Financial auditor by IMI PQ NET Romania

European Union

GOVERNMENT OF ROMANIA Ministry of Labour, Family, Social Protection and Elderly MASOPHRD

European Social Fund SOP HRD 2007-2013

GOVERNMENT OF ROMANIA Ministry of Education Structural Instruments 2007 - 2013

Invest in people! EUROPEAN SOCIAL FUND Sectoral Operational Programme Human Resources Development 2007 - 2013 Priority Axis 3 "Increasing adaptability of workers and enterprises" Key Area of Intervention 3.3 " Development of partnerships and encouraging initiatives for social partners and civil society." Project Title: â&#x20AC;&#x153;Network of Competent Authorities for Professional Qualifications in Romania (IMI PQ NET Romania)" Beneficiary: Ministry of National Education Contract no. POSDRU/93/3.3/S/53132

GUIDE ON COMPETENCE CERTIFICATION AND QUALIFICATION RECOGNITION FOR THE FINANCIAL AUDITOR PROFESSION Author: Dr. Irina Dumitriu July 2013

Project co financed by the European Social Fund Sectoral Operational Programme Human Resources Development 2007 - 2013 Invest in people! http://www.imipqnet.ro

European Union

GOVERNMENT OF ROMANIA Ministry of Labour, Family, Social Protection and Elderly MASOPHRD

European Social Fund SOP HRD 2007-2013

GOVERNMENT OF ROMANIA Ministry of Education Structural Instruments 2007 - 2013

TABLE OF CONTENTS

INTRODUCTION..............……………………………………………...…………………….3 1. REGULATORY SITUATION IN ROMANIA AND OTHER EU MS OF THE FINANCIAL AUDITOR PROFESSION………...…………………………………………....5 2. COMPETENCES CERTIFICATION PROCEDURES APPLIED BY THE CA IN THE ANALYZED COUNTRIES.....................................................................................................18 3. RECOGNITION PROCESSES FOR QUALIFICATIONS ACQUIRED IN OTHER EU MS IN ORDER TO PRACTICE THE FINANCIAL AUDITOR PROFESSION...........................................................................................................................22 4. EXERCISE OF THE FINANCIAL AUDITOR PROFESSION IN THE EU......…...…….32 5. CONCLUSIONS.…………………………………………………………………………..37 BIBLIOGRAPHY…………………………………………………………………………….39 ABBREVIATIONS...………………………………………………………………………...41 USEFUL LINKS……………………………………………………………………………...44

Project co financed by the European Social Fund Sectoral Operational Programme Human Resources Development 2007 - 2013 Invest in people! http://www.imipqnet.ro

European Union

GOVERNMENT OF ROMANIA Ministry of Labour, Family, Social Protection and Elderly MASOPHRD

