Moldova

Member Organizations

Member Organization Associate Other PAOs

  Association of Professional Accountants and Auditors of the Republic of Moldova

Legal and Regulatory Environment

  • Overview of Statuatory Framework for Accounting and Auditing

    Accounting and financial reporting in the Republic of Moldova is primarily regulated by the Accounting Law No. 113 of 2007, which establishes accounting requirements for all reporting entities depending on their size (total income, total assets, and number of employees). The law applies to all legal entities and individuals engaged in business activities, not-for-profit entities, regardless of their area of activity, type of ownership, organizational and legal form.

    Article 47(2) of the Accounting Law requires public interest entities (PIEs) to apply IFRS effective January 2012. PIEs under the law include financial institutions, investment funds, insurance companies, non-state pension funds, commercial companies listed on the stock exchange, and large companies. IFRS are endorsed for application in the Republic of Moldova through Orders of the Ministry of Finance (MoF). Endorsement of IFRS by the MoF involves approving an Order specifically identifying the standards that are adopted in Moldova. The applicable standards are then published in the Official Monitor and are posted on the MoF website. Translations are prepared under the direction of the IFRS Foundation and are available in the Romanian language. As of December 2017, the 2016 version of IFRS is being applied.

    Non-PIEs have an option to apply IFRS or Moldovan National Accounting Standards issued by the MoF in 2013 that are based on IFRS and EU Directives.

    Auditing is regulated by the Law on Audit Activities of 2007 as amended in 2012, which requires all PIEs to be audited. Furthermore, the Law on Joint Stock Companies (JSCs) requires JSCs with more than 50 employees and share capital of more than 500,000 MDL (approximately USD 41,000) to be audited as well. ISA as issued by the IAASB and promulgated by the MoF are to be applied in all audits. As of 2017, 2015 ISA as translated in the Russian and Romanian languages are being applied. No plans to adopt the most recent version of ISA have been indicated.

  • Regulation of Accountancy Profession

    Auditing activity is regulated at the state level and, according to the World Bank (2013), the regulation is fragmented, with multiple agencies involved in the process. Under the Law on Audit Activities of 2007, the Ministry of Finance (MoF) is responsible for implementing initial professional development and continuing professional development (CPD) that are set in law. This includes conducting the qualification examination through the Certification Commission and certifying and licensing of auditors through the Licensing Commission. The MoF also promulgates auditing standards, adopts the Code of Professional Conduct for auditors, and keeps the state registry of auditors and audit firms.

    The Auditing Supervision Council under the MoF also participates in the regulation of auditors. The Council is composed of seven members, representing the Ministry of Finance, National Commission on Financial Market (NCFM), National Bank of Moldova (NBM), and higher educational institutions appointed by the Ministry of Education, at the request of the Ministry of Finance. It is responsible for ensuring auditors’ and auditing firms’ compliance with the relevant auditing standards, code of ethics, and quality control standards; conducting quality assurance reviews; investigation and discipline, and monitoring the certification, licensing, and CPD processes performed by the MoF and the Licensing Commission, among other functions.

    Auditors of financial sector entities must be certified and licensed by the NBM and NCFM in addition to obtaining general certification and a license from the MoF.

    Under the law, audit firms and individual auditors may voluntary join professional associations and be subject to their self-regulation. The associations develop and propose draft acts in the area of accounting for approval by the competent authorities; develop and propose programs of continuing professional training; develop and implement their own professional rules according to the requirements of national legislation and the International Federation of Accountants. Professional associations are also responsible for regulating their members and ensuring auditors’ compliance with the Code of Professional Conduct; monitoring the continuing professional training of their members; mediating disputes between their members; and submitting information on their membership to the MoF on a quarterly basis in order to update the state registry of auditors and audit firms. The associations are not involved in in the qualification, licensing, regulation, or public oversight of auditors. According to the World Bank, as of 2013, there were three professional accounting associations in Moldova: the Association of Professional Accountants and Auditors (ACAP), the Association of Auditors and Auditing Firms of Moldova, and the Association of Auditors and Management Consultants (EcoFin-Consult).

    Accountancy professionals other than auditors are not regulated but may also choose to join professional associations and be subject to their supervision. Although there are no requirements to provide accountancy-related services, some of practicing professionals hold a university degree in accounting or finance, while some have a professional qualification and/or are members of a professional association. According to the ACAP, as of 2017, the concept of a national certification for accountants of public interest entities is under consideration.

