and changed by the Law no. 513 � Title VI � Financial auditors;
      - E.G.O. nr. 28/2002 on securities, financial investment services and regulated markets, approved and changed by the Law no. 525 - Title VI, Chapter 3, Section 2-a, Financial auditors.
      In order to harmonize the legislation on capital markets in Romania with the European legislation, CNVM developed the draft of a consolidated Law on capital markets that has been approved by the Romanian government, this being forwarded to the Romanian Parliament in order to be approved. Within this new law, the regulations on financial audit are stated at Title VIII.

    2. the Enacting body(ies)

      Romanian National Securities Commission

    3. the latest amendment date?

      The latest amendment to the above mentioned laws is by the E.G.O. no. 165/2002, that changed EGO no. 28/2002 on securities, financial investment services and regulated markets, approved and changed by Law no. 525/2002.


    35. How can IFAC obtain a copy of the Legal authority?
      From Romanian National Securities Commission's web site at www.cnvm.rdsnet.ro


    36. Is the Legal authority available in English?
      Yes   No


    37. Are there any additional or alternative financial statement reporting requirements for listed entities that are not described in your answer to Question 28?
      Yes   No
      If YES, please describe the requirement:
      According to art. 121 of EGO no. 28/2002, approved and changed by the Law no. 525/2002, listed companies will prepare and will forward to Romanian National Securities Commission current, semestrial and annual reports.


    38. Are there any additional auditing requirements that apply to listed entities other than those described in your answer to Question 29 (e.g., additional GAAS requirements, additional independence requirements, requirements to report to those charged with governance, etc.)?
      Yes   No
      If YES, please describe the requirement:
      According to art. 122 of EGO no. 28/2002, approved and changed by the law no. 525/2002, in the event of a material event, publicly-held companies shall prepare , within no more than three working days of the occurrence, current reports in conformity with the regulations of NSC and of the regulated markets where the securities issued by them are traded.
      According to the provisions of art. 267 from the Draft Consolidated Law on capital markets, financial auditors prepare, based on information presented by administrators, supplementary reports in conformity with standards on financial auditing and Romanian National Securities Commission�s regulations, concerning the operations claimed by shareholders representing at least 5% form the total of the voting rights.

      According to art. 268 from the Draft Consolidated law on capital market, financial auditors are required to report immediately to Romanian National Securities Commission any act or fact concerning the activity of regulated companies they became aware of when performing their specific attributions.


    39. Who appoints the statutory auditors of listed entities?
      Please check all that apply.
      Shareholders   Management
      Board of directors   Other (please specify):
      Audit committee   Other (please specify):
      Government agency   Other (please specify):


    40. Are auditors who perform audits of listed entities appointed for a specified period?
      Yes   No
      If YES, please indicate the term of appointment: Year(s)


    41. Are joint auditors required for audits of listed entities?
      Yes   No
      If YES, please describe the requirement:


    42. Is rotation of the auditor or audit firm for audits of listed entities required?
      Yes   No
      If YES, please describe the requirement:



    Section 5 -- Auditing Standards


    Responses to this section will provide a description of the legal and professional framework governing audit and other assurance standards in your country. The section focuses on the establishment of such standards. Please indicate the role your organization plays within this framework.

    Section 5A -- Statutory Framework


    43. Please provide the name of the Legal authority and/or self-regulatory rules that establish audit and other assurance standards in your country, the date of the last amendment of such authority or rules and the name of body responsible for setting audit and other assurance standards. If the standards are different for different entities (e.g., listed entities, private companies, governmental bodies, not-for-profit organizations, etc.), please specify the details that apply to each:
      Type of entity Name of
      applicable
      legal
      authority
      Date of last
      amendment
      (e.g. MM/YYYY 06/2001)
      Name of body responsible
      for setting audit and
      other assurance standards
      Listed entity EGO 75/1999, REPUBLISHED 08/2003 CHAMBER OF FINANCIAL AUDITORS FROM ROMANIA
      Other (please describe) ALL OTHER COMPANIES THAT REQUIRES TO BE AUDITED, EXCEPTING PUBLIC INSTITUTIONS EGO 75/1999, REPUBLISHED 08/2003 CHAMBER OF FINANCIAL AUDITORS FROM ROMANIA
      Other (please describe)
      Other (please describe)

      a. How can IFAC obtain copies of these documents?

      The Standards on Auditing are in conformity with International Standards on Auditing developed by IFAC fully adopted by the Chamber and can be downloaded from the CFAR's web site at www.cafr.ro

      b. Are the documents available in English?
      Yes   No


    Section 5B -- Standard-Setting (CHAMBER OF FINANCIAL AUDITORS FROM ROMANIA)


    44. For CHAMBER OF FINANCIAL AUDITORS FROM ROMANIA, please indicate the nature of the body (i.e., whether it is part of a government ministry or department, an agency appointed by government, a private organization established by the profession, or other [please describe]) and the name of the standards.
      a. Nature of body

      Professional body

      b. Name of standards

      International Standards on Auditing issued by IFAC


    45. How many voting members does the standard-setting body have?
      15, respectively Chamber's Council


    46. Are the members of the standard-setting body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe: Positions on the Board are voluntary and honorarium paid for the position held


    47. What are the criteria considered in selecting members of the standard-setting body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?
      Elected. However, when establishing the Chamber, was set up a Provisional Committee of 9 members, appointed by the Order of Ministry of Public Finance. The rest of 6 members were elected in the First Conference of the Chamber of October 2000.


    48. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      Members of the setting standards body are elected in the Conference by CFAR's members. See answer to question 47.


    49. What is the term of appointment for members?
      5 Year(s)


    50. For how many years has the standard-setting body been in existence?
      4 Year(s)


    51. Please indicate the budget in US$ of the standard-setting body for the last fiscal year:
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      95,283

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)

      32,595.00



    52. To what entity is the standard-setting body accountable?
      To the members and public at large.


    53. Describe the due process followed by the standard-setting body. Please include explanations of the following:
    1. public exposure of standards

      The standards are translated and published on the CFAR's web site in order to receive comments from members.

    2. accessibility of meetings (i.e., public or private)

      Private.

    3. approval process for final standards (i.e., majority required to approve final standards)

      The final standards are approved with simple majority forecast of the members of CFAR's Council.

    4. other relevant due process activities

      The drafts of the translated standards are discussed in the Technical Working Group created at the Department of Services for Members level. This Working Group gathers together representatives of major local audit firms (including the representatives of the local branches of Big Four).


    54. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      13 Day(s)



    Section 6 -- Ethics


    Responses to questions in this section will provide a description of the legal and professional framework governing ethics standards for accountants in your country. This section focuses on the establishment of such standards. Please indicate the role your organization plays within this framework.

    Section 6A -- Statutory Framework


    55. For each of the following types of professionals, please indicate the name of the Legal authority and/or self-regulatory rules establishing ethics standards for accountants and auditors in your country, the date of the last amendment of such authority or rules and the name of body responsible for setting the ethics standards.
      Type of professional covered Name of
      applicable
      legal
      authority
      Date of last
      amendment
      (e.g. MM/YYYY 06/2001)
      Name of body responsible
      for setting ethics standards
      Professional Accountants in Public Practice Code of Etics and Professional Conduct of IFAC, revised in November 2001, fully adopted by the Chamber 10/2000 Chamber of Financial Auditors from Romania
      Professional Accountants in Business
      Professional Accountants in the Public Sector
      Other (please describe)

      a. How can IFAC obtain copies of these documents?

