Moldova

Accounting and financial reporting in the Republic of Moldova are primarily regulated by Law No. 287 of 2017 — the Law on Accounting and Financial Reporting. The law establishes accounting and financial reporting requirements for all reporting entities, including legal entities and individuals engaged in business activities, as well as not-for-profit entities, regardless of ownership structure or organizational form. Reporting requirements are differentiated based on entity size, determined by total income, total assets, and number of employees.

Public interest entities are required to prepare financial statements in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board and endorsed for application by the Ministry of Finance. Public interest entities include financial institutions, investment funds, insurance companies, non-state pension funds, listed companies, and other large entities as defined in law. IFRS are endorsed through ministerial orders that specify the applicable standards and are published in the Official Gazette. Authorized translations are made available in Romanian and Russian under arrangements coordinated with the IFRS Foundation.

Entities that do not meet the definition of public interest entities may apply either IFRS or national accounting standards issued by the Ministry of Finance. National accounting standards, first issued in 2013 and subsequently amended, are based on IFRS and relevant European Union directives.

Auditing requirements in Moldova are governed by Law No. 271 of 2017 — the Law on the Audit of Financial Statements. Mandatory audits apply to public interest entities, medium-sized and large entities, and entities that prepare consolidated financial statements. The law requires the application of International Standards on Auditing as issued by the International Auditing and Assurance Standards Board and endorsed by the Ministry of Finance.

The Ministry of Finance is responsible for endorsing accounting, auditing, and ethical standards for application in the jurisdiction. Endorsed standards are incorporated into national requirements through ministerial orders and published for public access. As of January 2022, the 2020 IAASB Handbook of international quality control, auditing, review, other assurance, and related services pronouncements is applicable, and International Standards on Quality Management became effective in December 2022.

In the Republic of Moldova, the accountancy profession is regulated through a mixed model, with statutory auditors subject to state regulation and oversight, while other accountancy professionals may be subject to voluntary self-regulation through professional accountancy organizations.

Regulation of Auditors

Statutory auditors and audit firms are regulated in accordance with Law No. 271 of 2017 — the Law on the Audit of Financial Statements. The Public Audit Supervisory Council is the competent authority responsible for the regulation and oversight of auditors, including initial professional development, continuing professional development, registration, quality assurance, and investigation and disciplinary processes.

The Public Audit Supervisory Council conducts the auditor qualification process through the Auditors’ Certification Commission established within the Council. Individuals seeking certification as auditors are required to hold a higher education degree in economics or law, complete a minimum period of relevant practical experience, pass a qualification examination, and meet additional legal requirements, including language proficiency and good standing. The Council maintains a public register of certified auditors and audit firms.

Continuing professional development requirements for auditors are established in law and require completion of a minimum number of CPD hours annually. Compliance with CPD requirements is monitored by the Public Audit Supervisory Council.

The Ministry of Finance plays a central role in the regulatory framework by endorsing accounting, auditing, and ethical standards for application in Moldova. The Ministry cooperates with the Public Audit Supervisory Council and approves decisions issued by the Council in accordance with the law.

Regulation of Other Accountancy Professionals

Accountancy professionals other than statutory auditors, including accountants and chief accountants, are not subject to comprehensive professional regulation by the state. Educational requirements for chief accountants are stipulated in Law No. 287 of 2017 — the Law on Accounting and Financial Reporting — which establishes minimum qualification requirements based on the type of entity. Beyond these requirements, chief accountants and other accounting professionals are not subject to licensing, mandatory professional membership, or statutory quality assurance or disciplinary systems.

Other accountancy professionals may voluntarily join professional accountancy organizations and be subject to their membership requirements and internal regulatory mechanisms. These organizations may establish educational, ethical, continuing professional development, and disciplinary requirements for their members in accordance with national legislation.

An independent public audit oversight system exists in the Republic of Moldova and is established under Law No. 271 of 2017 — the Law on the Audit of Financial Statements. The Public Audit Supervisory Council is the authority responsible for the public oversight of statutory auditors and audit firms.

The Public Audit Supervisory Council operates independently from the audit profession and is composed of non-practitioner members with experience in economic, legal, and public interest fields. Its membership includes representatives of public institutions and other stakeholders as defined in law.

The Council’s responsibilities include the certification and registration of auditors, oversight of initial professional development and continuing professional development requirements, supervision of the quality assurance review system, and the investigation and discipline of statutory auditors. The Council is also responsible for maintaining the public register of auditors and audit firms.

