Article 1. Object of Regulation
The provisions of the present law establish the legal framework regarding the organization of auditing by audit companies, individual auditors-entrepreneurs, and regulate the auditing profession.
Article 2. Basic Definitions
For the purpose of this law the main definitions bellow have the following meaning:
Auditing – business activity consisting of providing professional services, on a contractual basis, of expressing an opinion on the accuracy of financial statements in compliance with this law and related legislation;
Audit – independent review of annual financial statements, consolidated annual financial reports, and other related information of audited entities to the effect of expressing and presenting the auditor’s professional opinion regarding their correspondence under all significant aspects with the requirements established for the above reports;
Auditor – natural person holding an auditor qualification certificate;
Association of auditors – voluntary, independent, self-sufficient, non-profit association established by free manifestation of the will of auditors, audit firms and individual auditors-entrepreneurs associated on the basis of community of professional interest in order to jointly exercise their civil, social and economic rights;
Auditor qualification certificate – a document issued as provided by this law confirming the professional qualification of an auditor;
Public interest entity – an entity with a significant importance to the public due to its area (type) of activity, size or number of employees, clients, such as financial institutions, investment funds, insurance companies, non-state pension funds, commercial companies listed on the stock exchange in the Republic of Moldova, as well as other legal entities which have dominant position on the market exceeding two of the following three criteria for the last two consecutive reporting periods:
-Total revenue – 120 million lei,
-Total balance sheet – 60 million lei,
- Average number of workers on the staff – 500 people;
Audited entity – an entity, including subdivisions thereof, whose annual financial statements, consolidated financial reports, and/or other information is subjected to audit;
Auditor’s report – document with legal effect prepared in line with Article 8;
Audit risk – the risk of the auditor expressing an inadequate audit opinion if the financial statements contain significant distortions;
Audit solicitant – natural person or legal entity requesting an audit ;
Audit firm, individual auditor-entrepreneur – subject of business activity, registered in accordance with civil legislation and specialized legislation in effect, which holds an auditing license;
Intern – natural person employed for internship as established by Article 19, who is not an auditor, but can participate in auditing under the supervision of an auditor;
Auditing standards – international standards on audit approved by the International Auditing and Assurance Standards Board and national standards on audit developed and adopted by the Ministry of Finance.
Article 3. Fundamental Principles of Auditing
Auditing is based on the following principles:
b)honesty and objectivity;
c)professional competence and conscientiousness;
d)confidentiality and professional conduct;
e)observance of professional standards.
Article 4. Types of Audits
(1)The audit can be statutory or requested.
(2)The statutory audit of annual financial reports is carried out for public interest entities.
(3) The requested audit can be carried out upon the request of shareholders (associates), the management of the audited entity, investors, lenders, government bodies and the court of law.
ORGANIZATION OF AUDITING
Article 5. Audit Firm, Individual Auditor-entrepreneur
(1) An audit firm can be established as a limited liability company or a closed joint stock company. The major part of charter/share capital of an audit firm is owned by the auditors and/or resident or non-resident audit firms.
(2)The executive body of the audit firm, individual auditor-entrepreneur shall be managed by an auditor.
(3)An auditor can conduct auditing activity as an employee of the audit firm, individual auditor-entrepreneur with legal entity status or individual auditor-entrepreneur without legal entity status.
(4) The audit firm, individual auditor-entrepreneur are obliged to comply with the principles of organizing and conducting audit in compliance with standards on audit, legal acts and other normative acts regulating these principles..
Article 6. Services provided by the audit firm, individual auditor-entrepreneur
(1) In addition to auditing, the audit firm, individual auditor-entrepreneur can provide the following services:
a)accounting organization, recovery and maintaining;
b)assistance on automation of accounting;
d)fiscal planning, computation of mandatory payments to the budget, preparation of tax statements;
e)analysis of economic and financial activity;
f)information support and services on issues related to financial and fiscal legislation;
g)development and publication of methodical materials, recommendations on accounting, taxation, and auditing;
h)legal assistance related to economic and financial activities;
j)assistance for administration, reorganization and liquidation;
k)advice on management of investments, analysis of investment projects;
(2) In addition to auditing, the same auditor cannot render within the same audited entity during the same reporting period the services mentioned by para. (1) letters a), c), d), i), j) and l).