      By request.

      b. Are the documents available in English?
      Yes   No


    Section 6B -- Standard-Setting (Chamber of Financial Auditors from Romania)


    56. For Chamber of Financial Auditors from Romania, please indicate the nature of the body (i.e., whether it is part of a government ministry or department, an agency appointed by government, a private organization established by the profession, or other [please describe]) and the name of the standards.
      a. Nature of body

      Professional body

      b. Name of standards

      Code of Ethics and Professional Conduct of IFAC, revised in November 1998, fully adopted by the Chamber.


    57. How many voting members does the standard-setting body have?
      15


    58. Are the members of the standard-setting body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe: Positions on the Board are voluntary and honorarium paid for the position held (see answer to question 46)


    59. What are the criteria considered in selecting members of the standard-setting body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?
      Elected. However, when establishing the Chamber, was set up a Provisional Committee of 9 members, appointed by the Order of Ministry of Public Finance. The rest of 6 members were elected in the First Conference of the Chamber of October 2000.(See answer to question 47).


    60. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      Members of the setting standards body are elected in the Conference by CFAR's members. (See answer to question 48).


    61. What is the term of appointment for members?
      5 Year(s)


    62. For how many years has the standard-setting body been in existence?
      4 Year(s)


    63. Please indicate the budget in US$ of the standard-setting body for the last fiscal year:
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      95,283

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)

      32.595



    64. To what entity is the standard-setting body accountable?
      To the members and public at large.


    65. Describe the due process followed by the standard-setting body. Please include explanations of the following:
    1. public exposure of standards

      The translated Code of Ethics will be published on the CFAR's web site in order to receive comments from members.

    2. accessibility of meetings (i.e., public or private)

      Private

    3. approval process for final standards (i.e., majority required to approve final standards)

      The final standards are approved with simple majority forecast of the members of CFAR's Council.

    4. other relevant due process activities

      The draft of the translated Code of ethics is to be discussed in the Technical working Group created at the Department of Services for member’s level. This Working Group gathers together representatives of major local audit firms (including the representatives of the local branches of Big Four).


    66. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      13 Day(s)



    Section 7 -- Education


    Responses to questions in this section will provide a description of how education requirements for the profession are established. Please indicate the role your organization plays within this process.

    Section 7A -- Education Requirements


    67. Please describe in general terms the education system in your country including the different stages of education from early childhood education through to tertiary level study. Please indicate which aspects / levels are compulsory as part of the national education system:
      The national education system contains:
      1. Primary level
      a)Kindergarten;
      b)Primary school (grades 1 � 4)
      c)Secondary school (grades 5 � 9)
      2. Secondary Level
      d)High school (grades 10-12)/Professional school (three years)
      3. Tertiary level
      e)College
      f)University education (undergraduates and postgraduates)
      Compulsory are primary level and one grades from secondary level (10 years after kindergarten, which is not compulsory).


    68. Is there a legal authority or regulation that specifies the requirements for an individual to operate as an accountant or auditor in your country?
      Yes   No

      If YES, please provide the name and describe the requirements, including any relating to education, experience or qualifications.

      For expert and licensed accountants, the legal authority is Governmental Ordinance no. 65/1994 with subsequent changes and additions.

      For financial auditors, the legal authority is Emergency Governmental Ordinance no. 75/1999, republished, please find bellow the relevant requirements as stated in the law.

      Art. 10 - (1) Are trainees in the financial audit activity the natural persons who cumulatively meet the following conditions:
      a) have a degree in economics and have worked in the financial-accounting field for minimum 4 years or have the qualification as chartered accountant, respectively licesed accountant with a degree in economics;
      b) have passed the financial-accounting test meant to provide access to the training period;
      c) have complied with the requirements of the Code of Ethics and professional conduct in the financial audit field of activity during the training period;
      (2) The Chamber establishes norms on the programme for professional education of trainees in the financial audit activity.
      (3) The trainees in the financial audit activity can perform the training period within the natural person cabinets or specialized companies as a employee or without payment, in accordance with the norms issued by the Chamber, the above mentioned entities issuing a proving document that they have performed the training period.

      CHAPTER III
      Rules on awarding the qualification as financial auditor

      Art. 11 - In order to obtain the qualification as financial auditor, in accordance with the provisions of this emergency ordinance, candidates must meet the following requirements:
      A. Natural persons:
      a)to comply with all the conditions stated under Article 10, paragraph (1);
      b)to have made a training period of 3 years in the financial audit activity, the training starting after the compliance with all the conditions stated at article 10 paragraph (1), letters a) and b);
      c)to have passed the professional competence examination provided under Article 13.
      B. Legal persons:
      a)the natural persons who perform the financial audit of the financial statements on behalf of the audit firms must comply with at least the requirements provided under this article A or art. 12;
      b)a majority of the voting rights must be held, directly or indirectly, by natural persons or audit firms that comply with at least the requirements provided under this article A or art. 12;
      c)a majority of the members of the board of directors of a firm of auditors must be natural persons or audit firm that comply with at least the requirements provided for by this article A or art. 12.
      Art. 12. - The Chamber can award the qualification and the grant the right to practice the financial audit activity, to those persons who meet the following requirements:
      A. natural persons must:
      a)have a professional qualification in financial audit or in similar field, awarded by another country according with specific it rules;
      b)have been for at least 3 years independent financial auditor or employee, associated, stock holder of an entity or a group of entities with authorisation for financial audit;
      c)comply with the Code of Ethics and Professional Conduct of IFAC.
      d)prove that they have acquired the necessary expertise in order to practice the financial audit activities in Romania.
      B. Firms of auditors, which have an authorisation for financial audit granted by another country or are part of a group of companies where the majority of the shareholders and/or of the employees are financial auditor according to the law of respective state.
      C. The award of the qualification as financial auditors and member of the Chamber and of authorisation to practice the financial auditor profession to the persons that comply with all the conditions stated in the present article will be made according to the norms developed by the Council of the Chamber.


    69. Please select from below all the relevant key levels of requirements to obtain certification from your member body (i.e. to qualify as a certified or chartered accountant) and provide a general description of the requirement.
      Academic requirements
      Economic studies, university level (graduate).
      Professional examinations
      Admission test for checking the knowledge in the financial-accounting field.
      Practical experience
      Four years experience in the financial-accounting field plus three years training under the supervision of a professional auditor, member of the Chamber.
      Final qualifying examination
      Examination of professional skills.
      Other (please describe) Romanian National Securities Commission's Register
      Romanian National Securities Commission's Register is to be developed based on attendance at courses organised by the Chamber of Financial Auditors from Romania on capital markets.


