Romania : Accounting and Auditing

Financial reporting and auditing requirements in Romania are currently in transition, from compliance with national standards, to compliance with International Accounting Standards (IAS), International Standards on Auditing (ISA), and the European Union (EU) Directives. Romania's legal framework seeks to attain maximum compliance with the EU Fourth and Seventh Directives, and the EU regulation on the use of IAS, as well as to create an environment for gradual implementation of IAS for both the legal entity and the consolidated financial statements by 2005. In practice however, the imposition of complex IAS has been delayed, and currently, compliance is not effectively enforced. Likewise, Romania seeks to attain compliance with the EU Eighth directive and ISA; however, serious practical problems exist due to the current out-dated translation of ISA. This report builds on recent international experience in developed economies, and accession countries, as well as on expected amendments to EU directives, and recommends that the current self-regulation of the audit profession should be reviewed, and an adequate oversight mechanism established.