Article 7. Performing Audit
(1) The highest governing structure of the audited entity is authorized to confirm the audit firm, individual auditor-entrepreneur that will perform the audit and to establish the quantum of payment for audit services.
(2) The relation between the audit firm, individual auditor-entrepreneur and the audited entity or audit applicant is regulated through the audit contract concluded in compliance with civil legislation.
(3) The audit contract is concluded in writing and, in addition to the requirements stipulated by civil legislation, will contain the objective and scope of the audit.
Article 8. Auditor’s Report
(1)The auditor’s report will include the auditor’s opinion, clearly expressed in writing, on the overall accuracy of financial statements of the audited entity. The auditor’s opinion can be unqualified, qualified, adverse or, if the auditor is unable to express an audit opinion, a disclaimer of expressing an opinion.
(2)The auditor’s report will comply to auditing standards applied by the auditor and contain the fundamental elements in the following sequence:
-list of audited financial statements;
-division of responsibilities of the management of the audited entity and auditor;
d)identification of the scope of audit, including:
-reference to the applied standards or auditing practice;
-description of works performed by the auditor;
e)paragraph containing the auditor’s opinion on financial statements;
f)date of preparing the report;
g)the headquarters of the audit firm or the address of the individual auditor-entrepreneur and data from the license;
h)name, last name, data from the auditor qualification certificate, signature of the responsible auditor that provides respective services on behalf of the audit firm or individual auditor-entrepreneur, and the stamp of the audit firm or individual auditor-entrepreneur.
(3)If the restrictions provided for by article 11 par (4) are infringed, the Auditing Supervision Council declares the auditor’s report null, which signifies that another auditor will perform the repeated audit of the entity.
Article 9. Insurance of Auditing Risk
(1) In order to insure the audit risk, audit firms, individual auditors-entrepreneurs are obliged to conclude an insurance contract with an insurance company for professional civil liability insurance, the subject of the insurance being the audit contract, and/or establish provisions, which should not be lower than 15% of the sales revenue of the reporting year.
(2) Established provisions are placed in high liquidity assets, which ensure their accessibility at any moment.
Article 10. Audit Quality Control
(1) Audit firms, individual auditors-entrepreneurs must develop and observe an audit quality control policy and procedures in conformity with the requirements of the Code on Professional Conduct of Auditors and Accountants.
(2) The quality control policy and procedures are approved by a document (order, disposition, etc.) issued by the management of the audit firms, individual auditors-entrepreneurs.
(3) The quality control procedures are carried out in each audit firm and by each individual auditor-entrepreneur.
(4) The quality control procedures applied by audit firms, individual auditors-entrepreneurs are documented according to the criteria established by the Code on Professional Conduct of Auditors and Accountants, standards on audit and include:
b)skills and competence;
c)assignment of staff (division of work to staff having the appropriate professional training);
d)delegation of work (management, supervision, and control of audit quality at all levels);
e)ensuring competent consultancy;
f)client acceptance and maintenance;
g)monitoring of the quality control policy and procedures.
(5) Until April 30 of the year following the reporting year, audit firms, individual auditors-entrepreneurs submit to the Auditing Supervision Council:
a)financial statements and information on observance of audit quality control procedures provided by auditing standards;
b)the report on the transparency of the audit firm, individual auditors-entrepreneurs to be posted on the website, in case of auditing a public interest entity, which should include at least the following elements:
-information on adherence of the audit firm, individual auditors-entrepreneurs to a professional association of audit firms and auditors;
-information of the quality control policy and procedures of audit activities, their efficiency declared by the executive body;
-the date of executing the last check of the quality of audit activity;
-statements on the observance by the audit firm, individual auditors-entrepreneur of the principle of independence;
-information on the continuous professional training of auditors;
-name, last name, data from auditor qualification certificate, signature of the director of audit firm, of the individual auditors-entrepreneur, stamp, series, number and date of issuance of the auditing license.
GUARANTIES FOR AUDITING PROFESSION
Article 11.Auditor’s Independence
(1) In performing his/her profession, the auditor is independent and is guided by this law and other normative acts approved for the execution of this law.