    70. Which of the following arrangements best describes who establishes the education requirements for the accounting profession in your country? Please select one option.
      A government ministry, department or agency establishes education requirements for the accounting profession with no additional requirements set by the member body(ies).
      A government ministry, department or agency establishes minimum education requirements for the accounting profession, and member body(ies) supplement these requirements.
      Member body(ies) establishes the education requirements for the accounting profession.
      Other (please describe)


    71. Please provide the name(s) of the relevant body in the government ministry, department, agency and / or member body who establishes the education requirements.
      Body of Expert and Licensed Accountants establishes the education requirements for expert and licensed accountants.

      Chamber of Financial Auditors from Romania established the education requirements for financial auditors.

    1. A general description of the role of the relevant body(ies) including how it operates and its due process in establishing the education requirements.

      Chamber established, based on the provisions of the Chamber Constitution, regulations concerning the continuous professional education of the financial auditors (Decision no. 9/2001 of the Chamber Council).

    2. How many voting members does the relevant body(ies) have

      15, Chamber Council

    3. Are the members of the relevant body(ies) involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe: Positions on the Board are voluntary and honorarium paid for the position held

    4. For how many years has the body been in existence?

      4 Year(s)


    72. How would you describe the authority that the education requirements have?
      Requirements are legally-based
      Requirements are set in the constitution, by-laws or other rules of the relevant body(ies).
      Requirements are set in member body(ies) policy document(s).
      Other (please describe)

    72 a. How can IFAC obtain copies of these documents?

    72 b. Are these documents available in English?
      Yes   No


    73. Are the education requirements for accountants and auditors the same throughout your country, or do they differ among regions, provinces or states?
      Same   Different
      If different, please briefly describe the main differences:


    74. Please indicate the scenario that best describes who delivers the education and examination process for members of the profession. Please only select one option.
      The education program and final examination are delivered by the member body.
      The education program and final examination are delivered by the member body and other education institutions (e.g., universities, colleges, and others).
      The education program and final examination are delivered by education institutions (e.g., universities, colleges, and others).
      Other (please explain)


    75. Once qualified as a member of your professional body, can members offer their services directly to the public?
      Yes   No



    Section 7B -- Licensing


    76. Are there licensing requirements for auditors in your country?
      Yes (continue with Question 77)   No (proceed to Section 8)


    77. Who sets the requirements to obtain a license?
      ROMANIAN NATIONAL SECURITIES COMMISSION


    78. What are the requirements to obtain a license (please select all relevant requirements.)?
      Academic study specific for obtaining a license
      Practical experience
      Licensing examination
      Final qualifying examination
      Other (please describe)


    79. Are there ongoing requirements to retain a license?
      Yes   No

      If YES, please select all relevant requirements.
      Continuing professional development
      Re-examination
      Other (please specify):


    80. What entity grants the license?
      Chamber of Financial Auditors from Romania


    81. Describe any additional licensing requirements for auditors of listed entities (e.g., additional education requirements, registration, etc.).
      According to the provisions of art. 128 para (2) of EGO no. 28/2002, approved and changed by the Law no. 525/2002, Romanian National Securities Commission will keep a special register with persons authorized to audit the legal persons that are subject of the provisions of the above-mentioned emergency ordinance.
      Romanian National Securities Commission developed a draft for Instructions on registering the financial auditors in Romanian National Securities Commission register, to be approved by the Commission soon.



    Section 8 -- Public Sector Accounting Standards


    Responses to this section will provide a description of the legal and professional framework governing public sector accounting standards in your country. The section focuses on the establishment of such standards. Please indicate, where appropriate, the role of your organization within this framework.

    Section 8A -- Statutory Framework


    82. Please provide the name of the Legal authority and/or self-regulatory rules establishing public sector accounting standards in your country, the date of last amendment and the name of the body responsible for setting public sector accounting standards. If the standards are different for different entities (e.g., whole of government, ministry/department, statutory authority/agency, profit entity owned by government, state governments, local governments, other [please specify]), please specify the details that apply to each.
      Type of entity Name of
      legal
      authority
      Date of last
      amendment
      (e.g. MM/YYYY 06/2001)
      Name of body responsible
      for setting public sector
      accounting standards
      Whole of government Accounting Law no.82/1991, republished, with subsequent changes and additions; Chart of Accounts for Public Institutions approved by the Order of the Ministry of Finance no. 324/1994; OMFP no. 1746/2002 is to be applied with January 1st 2005 08/2001;08/2003; 10/2003 Ministry of Public Finance
      Ministry/department Accounting Law no.82/1991, republished, with subsequent changes and additions; Chart of Accounts for Public Institutions approved by the Order of the Ministry of Finance no. 324/1994; OMFP no. 1746/2002 is to be applied with January 1st 2005 08/2001;08/2003; 10/2003 Ministry of Public Finance
      Statutory authority/agency Accounting Law no.82/1991, republished, with subsequent changes and additions; Chart of Accounts for Public Institutions approved by the Order of the Ministry of Finance no. 324/1994; OMFP no. 1746/2002 is to be applied with January 1st 2005 08/2001;08/2003; 10/2003 Ministry of Public Finance
      Profit entity owned by government Accounting Law no.82/1991, republished, with subsequent changes and additions; Chart of Accounts for Public Institutions approved by the Order of the Ministry of Finance no. 324/1994; OMFP no. 1746/2002 is to be applied with January 1st 2005 05/2002 Ministry of Public Finance
      State governments Accounting Law no.82/1991, republished, with subsequent changes and additions; Chart of Accounts for Public Institutions approved by the Order of the Ministry of Finance no. 324/1994; OMFP no. 1746/2002 is to be applied with January 1st 2005 08/2001 Ministry of Public Finance
      Local governments Accounting Law no.82/1991, republished, with subsequent changes and additions; Chart of Accounts for Public Institutions approved by the Order of the Ministry of Finance no. 324/1994; OMFP no. 1746/2002 is to be applied with January 1st 2005 08/2001 Ministry of Public Finance
      Other (please describe)
      Other (please describe)

      a. How can IFAC obtain copies of these documents?

      By request from the Ministry of Public Finance, Department for Public Accounting

      b. Are the documents available in English?
      Yes   No


    Section 8B -- Standard-Setting (Ministry of Public Finance)


    83. For Ministry of Public Finance, please indicate the nature of the body (i.e., whether it is part of a government ministry or department, an agency appointed by government, a private organization established by the profession, or other [please describe]) and the name of the standards.
      a. Nature of body

      Department of Ministry of Public Finance (Department for Public Accounting)

      b. Name of standards

      Accounting Law no.82/1991, republished, with subsequent changes and additions; Chart of Accounts for Public Institutions approved by the Order of the Ministry of Finance no. 324/1994; OMFP no. 1746/2002 is to be applied with January 1st 2005


    84. How many voting members does the standard-setting body have?
      N/A


    85. Are the members of the standard-setting body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe:


    86. What are the criteria considered in selecting members of the standard-setting body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?
      Best person for the job based on a test (knowledge and practical experience in the field required).


