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.

    Association of Professional Accountants & Auditors of the Republic of Moldova

     

    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:

      Republic of Moldova


    2. Name of member body:
      Association of Professional Accountants & Auditors of the Republic of Moldova

      Or please specify name:



    3. Individual responsible for preparation:
      Marina Shelaru


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

      05 / 1998



    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.):
      SEEPAD - South Eastern European Partnership on Accountancy Development

      ICCAA - International Council of Certified Accountants and Auditors



    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: Law on Joint Stock Company, No. 1134-XIII, MO 38-39/332, 12.06.97. (Also see Q25)
      b). the Enacting body: The Parliament of the Republic of Moldova
      c). date the Act or Code came into force: 02 / 1995


    25. How can IFAC obtain a copy of the Act or Code?
      From ACAP In addition to this main body of legislation, banks, insurance companies, and listed companies are subject to specific requirements set out in the Securities Market Law, the Law on Financial Institutions (LFI), the Insurance Law, and the National Securities Commission Law, respectively.


    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): budget institutions
      Private companies   Other (please specify): attorneys
      Governmental   Other (please specify): notaries
      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 Law on Joint Stock Companies, Securities Market Law, Law on Accounting - must apply National Accounting Standards
      Private companies Law on Joint Stock Companies, Securities Market Law, Law on Accounting - must apply National Accounting Standards
      Governmental Law on Accounting - must use National Accounting Standards (only to the extent incorporated as Joint Stock Companies. State owned enterprises are not subject to any particular accounting or auditing requirements.)
      Not-for-profit Law on Accounting - must use National Accounting Standards
      Other (please describe)
      Other (please describe)


    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 Companies listed on the Moldova Stock Exchange (MSE) may be subject to auditing and publication requirements under stock exchange regulations. MSE Regulations set out the structure of the exchange into three tiers: (i) companies with a share capital in excess of MLD 4 million (approximately US$300,000) and with 1,000 or more shareholders, which are required to have their annual financial statements audited by an international firm; (ii) companies whose share capital and number of shareholders are less than MLD 4 million and 1000, and in excess of MLD 2 million (approximately US$150,000) and 500 respectively, which must have their financial statements audited; and (iii) the remainder of listed companies. Since most of the tier one and tier-two companies are banks, which are already required to have their financial statements audited under the Law on Financial Institutions, the MSE regulation does not have much impact. As a result, the financial statements of most enterprises in Moldova are not required to be audited under the current legislation. The stock exchange imposes no specific requirement for audit other than that required by the Joint Stock Companies Law.
      Private companies Joint-stock companies may either be “open” or “closed”, depending on the number of shareholders and the existence of restrictions on stockholders’ right to dispose of their shares. JSCs are no longer required to have their annual accounts audited. Shareholders owning 10% or more of the shares may request an audit, which they have to pay for. If audited National Standards on Auditing are required.
      Governmental (only to the extent incorporated as Joint Stock Companies. State owned enterprises are not subject to any particular accounting or auditing requirements.)
      Not-for-profit
      Other (please describe)
      Other (please describe)


    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: 5 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

    2. the Enacting body(ies)

      Parliament of Republic of Moldova

    3. the latest amendment date?

      see Q34.a


    35. How can IFAC obtain a copy of the Legal authority?
      www.moldova.md


    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:


    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:


    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: 3 Year(s)


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


    42. Is rotation of the auditor or audit firm for audits of listed entities required?
      Yes   No
      If YES, please describe the requirement:
      Rotation of auditor or auditing firm is required by National Standards on Auditing and Code of Professional Conduct of Auditors and Accountants of the Republic of Moldova.



    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 Law on Auditing 01/2001 The Ministry of Finance
      Other (please describe) (above applies to all entities requiring an audit)
      Other (please describe)
      Other (please describe)

      a. How can IFAC obtain copies of these documents?

      From ACAP

      b. Are the documents available in English?
      Yes   No


    Section 5B -- Standard-Setting (The Ministry of Finance)


    44. For The Ministry of 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

      Ministry of Finance (government ministry)

      b. Name of standards

      National Standards on Auditing (NSA) are set forth on the basis of IFAC 1999, 2000 Pronouncements;
      National Accounting Standards (NAS) are set forth on the basis of 1996-2000 IASB edition.