(2) The auditor is free in choosing the method of performing the audit and to coordinate the procedures to be used with audit team members, the management of the audit firm, or the individual auditor-entrepreneur.
(3) The management of the audit firm, owners or shareholders of an audit firm, or affiliated entity do not intervene in the auditing process in any way that limits the independence and objectivity of the auditor.
(4) The auditor’s independence is considered infringed in case of:
a)direct or indirect involvement of the audited entity as founder, owner, person in charge and/or participation in its economic and financial affairs;
b)exercising managerial or other functions in the audited entity, during the audited period, or in the past three years prior to auditing;
c)relatives up to including the IIIrd degree, or with relations of affinity with the owners and members of the management body of the audited entity;
d)acceptance of goods and services as gifts, as well as acceptance of exaggerate cordiality and hospitality from the audited entity;
e)remunerations conditioned by discovered facts or results of services delivered;
f)remunerations received from the audited entity or from a group of associated audited entities, which represent a significant part (over 50%) from the total annual revenues of the audit firm or individual auditor-entrepreneur;
g)auditing by the same auditor for more than 3 years consecutively for the same entity. The auditor that performed audit of an entity for 3 consecutive years can audit the same entity only after 3 years.
(5) The cost of audit services will not depend on events based on conditionalities or contingencies or the fact that auditor, audit firm, individual auditor-entrepreneur provides other services as well to the audited entity.
Article 12. Guarantee of Independence
(1) Interference is forbidden in auditing.
(2) The auditor can be audited regarding the essence of his/her relation to the entity to which he/she provided auditing services during penal, civil and contravention legal procedures.
(3) No public authority is entitled to influence the delivery of audit services, on the report and working documents of the auditor.
Article 13. Confidentiality of audit
(1) The auditor keeps confidential the information on the business of the audited entity learned during delivery of professional services. The obligation to keep confidential this information is valid also after the completion of relations of the auditor and audited entity.
(2) The auditor, auditing firm, individual auditor-entrepreneur ensures confidentiality of information by personnel working under its authority as well as by people providing consulting and assistance.
RIGHTS AND OBLIGATIONS OF AUDITOR, AUDITED ENTITY AND AUDITORS ASSOCIATIONS AND AUDIT FIRMS
Article 14. Auditor’s Rights
The auditor is entitled to:
a)choose the method of auditing within the limits established by professional standards;
b)independently plan the auditing;
c)request written and verbal explanations from the management of the audited entity;
d)use services of experts, specialists, and other individuals whose knowledge is necessary in the course of auditing;
e)refrain from auditing and terminate the auditing contract, if the audited entity:
-failed to present the necessary documents, or presented documents with incomplete or inaccurate data;
-failed to eliminate the obstacles emerged in the process of auditing;
-intervened in auditor’s actions;
f)receive all notifications and communications related to any board, general assembly meetings of the audited entity.
Article 15. Auditor’s Obligations
The auditor is obliged to:
a)perform audit in compliance with the provisions of the legislation in effect;
b)observe the terms of the auditing contract;
c)inform the owner, audit solicitor and/or the person responsible for the management of the audited entity on the significant distortions identified and provide recommendations on actions to be undertaken as a result of the audit of financial statements;
d)refrain from auditing if the principle of independence is violated;
e)keep confidential the information obtained from the audited entity and not disclose it to third parties, except during penal, civil and contravention legal procedures.
f)enhance the qualification level at organizations, institutions providing continuous professional training each year, starting with the year following the one of auditor qualification certificate issuance (but with no less than 40 academic hours);
g)comply with requirements on quality control of auditing activities;
h)submit to the general assembly of the audited entity his report as well as information on distortions identified.
Article 16. Audited Entity’s Rights
The audited entity is entitled to:
a)receive from the audit firm, individual auditor-entrepreneur complete information on the requirements of the legislation in effect regarding auditing and on legislative and normative acts underlying the auditor’s opinion on financial statements;
b)receive from the audit firm, individual auditor-entrepreneur recommendations on removing cases of infringement of normative acts;
c)unilaterally terminate the audit contract with the audit firm, individual auditor-entrepreneur if during audit the auditor infringes the provisions of article 15. In case of contract termination, the audited entity will inform the Auditing Supervision Council on this fact and on the reasons of terminations;
d)address with complaints to the Auditing Supervision Council and other authorized bodies in cases of violation of legislation in effect made by auditors.