    87. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      Minister of Public Finance


    88. What is the term of appointment for members?
      Year(s)


    89. For how many years has the standard-setting body been in existence?
      Year(s)


    90. Please indicate the budget in US$ of the standard-setting body for the last fiscal year:
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)



    91. To what entity is the standard-setting body accountable?
      Romanian Government


    92. Describe the due process followed by the standard-setting body. Please include explanations of the following:
    1. public exposure of standards

      The drafts for regulations are developed by the Ministry of Public Finance, with the support of the entitied that will implement the regulations, and drafts are published on The Ministry of Public Finance web site for public debate.

    2. accessibility of meetings (i.e., public or private)

      Private

    3. approval process for final standards (i.e., majority required to approve final standards)

      N/A

    4. other relevant due process activities

      Before approval, the drafts are presented and discussed at the Accounting Consultative College level.


    93. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      Day(s)



    Section 9 -- Private Sector Accounting Standards


    Responses to the questions in this section will provide a description of the legal, statutory and professional framework governing private-sector accounting standards in your country. The section focuses on the establishment of such standards. Please indicate what role your organization plays within this framework.

    Section 9A -- Statutory Framework


    94. Please provide the name of the Legal authority and/or self-regulatory rules that establish private-sector accounting standards in your country, the date of last amendment, and the name of the body responsible for setting private sector accounting standards. If the standards are different for different entities (for example, listed entities, private companies, governmental organization, not for profit organizations, etc.), please specify the requirements that apply to each.
      Type of entity Name of legal
      authority or
      applicable
      rules
      Date of last
      amendment
      (e.g. MM/YYYY 06/2001)
      Name of body responsible
      for setting private sector
      accounting standards
      Listed entity Law no. 82/1991 with subsequent changes and additions JOINT ORDER OF THE MINISTRY OF PUBLIC FINANCE AND PRESIDENT OF THE ROMANIAN NATIONAL SECURITIES COMMISSION NO. nr. 1742/106/2002. ON THE APPROVAL OF THE ACCOUNTING REGULATIONS HARMONISED WITH THE EUROP 08/2002 Ministry of Public Finance and Romanian National Securities Commission
      Other (please describe) All other companies Law no. 82/1991, with subsequent changes and additions and simplified accounting regulations harmonised with the European Directives approved by OMFP 306/2002 08/2002 Ministry of Public Finance
      Other (please describe)
      Other (please describe)
      Other (please describe)

      a. How can IFAC obtain copies of these documents?

      By request from the Ministry of Public Finance, respectively from the Romanian National Securities Commission

      b. Are the documents available in English?
      Yes   No


    Section 9B -- Standard-Setting (Ministry of Public Finance and Romanian National Securities Commission)


    95. For Ministry of Public Finance and Romanian National Securities Commission, please indicate the nature of the body (i.e., whether it is part of a government ministry or department, an agency appointed by government, a private organization established by the profession, or other [please describe]) and the name of the standards.
      a. Nature of body

      Ministry of Public Finance is Government ministry and Romanian National Securities Commission is an agency appointed by Romanian Parliament

      b. Name of standards

      ACCOUNTING REGULATIONS HARMONISED WITH THE EUROPEAN DIRECTIVES AND INTERNATIONAL ACCOUNTING STANDARDS


    96. How many voting members does the standard-setting body have?


    97. Are the members of the standard-setting body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe:


    98. What are the criteria considered in selecting members of the standard-setting body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?
      Best person for the job


    99. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      For the Ministry of Public Finance - Minister of Public Finance.
      For the Romanian National Securities Commission - 7 members acting as Board of Directors appointed by the Romanian Parliament


    100. What is the term of appointment for members?
      5 Year(s)


    101. For how many years has the standard-setting body been in existence?
      10 Year(s)


    102. Please indicate the budget in US$ of the standard-setting body for the last fiscal year:
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)



    103. To what entity is the standard-setting body accountable?
      Romanian Parliament


    104. Describe the due process followed by the standard-setting body. Please include explanations of the following:
    1. public exposure of standards

      The drafts for regulations are developed by the Ministry of Public Finance and Romanian National Securities Commission and drafts are published on Romanian National Securities Commission web site for public debate.

    2. accessibility of meetings (i.e., public or private)

      Private

    3. approval process for final standards (i.e., majority required to approve final standards)

      At least 5 members out of 7 for Romanian National Securities Commission

    4. other relevant due process activities



    105. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      Day(s)


    Section 9B -- Standard-Setting (Ministry of Public Finance)


    95. For Ministry of Public Finance, please indicate the nature of the body (i.e., whether it is part of a government ministry or department, an agency appointed by government, a private organization established by the profession, or other [please describe]) and the name of the standards.
      a. Nature of body

      Government Ministry

      b. Name of standards

      ACCOUNTING REGULATIONS HARMONISED WITH THE EUROPEAN DIRECTIVES AND INTERNATIONAL ACCOUNTING STANDARDS


    96. How many voting members does the standard-setting body have?
      N/A


    97. Are the members of the standard-setting body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe:


    98. What are the criteria considered in selecting members of the standard-setting body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?
      Best person for the job based on test for testing the knowledge and experience in the field required.


    99. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      Minister of Public Finance.


    100. What is the term of appointment for members?
      Year(s)


    101. For how many years has the standard-setting body been in existence?
      Year(s)


    102. Please indicate the budget in US$ of the standard-setting body for the last fiscal year:
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)



    103. To what entity is the standard-setting body accountable?
      Romanian Government and Romanian Parliament.


    104. Describe the due process followed by the standard-setting body. Please include explanations of the following:
    1. public exposure of standards

      the drafts for regulations are developed by the Ministry of Public Finance, with the support of the entities that will implement the regulations, and drafts are published on The Ministry of Public Finance web site for public debate.

    2. accessibility of meetings (i.e., public or private)

      Private.

    3. approval process for final standards (i.e., majority required to approve final standards)

      N/A

    4. other relevant due process activities

      Before approval, the drafts are presented and discussed at the Accounting Consultative College level.


    105. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      Day(s)



    Section 10 -- Monitoring (Quality Assurance) and Enforcement


    Responses to the questions in this section will provide a description of the legal and professional framework governing regulation of the profession in your country. Please indicate what role your organization plays within this framework.

    Section 10A -- Securities Market Regulatory Authority


    106. Name the authority that regulates the securities market:
      ROMANIAN NATIONAL SECURITIES COMMISSION


    107. What responsibilities does this organization have for monitoring and enforcing compliance with accounting, reporting or auditing requirements? Please identify the Legal authority that establishes that responsibility:
      According to art. 2 of the Emergency Governmental Ordinance no. 25/2002, the basic objectives of the National Securities Commission shall be to:

      1. draw up and maintain the necessary framework for the development of regulated markets;
      2. promote trust in regulated markets and in financial instruments investments;
      3. ensure the protection of operators and of investors against unfair, abusive and fraudulent practices;
      4. promote a fair and transparent operation of the regulated markets;
      5. prevent market manipulation and fraud and to ensure the integrity of regulated markets.
      6. establish standards of financial soundness and honest practice in the regulated markets.
      7. take all the necessary actions in order to avoid the generation of a systemic risk on the regulated markets.
      8. prevent damaging the equality of notification and treatment of investors or the interests thereof.


