Romania

Member Organizations

Member Organization Associate Other PAOs

  Chamber of Financial Auditors of Romania
  Corpul Expertilor Contabili si Contabililor Autorizati din Romania

Legal and Regulatory Environment

  • Overview of Statuatory Framework for Accounting and Auditing

    As a member of the European Union (EU), Romania is subject to the accounting, auditing and financial reporting requirements established in EU Regulations and Directives as transposed into national laws and regulations.

    Accounting Framework

    The Order of the Ministry of Public Finances no.1802/2014 sets out the accounting regulations for the preparation of separate annual financial statements and consolidated financial statements with its subsequent amendments and supplements. Law 82/1991 with its subsequent amendments and supplements also known as the Accounting Law, establishes the Ministry of Public Finances (MFP) as the accounting standard-setter in Romania, responsible for transposing EU regulations that require the application of IFRS as endorsed by the European Commission into national law.

    In addition to the mandatory requirements to apply IFRS in consolidated accounts, under MFP Order No. 881/2012 all listed companies are required to apply IFRS as endorsed by the EU in their annual financial statements. The MFP has also permitted companies that do not trade in the regulated market to choose between EU-endorsed IFRS for consolidated financial statements or Romanian Accounting Standards (RAS) as established by the MFP.

    There are three tiers of RAS applicable for Romanian entities depending on their size. Companies that exceed at least two of the following thresholds must apply the more comprehensive set of RAS: (i) total assets are greater than 4,000,000 EUR; (ii) net turnover is more than 8,000,000 EUR; and (iii) the number of employees is more than 50. Companies that do not exceed the thresholds must apply the simpler set of standards. In addition, micro entities have further exemptions. IFRS for SMEs has not been adopted in Romania.

    Banks are supervised by the National Bank of Romania. The Financial Supervisory Authority (ASF) was established in 2013 as an autonomous, specialized, with legal status, independent, self-financed administrative authority, exercising its duties by taking over and reorganizing all duties and powers of the National Securities Commission (CNVM), the Insurance Supervisory Commission (CSA) and the Private Pension System Supervisory Commission (CSSPP).

    Auditing Framework

    The Law No. 162 of 2017 on Statutory Audit of Annual Financial Statements and Annual Consolidated Financial Statements which transposes the EU Audit Directive, specifies that audits must be carried out in compliance with ISA. ISA are to be applied for audits of entities preparing financial statements using EU-endorsed IFRS and medium-sized companies using the comprehensive set of RAS. Small companies that do not meet two of the three thresholds are not required to prepare audited financial statements.

    The Law No. 162 of 2017 also establishes the Statutory Audit Public Oversight Authority (ASPAAS) as the designated organization for ensuring the harmonization of national auditing standards with EU Directives. Under the supervision of the ASPAAS and in accordance with GEO No. 23 of 2012 and GEO No. 75 of 1999, the Chamber of Financial Auditors of Romania (CFAR) is responsible for translating and disseminating auditing standards. Only members of CFAR are authorized to perform statutory audits.

  • Regulation of Accountancy Profession

    In Romania, both accountants and statutory auditors are regulated by the government and two professional accountancy organizations (PAOs)—the Body of Expert and Licensed Accountants of Romania (CECCAR) and the Chamber of Financial Auditors of Romania (CFAR). Activities of CFAR are subject to the supervision of the Statutory Audit Public Oversight Authority (ASPAAS), which was established by Law 162 of 2017 as the oversight body of the audit activity.

    Law 162 of 2017, in addition to establishing the ASPAAS as the oversight board of the statutory audit activity, outlines activities, rights and duties of auditors and audit firms; establishes the IPD and CPD requirements for auditors; defines entry requirements to the auditing profession; establishes the professional standards; introduces the requirement for implementation of QA review mechanisms; and sets disciplinary arrangements that should be established. Aspiring auditors must have a university degree in a relevant field in order to qualify as an auditor, three years of practical experience in auditing under the supervision of a qualified auditor, and pass a final professional competence examination prior to earning the auditor designation and joining the CFAR.