Article 17. Audited Entity’s Obligations
The audited entity is obliged to:
a)create conditions for the audit firm representatives, individual auditor-entrepreneur for performing the audit, submit the requested information, written and verbal explanations;
b)not intervene in the actions of the audit firm, individual auditor-entrepreneur to the effect of limiting the aspects subjected to auditing;
c)address, upon the request of the audit firm, individual auditor-entrepreneur, written requests for necessary information on its behalf to third parties;
d)observe the terms and conditions of the auditing contract.
Article 18. Associations of Auditors and Audit Firms, their Rights and Obligations
(1) Auditors and audit firms are entitled to voluntarily associate following the provisions of Civil Code into professional associations as individual or collective members.
(2) The association of auditors and audit firms are founded at their general assembly. The attributions of the general assembly of auditors and audit firms and the attributions of its management body are provided for in the bylaws of the association and approved at the general assembly.
(3) The works of the general assembly of auditors and audit firms and the activity of its management body is based on principles of self-regulation.
(4) The associations of auditors and audit firms are entitled to:
a)represent the professional interests of their members;
b)collaborate with other associations and specialized non-governmental organizations from the country or from abroad;
c)develop and implement own professional rules in conformity with National Standards on Audit, the Code on Professional Conduct of Auditors and Accountants as well as draft on-going professional training programs for auditors.
(5) The associations of auditors and audit firms are obliged to:
a)coordinate the activity of their members;
b)ensure internal supervision of the auditing activity by their members;
c)monitor on-going professional training for their members;
d)mediate, with the agreement of all parties, the disputes between their members and audited entities;
e)submit on a quarterly basis to the Ministry of Finance information on membership in the association of auditors, individual auditors-entrepreneurs, audit firms to keep and update information from the state registry of auditors and state registry of audit firms, individual auditors-entrepreneurs;
PROFESSIONAL QUALIFICATION EXAMINATION
Article 19. Internship in Auditing
An audit intern is an individual meeting the following requirements:
a)higher economic-financial or legal education;
b)satisfies the requirements of the Code of Professional Conduct of Auditors and Accountants in the course of his/her internship;
c)is an employee of the audit firm or individual auditor-entrepreneur throughout the internship period in conformity with the requirements of the Labor Code.
Article 20. General Requirements for the Qualification Examination
(1) The qualification certificate is issued to individuals corresponding to the requirements specified in the present article, who passed the qualification examination. The requirements are:
(2) To get an auditor qualification for general audit, the applicant passes the qualification examination. The examination consists of written tests for the following subjects:
-legal requirements and standards on audit;
-professional conduct and independence;
-principles and general theory of accounting;
-legal requirements for preparing annual reports and consolidated annual reports, and on accounting standards;
-risk management and internal control;
-major principles of financial management of enterprises;
-economics of business, general and financial economics;
-mathematics and statistics;
-labor, social and medical insurance law;
-fiscal, civil, commercial law;
-legislation of trading companies;
-legislation of insolvency and similar procedure;
f) management of information technologies and computerized systems (at a user level).
(3) The qualification examination can be taken by citizens of the Republic of Moldova, foreign citizens, or stateless persons that meet the following requirements:
a)full working capacity, higher education in the economic-financial or legal fields, confirmed by a license diploma issued by the respective higher education institution from Republic of Moldova or other state, provided that this diploma meets the equivalent standards confirmed by the Ministry of Education and Youth of Republic of Moldova;
b)a length of service of at least three years in the economic-financial or legal fields, which can be accumulated during the examination period, of which, at least, two thirds as an auditing intern under the supervision of an auditor;
c)lack of an unsettled criminal record;
(4) For each discipline of the qualification examination a fee in an amount established by the Government is levied. The amounts of fees for examination are transferred to a special account open with the Territorial Chisinau Treasury – state budget.
(5) To obtain the qualification certificate for financial institution auditor, insurance company auditor and auditor of professional participants of the securities market, the applicants pass the tests and receive the qualification certificates only after having passed the examination and having received the auditor qualification certificate for general audit.