    108. Briefly describe the role of the regulatory authority as it relates to the following:
    1. regulation of the audit profession

      Chamber of Finacial Auditors from Romania regulates the financial audit profession. However, according to the provisions of art. 128 para (2) of EGO no. 28/2002, approved and changed by the Law no. 525/2002, Romanian National Securities Commission will keep a special register with persons authorized to audit the legal persons that are subject of the provisions of the above-mentioned emergency ordinance.
      Romanian National Securities Commission developed a draft for Instructions on registering the financial auditors in Romanian National Securities Commission register, to be approved by the Commission soon.


    2. accounting and auditing standard-setting

      National Securities Commission developed Accounting regulations harmonised with the European Directives and International Accounting Standards together with the Ministry of Public Finance.

    3. review of financial statements prepared by listed entities, and monitoring of their compliance with the accounting and disclosure requirements

      Romanian National Securities Commission receives from the listed companies annual and biannual reports, accompanied by the financial auditor's report.



    Section 10B -- Stock Exchange


    109. Name the four largest stock exchangers (by market capitalization) and whether it is organized as a profit or not-for-profit organization:
      Profit Not
      for
      profit
      Stock Exchange
      Bucharest Stock Exchange (public institution )
      Electronic Stock Exchange RASDAQ



    Section 10B -- Stock Exchange
    Bucharest Stock Exchange (public institution ) Details


    110. For Bucharest Stock Exchange (public institution ), is there a mechanism at the stock exchange(s) for monitoring and enforcing financial reporting, accounting and auditing of listed entities?
      Yes   No

      If YES, please describe the following:

    1. How the monitoring and enforcement of financial reporting, accounting and auditing is conducted.

      Both Bucharest Stock Exchange and Electronic Stock Exchange - RASDAQ have specialised departments in charge with supervision. These departments receive quarterly, biannual and annual financial statements from the listed companies.

    2. The consequences of non-compliance with the financial reporting, accounting or auditing requirements.

      The Romanian National Securities Commission shall order the submission of documents, reports or information, hearings, interdictions or suspensions of authorizations or activities, inquiries or other investigations, protective measures, as well as the removal or filing of documents or titles, the inalienability of certain goods or funds, disciplinary and administrative sanctions.

    3. How enforcement actions are administered.

      Emergency Governmental ordinance no. 26/2002 with subsequent changes and additions states: Art. 91. (1) The perpetration of the offences provided for in Article 89 will be established by the persons empowered to this end by the Romanian National Securities Commission. (2) The Romanian National Securities Commission may delegate to the persons provisioned in paragraph (1) only the power to punish by a fine, under the conditions and within the limits determined by its regulations. (3) Upon receipt of the writs with the findings, the Romanian National Securities Commission may decide the extension of the investigations, the application of conservatory measures and the hearing of those persons and the penalty for the controlled deeds. (4) The penalty decision shall take effect on the date it is notified to the punished person. (5) The notifications shall be delivered by registered letter with confirmation of receipt or by publication in the Commission�s Bulletin. Art. 92. (1) When establishing individual penalties, the personal and real circumstances of the facts and the behaviour of the perpetrator will be taken into account. (2) In case of repeated perpetration, during a three year interval, of one of the offences provided under Article 89 or in case of the perpetration of such offences by a person convicted for the perpetration in the three previous years of another of the offences provided in Article 89, the punishment will be cumulated with the maximum fine applicable for the last perpetrated offence. (3) In case of two or more offences, the penalties for each offence shall be cumulated. (4) For the offences under paragraphs (2) and (3), the provisions of paragraph (1) shall be applied only with regard to determining the duration of the interdiction to exercise the activities to which the authorisation refers. Art. 93. - (1)The fines will be determined, depending on the significance of the offence, as follows: 1. between 0.5% and 5% of the paid up capital for legal entities; 2. between 3,000,000 and 3,000,0000,000 Lei for individuals. (2) The minimum and maximum limits of the fines shall be updated by Government decision. Art. 94. - The Romanian National Securities Commission may issue a written or published warning to penalise the acts perpetrated by negligence which have not caused material patrimonial damages or a prejudice of another nature to individuals or legal entities subject to this Emergency Ordinance or to the protection of investors, if such acts are not perpetrated pursuant to paragraphs (2) or (3) of Article 92. Art. 95. (1) In the case of legal entities, the NSC may apply penalties for that particular offence to the individuals who, in their capacity as directors, legal representatives or who exercise de jure or de facto an executive position or who exercise as a profession the activities regulated herein, are responsible for the offence because they did not prevent its perpetration although they could have and should have prevented it. (2) The individuals provided under paragraph (1) shall also be liable to repair the patrimonial damages suffered as a result of the respective act. If several persons are responsible for the act, they shall be jointly liable for the damages. Art. 96. - The statute of limitations for the violations provided under Article 89 shall be of three years. Art. 97. - The intentional perpetration of the acts provided under paragraph (2) of Article 21, Article 37, paragraph (1) and (2) of Article 62, Article 65, Article 68, letter (a) of Article 89, which has caused a direct or indirect prejudice of a patrimonial and/or non-patrimonial nature to investors or third parties and which has caused a major disruption of the capital market shall be qualified as a criminal offence and shall be punished with imprisonment from six months to five years or with a fine within the limits provided in the criminal law and with the additional penalty for the interdiction to carry out the activity subject to the NSC authorisation for a period between three and five years. Art.98. - The statute of limitations for the acts provided under Article 97 shall be of five years.


    Section 10B -- Stock Exchange
    Electronic Stock Exchange RASDAQ Details


    110. For Electronic Stock Exchange RASDAQ, is there a mechanism at the stock exchange(s) for monitoring and enforcing financial reporting, accounting and auditing of listed entities?
      Yes   No

      If YES, please describe the following:

    1. How the monitoring and enforcement of financial reporting, accounting and auditing is conducted.

      Both Bucharest Stock Exchange and Electronic Stock Exchange - RASDAQ have specialised departments in charge with supervision. These departments receive quarterly, biannual and annual financial statements from the listed companies.

    2. The consequences of non-compliance with the financial reporting, accounting or auditing requirements.

      The National Securities Commission shall order the submission of documents, reports or information, hearings, interdictions or suspensions of authorizations or activities, inquiries or other investigations, protective measures, as well as the removal or filing of documents or titles, the inalienability of certain goods or funds, disciplinary and administrative sanctions.