European Social Fund SOP HRD 2007-2013

GOVERNMENT OF ROMANIA Ministry of Education Structural Instruments 2007 - 2013

INTRODUCTION The Guidelines on competence certification and qualification recognition for the financial auditor profession is one of the results of the “Network of Competent Authorities for Professional Qualifications in Romania (IMI PQ NET Romania) Project” implemented by the Ministry of National Education (MEN) in partnership with the National Qualifications Authority (ANC) and the Institute for Social Policy (IPS), co-financed by the European Social Fund through the Sectoral Operational Programme Human Resources Development 20072013 (SOP HRD) Within the IMI PQ NET Romania project there have been analyzed, together with the competent authorities (CA) members of the project working group, the procedures for validation and certification of competences and qualifications recognition processes for each regulated profession separately and, on that basis, there have been developed standard scheme for validation / certification of competences procedure and for the qualifications recognition process for corresponding regulated professions. The final result of these activities is the paper "Standard guiding terms of reference for the procedures validation and certification of competences and qualifications recognition processes", which can be accessed at………………………………………………………… This paper includes the basic terminology (definitions of terms used also in the guidelines) and standardization schemes for the certification of competences and qualifications recognition processes and therefore it was the basis for the elaboration a number of 30 guidelines for certification and recognition for different regulated professions, guidelines aimed at supporting CA from Romania in their efforts to standardize these procedures and processes by informing them about the practices of counterparts CA from other Member States (MS) of the EU. However, each individual guideline will address individuals which have acquired qualifications in the respective areas of activity in Romania and want to practice the profession in one of the EU MS presented in the guide. The analysis was performed for Romania and another 8 EU MS (Austria, Czech Republic, Denmark, Germany, Italy, United Kingdom, Netherlands and Spain), but the guidelines also includes some general information resulting from researching the database with regulated professions from all MS of the EU, the European Economic Area (EEA) and the Swiss Confederation, developed by the European Commission (EC) Directorate General for Single Internal Market (DG Internal Market) (http://ec.europa.eu/internal_market/qualifications/ regprof/index.cfm?newlang =en). The authors of the guidelines have studied the European legislation and of the respective states regarding the acquiring of qualifications, education and vocational training system, types of documents for competences certification (diplomas, certificates, certificates of competency, professional titles), regulations regarding the recognition of qualifications and the regulated professions under Directive 2005/36/EC on recognition of professional qualifications. In the case of some EU MS analyzed (Denmark, Germany, Italy, UK, Netherlands and Spain); there have been organized study visits with the participation of the representatives of IMI PQ NET Ro Network members established within Project co financed by the European Social Fund Sectoral Operational Programme Human Resources Development 2007 - 2013 Invest in people! http://www.imipqnet.ro

European Union

GOVERNMENT OF ROMANIA Ministry of Labour, Family, Social Protection and Elderly MASOPHRD

European Social Fund SOP HRD 2007-2013

GOVERNMENT OF ROMANIA Ministry of Education Structural Instruments 2007 - 2013

the project, and also MEN and ANC experts. During the visits, meetings were organized with representatives of the national CA but also CA which manages various regulated professions; occasions on which the guidelines authors were able to gather more specific information from the source. In conclusion, the realization of the Guidelines on competence certification and qualification recognition for the financial auditor profession aims to: â&#x20AC;˘ supporting the Chamber of Financial Auditors of Romania (CAFR) standardization efforts of the certification procedure / granting the financial auditor professional title and recognition of the qualifications for this regulated profession which is managed by it, through its information about counterparts CA practices from other MS; â&#x20AC;˘ inform all persons who have acquired the financial auditor qualification in Romania and wish to perform financial audits in one of the EU MS presented in the guide.

Project co financed by the European Social Fund Sectoral Operational Programme Human Resources Development 2007 - 2013 Invest in people! http://www.imipqnet.ro

European Union

GOVERNMENT OF ROMANIA Ministry of Labour, Family, Social Protection and Elderly MASOPHRD