Article 21. Organization of the Qualification Examination
(1) The Ministry of Finance organizes the qualification examination and the examination is carried out by the Certification Commission. Observers may include representatives of associations of accountants, auditors, and audit associations.
(2) The applicants who didn’t pass the examination for some disciplines can be accepted for repeated examination for those disciplines not earlier than in 6 months, and for the second time not earlier than one year after the previous attempt, while observing the deadline of three years, which starts on the day when the applicant passed the examination for one of the disciplines.
(3) The results of the qualification examination can be contested with the Auditing Supervision Council within 30 days since the results’ issuance.
(4) General requirements towards the qualification examination, the management of the process of examining and registering applicants, the nominal composition of the Certification Commission and the procedure of selecting its members assessing the results of the examinations, the manner of organization and supervisions, the terms of the qualification exam, the way qualification certificates are issued, suspended and withdrawn, the requirements for on-going professional training are established by the Regulation on Auditor Certification approved by Government.
ISSUANCE AND WITHDRAWAL OF THE QUALIFICATION CERTIFICATE. SUSPENSION, TERMINATION AND RESUMPTION OF AUDITOR’S ACTIVITY
Article 22. Issuace of Auditor Qualification Certificate
(1) The applicant who passed the qualification examination receives an auditor qualification certificate. The validity term of the certificate is unlimited.
(2) The qualification certificate must include:
b)number and series;
c)holder’s name and last name;
d)name of the issuing body;
e)number and date of the decision of the Certification Commission;
f)area of qualification;
g)signature of the chairman and secretary of the Commission;
h)number and date of certificate registration;
j)the seal of the Ministry of Finance.
(3) The form of the auditor qualification certificate is a document of strict evidence.
Article 23. Withdrawal of the Auditor Qualification Certificate
(1) The qualification certificate is withdrawn by the Auditing Supervision Council in the following cases:
a)the qualification certificate was received after submission of false documents or the data from submitted documents have been found to be non-authentic;
b)the certificate holder violated the requirements on on-going professional training stipulated by item f) of Article 15;
c)the certificate holder was sentenced finally and irrevocably for an infraction related to his/her professional activity.
(2) The decision on qualification certificate withdrawal is brought to the holder’s attention within five days from the decision taking by the Auditing Supervision Council. The decision must be executed after 10 days from being communicated.
(3) The holder whose qualification certificate was withdrawn:
a) on the basis of paragraph (1), item a) has the right to take the qualification exam not earlier than five years after the date of adoption of the respective decision;
b) on the basis of items b) and c) of paragraph (1) has the right to take the qualification exam not earlier than six months after removing the infringements made or execution of the sentence.
Article 24. Suspension of Auditor’s Activity
(1) The auditor’s activity is considered suspended automatically if the auditor holds a public function incompatible, according to legislation, with the functions of an auditor.
(2) In cases provided for in paragraph (1) the auditor shall notify the Auditing Supervision Council within 30 days of the emergence of the incompatibility situation.
(3) Any report of the auditor, issued during the suspension period, is considered null.
Article 25. Termination of Auditor’s Activity
(1) The auditor’s activity is terminated in case of:
a)voluntary exclusion from the State Registry of Auditors;
b)withdrawal of auditor qualification certificate on grounds listed in paragraph (1) of Article 23;
c)death of auditor.
Article 26. Resumption of Auditor’s Activity
(1)In case of removal of conditions that led to the suspension of auditor’s activity in line with Article 24, the auditor can resume his/her activity provided the observance of item f) of Article 15.
(2)In case of termination of auditor’s activity:
a.in line with items a) of Article 25, the auditor can resume his/her activity, provided the observance of Article 20;
b.in line with items b) of Article 25, the auditor can resume his/her activity, provided the observance of paragraph (3) of Article 23.
STATE REGULATION OF AUDITING
Article 27. State Bodies Authorized to Regulate Auditing
(1) State regulation of auditing includes normative provisions, certification and licensing
(2) State regulation of auditing is done by the Ministry of Finance, the Auditing Supervision Council and Licensing Chamber.
