Financial Crime World

Moldova’s Accounting Standards and Ethics: A Mixed Bag

Moldova is expected to adopt new accounting standards and guidelines as of January 2022. However, its progress in implementing international standards for ethics, public sector accounting, investigation, and discipline varies.

Ethics

According to Law No. 271 of 2017, all auditors in Moldova are required to adhere to the International Ethics Standards Board for Accountants (IESBA) Code of Ethics. As of August 2023, the Ministry of Finance has accepted translated versions of the 2018 and 2020 codes. While other accountancy professionals are not subject to legal ethical requirements, they may voluntarily join professional associations.

Public Sector Accounting

Moldova’s Accounting Law of 2007 requires the application of National Public Sector Accounting Standards (NPSAS), which are developed by the Ministry of Finance. Although NPSAS are accrual-based, the government has started drafting national standards following International Public Sector Accounting Standards (IPSAS).

Investigation and Discipline

The Public Audit Supervisory Council is responsible for investigating and disciplining auditors in Moldova. However, the Association of Professional Accountants and Auditors reports that the investigation and discipline system does not fully align with best practices. ACAP operates an internal I&D system but has identified gaps.

International Financial Reporting Standards

Moldova’s Accounting Law requires public interest entities to apply International Financial Reporting Standards (IFRS). The Ministry of Finance has endorsed all IFRS standards, making them applicable in the country. Non-public interest entities can choose between applying IFRS or Moldovan National Accounting Standards based on IFRS and EU Directives.

Current Status

  • Ethics: Partially Adopted
  • Public Sector Accounting: Not Adopted
  • Investigation and Discipline: Partially Adopted
  • International Financial Reporting Standards: Adopted

As Moldova continues to work towards implementing international standards, it is essential for the country’s authorities to address the remaining gaps in ethics, public sector accounting, and investigation and discipline.