European Social Fund SOP HRD 2007-2013

GOVERNMENT OF ROMANIA Ministry of Education Structural Instruments 2007 - 2013

1. REGULATORY SITUATION IN ROMANIA AND IN THE OTHER EU MS OF THE FINANCIAL AUDITOR PROFESSION The current European regulatory framework on the recognition of professional qualifications acquired in EU MS is composed primarily by the Directive 2005/36/EC of the European Parliament and of the Council of 7 September 2005 on the recognition of professional qualifications but also by a number of sectoral directives in the case of some professions that are not covered or are covered only in some specific situations by the Directive 2005/36/EC (such as, for example, the Directive 2006/43/EC on statutory audits in the case of the financial auditor profession, Directive 2002/92/EC in the case of from insurance intermediaries or directives 1977/249/CEE and 1998/5/CE for lawyers). The Directive 2005/36/EC establishes a system for recognition of professional qualifications in order to improve the EU labor market flexibility, to continue liberalization of the provision of services (Directive 2006/123/EC on the free movement of services), to encourage automatic recognition of qualifications and simplify the administrative procedures. This directive applies to all European citizens who wish to exercise a regulated profession either as self-employed or as an employee in other MS than that in which they obtained their professional qualifications and make distinction between "freedom to provide services "and" freedom of establishment” based on criteria such as duration, frequency, regularity and continuity of service provision. From the point of view of the way in which can be done the recognition of professional qualifications covered by it, the Directive 2005/36/EC covers the following recognition systems: • The automatic recognition system of certified qualifications by professional experience in certain industrial, craft and commercial activities – activities which are listed in Chapter II, for which the items taken into account for the recognition of professional experience are the length and its type (self-employed basis or as an employee) and prior formation (item that may reduce the length of necessary professional experience) proven by a certificate recognized by the Member State or considered valid by a professional body, and the conditions to exercise mentioned in the lists for the various groups sectors and activities listed in Annex IV of the Directive; • The system of automatic recognition of qualifications for the professions of doctor, nurse, dentist, veterinary surgeon, midwife, pharmacist and architect - professions referred to in Chapter III, for which automatic recognition of qualifications is based on the coordination of the minimum training conditions, including minimum duration of studies, evidence of formal qualifications referred to in Annexes V and VI to Directive; • The general system for qualifications recognition - system which applies to professions that are not regulated by specific rules of recognition and to certain situations in which the holder of professional qualification does not meet the conditions set out in other recognition systems ,system based on the principle of mutual recognition, without prejudice application of Project co financed by the European Social Fund Sectoral Operational Programme Human Resources Development 2007 - 2013 Invest in people! http://www.imipqnet.ro

European Union

GOVERNMENT OF ROMANIA Ministry of Labour, Family, Social Protection and Elderly MASOPHRD

European Social Fund SOP HRD 2007-2013

GOVERNMENT OF ROMANIA Ministry of Education Structural Instruments 2007 - 2013

compensatory measures when there are significant differences between the training acquired by the person concerned and the necessary training in the host MS (adaptation period no more than three years or aptitude tests). In terms of the qualifications level subject to the general system of recognition, the Directive 2005/36/EC distinguish five levels of professional qualifications:  an attestation of competence issued by a competent authority in the home Member State, certifying either that the holder has acquired general knowledge corresponding to secondary or high school education, or a training course not forming part of a certificate or diploma, or a specific examination without prior training, or full-time pursuit of the profession for three consecutive years;  certificate attesting to a successful completion of technical or professional or general secondary education supplemented by professional training;  diploma certifying successful completion of training at post-secondary level duration of at least one year or training which prepares the trainee for an comparable level of responsibilities and functions;  diploma certifying that the holder has successfully completed training of postsecondary or university level of at least three and not more than four years' duration;  diploma certifying that the holder has successfully completed training of postsecondary or university level of at least four years' duration. The regulated professions in the field of financial audit fall under the qualifications recognition general system, qualification level certifying successful completion of training at post-secondary education, university education of 3-4 years or at least four years. As in the case of all the other European directives, all the EU MS were obliged to comply with the Directive 2005/36/EC trough its transposition into national legislation. Therefore, the relevant information on the procedure and the rules for the recognition processes valid in each MS are contained in the national legislation through which it was transposed the Directive 2005/36/EC and can be obtained from the National Contact Points (National Contact Points) for qualifications recognition, which all Member States were obliged to establish (they are listed on http://ec.europa.eu/internal_market/qualifications/contact/national_contact_points_en.htm). In the case of the statutory financial audit activity, this is a regulated activity in all EU MS by the Directive 2006/43/EC on statutory audits of annual accounts and consolidated accounts. Moreover, the Directive 2005/36/EC explicitly states1: “This Directive applies, concerning the right of establishment and the provision of services, without prejudice to other specific legal provisions regarding the recognition of professional qualifications, such as those existing in the field of transport, insurance intermediaries and statutory auditors”.

