Moldova

Accounting and financial reporting in the Republic of Moldova is primarily regulated by Law No. 287 of 2017 — the Law on Accounting and Financial Reporting — 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 5 of the Accounting Law requires public interest entities (PIEs) to apply IFRS. 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 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 Gazette and are posted on the MoF website. Translations are prepared under the direction of the IFRS Foundation and are available in the Russian and Romanian language.

Non-PIEs have an option to apply IFRS or Moldovan National Accounting Standards issued by the MoF in 2013, with amendments in 2015 -2019, 2020 and 2021 that are based on IFRS and EU Directives.

Auditing is regulated by Law No. 271 of 2017 — the Law on the Audit of Financial Statements. Medium-sized, large entities, and PIEs must undergo audits as well as companies preparing consolidated financial statements. ISA as issued by the IAASB and endorsed by the MoF are to be applied in all audits. As of January 2022, the 2020 IAASB handbook of international quality control, auditing, review, other assurance, and related services pronouncements are to be applied. As of December 2022, ISQM 1 and ISQM 2 are also to be applied.

In Moldova, auditors are regulated at the state level in accordance with Law No. 271 of 2017 — the Law on the Audit of Financial Statements. Chief accountants of all entities are also subject to educational requirements outlined in Law No. 287 of 2017 — the Law on Accounting and Financial Reporting — but otherwise, are not subject to other professional standards or enforcement mechanisms. Furthermore, other accountancy professionals are not subject to any state regulation.

Per Law on the Audit of Financial Statements, the Public Audit Supervisory Council (the Council) is responsible for overseeing the initial professional development and continuing professional development (CPD) for auditors that are set in law. The Council consists of 7 non-practitioner members who have knowledge in the economic or legal field and has the following composition: 2 representatives of the Ministry of Finance, a representative of the National Bank of Moldova, a representative of the Court of Accounts, a representative of the National Market Commission Financial, a representative of the business environment and a representative of the academic environment specialized in audit.

The Council conducts the qualification examination through the Auditors’ Certification Commission established within the Council. Individuals seeking to sit for the examination: a) hold a higher education diploma in economy or in law; b) have a service record of at least three years in an economic or legal sphere, including at least two years as an auditor in internship; c) have no criminal record; and d) are fluent in Romanian. The Council maintains a Public Register of Auditors of those individuals who successfully pass the exam and complete CPD training of 40 hours per year. The Council is also responsible for carrying out quality assurance reviews and implementing enforcement procedures for auditors.

Meanwhile, the Ministry of Finance (MoF) is responsible for endorsing applicable accounting, auditing, and ethical standards. The MoF also collaborates with the Council and ultimately approves any decisions issued by the Council.

Auditors and audit firms may voluntarily join Moldovan professional associations and be subject to their self-regulation. The associations may: develop and propose draft acts in 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; ensure auditors’ compliance with the Code of Professional Conduct; monitor the continuing professional training of their members; establish enforcement mechanisms for their members; and submit information on their membership to the Council and MoF to update the 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 (2019), there are three professional accountancy 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). Only ACAP is an IFAC member. As of January 2021, per Decision No. 21 of 2020, the ACAP was delegated authority to perform QA reviews for its members that conduct audits.

As mentioned, accountancy professionals other than auditors are not regulated but may also choose to join professional associations and be subject to their supervision. The ACAP has established educational and ethical requirements for these members. To qualify, individuals must:

• Pass an examination in accounting and other related subjects at the CIPA Examination Center.
• Possess a relevant valid certificate, either the CAP (Certified Accounting Practitioner) or CIPA (Certified International Professional Accountant) issued under the ECCAA (Eurasian Council of Certified Accountants and Auditors) or hold qualifications issued by IFAC Full Members including Association of Certified and Chartered Accountants (ACCA), the International Chartered Accountants in England and Wales (ICAEW), and CPA Canada.
• Complete 120 hours of continuous professional education (CPD) in three years or 40 hours annually.
• Have higher specialized education, with at least three years’ experience in accounting or other activities connected with accounting. If higher specialized education is lacking, then a candidate must have five years' working experience as Chief Accountant or Chief Accountant Deputy.
• Agree in writing to comply with the Code of Professional Conduct.