    A creation of an audit oversight agency is envisioned as part of the implementation of the EU–Republic of Moldova Association Agreement. The agency would be a public institution under the MoF and would carry out activities based on the self-governance and self-financing principles under the Law on Audit of Financial Statements. The agency is envisioned to be responsible for auditor certification and registration, monitoring continuing education, quality assurance, investigations and sanctions, and drafting regulations in order to carry out the public oversight function. The MoF would continue to be responsible for audit regulation policy-making and approving related standards (auditing, ethics, and quality control). It is expected that the Auditing Supervision Council (ASC) will be reorganized as the audit oversight agency. According to the provisions of the draft Law, each audit firm will subject to external quality control at least once every six years, while firms performing audit of public interest entities, at least every three years.

    Although professional associations are not required by law to conduct quality assurance reviews of their members, the draft Law provides that the reorganized ASC will have the right to delegate to professional audit organizations the function of external control of audit quality of its member firms that provide auditing services to non-public interest entities. The detailed criteria for selection of professional associations and the conditions under which they could perform the delegated tasks will be developed and approved by the Ministry of Finance after the draft Law has been approved by the Parliament.

  • Audit Oversight Arrangements

    There is no independent audit oversight arrangement in the Republic of Moldova. Auditing activity is regulated at the state level and, according to the World Bank (2013), the regulation is fragmented, with multiple agencies involved in the process. Under the Law on Audit Activities of 2007, the Ministry of Finance (MoF) is responsible for implementing initial professional development and continuing professional development (CPD) which are set in law. This includes conducting the qualification examination through the Certification Commission and certifying and licensing through the Licensing Commission. The MoF also promulgates auditing standards, adopts the Code of Professional Conduct for auditors, and keeps the state registry of auditors and audit firms.

    The Auditing Supervision Council under the MoF also participates in the regulation of auditors. The Council is composed of seven members, representing the Ministry of Finance, National Commission on Financial Market (NCFM), National Bank of Moldova (NBM), and higher educational institutions appointed by the Ministry of Education, at the request of the Ministry of Finance. It is responsible for ensuring auditors’ and auditing firms’ compliance with the relevant auditing standards, code of ethics, and quality control standards; conducting quality assurance reviews; investigation and discipline; and monitoring the certification, licensing, and CPD processes performed by the MoF and the Licensing Commission, among other functions.

    Auditors of financial sector entities must be certified and licensed by the NBM and NCFM in addition to obtaining general certification and a license from the MoF.

    A creation of an audit oversight agency is envisioned as part of the implementation of the EU–Republic of Moldova Association Agreement. The agency would be a public institution under the MoF and would carry out activities based on the self-governance and self-financing principles under the Law on Audit of Financial Statements. The agency is envisioned to be responsible for auditor certification and registration, monitoring continuing education, quality assurance, investigations and sanctions, and drafting regulations in order to carry out the public oversight function. The MoF would continue to be responsible for audit regulation policy-making and approving related standards (auditing, ethics, and quality control). It is expected that the Auditing Supervision Council will be reorganized as the audit oversight agency.

  • Professional Accountancy Organizations

    The Association of Professional Accountants and Auditors (ACAP RM)

    ACAP RM was established in 1996 and is a not-for-profit, independent, non-governmental organization with a public interest mission to contribute to the development of the accountancy profession in the Republic of Moldova. Its objectives are to strengthen the reputation of the profession through education, and ensure adherence to ethical, quality, and professional standards by its members.

    In addition to being an Associate of IFAC, ACAP is member of the South-Eastern European Partnership on Accountancy Development (SEEPAD), Eurasian Council of Certified Accountants and Auditors, and the Fédération Internationale des Experts-Comptables Francophones.

    Other PAOs

    There is limited information available about the Association of Auditors and Auditing Firms of Moldova and the Association of Auditors and Management Consultants (EcoFin-Consult), which are not IFAC member organizations. According to the World Bank (2013), both associations unite accountancy and related professionals, have open membership requirements, and operate quality assurance reviews for their members.

  • Projects or Other Information

    In September 2014, the Republic of Moldova signed a Moldova–EU Association Agreement, under which the corporate financial reporting framework in the Republic needs to be brought in line with the relevant EU Directives and Regulations. As of 2017, the new Law on Audit of Financial Statements and the Accounting Law that would incorporate some of the EU requirements are open for public consultation, with the Law on Audit expected to be approved in final reading by the end of 2017.

    In addition, a creation of an audit oversight agency is envisioned as part of the implementation of the EU–Republic of Moldova Association Agreement. The agency would be a public institution under the Ministry of Finance (MoF) and would carry out activities based on the self-governance and self-financing principles under the Law on Audit of Financial Statements. The agency is envisioned to be responsible for auditor certification and registration, monitoring continuing education, quality assurance, investigations and sanctions, and drafting regulations in order to carry out the public oversight function. The MoF would continue to be responsible for audit regulation policy-making and approving related standards (auditing, ethics, and quality control). It is expected that the Auditing Supervision Council (ASC) will be reorganized as the audit oversight agency. According to the provisions of the draft Law, each audit firm will subject to external quality control at least once every six years, while firms performing audit of public interest entities, at least every three years.