    45. How many voting members does the standard-setting body have?
      13


    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:


    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.)?
      public members


    48. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      Regulator


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


    50. For how many years has the standard-setting body been in existence?
      13 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)

      Please enter the exchange rate used to calculate this number.

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



    52. To what entity is the standard-setting body accountable?
      Collegium of MoF.


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

      The exposure drafts of the Regulations, Standards, or Laws are distributed to the public through the professional associations for discussions and comments.

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

      The meetings are private.

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

      Majority.

      NSA and developed regulations are published in the Official Monitor, indicating the date of enactment.


    4. other relevant due process activities

      Alignment of developed standards and regulations to international ones.


    54. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      12 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 Order No 29 3/2001 Ministry of Finance
      Professional Accountants in Business as above
      Professional Accountants in the Public Sector as above
      Other (please describe)

      a. How can IFAC obtain copies of these documents?

      From ACAP

      b. Are the documents available in English?
      Yes   No


    Section 6B -- Standard-Setting (Ministry of Finance)


    56. For Ministry of 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

      Ministry of Finance

      b. Name of standards

      Code of Professional Conduct for Auditors and Accountants of Moldova


    57. How many voting members does the standard-setting body have?
      10


    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:


    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.)?


    60. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      Regulator (Ministry of Finance Ordinance)


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


    62. For how many years has the standard-setting body been in existence?
      13 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)

      Please enter the exchange rate used to calculate this number.

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



    64. To what entity is the standard-setting body accountable?
      Ministry of Finance Collegium


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

      Exposure draft is available for discussion, had comments from professional associations. The final publication was published in the official newspaper "Monitorul Oficial"

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

      once in 3 weeks

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

      Majority

    4. other relevant due process activities



    66. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      12 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:


    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.

      Law on Educatuion,
      Law on Accounting, (revised, exposure draft 2004)
      Law on Auditing Activity (revised, exposure draft 2004)
      Regulations of Ministry of Education


    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
      Persons in full exercise of their faculties, with higher education in the economic-financial, private law field, teachers and university lecturers of economic subjects.
      Professional examinations
      Practical experience
      The persons must have an uninterrupted length of service of at least five years, including at least three consecutive years as an auditor, assistant auditor, accountant and specialist in the financial-banking sector, economic consultant, expert accountant, chief accountant, deputy chief accountant, controller reviewer, state controller with the Court of Accounts, economic director, chief economist, financial expert, chief of economic-financial unit, manager in economic-financial units, consultant, lawyer, professor, university lecturer in economic subjects may be admitted to the attestation for the right to practice audit activity.
      Final qualifying examination
      Other (please describe)


    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.
      The MoF Qualification Board
      The Ministry of Education Attestation Committee

    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.

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

    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:

    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?
      Audit activities, except audit of professional participants of securities market, shall be performed based on licenses issued by the Ministry of Finance according to the legislation in force, as well as based on the certificate issued by the Qualification Commission under the Ministry of Finance or the National Bank of Moldova.
      (1) Audit of professional participants of securities market shall be performed based on licenses issued by the National Commission for Securities Market.

      Art. 8 (1) In order to award auditor titles for all types of audit, except audit of financial institutions and audit of professional participants of securities market, the Ministry of Finance shall form a qualification commission, functioning based on regulations approved by the Ministry.
      (1) The auditor title for audit of financial institutions is awarded by the qualification commission of the National Bank of Moldova, functioning based on regulations approved by the Bank.
      (2) Auditor title for audit of professional participants of securities market is awarded by the qualification commission of the National Commission for Securities Market, functioning based on regulations approved by the Commission.

      Law no. 5 art. 5 The participants in the licensing process are:
      a. The Licensing Chamber;
      b. The National Bank of Moldova;
      c. The National Securities Commission;
      d. The National Energy Regulation Agency and others


    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?
      Ministry of Finance of the Republic of Moldova


    81. Describe any additional licensing requirements for auditors of listed entities (e.g., additional education requirements, registration, etc.).
      Persons in full exercise of their faculties, with higher education in the economic-financial, private law area, teachers, university lecturers of economic subjects and an uninterrupted length of service of at least five years, including at least three consecutive years as an auditor, assistant auditor, accountant and specialist in the financial-banking sector, economic consultant, expert accountant, chief accountant, deputy chief accountant, controller reviewer, state controller with the Court of Accounts, economic director, chief economist, financial expert, chief of economic-financial unit, manager in economic-financial units, consultant, lawyer, professor, university lecturer of economic subjects may be admitted to the attestation for the right to practice audit activity.