In Moldova, auditors are regulated at the state level in accordance with Law No. 271 of 2017 — the HYPERLINK "https://www.legis.md/cautare/getResults?doc_id=110387&lang=ro" Law on the Audit of Financial Statements. Per Law on the Audit of Financial Statements, the Public Audit Supervisory Council (the Council) is responsible for the regulation and oversight of auditors. Please see the Regulation section for further details.

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 requirements for quality assurance (QA) reviews of audits are set in Law No. 271 of 2017 — the Law on the Audit of Financial Statements. Per the legislation, the Public Audit Supervisory Council (the Council) is responsible for conducting QA reviews of all audits – with all entities subject to a review at least every 6 years and PIEs at least every 3 years. The Association of Professional Accountants and Auditors (ACAP) states that the Council’s QA review procedures are in line with SMO 1 requirements.

Effective January 2021, per Decision No. 21 of 2020, the ACAP was delegated authority to perform QA reviews for its members that conduct audits. The ACAP’s QA review system is supervised by the Council. The ACAP reports that its procedures meet the SMO 1 requirements.

As of December 2022, ISQM 1 and ISQM 2 are to be applied. 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: Adopted

In the Republic of Moldova, initial professional development and continuing professional development (CPD) requirements are stipulated for auditors in Law No. 271 of 2017 — the Law on the Audit of Financial Statements. The Public Audit Supervisory Council (the Council) is responsible for overseeing the initial professional development and continuing professional development (CPD) for auditors that are set in law.

The Council conducts the qualification examination through the Auditors’ Certification Commission established within the Council. Individuals seeking to sit for the examination: a) hold a higher education diploma in economy or in law; b) have a service record of at least three years in an economic or legal sphere, including at least two years as an auditor in internship; c) have no criminal record; and d) are fluent in Romanian. The Council maintains a Public Register of Auditors of those individuals who successfully pass the exam and complete CPD training of 40 hours per year.

Universities administer the tertiary accounting education, which, according to the CFRR’s report National Education Initiatives – Moldova (2019), needs to be updated to align with the latest IES which adopt an outcome-based approach. The Ministry of Education, Culture and Research and National Agency for Quality Assurance in Education and Research (ANACEC) are responsible for accrediting institutions and curricula in the vocational, higher, and continuing professional education in Moldova. The CFRR report identifies several challenges with accountancy education in the jurisdiction and recommends greater collaboration between the universities, professional associations, employers, the Council, and the Ministries in developing, updating, and carrying out educational programming.

Chief accountants of all entities are also subject to educational requirements outlined in Law No. 287 of 2017 — the Law on Accounting and Financial Reporting. Chief accountants of public interest entities must have a tertiary degree in economics. All other chief accountants should have a tertiary degree or a or a post-secondary technical vocational degree in economics. The law also stipulates that other legislation relating to specific areas of activity may provide for additional requirements for the chief accountant of public-interest entities. As mentioned above, university curricula need to be updated to align with the latest IES.

Other accountancy professionals are not subject to any state regulation but may voluntarily join Moldovan professional associations and be subject to their self-regulation. According to the World Bank (2019), there are three professional accountancy 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). Only ACAP is an IFAC member.

The ACAP has established educational requirements for these members. To qualify, individuals must:

• Pass an examination in accounting and other related subjects at the CIPA Examination Center.
• Possess a relevant valid certificate, either the CAP (Certified Accounting Practitioner) or CIPA (Certified International Professional Accountant) issued under the ECCAA (Eurasian Council of Certified Accountants and Auditors) or hold qualifications issued by IFAC Full Members including Association of Certified and Chartered Accountants (ACCA), the International Chartered Accountants in England and Wales (ICAEW), and CPA Canada.
• Complete 120 hours of continuous professional education (CPD) in three years or 40 hours annually.
• Have higher specialized education, with at least three years’ experience in accounting or other activities connected with accounting. If higher specialized education is lacking, then a candidate must have five years' working experience as Chief Accountant or Chief Accountant Deputy.

