Association of Professional Accountants and Auditors of the Republic of Moldova
Member | Established: 1996 | Member since 1998
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, Eurasian Council of Certified Accountants and Auditors, and the Fédération Internationale des Experts-Comptables Francophones.
Statements of Membership Obligation (SMO)
The Statements of Membership Obligations form the basis of the IFAC Member Compliance Program. They serve as a framework for credible and high-quality professional accountancy organizations focused on serving the public interest by adopting, or otherwise incorporating, and supporting implementation of international standards and maintaining adequate enforcement mechanisms to ensure the professional behavior of their individual members.
SMO 1: Quality Assurance
ACAP reports to be actively involved in the activities related to quality assurance (QA) reviews of audits in the Republic of Moldova. It has assisted the Auditing Supervision Council (ASC) of the Ministry of Finance, which is responsible for conducting QA reviews, with the establishment of the QA review system and continues to promote international best practices in the area of QA reviews through conferences, seminars, its newsletter, and organizing trainings for the staff of ASC.
Although not required by law, ACAP conducts QA reviews of its members as required by its Statue, internal regulations, and IFAC SMO 1 requirements. ACAP has therefore established a Quality Control and Monitoring Department (DCCM), which since 2014 has conducted reviews of 16 audit firms—41% of the total number (39) of audit firms that are members of the association.
In order to minimize the overlap with the QA reviews conducted by the ASC, ACAP reports that it takes the ASC’s work plan into consideration when developing its plan accordingly. ACAP has been preparing annual plans of inspections since 2015, which are approved by the ACAP Board.
ACAP supports its members with the implementation of ISQC 1, which has been adopted in the jurisdiction, to ensure that the objectives of quality control are understood by the members and appropriate quality control systems are implemented and maintained. To this end, DCCM has developed the Manual on Quality Control for Audit Firms and been organizing seminars, roundtables, and trainings that take into consideration the results not only of the reviews conducted by the DCCM but also those carried out by the ASC.
Furthermore, to support its members who provide services to small and medium-sized enterprises, in 2014 ACAP developed its Guide on Quality Control for Small- and Medium-size Practices (SMP) that is based on IFAC’s SMP Guide as well as the manuals developed by the professional accountancy organizations from Romania.
Finally, ACAP together with the regulators are actively participating in the World Bank Centre for Financial Reporting Reform’s project on Strengthening Auditing and Reporting in the countries of the Eastern Partnership (STAREP) which is being implemented from 2014–2018 and aims to assist client countries in transposing related EU requirements in national legislation.
In 2017, ACAP 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.
Based on the results of the self-assessment conducted in 2017, ACAP should strategically develop plans to incorporate the missing requirements into its QA review system and to work with other stakeholders that are involved in QA reviews to ensure that the resulting system is fully in line with SMO 1 and to ensure a uniform approach to the requirements of QA reviews and qualifications of the reviewers.
SMO 2: International Education Standards
As a professional association, ACAP is involved in developing and proposing programs of continuing professional development (CPD) to the regulator and monitoring the continuing professional training of its members.
Through its training center, ACAP offers CAP/CIPA certification programs, promotes the ACCA DipIFR (Rus) training program, and offers CPD trainings for auditors on IFRS, ISA, ISQC 1, Code of Ethics, and national accounting standards as well as fiscal and legal issues. However, it is not clear whether the latest international pronouncements are incorporated in the training and examination materials and whether the requirements are aligned with those of IES.
ACAP reports to be collaborating with the regulator in raising awareness about the international requirements in the area. In 2009, ACAP conducted a seminar with the Audit Supervisory Council to raise its awareness about the need to bring national requirements in line with IES. Subsequently it organized roundtables and seminars on IES, and maintained dialogue with the Ministry of Finance, Ministry of Education, and Academy of Economic Studies of Moldova and other universities regarding necessary revisions to the Accounting Law and Law on Auditing Activity and the revised IES. ACAP reports that a review of the general framework of professional competencies is ongoing as of the time of the assessment. A discussion paper “Accounting and Audit Education in Moldova: Possible Reform Initiatives” was developed collaboratively by the above-mentioned stakeholders. One of the objective of the draft discussion paper is to promote a learning outcome-based approach in the accounting and auditing education at the both university and professional education levels.