      The MoF issues certificates for the audit of businesses (general audit) and audit of
      Insurance companies.
      The National Bank of Moldova issues qualification certificates for the audit of financial institutions
      The National Securities Commission issues certificates for the audit of professional participants in the securities market.



    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
      Ministry/department
      Statutory authority/agency
      Profit entity owned by government
      State governments
      Local governments
      Other (please describe)
      Other (please describe)

      a. How can IFAC obtain copies of these documents?



      b. Are the documents available in English?
      Yes   No



    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 National Accounting Standards and Commentaries 01/2004 Ministry of Finance
      Other (please describe) (applicable for all entities preparing financial statements)
      Other (please describe)
      Other (please describe)
      Other (please describe)

      a. How can IFAC obtain copies of these documents?

      Partially translated NASs are available from ACAP.

      Additional information is available on the following web-sites: www.moldova.org/government/Ministry of Finance, www.pca.md.


      b. Are the documents available in English?
      Yes   No


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


    95. For Ministry of 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

      Ministry of Finance (government)

      b. Name of standards

      29 National Accounting Standards and 14 Commentaries for Application on NAS


    96. How many voting members does the standard-setting body have?
      10 - MoF; 18/ Consultative Methodological Council


    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: [Are there both voluntary and employed members?]


    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.)?
      Private and public members, academic with working experience of more then 10 years/MoF


    99. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      Regulator & Government of RM


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


    101. For how many years has the standard-setting body been in existence?
      9 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?
      Government of RM


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

      publication in Monitorul Oficial (MO)

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

      public

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

      First, Consultative Methodological Council approves NAS or CNAS and then it sends to the Ministry of Finance Collegium for approval.

    4. other relevant due process activities



    105. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      12 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:
      National Commission for Securiries


    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:


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

      Issuing qualification certificates to active auditors on the securities market and licenses to auditing firms

    2. accounting and auditing standard-setting

      Development of accounting standards and their approval in conjunction with the MoF (art. 8 lit.h of Law on National Commission for Securiries). Auditing standards setting is out of the competence of the Commission.

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





    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
      Moldovan Stock Exchange



    Section 10B -- Stock Exchange
    Moldovan Stock Exchange Details


    110. For Moldovan Stock Exchange, 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.

      The Stock Exchange is monitoring the timely receipt of financial reports.

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

      The responsibility for violating accounting and reporting requirements is set in the Civil Code . Depending on the circumstances sanctions are applied to: juridical persons, manager (director) and/or chief accountant.

    3. How enforcement actions are administered.

      The Civil Code doesn’t foresee sanctions for the auditor or for the non-compliance with the audit requirements by the auditor.



    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:
      In compliance with article 44 of the Law on the National Bank of Moldova (NBM), the NBM represents the only institution that authorizes, supervises and regulates the activity of financial institutions. The NBM developed and approved the Instruction on preparation and submission of final reports, which includes the reports to be submitted to the NBM and establishes the rules for their preparation and terms for submission to the NBM. This bylaw was elaborated taking into account the provisions of Accounting Standards, including the National Accounting Standard 30 elaborated by the NBM. Respectively, the prudence reporting to the NBM by the commercial banks is done in compliance with accounting requirements. The Regulation on disclosure by Moldovan commercial banks of information about their financial activity establishes certain requirements related to the qualitative nature of the information subject disclosed; authentication of information; publication of information about financial activity; provision of banking services and other information required to be published. This regulation has been developed taking into account the provisions of the National Accounting Standard 30 "Disclosures in the Financial Statements of Banks and Similar Financial Institutions".