(3) The scope of competency of the Ministry of Finance includes:
a)development, approval and publication of National Auditing Standards, auditing regulations, Code on Professional Conduct of Auditors, the examination program, and other normative acts regulating auditing;
b)organization of the qualification examination;
c)keeping the State Registry of Auditors and the Registry of audit companies, individual auditors-entrepreneurs, as established, publishing it in “Monitorul Oficial” of the Republic of Moldova and on the webpage of the Ministry of Finance;
d)representation of the interests of Republic of Moldova in international organizations specialized in auditing as established by legislation;
e)collaboration with professional associations of auditors and audit companies while developing draft normative acts on auditing;
f)issuing auditor qualification certificates based on the decision of the Certification Commission, suspension and withdrawal of the auditor certification certificate on the basis of the Auditing Supervision Council decision.
(4) The scope of competency of the Auditing Supervision Council includes the supervision over the observance by auditors and audit companies, individual auditors-entrepreneurs of:
a)provisions of current legislation on auditing;
b)auditing standards and the Regulations on Auditing Practice;
c)The provisions of the Code on Professional Conduct of Auditors and Accountants;
d)procedures on audit quality control.
(5) The National Standards on Audit and the Code on Professional Conduct of Auditors and Accountants are developed and updated in conformity with European Union directives and International Standards on Audit. If the national standards on audit and other normative acts do not stipulate regulations provided in international standards on audit, the entity is encouraged to apply the provisions of the international standards on audit until such provisions are included in the national standards on audit.
Article 28. Licensing of Auditing
(1) The audit firms, including those established with foreign capital, individual auditors-entrepreneurs have the right to practice auditing in Republic of Moldova only if they hold the audit license issued by the competent body of the Republic of Moldova.
(2) In addition to the provisions of Law nr. 451-XV from July 30, 2001 on licesing certain types of activities, in order to obtain the license, the audit firm or individual auditor-entrepreneur must meet the following criteria:
a)the natural persons responsible for auditing in the audit firm, the individual auditors-entrepreneurs must be auditors;
b)the audit firm must meet the provisions of Article 5;
(3) Additionally to the grounds set out by the Law on Licensing of Some Types of Activities, the auditing license can also be withdrawn when the audit firm, the individual auditor-entrepreneur:
a)perform other entrepreneurial activity concurrently with auditing, except for the ones allowed by the present law;
b)violate the requirements of Article 5;
c)commit violations in the course of audit, which is confirmed by the decision of the Auditing Supervision Council;
d)does not comply with requirements stipulated in art. 11 par. (4).
Article 29. State Registry of Auditors
(1) The State Registry of Auditors is kept in the state language, on electronic and hard copies and is updated depending on operated modifications.
(2) The State Registry of Auditors includes the following:
a)current number of entry;
b)name and last name of auditor;
c)serial number, number and date of certificate issuance;
d)data on professional training;
e)data on termination of auditor’s activity;
f)data on suspension of qualification certificate;
g)data on withdrawal of qualification certificate;
h)data from the personal ID bulletin (serial number, number, date and office that issued it);
i)name, address and phone number of the audit firm, individual auditor-entrepreneur where the auditor works;
j)auditor’s membership in an accountants, auditors association.
(3) The extract from the State Registry is published in “Monitorul Oficial” of Republic of Moldova as needed, but not less than 2 times per year, and on the webpage of the Ministry of Finance.
(4) If the information related to in items b), d)-j) of paragraph (2) of the present article change, the auditor must inform and submit to the Ministry of Finance within 30 days, from the date of emergence of modifications, the copies of confirmation documents to update the information in the State Registry.
(5) For the keeping and updating of the State Registry of Auditors, the National Bank of Moldova and the National Securities Commission submit to the Ministry of Finance information stipulated in par (2) letters b), c) and g) every 6 months.
(6) In case of suspension or withdrawal of auditor qualification certificate, termination of auditor’s activity, the auditor is removed from the State Registry of Auditors.
Article 30. State Registry of Audit Firms, Individual Auditors-Entrepreneurs
(1) The State Registry of audit firms, individual auditors-entrepreneurs is kept in the state language, in a computerized manner, and is updated depending on operated modifications.
