2003年-世界发展银行全球_Romania___Accounting_and_Auditing_17页_466kb

ROSC Report Summary: Romania - Accounting and Auditing

Core Content

This report evaluates the current state of accounting and auditing practices in Romania, highlighting the transition from national standards to International Accounting Standards (IAS) and International Standards on Auditing (ISA), driven by Romania's aspirations for EU membership. It outlines the legal, institutional, and practical challenges in this transition and offers policy recommendations for improving the financial reporting and auditing environment.

Main Points of the Report

1. Legal and Regulatory Transition

• EU Compliance Goal: Romania aims to fully comply with IAS and ISA by 2005, aligning with EU Fourth and Seventh Directives and EU Regulation on IAS usage.
• Delayed Implementation: Despite legal mandates, the practical application of IAS is delayed due to its complexity, especially in areas like financial instruments, consolidation, and hyperinflation.
• Conflicts with IAS: Certain national regulations (e.g., Order 94 and Order 772/2000) contain provisions that conflict with IAS, such as the capitalization of formation expenses and the treatment of treasury shares as assets.
• Hyperinflationary Context: IAS 29 cannot apply to official financial statements under Order 94, even though Romania is considered hyperinflationary.

2. Financial Reporting Requirements

• Consolidation Thresholds: Lower than EU standards, requiring more companies to prepare consolidated financial statements, increasing the burden on medium-sized enterprises.
• Simplified Reporting for SMEs: SMEs and some larger entities are allowed to prepare financial statements in accordance with the EU Fourth Directive, under Order 306.
• Banks and Insurance Companies:
  • Banks must prepare financial statements under Order 1982/5, which differ significantly from IAS.
  • Insurance companies follow Joint Order 2328, which also deviates from IAS in areas like technical reserves and revenue recognition.
• Public Access to Financial Statements: Despite legal requirements, audited financial statements are not easily accessible, as the Trade Registry restricts access to these documents.

3. Auditing Standards and Practice

• ISA Compliance: Romania's current ISA translation is outdated, based on a 1998 version, and is not updated due to resource constraints.
• Audit Quality Control: The CFAR is implementing quality control reviews, but lacks the technical expertise and resources to effectively enforce ISA.
• Audit Independence: CFAR has strict independence rules, prohibiting auditors from accepting non-audit services from audit clients, which is more stringent than most EU countries. However, this is criticized by local firms.
• Audit Liabilities: Auditors are subject to civil, disciplinary, administrative, and criminal liabilities, but no legal cases have been reported. Professional indemnity insurance is required, but some firms include disclaimer clauses that limit liability.

4. Professional Education and Training

• Education Requirements: Auditors must have higher education in economics, practical experience, and pass CFAR exams. The current curriculum is not aligned with IAS.
• Curriculum Lag: Universities are adapting their programs to new legal requirements, but the transition will take 4–6 years. There is a lack of IAS training material in Romanian.
• Need for Practical Orientation: Both enterprises and audit firms emphasize the need for more practical-oriented curricula and greater involvement of practitioners in education.
• Continuing Professional Education (CPE): CFAR mandates 40 hours of annual CPE, but enforcement mechanisms and oversight of external providers are unclear.

Key Challenges

• Institutional Conflicts: The Ministry of Public Finance (MOF) oversees both accounting and auditing standards, potentially creating a conflict of interest due to its role in tax and statistics.
• Outdated Standards: The Romanian translation of ISA is not updated since 1998, and the CFAR has limited capacity to provide technical support.
• Lack of Enforcement: Regulatory bodies have limited resources to enforce accounting standards, relying heavily on auditors for compliance checks.
• Cultural Shift Needed: There is a need to reduce the influence of tax accounting on general-purpose financial statements and to adopt a more transparent and international reporting culture.

Policy Recommendations

• Review Self-Regulation: The current self-regulation of the audit profession should be reviewed to establish an adequate oversight mechanism.
• Update ISA Translation: The outdated Romanian ISA translation should be updated to ensure proper understanding and application of international standards.
• Enhance Technical Resources: The CFAR should develop a full-time technical director and a volunteer technical committee to support members with audit research and guidance.
• Improve Education and Training: Universities should integrate more IAS content into their curricula and involve practitioners to enhance practical skills.
• Clarify Legal Access: The Trade Registry should ensure public access to audited financial statements to support transparency and investor confidence.
• Strengthen Enforcement Mechanisms: Regulators should be equipped with the necessary resources and expertise to enforce accounting and auditing standards effectively.

Conclusion

Romania is undergoing a significant transition in its financial reporting and auditing systems, aiming to meet EU standards. However, the transition is hindered by outdated regulations, limited enforcement capacity, and a lack of technical resources. Improving education, updating standards, and strengthening oversight are critical to ensuring the quality and reliability of financial reporting in Romania.