    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 Law on Accounting No. 426 as of April 4, 1995 binds economic entities, including banks, to keep their accounting records in compliance with the national accounting standards and with the accepted accounting policy. The Law on Financial Institutions No. 550-XII as of July 21, 1995 provides that financial institutions shall permanently keep the accounts and books, and prepare financial statements which shall reflect the operations and financial situation as the general accounting practice provides. The accounts and the financial statements shall correspond to the accounting standards established by the National Bank. The Regulation on preparation and submission of audit results foresees that a bank's audit has to be performed in compliance with ISA and NAS.


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

      Article 8 of the Law on Auditing and the Regulation on issuance of qualification certificate to banking auditors stipulates that the qualification of financial intitution auditor is issued by the attestation commission of the NBM. This regulation establishes certain criteria for the persons that apply for the qualification certificate that gives the right to practice the activity of banking auditing. To attestation are admitted persons that have relevant education and experience, with adequate reputation. The NBM decides on the possibility or impossibility to issue the qualification certificate taking into account the level of knowledge of candidates in all areas of activity of the commercial banks and depending on the number of criteria that the candidates comply with. In compliance with chapter 5 of the above mentioned regulation, the qualification certificate of the banking auditor can be annulled at the decision of the attestation commission in the cases foreseen by the regulation. Article 34 of the LFI and the Regulation on procedure for preparation and submission of audit results stipulate the bank’s obligation to annually conclude a contract with an independent auditing company accepted by the NBM, which shall execute the provisions of this article during the entire financial year. The banking audit has to be performed in compliance with the International Standards on Auditing and the National Accounting Standards of the Republic of Moldova drafted in line with the international ones, as provided by the above mentioned article. This regulation establishes certain criteria for auditing contracts concluded between the bank and the auditor. These contracts shall contain provisions related to preparation by the auditor of the report and audit opinion in compliance with letter (b) of the article 34 (1) of the LFI and article 15 (3) of the Law on Auditing, as well as the management letter, and shall submit these documents not later than April 30 of each year to the Board of the Bank and NBM; In case the general meeting of shareholders decides to sign a contract with a certain auditor and the contract is signed during the current financial year, the contract shall contain provisions foreseeing that the audit will be performed during the entire financial year and the auditor is obliged to observe the provisions under article 34 in letter a), c) and d) of the LFI, until the moment the bank concludes a contract with an auditor for the next financial year. In compliance with sub-paragraph 1 of chapter VI of the regulation, the NBM shall not accept in the future those independent auditors, which do not abide the provisions of the LFI and the above-mentioned regulation. As necessary, the NBM regulates certain aspects incidental to the external audit by means of letters. Thus, by its letter No. 09-01215/121 as of November 8, 1999, in view of proper fulfillment by the auditors of the requirements under the Regulation on preparation and submission of audit results, the NBM informed the auditors about the fulfillment of certain requirements for preparation of audit reports and annual audit opinion, as well as of management letters, in order to fully correspond to the International Standards on Auditing and the National Accounting Standards

    2. accounting and auditing standard-setting

      The NBM elaborated the National Accounting Standard 30 “Disclosures in financial statements of the banks and other financial institutions” with the aim to establish the principles regarding the structure and the content of the balance-sheet, the income statement, as well as the cash flow statement. In order to create conditions for commercial banks to set international relations, the NBM has amended the NAS 30 with the provisions under IAS 39 (there is no analogy in the NAS). The difference between the two consists in the fact that the NAS 30 also includes the requirements for preparation and disclosure of the Cash flow statement especially for the banks (NAS 7 “Cash flow statement” does not apply to financial institutions). NBM representatives, as members of the Consultative Methodological Council for accounting in the national economy affiliated to the Ministry of Finance, examine and participate in discussions about new drafts of NAS.

    3. review of financial statements prepared by listed entities

      The commercial banks submit periodically (monthly, quarterly) to NBM, in compliance with the Instruction on preparation and submission of financial statements by the banks, the financial statements that reflect banking operations and state of affairs. In case in the reports are revealed divergences, mistakes and/or important errors, the NBM requires repeated presentation of reports that shall include relevant amendments and corrections. Under the provisions of article 18 of the Instruction on preparation and submission of financial statements by the banks, after the approval of reports by the general meeting of shareholders – but not later than April 30 of the current year, the banks shall repeatedly submit the financial statements to the NBM on paper and in electronic format (situation at December 31), amended as a result of audit and having attached the detailed explanations on the adjustments made. During field controls, the banking supervisors assess all main aspects of the banks’ operations and activities, reflected in the banks' financial statements submitted to the NBM and disclosed to the public. In compliance with sub-paragraph 17 of the above mentioned Instruction, the NBM follows up that the banks take into account the results of the controls performed by NBM inspectors when preparing the financial statements to be presented by the end of the next accounting period, which comes after the review of control reports at the NBM Board of Directors, attaching also the written note containing detailed explanations on the amendments related to removal of violations revealed during the controls.