Directive 2005/36/EC on the recognition of professional qualifications p. 7, (42), at http://www.umftgm.ro/fileadmin/consultare_publica/bibliografie/Directiva_2036_2005_20privind_20recunoaste rea_20calificarilor.pdf

Project co financed by the European Social Fund Sectoral Operational Programme Human Resources Development 2007 - 2013 Invest in people! http://www.imipqnet.ro

European Union

GOVERNMENT OF ROMANIA Ministry of Labour, Family, Social Protection and Elderly MASOPHRD

European Social Fund SOP HRD 2007-2013

GOVERNMENT OF ROMANIA Ministry of Education Structural Instruments 2007 - 2013

Within the Directive 2006/43/EC, the provisions relating to the qualifications required for evaluation / examination of professional competence, continuous vocational training (CVT) and systems for investigation and for penalty of non conformity with the qualification requirements and continuous training are the following2:  A natural person may be approved to carry out a statutory audit only after having attained university entrance or equivalent level, then completed a course of theoretical instruction, undergone practical training and passed an examination of professional competence of university final or equivalent examination level, organized or recognized by the Member State concerned(art.6); the Member State may approve a person who does not satisfy these conditions, if he or she can demonstrate either that he or she has been employed, for 15 years, in professional activities which have enabled him or her to acquire sufficient experience in the fields of finance, law and accountancy, and has passed the examination of professional competence or that he or she has, for seven years, engaged in professional activities in those fields and has, in addition, undergone the practical training and passed the examination of professional competence(art.11);  The examination of professional competence guarantees the necessary level of theoretical knowledge of subjects relevant to statutory audit and the ability to apply such knowledge in practice. Part at least of that examination shall be written. (art.7);  In order to ensure the ability to apply theoretical knowledge in practice, a test of which is included in the examination, a trainee shall complete a minimum of three years' practical training in, inter alia, the auditing of annual accounts, consolidated accounts or similar financial statements. At least two thirds of such practical training shall be completed with a statutory auditor or audit firm approved in any Member State. (art. 



10)

Member States ensure that statutory auditors are required to take part in appropriate programs of continuing education in order to maintain their theoretical knowledge, professional skills and values at a sufficiently high level, and that failure to respect the continuing education requirements is subject to appropriate penalties(art.13); Member States ensure that there are effective systems of investigations and penalties to detect, correct and prevent inadequate execution of the statutory audit and, without prejudice to Member States' civil liability regimes, the penalties are effective, proportionate and dissuasive, including the possibility of the withdrawal of approval, and are appropriately disclosed to the public (art.30).

Other European Directives of relevance in the financial audit are the Services Directive 2006/123/EC and Directive 2005/60/EC on measures to combat money laundering. According to the National Classification of Economic Activities (NACE), financial audit services are part of the same group of economic activities as the accounting and the tax consultancy (group 692 - Accounting and auditing activities, tax consultancy) , group which, together with the group 691 - legal activities, form the division 69 - legal and accounting 2

Directive 2006/43/EC of the European Parliament and of the Council of 17 May 2006 on statutory audits of annual accounts and consolidated accounts JO L 157, 9.06.2006, p.87

Project co financed by the European Social Fund Sectoral Operational Programme Human Resources Development 2007 - 2013 Invest in people! http://www.imipqnet.ro

European Union

GOVERNMENT OF ROMANIA Ministry of Labour, Family, Social Protection and Elderly MASOPHRD