While certain quality assurance review functions have been delegated to professional accountancy organizations for their members, including the Association of Professional Accountants and Auditors of the Republic of Moldova, these activities are conducted under the supervision of the Public Audit Supervisory Council. The Council retains ultimate responsibility for audit oversight and enforcement in the jurisdiction.

The Public Audit Supervisory Council is not a member of the International Forum of Independent Audit Regulators.

The Association of Professional Accountants and Auditors (ACAP)

ACAP 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 a Member of IFAC, ACAP is member of the 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 (2019), both associations unite accountancy and related professionals, have open membership requirements, and operate quality assurance reviews for their members.

In the Republic of Moldova, the quality assurance (QA) review system for statutory audits is established in law under Law No. 271 of 2017 — the Law on the Audit of Financial Statements. The legislation requires all audit entities to be subject to external quality assurance reviews at least once every six years, with audits of public interest entities reviewed at least once every three years.

The Public Audit Supervisory Council is the competent authority responsible for the regulation and oversight of the QA review system. The system applies to all mandatory audits and incorporates the requirements of SMO 1.

Pursuant to Decision No. 21 of 2020, effective January 2021, the Association of Professional Accountants and Auditors of the Republic of Moldova (ACAP) has been delegated authority to conduct QA reviews for its member audit firms. These reviews are performed under the supervision of the Public Audit Supervisory Council, which retains ultimate responsibility for audit oversight and enforcement.

International Standards on Quality Management, including ISQM 1 and ISQM 2, are effective in the jurisdiction as of December 2022 and form part of the applicable framework for audit quality management.

Based on the existence and operation of a QA review system covering all mandatory audits and incorporating the requirements of SMO 1, quality assurance in Moldova is assessed as adopted.

Current Status: Adopted

Initial professional development and continuing professional development requirements for statutory auditors in the Republic of Moldova are established under Law No. 271 of 2017 — the Law on the Audit of Financial Statements. The Public Audit Supervisory Council is responsible for setting and overseeing the qualification, examination, registration, and continuing professional development requirements for auditors.

To qualify as a statutory auditor, individuals are required to hold a higher education degree in economics or law, complete a prescribed period of relevant practical experience, and pass a qualification examination administered by the Auditors’ Certification Commission. Statutory auditors are also subject to mandatory continuing professional development requirements, which are monitored by the Public Audit Supervisory Council.

University-level accounting education is administered by higher education institutions and accredited by the Ministry of Education and Research and the National Agency for Quality Assurance in Education and Research. Available assessments indicate that university curricula have not yet been fully aligned with the learning-outcomes-based approach reflected in the most recent International Education Standards.

Accountants other than statutory auditors are not subject to state regulation but may voluntarily join professional accountancy organizations. The Association of Professional Accountants and Auditors of the Republic of Moldova (ACAP) has established education, examination, practical experience, and continuing professional development requirements for its members, including the use of the CAP and CIPA qualifications. While these programs are generally based on the International Education Standards framework, the extent of alignment with the current IES requirements, particularly with respect to learning outcomes, assessment, and practical experience, has not been fully demonstrated.

Based on the scope of application of statutory requirements and the absence of demonstrated alignment with the current International Education Standards across the profession, the International Education Standards are assessed as partially adopted in the Republic of Moldova.

Current Status: Partially Adopted

Auditing requirements in the Republic of Moldova are established under Law No. 271 of 2017 — the Law on the Audit of Financial Statements. Mandatory audits apply to public interest entities, medium-sized and large entities, and entities that prepare consolidated financial statements.

The law requires the application of International Standards on Auditing as issued by the International Auditing and Assurance Standards Board and endorsed by the Ministry of Finance. Auditing standards are incorporated into national requirements through ministerial endorsement and publication.

As of January 2022, the 2020 IAASB Handbook of International Quality Control, Auditing, Review, Other Assurance, and Related Services Pronouncements is applicable in the jurisdiction. International Standards on Quality Management, including ISQM 1 and ISQM 2, became effective in December 2022.

As the most current revisions to ISA in effect at the time of this assessment have not yet been adopted for application in all mandatory audits, the International Standards on Auditing are assessed as partially adopted in the Republic of Moldova.