(2) The State Registry of audit firms, individual auditors-entrepreneurs includes the following:
a)current number of entry;
b)name of audit firm, individual auditor-entrepreneur;
c)address and phone number of audit firm, individual auditor-entrepreneur;
d)data on shareholders (associates) and their shares in the charter/share capital;
e)data on registration of audit firm, individual auditor-entrepreneur;
f)data on termination of the activity performed by the audit firm, individual auditor-entrepreneur;
g)name and last name of auditors working for the audit firm, individual auditor-entrepreneur;
h)serial number and issuance date for the auditing license;
i)data on auditing license reprocessing;
j)information on auditing license suspension;
k)information on auditing license withdrawal;
l)information on membership of the audit firm, individual auditor-entrepreneur in an association of audit firms.
(3) The extract from the State Registry is published in “Monitorul Oficial” of the Republic of Moldova as needed, but not less than 2 times a year and on the webpage of the Ministry of Finance.
(4) In case of termination of activity, the audit firm, individual auditor-entrepreneur is removed from the State Registry of audit firms, individual auditor-entrepreneurs.
(5) To keep and update the information from the State Registry of audit firms, individual auditor-entrepreneurs, each 6 months the State Registration Chamber submits to the Ministry of Finance the information stipulated by letters b)-f) of par. (2) of the present article, and the Licensing Chamber submits the information indicated in letters g)-k) of par. (2).
SUPERVISION AND CONTROL OF AUDITING
Article 31. Auditing Supervision and Control Authorities
(1) The supervision and control of auditing is performed by the Auditing Supervision Council.
(2) The Auditing Supervision Council, which is a legal entity, is an administrative authority established under the Ministry of Finance to regulate and supervise the activity of audit, which operates on the basis of this law and the regulations approved by the Government.
(3) The Auditing Supervision Council has the following attributions:
a) examines draft National Standards on Audit and other normative acts related to auditing developed by the Ministry of Finance;
b) develops recommendations to improve the professional training and retraining system for auditors;
c) monitors the auditor certification process;
d) establishes minimum requirements for the internship training program in auditing;
e) examines the requests on verifying the quality of audit works;
f) submits to the Licensing Chamber proposals on withdrawal or suspension of auditing licenses;
g) reviews issues related to suspension or withdrawal of auditor qualification certificates;
h) supervises and controls the activity of auditors, individual auditors-entrepreneurs and audit companies.
i) monitors the on-going professional training process for auditors as provided in art. 15 letter f);
j) selects and approves specialists for membership in the Control and Verification Service;
k) revise observance of the independence principle by auditors and adopts the respective decisions.
Article 32. Auditing Supervision Council
(1) The Auditing Supervision Council (hereinafter – Council) consists of 7 members: 2 representatives from the Ministry of Finance one representative from the National Bank of Moldova, National Securities Commission, State Inspection for Supervision of Insurance and Non-state Pension Funds, 2 representatives from higher education economic institutions, specialized in accounting and audit, with scientific degrees in economy, appointed by the Ministry of Education and Youth at the request of the Ministry of Finance.
(2) The nominal composition of the Council is approved by Government for a period of two years.
(3) The Auditing Supervision Council submits to the Ministry of Finance annual activity reports. The activity results are posted annually on the webpage of the ministry.
(4) A Control and Verification Commission is established under the Auditing Supervision Council, which will be a permanent working body consisting of at least four specialists with higher education in economic-financial fields, with the status of public official, including the secretary of the Council hired on the basis of a labor contract, in accordance with the provisions of the Labor Code. The Control and Verification Commission will carry out the control of observance by auditors, audit firms and individual auditors-entrepreneurs of legislative acts and other acts regulating auditing and audit quality control procedures.
(5) During exercise of control and verification functions, the specialists of the Control and Verification Service are not entitled to conduct audits as part of the audit firm or as individual auditor-entrepreneur.
(6) The Auditing Supervision Council prepares and submits annually for approval to the Minister of Finance the plan of internal activity and the estimate of expenses. The remuneration expenses related to the activity of Control and Verification Service specialists and Council’s members for the time spent on reviewing normative acts on auditing and participation in Council meetings, and other expenses related to Council’s activity shall be covered from state budget proceeds.
Article 33. Management of the Council
(1) The Auditing Supervision Council is managed by the chairman elected by secret voting from the representatives the Ministry of Finance, one representative from the National Bank of Moldova, National Securities Commission, State Inspection for Supervision of Insurance and Non-state Pension Funds, who are members of the Council.