    Although professional associations are not required by law to conduct quality assurance reviews of their members, the draft Law provides that the reorganized ASC will have the right to delegate to professional audit organizations the function of external control of audit quality of its member firms that provide auditing services to non-public interest entities. The detailed criteria for selection of professional associations and the conditions under which they could perform the delegated tasks will be developed and approved by the MoF after the draft Law has been approved by the Parliament.

Adoption of International Standards

  • Quality Assurance

    In the Republic of Moldova, the requirements for quality assurance (QA) reviews of audits are set in the Law on Auditing of 2007 and its implementing Resolution No. 1450. The Auditing Supervision Council (ASC) under the Ministry of Finance is responsible for conducting QA reviews through its Control and Verification Service, which started carrying out quality assurance reviews in 2012. The ASC carries out the inspections in accordance with its work plans and makes the results publicly available through its annual activity reports.

    In 2017, the Association of Professional Accountants and Auditors (ACAP), an IFAC member, conducted a detailed self-assessment of the QA review systems both at jurisdictional and PAO levels and identified a number of areas where the requirements fall short of those of SMO 1. Some of the gaps are expected to be addressed in the new Law on Audit of Financial Statements, which is expected to be approved by the end of 2017.

    The new law will establish an audit oversight body through reorganization of the ASC, which will be responsible for QA reviews. According to the provisions of the draft Law, each audit firm will subject to external quality control at least once every six years, while firms performing audit of public interest entities, at least every three years.

    Although professional associations are not required by law to conduct quality assurance reviews of their members, the draft Law provides that the reorganized ASC will have the right to delegate to professional audit organizations the function of external control of audit quality of its member firms that provide auditing services to non-public interest entities. The detailed criteria for selection of professional associations and the conditions under which they could perform the delegated tasks will be developed and approved by the Ministry of Finance after the draft Law has been approved by the Parliament.

    As of 2017, ACAP has been conducting QA reviews since 2014. As mentioned above, some of the features of ACAP’s QA review system fall short of the requirements of SMO 1.

    There is limited information available about the two other professional associations, which are not member organizations of IFAC. According to the World Bank (2013), the Association of Auditors and Auditing Firms of Moldova and the Association of Auditors and Management Consultants (EcoFin-Consult) operate quality assurance reviews systems for their members. However, no information is available on the extent of the systems’ alignment with SMO 1.

    Current Status: Partially Adopted

  • International Education Standards

    In the Republic of Moldova, initial professional development and continuing professional development (CPD) requirements are stipulated only for auditors. The requirements are laid out in the Law on Auditing Activity of 2007 and are implemented by universities, the Ministry of Finance, the Audit Supervision Council (ASC), and professional associations.

    Universities administer tertiary accounting education, which, according to the World Bank (2013) needs to be updated to include subjects related to IFRS, ISA, ethics, and national accounting standards.

    The Law on Auditing Activity requires auditors to maintain their competence through participation in programs of CPD, the structure, content, and organization of which is described in the Regulation on Certification of Auditors. The Certification Commission of the Ministry of Finance, the ASC, and professional associations monitor compliance with the CPD requirements for auditors. The World Bank identified two key issues that require enhancement in the education area: (i) greater collaboration between the universities, professional associations, and the Ministry of Finance in developing, updating, and carrying out CPD programming; and (ii) establishing more linkages between university accounting and auditing degrees and any credits that may be counted towards either the training or examination requirements for professional certification of auditors.

    There are no educational requirements for offering accountancy-related services other than auditing, although, according to the Association of Professional Accountants and Auditors, the concept of a national certification for accountants of public interest entities is, as of 2017, under consideration.

    Meanwhile, professional associations have established some educational requirements for their members and offer voluntary qualifications. They are also involved in developing and proposing programs of continuing professional training to the regulator and monitoring the continuing professional training of their members.

    Overall, although some elements of the IES appear to be in place in the Republic of Moldova, the extent of alignment remains to be clarified.

    Current Status: Partially Adopted

  • International Standards on Auditing

    The Law on Audit Activities of 2007 requires application of ISA as issued by the IAASB and promulgated by the Ministry of Finance for application in all mandatory audits. As of 2017, 2015 ISA as translated in the Russian and Romanian languages are being applied. No plans to adopt the most recent version of ISA have been indicated.