    4. enforcement of accounting, reporting and auditing requirements

      In accordance wit the Law on Accounting and article 33 of the LFI, it is the National Bank of Moldova who shall draft and approve the chart of accounts and the accounting regulations in banking sector. In the view of establishing accounting requirements, there has been developed the Chart of accounts for accounting in banks and other financial institutions (which contains the detailed description of the accounts used to reflect the economic and financial operations), the National Accounting Standard 30 “Disclosures in financial statements of the banks and other financial institutions" (which determines the notion of disclosures in the financial statements of the banks and other financial institutions and establishes the principle of structure and the content of the balance-sheet, of the income statement, as well as the cash flow statement). The NBM developed the Regulation on Accounting in the banks of the Republic of Moldova in the view of developing the basic accounting regulating requirements in the banking system. In accordance with articles 11 and 44 of the Law on NBM and articles 37 and 40 of the LFI, in order to perform its duties, the NBM has the right to issue normative acts, regulations, and instructions that are compulsory for execution by the banks. Thus, in order to establish the banking reporting and auditing requirements, the NBM elaborated the Instruction on preparation and submission of financial statements by the banks and financial institutions (which provides the requirements for form, content and modality for development and submission of financial statements); the Regulation on procedures for preparation and submission of audit reports (which provides the requirements for acceptance of auditing company, performance of the audit, reporting conditions to the bank and the NBM, publication of balance-sheet and the annual report by the bank); the Regulation on disclosure of information on financial activity of the banks in the Republic of Moldova (which provides the requirements for financial activity, and rendering of banking services, other information subject to public disclosure).



    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)?
      Law on Saving and Credit Associations, No 1505-XIII, MO 38-39/268, 30.04.98 The present law establishes the legal status of saving and credit associations, principles and particularities of establishment, functioning and closing of these associations, rights and obligations of the members, protection of their rights.


    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

      The Ministry of Finance has approved NAS 63 "Disclosure of information in financial statements of saving and loan associations and other similar entities".

    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.
      The State Service on Insurance Supervision (SSIS) - a state body under the Ministry of Finance, supervises the insurance market. The responsibilities of the SSIS are the following: - Elaboration of the state policy in the field of insurance - Elaboration of the normative framework (regulations) - Issuance of licences for insurance activity; - Supervision of the activity of insurance institutions - Protection of rights of insured and insuring entities This body is responsible for monitoring and enforcing accounting and reporting requirements. Monitoring and enforcing auditing requirements is performed by the Ministry of Finance.


    119. What is the source of Legal authority of the regulatory authority(ies)?
      The Law on Insurance No 1508-XII as of June 15, 1993 and the Decision of the Government of the Republic of Moldova ‘on approval of the Regulation, structure and staffing of the State Service on Insurance Supervision # 77 as of February 8, 1996.


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

      The State Service on Insurance Supervision has no rights to elaborate regulations related to auditing, as elaboration of accounting standards, review of income statements and enforcement of accounting requirements and financial reporting is out if its competence

    2. accounting and auditing standard-setting

      Ministry of Finance

    3. review of financial statements prepared by listed listed entities



    4. enforcement of accounting, reporting and auditing requirements




    Section 10G -- Other Regulatory Authority


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


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


    123. 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 listed entities



    4. enforcement of accounting, reporting and auditing requirements




    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.



    125. Under what authority does the organization conduct the program of quality assurance review?


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




    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.



    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?


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


    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.)?



    133. Who appoints these members (e.g., member body, government, user, regulator, etc.)?


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


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

      Please enter the exchange rate used to calculate this number.

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

      (specify currency)



    137. To what entity is the body accountable?



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



     

     

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