    3. How enforcement actions are administered.

      Emergency Governmental ordinance no. 26/2002 with subsequent changes and additions states: Art. 91. (1) The perpetration of the offences provided for in Article 89 will be established by the persons empowered to this end by the NSC. (2) The Romanian National Securities Commission may delegate to the persons provisioned in paragraph (1) only the power to punish by a fine, under the conditions and within the limits determined by its regulations. (3) Upon receipt of the writs with the findings, the Romanian National Securities Commission may decide the extension of the investigations, the application of conservatory measures and the hearing of those persons and the penalty for the controlled deeds. (4) The penalty decision shall take effect on the date it is notified to the punished person. (5) The notifications shall be delivered by registered letter with confirmation of receipt or by publication in the Commission�s Bulletin. Art. 92. (1) When establishing individual penalties, the personal and real circumstances of the facts and the behaviour of the perpetrator will be taken into account. (2) In case of repeated perpetration, during a three year interval, of one of the offences provided under Article 89 or in case of the perpetration of such offences by a person convicted for the perpetration in the three previous years of another of the offences provided in Article 89, the punishment will be cumulated with the maximum fine applicable for the last perpetrated offence. (3) In case of two or more offences, the penalties for each offence shall be cumulated. (4) For the offences under paragraphs (2) and (3), the provisions of paragraph (1) shall be applied only with regard to determining the duration of the interdiction to exercise the activities to which the authorisation refers. Art. 93. - (1)The fines will be determined, depending on the significance of the offence, as follows: 1. between 0.5% and 5% of the paid up capital for legal entities; 2. between 3,000,000 and 3,000,0000,000 Lei for individuals. (2) The minimum and maximum limits of the fines shall be updated by Government decision. Art. 94. - The Romanian National Securities Commission may issue a written or published warning to penalise the acts perpetrated by negligence which have not caused material patrimonial damages or a prejudice of another nature to individuals or legal entities subject to this Emergency Ordinance or to the protection of investors, if such acts are not perpetrated pursuant to paragraphs (2) or (3) of Article 92. Art. 95. (1) In the case of legal entities, the NSC may apply penalties for that particular offence to the individuals who, in their capacity as directors, legal representatives or who exercise de jure or de facto an executive position or who exercise as a profession the activities regulated herein, are responsible for the offence because they did not prevent its perpetration although they could have and should have prevented it. (2) The individuals provided under paragraph (1) shall also be liable to repair the patrimonial damages suffered as a result of the respective act. If several persons are responsible for the act, they shall be jointly liable for the damages. Art. 96. - The statute of limitations for the violations provided under Article 89 shall be of three years. Art. 97. - The intentional perpetration of the acts provided under paragraph (2) of Article 21, Article 37, paragraph (1) and (2) of Article 62, Article 65, Article 68, letter (a) of Article 89, which has caused a direct or indirect prejudice of a patrimonial and/or non-patrimonial nature to investors or third parties and which has caused a major disruption of the capital market shall be qualified as a criminal offence and shall be punished with imprisonment from six months to five years or with a fine within the limits provided in the criminal law and with the additional penalty for the interdiction to carry out the activity subject to the Romanian National Securities Commission authorisation for a period between three and five years. Art.98. - The statute of limitations for the acts provided under Article 97 shall be of five years.



    Section 10C -- Regulatory Oversight of the Accounting Profession


    111. Has an audit profession oversight body been established (e.g., to oversee the external quality assurance review process, etc.)?
      Yes   No

      If NO, proceed to the next section.

      If YES, please describe :

    1. What are the name and duties of the oversight body?



    2. The number of members on the oversight body



    3. Its powers



    4. How the oversight body conducts or oversees a program of inspections to assess the degree of compliance of each audit firm/auditor with applicable auditing standards and regulations



    5. The sanctions the oversight body may impose in the event of non-compliance



    6. How the oversight body is accountable to any public institution or body



    Section 10D -- Banks Regulatory Authority


    112. Name the authority that regulates the banks and similar financial institutions. Discuss how this authority differentiates between accounting requirements for regulatory reporting and general purpose external financial reporting:
      According to the provisions of art.4 of Law no.82 of 24 December 1991 � Accounting Law, re-published, the accounting regulations for credit institutions are issued by the National Bank of Romania, with the approval of the Ministry of Public Finance. The provisions of the harmonized accounting regulations require credit institutions to prepare annual financial statements that contain the information required by the European Directive no.86/635/EEC and by the International Accounting Standards. These financial statements shall be published together with the Board report and the auditor report in the Romanian Official Gazette, Part IV, according to the legal deadline. In order to report detailed information regarding the financial situation of each credit institution and to allow the National Bank of Romania to fulfill it�s supervisory mission and to prepare the monetary statistics, it was issued the Order no.2/2003 of National Bank of Romania�s Governor (updated by Order no.3/2004) that contains the form models of the interim financial statements (sent to the Supervision Department of the National Bank of Romania) and the rules of their preparation and use, for the credit institutions that apply the Harmonized Accounting Regulations. These interim financial statements models were prepared considering the provisions of the Harmonized Accounting Regulations so that the accounting information used in preparing these interim financial statements is the same as the one used when preparing the annual (public) financial statements according to the Harmonized Accounting Regulations.


    113. Discuss briefly the legal requirements with respect to monitoring and enforcement by the regulatory authority of accounting and auditing standards that apply to the banks and similar financial institutions:
      The National Bank of Romania (NBR) supervises the banking activity based on accounting and prudential reports submitted by banks in accordance with Banking Law and with the regulations issued by the NBR for its application (Off-site examination), as well as by inspections carried out at headquarters of banks (On-site supervision). Also, we�d like to mention that the credit institutions� financial auditors are subject to the NBR�s approval. Off-site examination is designed to monthly, quarterly and yearly collect, review and analyze accounting (profit and loss, balance sheet, details on main assets, liabilities) and prudential reports (relating to solvency, related party lending, credit classification and provisioning, foreign exchange positions, own funds, liquidity) submitted by banks. It determines the trend and performance of banks, individually and of the banking system, generally. It also identifies cases when banks are not complying with NBR regulations. On-site supervision is carried out, for each bank, periodically. The main goal for on-site inspection is to assess the bank�s viability and soundness by verifying and analyzing a range of matters including the accuracy of reports received from the bank, the overall operations and condition of the bank, the adequacy of the bank�s risk management system and internal control and audit procedures, the quality of the loan portfolio and the adequacy of loan loss provisions, and management capacity to identify, monitor and control the risk incurred by the bank. Based on the above assessments, a conclusion regarding the overall performance of the bank and its risk profile is drawn. In case those on-site and off-site teams find deficiencies consisting mainly of infringement of banking legislation provisions or non-observance of the prudential norms, the NBR has corrective powers and may apply sanctions and take measures, including the withdraw of the NBR�s approval granted to the financial auditor in case he fails to adequately discharge his legal responsibilities or does not comply with the particular requirements of the ethical and professional conduct. According to the provisions of the law, the National Bank of Romania may set out civil penalties if a credit institution and/or any of its administrators, managers or auditors are guilty of breaching a provision of the laws or regulations or orders issued by the National Bank of Romania in the application of the laws, of performing fictitious operations without real covering, or of not reporting or delayed reporting or reporting with wrong data regarding the prudential banking ratios or other ratios stipulated in the regulations of the National Bank of Romania. Also, the National Bank of Romania as banking prudential supervisory authority may decide upon measures of special supervision and special administration of credit institutions. The board of directors of National Bank of Romania may decide upon measures of special supervision of credit institutions for the violation of the law of prudential regulations issued by the National Bank of Romania ascertained as result of the on-site supervision and/or review of credit institution�s reports as well as of a bad financial condition. The special supervision shall be provided by a commission, incorporated with this purpose, consisting of specialists of the National Bank of Romania. Special administration activity is carried out by a special administrator appointed by the Board of Directors of the National Bank of Romania. The special administrator takes over all the tasks of the Board of Directors subject to the special administration regime.