    Under the legislation, the ASPAAS’ main tasks are to (i) authorize the registration of statutory auditors and audit firms; (ii) adopt professional standards and ethical requirements, (iii) continuous professional development and training of auditors; (iv) conduct the quality assurance (QA) reviews and investigative and disciplinary (I&D) mechanisms; (v) organize the professional competence examination for the auditor qualification; (vi) supervise CFAR in carrying out its delegation of tasks; (vii) issue its own regulations as necessary; and (viii) cooperate with other competent authorities nationally and internationally as related to the field of audit. The ASPAAS may delegate any of the above tasks to the CFAR.

    CFAR is authorized by Ordinance No. 75 of 1999 to carry out certain responsibilities and has also been delegated the following tasks from the ASPAAS: (i) maintain registries of auditors and firms; (ii) implement IPD and CPD requirements established by law, including the organization of the final examination, verifying practical experience, and organizing CPD; (iii) establish an I&D system for its members; (iv) translate and publish ISA and the IESBA Code of Ethics; and (v) conduct QA reviews for audits of non-public interest entities (PIEs).

    In addition, the National Bank of Romania must approve the appointment of auditors for credit institutions and reserves the right to reject the appointment of an auditor if it considers the auditor to lack expertise, independence, or established the auditor has breached ethical requirements.

    Other professional accountants are subject to the requirements of CECCAR, established by Ordinance No. 65 of 1994 and the Law No 162/2017 on the Statutory Audit of Annual Financial Statements and Annual Consolidated Financial Statements.

    CECCAR is empowered to (i) maintain registries of its members; (ii) set IPD and CPD requirements; and (iii) establish ethical standards and an I&D system for its members.

    The institute is comprised of expert accountants and licensed accountants and membership of the institute is mandatory for public practice. Candidates for CECCAR membership must obtain an economics degree, pass an entry examination, complete a practical training period of one to three years, and pass CECCAR’s final examination.

  • Audit Oversight Arrangements

    The Council for Supervision of Public Statutory Audit Activity (CSPAAS) was established under the Government Emergency Ordinance (GEO) No. 90 of 2008 as the entity responsible for the supervision of public statutory audit in accordance with the principles contained in the European Union Directives and Regulations. Through the GEO No. 23 of 2012, amending GEO No. 90 of 2008, the CSPAAS was reorganized into the Public Interest Oversight Board for the Accountancy Profession (CSIPPC). Through Law No. 162 of 2017, CSIPPC was reorganized into the Statutory Audit Public Oversight Authority (ASPAAS).

    Under the legislation, the ASPAAS’ main tasks are to (i) authorize the registration of statutory auditors and audit firms; (ii) adopt professional standards and ethical requirements, (iii) continuous professional development and training of auditors; (iv) conduct the quality assurance (QA) reviews and investigative and disciplinary (I&D) mechanisms; (v) organize the professional competence examination for the auditor qualification; (vi) supervise CFAR in carrying out its delegation of tasks; (vii) issue its own regulations as necessary; and (viii) cooperate with other competent authorities nationally and internationally as related to the field of audit.

    ASPAAS is not a member of the Independent Forum of Independent Audit Regulators.

  • Professional Accountancy Organizations

    There are two professional accountancy organizations (PAOs) in the Romania. Membership in the PAOs is mandatory to practice the profession.

    The Body of Expert and Licensed Accountants of Romania (CECCAR)

    CECCAR was established on September 21, 1921, and subsequently reestablished in 1992 by Government Ordinance No. 65 of 1994. CECCAR is comprised of expert accountants and licensed accountants. It is mandated by law to (i) maintain registries of its members; (ii) set initial and continuing professional development (IPD and CPD) requirements; and (iii) establish ethical standards and an investigative and disciplinary (I&D) system for its members. Up until 1999, CECCAR was the only PAO in Romania and was responsible for regulating accounting and auditing activities in the jurisdiction.