    Current Status: Partially Adopted

  • Code of Ethics for Professional Accountants

    The Law on Audit Activities of 2007, as amended in 2012, requires all auditors to abide by the IESBA Code of Ethics as issued by the IESBA and promulgated by the Ministry of Finance starting January 1, 2013. As of 2017, the 2015 IESBA Code as translated in Russian and Romanian is being applied. No plans to adopt the most recent version of the IESBA Code have been indicated.

    The rest of the accountancy profession does not appear to be subject to ethical requirements.

    Current Status: Partially Adopted

  • International Public Sector Accounting Standards

    The Accounting Law of 2007 requires the application of National Public Sector Accounting Standards (NPSAS), which are developed and approved by the Ministry of Finance of the Republic of Moldova. The Government of Moldova declared its intent to reform the accounting and financial reporting system of the public sector, with the objective of developing NPSAS in line with IPSAS and introducing them at central and local government levels. To this effect, through Order No. 202 of December 17, 2015, the Ministry of Finance established a Council for Public Sector Accounting Standards as an advisory body for the development of NPSAS as well as for the drafting/amending of the relevant acts. NPSAS will be designed in compliance with IPSAS taking into account the specific characteristics of the Moldovan Government operations.

    As indicated on the website of the Ministry of Finance, the concept for the development and introduction of NPSAS was approved by Order of the Minister of Finance No. 159 of December 27, 2016. It includes a 2017–2022 action plan for accounting and reporting reform.

    Current Status: Not Adopted

  • Investigation and Discipline

    Investigation and discipline (I&D) of professional accountants in the Republic of Moldova is limited to that of auditors and the system is overall fragmented, with different aspects of investigations and discipline performed by the Ministry of Finance, Auditing Supervision Council (ASC), and the Licensing Chamber. The Law provides for the following sanctions that the ASC may impose on registered audit firms and auditors: warnings; recommendations to the Ministry of Finance to withdraw or suspend an auditor’s qualification certificate; and proposals to the Licensing Chamber to withdraw or suspend an auditor’s license.

    In 2017, the Association of Professional Accountants and Auditors (ACAP), an IFAC member, conducted a detailed self-assessment of the I&D systems both at jurisdictional and PAO levels and concluded that the systems fall short of SMO 6. Some of the gaps are expected to be addressed in the new Law on Audit of Financial Statements, which is expected to be approved by the end of 2017, as well as its implementing regulations that will contain clear and detailed provisions in respect of I&D of auditors.

    The new law will establish an audit oversight body through reorganization of the ASC, which will be authorized to establish systems of investigations and sanctions to detect, correct and prevent inadequate audit and to apply sanctions on auditors and audit firms.

    ACAP reports that a disciplinary concept is part of the ACAP’s Charter and it has established a Department for Ethics and Discipline. However, an I&D system does not appear to have been operationalized.

    There is no information available about the two other professional associations, which are not member organizations of IFAC and unite professionals on a voluntary basis: the Association of Auditors and Auditing Firms of Moldova and the Association of Auditors and Management Consultants (EcoFin-Consult).

    Current Status: Partially Adopted

  • International Financial Reporting Standards

    Article 47(2) of the Law in Accounting requires public interest entities (PIEs) to apply IFRS effective January 2012. PIEs under the act include financial institutions, investment funds, insurance companies, non-state pension funds, commercial companies listed on the stock exchange, and large companies. IFRS are endorsed for application in Moldova through Orders of the Ministry of Finance (MoF). Endorsement of IFRS by the Minister involves approving an Order specifically identifying the standards that are adopted in Moldova. The applicable standards are then published in the Official Monitor and are posted on the MoF website. Translations are prepared under the direction of the IFRS Foundation and are available in the Romanian language. As of December 2017, the 2016 version of IFRS is being applied.

    Non-PIEs have an option to apply IFRS or Moldovan National Accounting Standards issued by the Ministry of Finance in 2013 that are based on IFRS and EU Directives.

    Current Status: Partially Adopted

Disclaimer

IFAC bears no responsibility for the information provided in the SMO Action Plans prepared by IFAC member organizations. Please see our full Disclaimer for additional information.

Methodology

Methodology
Last updated: 12/2017
We welcome feedback. Please email compliance@ifac.org

Thank you for your interest in our publications. These valuable works are the product of substantial time, effort and resources, which you acknowledge by accepting the following terms of use. You may not reproduce, store, transmit in any form or by any means, with the exception of non-commercial use (e.g., professional and personal reference and research work), translate, modify or create derivative works or adaptations based on such publications, or any part thereof, without the prior written permission of IFAC.

Our reproduction and translation policies, as well as our online permission request and inquiry system, are accessible on the Permissions Information web page.

For additional information, please read our website Terms of Use. ALL RIGHTS RESERVED.