    114. Briefly describe the role of the regulatory authority as it relates to the following:
    1. regulation of the audit profession

      In Romania, the audit profession is regulated only by the Romanian Chamber of Financial Auditors. The Harmonized Accounting Regulations require that the annual financial statements of the credit institution, which are subject to these regulations to be audited by financial auditors, in compliance with the national regulations concerning financial audit. Also, the Banking Law contains some specific requirements regarding the activity of the financial auditors of credit institutions, as follows: �Art. 61 . For the purpose of auditing the financial statements, each bank shall conclude agreements with financial auditors, legal persons authorized by the Romanian Chamber of Financial Auditors, in accordance with the law. The financial auditor shall: a) draw up an annual report, which shall enclose its opinion, from which shall result whether the financial statements accurately reflect the financial position, financial performance, treasury flows of the bank and other information related to the activity carried on, according to the professional standards published by the Romanian Chamber of Financial Auditors; b) analyze the practices and procedures of internal control and audit and, if he considers them inadequate, make recommendations to the bank for their adjustment; c) provide, at the National Bank of Romania�s request, any details, specifications, and explanations concerning the information included in the bank�s financial statements. The financial auditor�s report and the opinion accompanying it shall be communicated to the General Meeting of Shareholders and shall be made public along with the annual financial statements. Art.611. While discharging his duties, the bank�s financial auditor shall inform the National Bank of Romania as soon as he finds any action or fact related to the bank or to the entities included in the consolidation scope that: a) represents for a significant violation of the law and/or of the regulations issued for its implementation which set the legal requirements for authorization and pursuit of the bank�s activity; b) affects the smooth functioning of the bank or its financial condition; c) may lead to the auditor�s refusal to certify the bank�s financial statements or to the expression of his reservations. The performance in good faith of the financial auditor�s obligation to notify the National Bank of Romania, in accordance with provisions of para.1 and of Article 61 para.2 letter c) shall not constitute a breach of professional secrecy imposed by law or by contract and shall not involve such persons in patrimonial liability.�

    2. accounting and auditing standard-setting

      According to the provisions of art.4 of Law no.82 of 24 December 1991 � Accounting Law, re-published, the accounting regulations for credit institutions are issued by the National Bank of Romania, with the approval of the Ministry of Public Finance. Regarding the audit standards, these are adopted only by the Romanian Chamber of Financial Auditors. The Harmonized Accounting Regulations require that the annual financial statements of the credit institution, which are subject to these regulations to be audited by financial auditors, in compliance with the national regulations concerning financial audit.

    3. review of financial statements prepared by listed entities

      The listed companies are subject to the same monitoring procedures as the other credit institutions, as described in the answer to question 113.

    4. enforcement of accounting, reporting and auditing requirements

      When NBR find deficiencies consisting mainly of infringement of banking legislation provisions or non-observance of the prudential norms, the NBR has corrective powers and may apply sanctions and take measures, including the withdraw of the NBR�s approval granted to the financial auditor in case he fails to adequately discharge his legal responsibilities or does not comply with the particular requirements of the ethical and professional conduct. These sanctions and measures are those presented in detail in the answer to the question 113.



    Section 10E -- Non-Banking Financial Institutions Regulatory Authority


    115. Name the regulatory authority(ies) responsible for monitoring compliance with and enforcing accounting, reporting and auditing requirements imposed on non-banking institutions.


    116. What is the source of Legal authority of the regulatory authority(ies)?


    117. Briefly describe the role of the regulatory authority(ies) as it relates to the following:
    1. regulation of the audit profession



    2. accounting and auditing standard-setting



    3. review of financial statements prepared by listed entities



    4. enforcement of accounting, reporting and auditing requirements




    Section 10F -- Insurance Companies Regulatory Authority


    118. Name the regulatory authority responsible for monitoring compliance with and enforcing accounting, reporting and auditing requirements imposed on insurance companies.
      Commission for Insurance Supervision


    119. What is the source of Legal authority of the regulatory authority(ies)?
      Law no. 32/2000 on insurance companies and supervision of insurance sector, with subsequent addition and changes and norms for its implementation that regulates: organisation and functioning the insurance companies, insurance - reinsurance and reinsurance companies, mutual companies as well as the insurance intermediaries, organisation and functioning of Commission for Insurance Supervision, supervision of the insurance and reinsurance companies on the Romanian market, supervision of the insurance and reinsurance intermediaries activity, as well as other activities in connection with this.


    120. Briefly describe the role of the regulatory authority(ies) as it relates to the following
    1. regulation of the audit profession

      Commission for Insurance Supervision has no competence in regulating the audit activity.

    2. accounting and auditing standard-setting

      According to provisions of art. 4, para (2) of Accounting Law no. 82/1991, republished, the Commission for Insurance Supervision develops and issues accounting norms and regulations, namely accounting standards for companies activating on the insurance market and forward them to the Ministry of Public Finance in order to be advised. Currently, the companies in the insurance sector implement the provisions of the Accounting regulations specific to the insurance sector harmonised with the European Directives and International Accounting Standards approved by Joint Order of the Minister of Public Finance and President of the Commission for Insurance Supervision no. 2328/2390/2001.

    3. review of financial statements prepared by listed listed entities

      The review of the annual financial statements of insurance companies (including listed insurance companies) is made by the specialised departments of Commission for Insurance Supervision, following the compliance with technical and accounting regulations, as well as how the IAS are implemented. At the same time, is reviewed the coherence, reasonability and integrity of annual financial statements taking into consideration the audit report. When finding, as a result of the review of annual statements, noncompliance with accounting regulations and IASs, respectively, errors, Commission for Insurance Supervision applies gradual sanctions for the companies in the insurance sector.

    4. enforcement of accounting, reporting and auditing requirements

      The annual financial statements are prepared in accordance with the requirements of the specific European Directives and those of IASs. according to the provisions of point 7.3 of the accounting regulations specific to the insurance sector, approved by the Joint Order of the Minister of Public Finance and President of the Commission for Insurance Supervision no. 2328/2390/2001, the insurance companies have the obligation to have audited the annual financial statements, in compliance with national regulations on financial audit. The financial audit is performed by an authorised financial auditor, individual or legal person, CFAR's members. Insurance companies have the obligations, according to the provisions of the Order of the President of the Commission for Insurance Supervision no. 3102/2004 for the approval of the methodological norms on preparing, reviewing and centralising the annual financial statements of the insurance, insurance-reinsurance and reinsurance companies, as well as insurance brokers, for the year 2003, to forward annual financial statements together with the audit report to the Commission for Insurance Supervision



    Section 10G -- Other Regulatory Authority


    121. Name any other regulatory authority(ies) responsible for monitoring compliance with and enforcing accounting, reporting and auditing requirements.
      N.A.


    122. What is the source of Legal authority of each regulatory authority?
      N.A.


    123. Briefly describe the role of the regulatory authority(ies) as it relates to the following
    1. regulation of the audit profession

      N.A.