    The Chamber of Financial Auditors of Romania (CFAR)

    The CFAR was established by Government Ordinance No. 75 of 1999 and is comprised only of auditors. Only CFAR members are authorized to perform statutory audits. CFAR is authorized by Ordinance No. 75 of 1999 to carry out certain responsibilities and has also been delegated the following tasks from the Statutory Audit Public Oversight Authority (ASPAAS—the audit oversight authority): (i) maintain registries of auditors and firms; (ii) implement IPD and CPD requirements established by law, including the organization of the final examination, verifying practical experience, and organizing CPD; (iii) establish an I&D system for its members; (iv) translate and publish ISA and the IESBA Code of Ethics; and (v) conduct QA reviews for audits of non-public interest entities (PIEs).

    Both CFAR and CECCAR are Members of IFAC as well as Accountancy Europe and the Federation Internationale des Experts-Comptables Francophones.

  • Projects or Other Information

Adoption of International Standards

  • Quality Assurance

    Government Emergency Ordinance No. 75 of 1999 and Law No. 162 of 2017 establish the Chamber of Financial Auditors of Romania (CFAR) with the authority to conduct quality assurance (QA) reviews for all mandatory audits, under the supervision of the Statutory Audit Public Oversight Authority (ASPAAS).

    Responsibility for the QA review system is shared between CFAR and ASPAAS. CFAR is responsible for the performance of QA reviews for non-public interest entities (PIEs), while ASPAAS performs the QA reviews for PIEs. Reviews must be conducted every six years for non-PIEs and every three years for PIEs. CFAR’s members and its QA system are also regulated by their internal Department for Monitoring and Professional Competence which collaborates with ASPAAS.

    CFAR reports that its QA system is in line with SMO 1 requirements and the 2015 version of applicable standards have been adopted in Romania and are mandatory for all CFAR members (including ISQC 1 and ISA 220).

    The Body of Expert and Licensed Accountants of Romania (CECCAR) which unites professional accountants in the jurisdiction has also established a mandatory QA review system for its members.

    In 2017, CECCAR conducted a self-assessment of its QA system and reports that its QA system is in line with the revised SMO 1 requirements.

    Current Status: Adopted

  • International Education Standards

    In Romania, the initial professional development (IPD) and continuing professional development (CPD) requirements for expert and licensed accountants are set by the Body of Expert and Licensed Accountants of Romania (CECCAR) Ordinance No. 65 of 1994 while for auditors the requirements are set in Government Emergency Ordinance (GEO) No. 90 of 2008 as amended by Law No. 162 of 2017.

    At the PAO level, CECCAR has stated that it has incorporated the main provisions of IES in the CECCAR internal standards and regulations. CECCAR indicates that it is reviewing its educational regulations to address changes in the 2015 revised IES requirements.

    The Government Ordinance No. 75 of 1999 and components of the Law No. 162 of 2017 empower the Chamber of Financial Auditors of Romania (CFAR) to implement IPD and CPD requirements established by law for its members, which are solely auditors, under the supervision of the Statutory Audit Public Oversight Authority (ASPAAS). The Department for Admission, Continuous Education and Trainees within CFAR incorporates the requirements of the IES into its educational programming and CFAR reports that its IPD and CPD requirements are in line with IES requirements; however it has plans to translate the IES internally in order to address the latest changes in the 2015 revised IES related to the professional competence requirements for auditors.

    Current Status: Partially Adopted

  • International Standards on Auditing

    The Law No. 162 of 2017 on Statutory Audit of Annual Financial Statements and Annual Consolidated Financial Statements which translates the EU Audit Directive, stipulates that all statutory audits are to be carried out in compliance with ISA as issued by the IAASB as translated by the Statutory Audit Public Oversight Authority (ASPAAS).

    The ASPAAS has delegated its translation authority to the Chamber of Financial Auditors of Romania (CFAR).

    CFAR has been translating ISA since 2006 according to IFAC Translation Policy. As of 2017, CFAR reports that 2015 ISA has been translated and is being applied. The institute has also translated the new auditor’s report for application in the jurisdiction.

    Current Status: Adopted

  • Code of Ethics for Professional Accountants

    Under the Law No. 162 of 2017 on Statutory Audit of Annual Financial Statements and Annual Consolidated Financial Statements, the Chamber of Financial Auditors of Romania (CFAR) and the Body of Expert and Licensed Accountants of Romania (CECCAR) are responsible for adopting ethical requirements for their members.