European Social Fund SOP HRD 2007-2013

GOVERNMENT OF ROMANIA Ministry of Education Structural Instruments 2007 - 2013

activities. Therefore, in terms of the activities of various regulated professions reserved for services in NACE group 692, in practice there is much interference between the professions of accounting, the financial audit and tax consulting, different from one country to another. There are quite a few countries with distinct professions on the three areas of activity (between those analyzed in this guide, only Romania and the Czech Republic, but in the Czech Republic the accounting professions are not regulated, but only the profession of statutory auditor and tax consultant), in other countries, although they are distinct regulated professions, there is only one AC to which all holders of professional qualifications from accounting, auditing and tax consulting are required to be members (e.g. Austria until 1 January 2013, when the accounting professions regulated were transferred to another AC), in other countries the professions are named with the term "accountant", but they is regulated only for the activity exclusively reserved for statutory auditing, while accounting activities are reserved to the respective professions (e.g. the Netherlands). In addition, all the identified studies and used as an information resource deals the professions in NACE group 692 together as accounting professions. In fact, in terms of knowledge necessary to practice the professions related to NACE group 692, all these professions have a common base (hence FEE - Fédération des Experts-comptables Européens / Federation of European Accountants / Federation of European Accountants - treated in his paper "Structure and Organization of the accountancy profession " both the actual accounting professions and the professions of financial auditor and tax consultant in the countries where the latter is a distinct regulated profession), . For the same reason, in the IMI system - the electronic platform for the exchange of information between EU MS AC, SEE and the Swiss Confederation towards the mutual recognition of professional qualifications, there are several generic categories of regulated professions falling under NACE group 692 - accounting activities and financial audit, tax consultancy, categories of occupations where some of EU MS have chosen to enroll their regulated professions in the financial audit: accountant-lawyer (accountant - lawyer), auditor / accountant (auditor / accountant ), Company auditor (Company auditor), public finance accountant (public finance accountant) accountant / tax advisor (accountant / tax advisor). In Table 1.1 is given only the situation of financial audit regulated professions that have been submitted by the MS to the CE database, extracted by the author from all the generic categories listed above, in which 25 MS of EEA and Swiss Confederation registered 39 professions that was reserved primarily for the financial audit activity:

Project co financed by the European Social Fund Sectoral Operational Programme Human Resources Development 2007 - 2013 Invest in people! http://www.imipqnet.ro

European Union

GOVERNMENT OF ROMANIA Ministry of Labour, Family, Social Protection and Elderly MASOPHRD

European Social Fund SOP HRD 2007-2013

GOVERNMENT OF ROMANIA Ministry of Education Structural Instruments 2007 - 2013

Table 1.1 The regulated professions in the field of financial audit registered by the MS of EU, EEA and Swiss Confederation in the IMI system Name of the profession in the MS / generic category in English / Romanian translation

Financial auditor / Company auditor

ROMANIA

Beeideter Wirtschaftsprüfer/ Certified Public Accountant /contabil certificat şi auditor

AUSTRIA

Reviseur d’entreprise/ bedrijfsrevisor/ Auditor/accountant/ auditor de firmă

BELGIUM

Name of CA

Chamber of Financial Auditors of Romania PS3 - Post-secondary diploma (3(CAFR) 4years) , Article 11 d www.cafr.ro

Kammer der Wirtschaftstreuhänder (KWT)/ PS3 - Post-secondary diploma (3Chamber of Public accountants 4years) , Article 11 d www.kwt.or.at

SPF Economie, P.M.E., Classes moyennes et Energie, Direction générale de la régulation et de l’organisation du marché, Service audit, droit comptable, coopératives/ Federal Public PS3 - Post-secondary diploma (3Service Economy, SMEs, Self-employed and 4years) , Article 11 d Energy – General Directorate for regulation and market organization, audit, accounting law, cooperative unit

Дипломиран експертсчетоводител (одитор)/ Institute of Certified Public Accountants/ Auditor/accountant/ Expert Institute of Certified Public Accountants contabil diplomat (auditor) Одитор по смисъла на Закона за Сметната палата/ accountantlawyer/ Court of Audit/ Court of Audit Auditor în cf. cu Legea Oficiului Naţional de Audit Вътрешен одитор в публичния сектор/ Public finance accountant/ auditor intern în sectorul public Одитор на специфични одитни дейности по фондове и програми на Европейския съюз/ Public finance accountant/ auditor pentru programe finanţate Ministry of Finance/ Ministry of Finance din fonduri UE