    2. accounting and auditing standard-setting

      N.A.

    3. review of financial statements prepared by listed listed entities

      N.A.

    4. enforcement of accounting, reporting and auditing requirements

      N.A.



    Section 10H -- Quality Assurance


    124. Does any organization of professional accountants/auditors organize a program of quality assurance review to monitor compliance with accounting, reporting and auditing requirements?
      Yes   No

      If NO, proceed to next Section.

      If YES, briefly describe the monitoring and enforcement mechanism.

      According to provisions of Art. 5. of the Emergency Governmental Ordinance no. 75/1999, republished:
      (1) The Chamber of Financial Auditors of Romania is established as an autonomous legal entity, professional association of public interest � not for profit.
      (2) The Chamber, on behalf of the state, organizes, coordinates and authorizes the performing of financial audit activities.
      (3) The Chamber has the following remits:
      a. elaborates the following documents;
      a1) the Chamber�s Constitution in order to be approved by the Government. The Constitution will contain regulations on the followings:
      - the governing bodies and how are they elected.
      - the remits and responsibilities of the Chamber.
      - the regulation on awarding and withdrawing the financial auditor title.
      - the requirements concerning the insurance for the professional risk in performing the financial audit activity;
      - the misconducts, disciplinary penalties and disciplinary procedures;
      a2) Code of ethics and professional conduct in the audit field;
      a3) Standards on auditing;
      a4) Syllabuses for the examination of professional competence;
      a5) Norms on quality control procedures for the financial audit activity;
      a6) Rules on continuous professional education;
      a7) Norms on minimum audit requirements
      The regulations from a2) to a7) are approved by Decisions of the Chamber�s Council.
      b) awards the qualification as financial auditor and issues authorizations for performing their activities with independence;
      c) organizes and supervises the Program for Continuous Professional Education;
      d) promotes the up to date of the legislation notifying the competent authorities, brings the financial audit norms up to date, in accordance with the regulations issued by the European and international professional organisation;
      e)issues internal procedures concerning Chamber�s activity;
      f) withdraws temporarily or permanently the right to practice the financial auditor profession with independence in accordance with the provisions of the Chamber�s Constitution;
      g) ensures the international recognition of Romanian financial auditor profession;
      h) issues rules and procedures within the limits and competences of the Chamber�s Constitution, in order to ensure the compliance with the provisions of the above mentioned emergency ordinance.

      Chamber's Council can impose sanctions for the following cases of misconduct:
      a)non compliance with the Chamber�s Ethics Code;
      b) undertaking of professional activities inefficiently, unsatisfactory, or incompetently, in such a way or for so many times that the financial auditor discredited himself or the Chamber;
      c) breaching by the financial auditor of the provisions of the present and other pronouncements, norms or papers issued by the Chamber;
      d) breaching the provisions of the present and other pronouncements, norms or papers issued by the Chamber by an employee, associate, share holder or director of a an audit firm member of the Chamber;
      e) breaching of other laws in force in their own branch of activity;
      f)the existence of a Romanian or other country court of law decision regarding a fact which prejudices the Chamber or the profession.

      According to the Chamber's Constitutions, the financial auditors, members of the Chamber, individuals or legal entities, may be punished for disciplinary misconduct by:
      a) admonition;
      b) reprimand;
      c) limitation of certain rights;
      d) suspension of membership quality;
      e) exclusion from the Chamber.
      (2) Disciplinary sanctions must be communicated to the member within 30 days as from the date of the decision.


      According to provisions of Chamber's Constitution:

      Members of the Chamber shall ensure that all persons associated with them shall co-operate with the Chamber in its monitoring and enforcement of compliance with the present Constitution and Chamber�s norms.

      Members shall maintain proper books and records of their affairs and provide the Chamber with all information required to facilitate it to carry out an effective monitoring.

      The Department for monitoring and professional competence has, mainly, attributions regarding the observation of the norms of the Chamber by its members. These comprise:
      (a)The code concerning the ethics of the financial audit profession;
      (b)The continuing professional learning of the financial auditors;
      (c)The norms concerning the training of the trainees auditors;
      (d)Audit standards;
      (e)Minimal financial audit procedures;
      (f)Audit quality control procedures;
      (g)Other norms for the regulation of the profession.

      The Department for monitoring and professional competence ensures the implementation of the quality control system and the investigation of the issues concerning the professional conduct of the members.

      If the Department for monitoring and professional competence finds any non-compliance with the norms of the Chamber, it has to inform the Department for professional conduct and discipline.

      The disciplinary procedures are to be undertaken by the following bodies of the Chamber, depending on their competences:
      a) The Ethics and Professional Conduct Department;
      b) The Council;
      c) The Appeal Committee.

      The General Secretariat has to be notified by all the matters, facts or circumstances that are of such a nature that lead to disciplinary responsibility of a member. The Secretariat General reviews the documentation and sends it to the Department of Ethics and Professional Conduct.



    125. Under what authority does the organization conduct the program of quality assurance review?
      According to the provisions of the Emergency Governmental Ordinance no. 75/1999, republished and Chamber Constitutions and regulations in the area.


    126. Who performs the review (e.g., one firm reviewing another firm, staff from the national professional organization, contractors, or a combination of these)?
      Staff from the Chamber of Financial Auditors from Romania.



    Section 10 I -- Investigation and Discipline


    127. Is there a process for investigating and disciplining the accounting profession in your country?

    128. Which of the following best describes the responsibility for the investigatory and disciplinary function in your country?
      Government or other agencies are solely responsible for this function.
      Government or other agencies have this responsibility, but the member body or bodies participate in the process.
      Government formally delegates this function to the member body or bodies, to exercise on its behalf.
      Member body or bodies have separate and independent processes that operate alongside processes of legal authorities.
      Other (please explain)


    129. Please indicate the name of the body or bodies responsible for investigation and discipline.
      Chamber of Financial Auditors from Romania by its Ethics and Professional Conduct Department. The members can appeal against the sanctions imposed by the Chamber's Council to the Appeal Committee.


    Responses to the remaining questions in this Section are required if your organization has responsibility for investigation and disciplinary actions.

    130. How many voting members does the body have?
      15 + 5 Appeal Committee


    131. Are the members of the body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe: Positions on the Board are voluntary and honorarium paid for the position held. Members of the Appeal Committee are elected in the Conference or appointed


    132. What are the criteria considered in selecting members of the body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?
      Elected or appointed, see answer to question 131. Council members and a part of the members of the Appeal Committee are elected by the Chamber's Conference, and some members of the Appeal Committee are appointed by the Ministry of Public Finance and Minsitry of Justice.


    133. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      See answer to question 132.


    134. What is the term of appointment for members?
      5 Year(s)


    135. For how many years has the body been in existence?
      4 Year(s)


    136. Please indicate the budget in US$ of the body for the last fiscal year.
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      95,283

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)

      32,525 (specify currency)



    137. To what entity is the body accountable?
      To the members of the Chamber of Financial Auditors from Romania and to the public at large.


    138. Approximately how many days per year does the body meet in full session (including teleconferences)?
      13 Day(s)



     

     

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