(2) The chairman of the Council is elected for a period of two years. The same individual can be reelected as chairman of the Council for maximum two consecutive mandates.
(3) The chairman of the Council chairs the sessions of the Council and leads its activities. If the chairman of the Council is absent, his/her functions are carried out by the deputy chairman.
(4) The Deputy-chairman of the Council is elected by open voting, upon the proposal of the chairman, from the members of the Council.
(5) The candidate for the secretary of the Council is proposed by the chairman of the Council from the members of the Control and Verification Service. In addition to exercising control and verification functions, the secretary is responsible for the organization of secretariat works and protocol activity of the Council.
(6) The members of the Council and of the Control and Verification Service are responsible for the working sector assigned by the chairman of the Council and must observe the confidentiality requirements.
Article 34. Organization of the Activity of Council
(1) The sessions of the Council are convened by the chairman of the Council as needed, but not less than once per quarter. Minutes are drawn up at every session, which are signed by the chairman/deputy chairman of the session and secretary.
(2) The sessions of the Council are deliberative, provided the mandatory participation of the chairman and/or deputy chairman and at least 2/3 of its members.
(3) The decisions of the Council are adopted by a simple majority of votes of the members.
(4) The Council decides independently on the manner of conducting the sessions and voting for certain questions, by secret or open vote.
(5) The sessions of the Council, except for the sessions considered confidential, specialists from the economic-financial and legal fields, who are not members of the Council might be invited.
LIABILITY FOR INFRINGING THIS LAW. SETTLEMENT OF LITIGATIONS
Article 35. Auditor’s, Audit Firm, Individual Auditor-Entrepreneur Liability
(1) The auditor is responsible for the formation and expression of the opinion in the audit report in compliance with art. 8.
(2) The auditor, audit firm, individual auditor-entrepreneur holds criminal, administrative and civil liability to the audited entity, solicitor of audit.
(3) The compensation of material damage caused to audited entities requesting the audit is made from the proceeds of insurance payments, provisions established to this purpose, from other sources available to the audit firm, individual auditor-entrepreneur.
Article 36. Liability of Audited Entity
(1) The management of the audited entity is responsible for the preparation and submission of financial statements.
(2) The auditing doesn’t lift the liability off the audited entity for the authentication and completeness of financial statements and other information submitted in order to meet the requirements stipulated by the audit contract.
(3) The manager of the audited entity who avoids statutory auditing is held liable according to Administrative Contraventions Code.
Article 37. Settlement of Litigations
The litigations emerged between the parties that concluded the auditing contract and/or letter of commitment are settled in an amiable or judicial manner.
FINAL AND TRANSITORY PROVISIONS
(1) The audit companies, individual auditor-entrepreneurs that operate on the date of this law coming into effect shall bring their charter in line with the present law within one year.
(2) The audit licenses issued by the Licensing Chamber prior to the date of adoption of the present law shall stay in effect for the whole period of their validity;
(3) The auditor qualification certificates issued by the Ministry of Finance valid on the date of publication of this law, as well as certificates issued after the date of publishing this law shall be replaced until this law comes into effect, but not later than 6 months, with qualification certificates without term of validity;
(3) People who in addition to the auditor qualification certificate for general audit, issued by the Ministry of Finance, hold the auditor qualification certificate for financial institutions, issued by the National Bank of Moldova, and/or auditor qualification certificate for professional participants on the securities market, issued by the National Securities Commission, will receive a corresponding qualification certificate without limitation to term from respective bodies, basing on the provisions of par. (3).
Article 39. The duties of the Government
Within 6 months from the approval of the present law, the Government:
a)shall submit to the Parliament proposals on bringing the legislation in line with this law;
b)shall bring its normative acts in line with this law;
c)shall develop and approve the Regulations of the Auditing Supervision Council under the Ministry of Finance and approve its nominal composition;
d)shall develop and approve the Regulations on auditor certification.
Article 40. Effectiveness. Abrogation.
(1) This law comes into effect on January 1 2008, except articles 38 and 39, which come into effect on the date of publication.
(2) On the date of this law coming into effect, Law nr. 729-XIII from February 15, 1996 on auditing is abrogated.
Chairman of the Parliament Marian Lupu
Chisinau, 16 March 200, Nr. 61 – XVI