ACAP also collaborates with other professional accountancy organizations in administering its educational programs. In 2010, ACAP signed a Memorandum of Understanding (MoU) with the Chamber of Financial Auditors for the conduct of CPD for auditors, Train of Trainers, and exchange of publications. In 2011, ACAP signed a MoU with the Corpul Expertilor Contabili si Contabililor Autorizati din Romania and the Institute of Professional Accountants of Russia to collaborate on the dissemination of IES and education programs. With ACCA, ACAP has a MoU that envisions organizing joint education events and CPD recognition for members. ACAP is also an active participant of the World Bank Centre for Financial Reporting Reform’s project on Strengthening Auditing and Reporting in the countries of the Eastern Partnership (STAREP) Program, including the Education Community of Practice (Edu CoP) and participating in its events and local workshops.
As far as alignment with IES requirements is concerned, ACAP indicates that it has been working over the past several years w/the universities and ASC to bring national educational requirements in line with the IES, such as practical experience requirements, final assessments, and CPD. It seems to have made progress in executing some of these activities while others are still ongoing. ACAP states that is establishing plans to incorporate the revised IES and address gaps in accountancy education requirements.
ACAP is encouraged to collaborate with all stakeholders, including universities, regulators, and other professional associations, involved in establishing and regulating educational requirements for the profession to bring them in line with IES. As the first step, if not yet already done, it is recommended that ACAP facilitates conducting a review of the national requirements against the revised IES. Based on the results, ACAP should then develop plans to address the identified gaps and update its SMO Action Plan accordingly. ACAP should also ensure that its initial professional development and CPD programming include the latest international pronouncements.
SMO 3: International Standards on Auditing
In Moldova, ISA are required to be applied as issued by the IAASB and published by the Ministry of Finance. ACAP is not directly responsible for the auditing standard-setting and explains that its role in this area involves supporting the Ministry of Finance in the adoption process as well as its members with the standards’ implementation. ACAP reports that it assists the Ministry by making the Russian and Romanian translations of ISA available through collaboration with professional accountancy organizations form Russia and Romania and obtaining the relevant permissions from IFAC. As of 2017, the 2015 ISA as translated in the Russian and Romanian is being applied.
ACAP reports that it disseminates international standards in a timely manner to its members, the Audit Supervision Council, the Ministry of Finance, universities and other stakeholders in Moldova and incorporates ISA into its educational and training materials. However, it is not clear what version of ISA has been incorporated in the training and examination materials.
ACAP indicates that it is active in public debates regarding the transposition of the EU Directives into the Moldovan legislation and participated in drafting the Law on Financial Statements Audit, which is expected to be approved by the Parliament by end of 2017.
ACAP is also involved in the working committees of the program on Strengthening Auditing and Reporting in the countries of the Eastern Partnership (STAREP) of the World Bank’s Center for Financial Reporting Reform.
The association is encouraged, in collaboration with other stakeholders, to consider ways to ensure that the latest version of ISA is being applied in the jurisdiction. ACAP is also encouraged to provide information on what version of ISA has been incorporated into its educational and training materials and whether training courses on more recent ISA have been conducted. In addition, providing examples of the activities undertaken to support ACAP’s members with the implementation of ISA would be beneficial.
SMO 4: Code of Ethics for Professional Accountants
With the Law on Auditing Activities requiring application of the IESBA Code as promulgated by the Ministry of Finance for auditors since 2012, ACAP focuses on obtaining translations of the IESBA Code and on providing support to its members. ACAP reports that it had played a major role in promoting the need for introducing the requirement for application of the IESBA Code in law.
ACAP collaborates with professional accountancy organizations from Russia and Romania to ensure that the latest translation is made available to auditors and obtains relevant permissions from IFAC. As of 2020, the 2018 IESBA Code as translated in Romanian is being applied. ACAP reports that the requirements of this version of the Code have been incorporated into ACAP’s educational and training materials.
ACAP reports that it monitors the changes made to the IESBA Code of Ethics and the IESBA work program so they can be incorporated into ACAP’s framework on a timely basis. However, it is not clear what version of the IESBA Code, if any, is required for application for all ACAP members, which include other accounting professionals besides auditors.
In 2016–2017, ACAP planned to organize workshops and an international conference on Code of Ethics for Accountants: Best Practice of Implementation and Prospects for Moldova in coordination with ACCA, universities, and other stakeholders. The institute also planned to prepare a Manual on Ethics for its members and to raise awareness of ethical issues through its website and organizing seminars on the subject. However, it is not clear whether these plans have progressed as planned and further information has been requested as part of the assessment process.
ACAP is encouraged to provide an update on the planned actions to achieve fulfillment of SMO 4 and specifically on the activities it undertakes to support its members’ understanding of ethical requirements. ACAP is also strongly encouraged to work with other stakeholders in the jurisdiction—such as the Ministry of Finance and other professional associations—to extend the requirements to all categories of professional accountants, at minimum to members of professional associations. The association is also encouraged, in collaboration with other stakeholders, to consider ways to ensure that the latest version of the IESBA Code is being applied in the jurisdiction on an ongoing basis.