    CFAR is responsible for establishing ethical requirements for auditors under the oversight and delegation of the Statutory Audit Public Oversight Authority (ASPAAS)—the audit oversight authority—and the institute translated and adopted the 2015 IESBA Code of Ethics in December 2016.

    The CECCAR is empowered to set ethical requirements for expert and licensed accountants. In 2011, CECCAR issued the National Code of Ethics for Professional Accountants based on the 2011 IESBA Code of Ethics with limited modifications.

    Current Status: Partially Adopted

  • International Public Sector Accounting Standards

    The Ministry of Public Finances (MFP) is responsible for the adoption of public sector accounting standards in Romania. MFP Order No. 1917/2005, with its subsequent amendments and supplements, requires the application of accrual-basis accounting principles.

    Notably, the regulation includes the adoption of certain accrual-basis IPSAS provisions. According to the Body of Expert and Licensed Accountants of Romania (CECCAR), there are further plans to adopt accrual-basis IPSAS but the timeline is unknown.

    CECCAR has been translating IPSAS into Romanian according to IFAC Translation Policy and disseminating them to relevant government authorities including the Romanian Presidency, the Ministry of Public Finances and the Ministry of European Integration.

    The Chamber of Financial Auditors of Romania reports that it expects the implementation process of IPSAS to be gradual and follow the requirements of the Statistical Office of the European Communities.

    Current Status: Partially Adopted

  • Investigation and Discipline

    The Statutory Audit Public Oversight Authority (ASPAAS) in accordance with Law No. 162 of 2017 and the Government Emergency Ordinance (GEO) No. 23 of 2012 is responsible for establishing an investigative and disciplinary (I&D) system I&D system for statutory auditors and audit firms. ASPAAS is also responsible for the oversight of the I&D system of the Chamber of Financial Auditors of Romania (CFAR).

    In accordance with the GEO No. 75 of 1999 and GEO No. 90 of 2008, CFAR is responsible for adopting I&D procedures for all other types of activities, except for statutory audits, performed by its members. These activities include assurance engagements, the agreed-upon procedures, among others.

    The GEO No. 65 of 1994 authorizes the CECCAR to set I&D requirements for its members who are expert and licensed accountants. For its I&D system, CECCAR has a Superior Disciplinary Commission at a national level and 42 Disciplinary Commissions at a county level which are spread out across its 42 branches nationwide.

    In 2017, both CFAR and CECCAR conducted a self-assessment of its existing I&D systems with the requirements of the revised SMO 6. Both PAOs noted several areas in their I&D systems that require further development including: the investigative processes, the composition of its Disciplinary Committee, certain administrative processes, making results of its cases public, and procedures for liaising with outside bodies. In addition, the extent of alignment of the I&D system for statutory auditors which is implemented by the ASPAAS with regards to SMO 6 best practices needs further clarification.

    Current Status: Partially Adopted

  • International Financial Reporting Standards

    Law 82/1991, also known as the Accounting Law, with its subsequent amendments and supplements, establishes the Ministry of Public Finances (MFP) as the accounting standard-setter in Romania and is responsible for transposing EU regulations that require the application of IFRS as endorsed by the European Commission into national law.

    In addition to the mandatory requirements to apply in consolidated accounts, under MFP Order No. 881/2012 all listed companies are required to apply IFRS as endorsed by the EU in their annual financial statements. The MFP has also permitted companies that do not trade in the regulated market to choose between EU-endorsed IFRS for consolidated financial statements or Romanian Accounting Standards.

    The MFP is also responsible for approving the accounting standards set by the regulators of banks, insurance, and pension companies. Banks are supervised by the National Bank of Romania. Insurance and pension companies are supervised by the Financial Supervisory Authority (ASF) Each regulator requires entities under its supervision to apply EU-endorsed IFRS.

    The Body of Expert and Licensed Accountants of Romania is responsible for the translation of IFRS and IFRS for SMEs into Romanian.

    Current Status: 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: 09/2018
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