BULGARIA

Qualification level

PS3 - Post-secondary diploma (34years) , Article 11 d

Служител в Централно хармонизиращо звено за вътрешен одит/ Public finance accountant/ angajat în Internal Central Harmonization Unit Division

CZECH REPUBLIC

CYPRUS

Auditorské služby / Auditor/accountant/ servicii de audit Λογιστής/ Auditor/accountant/ Contabil (auditor)

Czech Chamber of Auditors/ Czech Chamber PS3 - Post-secondary diploma (3of Auditors www.kacr.cz 4years) , Article 11 d Institute of Certified Public Accountants of Cyprus/ Institute of Certified Public Accountants of Cyprus www.icpac.org.cy

PS3 - Post-secondary diploma (34years) , Article 11 d

Project co financed by the European Social Fund Sectoral Operational Programme Human Resources Development 2007 - 2013 Invest in people! http://www.imipqnet.ro

European Union

DENMARK

SWITZERLAND

FINLAND

GOVERNMENT OF ROMANIA Ministry of Labour, Family, Social Protection and Elderly MASOPHRD

Name of the profession in the MS / generic category in English / Romanian translation Statsautoriseret revisor/ Auditor/accountant/ Contabil public autorizat de stat Registrered revisor/ Auditor/accountant/ Contabil public înregistrat

GREECE

Orkotós logistís/ Auditor/accountant/ contabil public certificat okleveles könyvvizsgáló/ Auditor/accountant/ auditor statutar Chartered and certified accountants and other professional accountants registered as auditors/ Auditor/accountant/ contabili autorizaţi şi certificaţi şi alţi contabili înregistraţi ca auditori

ICELAND

ITALY

Name of CA

Qualification level

Erhvervsstyrelsen/ Danish Commerce and PS3 - Post-secondary diploma (3Companies Agency/ Agenţia Daneză pentru 4years) , Article 11 d Comert şi Firme www.erst.dk

Julkishallinnon ja talouden tilintarkastaja/revisor inom den offentliga förvaltningen och ekonomin/ Public finance accountant/ auditor

Wirtschaftsprüfer/ Auditor/accountant/ contabil public

IRELAND

GOVERNMENT OF ROMANIA Ministry of Education Structural Instruments 2007 - 2013

Réviseur/ Revisor/ Company auditor/ auditor Réviseur de SA (selon critère art. Federal Audit Oversight Authority (FAOA)/ 727b CO)/ Revisoren für AG unspecified (Kriterien gemäss Art. 727b OR) Autoritatea Federală de Supraveghere a / Company auditor/ Auditor de Auditului societăţi pe acţiuni (cf. art. 727b CO)

GERMANY

HUNGARY

European Social Fund SOP HRD 2007-2013

PS3 - Post-secondary diploma (34years) , Article 11 d

PS3 - Post-secondary diploma (3Wirtschaftsprüfer-kammer (WPK)/ Chamber 4years) , Article 11 d of Public Accountants The Institute of Certified Public Accountants of Greece (SOEL)/ Institutul Contabililor PS3 - Post-secondary diploma (3Publici Certificaţi din Grecia 4years) , Article 11 d

Chamber of Hungarian Auditors (MKVK) / Camera Auditorilor Maghiari

PS3 - Post-secondary diploma (34years) , Article 11 d

The Irish Auditing and Accounting Supervisory Authority (IAASA)/Autoritatea Irlandeză de Supraveghere a Auditului şi Contabilităţii info@iaasa.ie

PS3 - Post-secondary diploma (3Chartered accountant/ Institute of Chartered Accountants in Ireland/ 4years) , Article 11 d Accountant/tax advisor/ contabil Institutul Contabililor Autorizaţi în Irlanda autorizat www.icai.ie Certified public accountant/ Public finance accountant/ contabil public certificat

Institute of Certified Public Accountants in Ireland/ Institutul Contabililor Publici Certificaţi în Irlanda www.cpaireland.ie