The ACAP indicates that the CAP and CIPA are generally based on the IES; however, it is not clear how its training center programs (preparing candidates for the CAP and CIPA) align with the latest IES 1-4; and how the examinations and evaluation of practical experience align with latest IES 5 and 6. The ACAP’s CPD program is approved annually by Public Audit Supervisory Council

Current Status: Partially Adopted

Auditing is regulated by Law No. 271 of 2017 — the Law on the Audit of Financial Statements. Medium-sized, large entities, and PIEs must undergo audits as well as companies preparing consolidated financial statements. ISA as issued by the IAASB and endorsed by the MoF are to be applied in all audits As of January 2022, the 2020 IAASB handbook of international quality control, auditing, review, other assurance, and related services pronouncements are to be applied. As of December 2022, ISQM 1 and ISQM 2 are also adopted.

Current Status: Partially Adopted

Law No. 271 of 2017 — the Law on the Audit of Financial Statements — stipulates that all auditors are to adhere to the IESBA Code of Ethics issued by the IESBA and accepted for application by the Ministry of Finance. As of August 2023, the 2018 International Code of Ethics translated into Romanian, and the 2020 International Code of Ethics in English are accepted by the MoF and are to be applied.

Other accountancy professionals are not subject to any legal ethical requirements. Other accountancy professionals may voluntarily join Moldovan professional associations and be subject to their self-regulation. According to the World Bank (2019), there are three professional accountancy 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). Only ACAP is an IFAC member, and it appears that it does not set ethical requirements for members who are not auditors.

Current Status: Partially Adopted

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. According to the 2020 IFAC/CIPFA Public Sector Financial Accountability Index and the World Bank/CFRR’s 2020 Stocktaking of Public Sector Accounting and Reporting Environment in PULSAR Beneficiary Countries: Moldova the current standards are accrual-basis.

Per the World Bank/CFRR report, the government has started to draft national accounting standards for public sector which follow IPSAS. 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 considering the specific characteristics of the Moldovan Government operations. The Ministry also plans to develop an integrated information accounting system for public entities by 2027.

Current Status: Not Adopted

Law No. 271 of 2017 — the Law on the Audit of Financial Statements — stipulates that the Public Audit Supervisory Council (the Council) is responsible for the investigation and discipline (I&D) for auditors in Moldova. The Association of Professional Accountants and Auditors (ACAP) reports that the I&D system of the Council is not fully aligned with the SMO 6 best practices in the following areas: no separation of committees for performing investigations and making disciplinary decisions and no process for independently reviewing complaints where no follow-up was established.

ACAP operates an I&D system for its members, which includes auditors and other professionals that join on a voluntary basis. ACAP conducted a detailed self-assessment of its procedures against the SMO 6 requirements—available in its SMO Action Plan—and identified gaps in the following areas: only a complaints-based approach is adopted; all individuals on the committees are professional accountants; and it does not publish results of its cases.

There is no information available about the I&D procedures, if established, of 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

Accounting and financial reporting in the Republic of Moldova is primarily regulated by Law No. 287 of 2017 — the Law on Accounting and Financial Reporting — 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 5 of the Accounting Law requires public interest entities (PIEs) to apply IFRS. 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. Per the IFRS Foundation, IFRS are endorsed for application in the Republic of Moldova through 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 Gazette and are posted on the MoF website. Translations are prepared under the direction of the IFRS Foundation and are available in the Russian and Romanian language. The MoF has issued endorsements to date adopting all IFRS Standards through IFRS 13 Fair Value Measurement, IFRS 16 Leases, and IFRS 17 Insurance Contracts and IFRIC Interpretations.

Non-PIEs have an option to apply IFRS or Moldovan National Accounting Standards issued by the MoF in 2013, with amendments in 2015 and 2019, that are based on IFRS and EU Directives.

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.