Current Status: Partially Adopted

Ethical requirements for statutory auditors in the Republic of Moldova are established under Law No. 271 of 2017 — the Law on the Audit of Financial Statements. The law requires auditors to comply with the International Code of Ethics for Professional Accountants issued by the International Ethics Standards Board for Accountants, as endorsed by the Ministry of Finance.

The Ministry of Finance is responsible for endorsing the Code for application in the jurisdiction. As of August 2023, the 2018 edition of the International Code of Ethics has been translated into Romanian and made available for application.

As the most recent revisions to the Code in effect at the time of this assessment have not yet been adopted for application across the profession, the International Code of Ethics for Professional Accountants is assessed as partially adopted in the Republic of Moldova.

Current Status: Partially Adopted

Public sector accounting in the Republic of Moldova is governed by national public sector accounting standards established by the government. Accrual-basis International Public Sector Accounting Standards have not been adopted for application by public sector entities, nor have national public sector accounting standards been issued with explicit reference to IPSAS.

Accordingly, the International Public Sector Accounting Standards are assessed as not adopted in the Republic of Moldova.

Current Status: Not Adopted

Statutory auditors in the Republic of Moldova are subject to investigation and disciplinary requirements established under Law No. 271 of 2017 — the Law on the Audit of Financial Statements. The Public Audit Supervisory Council is responsible for investigating misconduct and imposing disciplinary measures on statutory auditors and audit firms.

Professional accountancy organizations may also establish investigation and disciplinary mechanisms for their members in accordance with their internal regulations. The Association of Professional Accountants and Auditors of the Republic of Moldova maintains investigation and disciplinary arrangements applicable to its members, which operate alongside the public oversight framework for statutory auditors.

As investigation and disciplinary arrangements are in place but apply to different segments of the profession through separate mechanisms, and do not constitute a single system covering all professional accountants, the investigation and discipline system in the Republic of Moldova is assessed as partially adopted in line with SMO 6.

Current Status: Partially Adopted

Financial reporting in the Republic of Moldova is governed by Law No. 287 of 2017 — the Law on Accounting and Financial Reporting. Public interest entities are required to prepare financial statements in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board and endorsed by the Ministry of Finance.

The Ministry of Finance endorses IFRS for application in the jurisdiction through ministerial orders identifying the applicable standards, which are published in the Official Gazette. Authorized translations are made available in Romanian and Russian.

Entities that do not meet the definition of public interest entities may apply either IFRS or national accounting standards issued by the Ministry of Finance, which are based on IFRS and European Union directives.

As IFRS are mandatory only for a defined category of entities and are not required for all entities within the jurisdiction, IFRS are assessed as partially adopted in the Republic of Moldova.

Current Status: Adopted

Relevant Organizations

• Association of Professional Accountants and Auditors of the Republic of Moldova (ACAP)
• Ministry of Finance
• Public Audit Supervisory Council

Relevant Legislation

• ACAP Statue, 2018
• Law No. 287 of 2017 — the Law on Accounting and Financial Reporting
• Law No. 271 of 2017 — the Law on the Audit of Financial Statements
• Decision No. 17 from 14-08-2019 — On the approval of the Regulation on external audit quality control
• Moldovan National Accounting Standards

Relevant Publications

• ACAP, SMO Action Plan, 2021.
• IFAC & CIPFA Public Sector Financial Accountability Index, 2020.
• IFRS Foundation, “IFRS Application Around the World, Jurisdictional Profile: Moldova,” June 2016.
• International Monetary Fund, Republic of Moldova: Financial Sector Assessment Program-Detailed Assessment of Observance on the Basel Core Principles for Effective Banking Supervision, IMF Country Report No. 16/71, February 29, 2016.
• Ministry of Finance, “National Public-Sector Accounting Standards (NPSAS)”, n.d.
• “Reforming Public Audit Oversight Framework in Moldova,” part of Accounting and Auditing Standards Community of Practice (A&A CoP) STAREP, n.d.
• Rencheci, D. “International Practices in Audit Supervision”. Ecoforum Journal, North America, 10 Aug. 2021. Date accessed: 11 Nov. 2021.
• World Bank, Report on the Observance of Standards and Codes (ROSC), Accounting and Auditing: Moldova, June 2013.
• World Bank/CFRR, Stocktaking of Public Sector Accounting and Reporting Environment in PULSAR Beneficiary Countries: Moldova, 2020.