Financial Crime World

Here is the article rewritten in markdown format:

Moldova’s Progress on International Accounting Standards

The SMO Action Plan report on Moldova provides an overview of the country’s adoption and implementation of International Standards on Auditing (ISAs), International Public Sector Accounting Standards (IPSAS), and International Financial Reporting Standards (IFRS). Here are the key points:

International Standards on Auditing (ISAs)

Alignment with Best Practices

  • The Association of Professional Accountants and Auditors (ACAP), a member organization of IFAC, operates an Investigation and Discipline (I&D) system for its members.
  • However, ACAP’s I&D system 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
    • No process for independently reviewing complaints where no follow-up was established

Other Professional Associations

  • Two other professional associations, the Association of Auditors and Auditing Firms of Moldova and the Association of Auditors and Management Consultants (EcoFin-Consult), do not have I&D procedures or information available.

International Public Sector Accounting Standards (IPSAS)

Current Implementation Status

  • The Accounting Law of 2007 requires the application of National Public Sector Accounting Standards (NPSAS) developed and approved by the Ministry of Finance.
  • However, NPSAS are accrual-basis, but the government has started to draft national accounting standards for public sector which follow IPSAS.
  • The Ministry plans to develop an integrated information accounting system for public entities by 2027.

International Financial Reporting Standards (IFRS)

Adoption Status

  • Law No. 287 of 2017 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.
  • The Ministry of Finance has endorsed all IFRS Standards through IFRS 13 Fair Value Measurement, IFRS 16 Leases, and IFRS 17 Insurance Contracts and IFRIC Interpretations.

Conclusion

Moldova’s current status is:

  • Partially Adopted for ISAs (due to gaps in the ACAP’s I&D system)
  • Not Adopted for IPSAS (as NPSAS are not fully aligned with IPSAS)
  • Adopted for IFRS (as PIEs are required to apply IFRS)