SMO 5: International Public Sector Accounting Standards
Adoption of public sector accounting standards in the Republic of Moldova is the responsibility of the Ministry of Finance. ACAP reports that its role in the area of public sector accounting is that of supporting the Ministry in the process of adoption of IPSAS and educating its members and providing them access to IPSAS and other IPSASB pronouncements. Since 2009, ACAP has been delivering continuing professional development (CPD) courses on IPSAS to public sector staff and its members and conducting on-demand training courses on IPSAS delivered by experts from the United Kingdom and the Corpul Expertilor Contabili si Contabililor Autorizati din Romania (CECCAR) of Romania. ACAP also indicates that it is offering CIPFA exams convener services.
The association also reportedly monitors issuance of new and amended IPSASB pronouncements and updates its CPD program accordingly. ACAP also reports that it has initiated dialogues with IFAC and CECCAR to update the approved translation of IPSAS in Romanian and Russian in accordance with IFAC’s translation and reproduction policy. The 2013 version of IPSAS as translated in Romanian has been shared with Ministry.
ACAP is encouraged to update the relevant section of its SMO Action Plan to indicate specific completed and planned activities aimed at progressing fulfillment of SMO 5. In particular, ACAP is encouraged to provide an update on the status of adoption of IPSAS in the jurisdiction.
SMO 6: Investigation and Discipline
The Auditing Supervision Council (ASC) under the Ministry of Finance is responsible for the investigation and discipline (I&D) of auditors under the Law on Auditing Activity of 2007 and appears to have established an I&D system, although it falls short of the requirements of SMO 6, according to ACAP.
In its 2017 SMO Action Plan, ACAP indicates that since 2009, in cooperation with the ASC the association was considering establishing a system in line with SMO 6 and raising awareness about the need for such a system. The new Law on Audit of Financial Statements is expected to address some of the shortcomings and provide for the establishment of an effective system of investigation and discipline of auditors.
In 2010, ACAP approved a disciplinary concept as part of its Charter and planned to develop I&D processes and procedures, such as the composition of ACAP’s I&D Committee, financial resources, committee membership criteria, appoint Committee members, and provide inputs to the ASC. However, limited progress has been made in this regard. The disciplinary function as of the time of writing of this report is partially covered by the Ethics and Discipline Committee established within ACAP, which performs its activity as per the annual plan.
In 2017, ACAP conducted a detailed self-assessment of the I&D systems both at jurisdictional and PAO levels and identified a number of areas where the requirements fall short of those 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.
Based on the results of the self-assessment conducted in 2017, ACAP should strategically develop plans to incorporate the missing requirements into its I&D system and to work with other stakeholders that are involved in I&D to ensure that the resulting system is fully in line with SMO 6 and to ensure a uniform approach to investigation and discipline of professional accountants, not only auditors, in the jurisdiction. Following the adoption of the new law, ACAP is encouraged to continue establishing and operationalizing an I&D system for its members that is in line with the requirements of SMO 6.
SMO 7: International Financial Reporting Standards
ACAP is not directly responsible for setting accounting standards and sees its role as supporting the Ministry of Finance in the process of adoption of the standards as well as its members with the standards’ implementation. IFRS are required to be applied as issued by the IASB and published by the Ministry of Finance. ACAP reports that in 2008 it participated in the IFRS Working Group to determine the scope of application of IFRS, promote convergence of the national standards with their international counterparts, and to develop processes for implementation of IFRS in the Republic of Moldova.
Now that IFRS have been adopted, ACAP reports that it assists the Ministry with disseminating the latest translated IFRS in a timely manner to its members, the Audit Supervision Council, universities, and other stakeholders in Moldova and incorporates IFRS into its educational and training materials. As of December 2017, IFRS as of 2016 have been incorporated into ACAP’s educational and training materials.
ACAP indicates it is engaged in public debates regarding the transposition of the EU Directives into the Moldovan legislation and participated in drafting the revised Accounting Law, which is expected to be approved by the Parliament by end of 2017.
ACAP is also an active participant of the working committees of the program on Strengthening Auditing and Reporting in the countries of the Eastern Partnership (STAREP) of the Center for Financial Reporting Reform of the World Bank and participates in the IFRS Foundation webinars on IFRS issues. The association also reports that it disseminates information on the recent developments in the area through its website and publications.
The association is encouraged, in collaboration with other stakeholders, to consider ways to ensure that the latest version of IFRS is being applied in the jurisdiction. ACAP is also encouraged to provide examples of the activities undertaken to support ACAP’s members with the implementation of IFRS.
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