Löggiltur endurskoðandi/ Tax advisor/accountant/ contabil certificat

Ministry of Finance/ Ministerul Finanţelor

Revisore legale/ Auditor/accountant/ Auditor legal

Ministry of Economy and Finance/Min. Economiei şi Finanţelor

PS3 - Post-secondary diploma (34years) , Article 11 d

Project co financed by the European Social Fund Sectoral Operational Programme Human Resources Development 2007 - 2013 Invest in people! http://www.imipqnet.ro

European Union

GOVERNMENT OF ROMANIA Ministry of Labour, Family, Social Protection and Elderly MASOPHRD

European Social Fund SOP HRD 2007-2013

GOVERNMENT OF ROMANIA Ministry of Education Structural Instruments 2007 - 2013

Name of the profession in the MS / generic category in Name of CA English / Romanian translation Revisore contabile/ Professional Order of Accountants and Auditor/accountant/ auditor Commercial Law Experts/Ordinul contabil Profesional al Contabililor şi Experţilor în Drept Comercial

LATVIA

LUXEMBOURG

Zvērināts revidents/ Auditor/accountant/ auditor certificat

Latvian Association of Certified Auditors (LZRA)/ Asociaţia Letonă a Auditorilor Certificaţi

Reviseur d’entreprise/ Auditor/accountant/ auditor de firmă

Institut des Raviseurs d’Entreprises (IRE)/ Enterprise Auditors Institute Commission de Surveillance du Secteur Financier (CSSF)/ Financial Sector Supervisory Commission Accountancy Board/Consiliul Contabilităţii

Auditor/ Auditor/accountant/ Auditor Chartered accountant/ Auditor/accountant/ contabil autorizat

MALTA

UNITED KINGDOM

Qualification level PS3 - Post-secondary diploma (34years) , Article 11 d

PS3 - Post-secondary diploma (34years) , Article 11 d

PS3 - Post-secondary diploma (34years) , Article 11 d PS3 - Post-secondary diploma (34years) , Article 11 d

Institute of Chartered Accountants in England and Wales (ICAEW)/ Institutul Contabililor Autorizaţi din Anglia şi Tara Galilor Institute of Chartered Accountants of Scotland (ICAS)/ Institutul Contabililor Autorizaţi din Scoţia www.icas.org.uk Institute of Chartered Accountants in Ireland PS3 - Post-secondary diploma (3(ICAI)/ Institutul Contabililor Autorizaţi în 4years) , Article 11 d Irlanda www.icae.ie

Chartered Certified Accountant/ Association of Chartered Certified Auditor/accountant/ contabil Accountants (ACCA)/Asociaţia Contabililor autorizat certificat Autorizaţi Certificaţi www.accaglobal.com Registrert revisor/ Auditor/accountant/ auditor înregistrat

Kredittilsynet/ Financial Supervisory Authority of Norway www.kredittilsynet.no

PS3 - Post-secondary diploma (34years) , Article 11 d

NORWAY

NEDERLANDS

POLAND

Statsautorisert revisor/ Auditor/accountant/ auditor autorizat de stat Accountant – NBA Institute administratieconsulent/ (formal professional bodies Nederlandse Auditor/accountant şi la Orde van Accountants Accountant/tax advisor Administratieconsulenten- NovAA/ The /consultant în contabilitate Netherlands Accounting Consultants Order + (învăţământ superior politechnic Koninklijk Nederlands Instituut van –profesional) Registeraccountants – NIVRA/ Royal Institute of Registered Accountants) Registeraccountant/ Auditor/accountant şi la Accountant/tax advisor Contabil certificat (învăţământ superior universitar – academic) Audytorwewnętrzny / Internal auditor/ auditor intern

Minister Finansów/ Ministry of Finance www.mf.gov.pl

Biegły rewident / Auditor

Krajowa Izba Bieglych Rewidentów/ Auditors chamber

PSM – Post-secondary diploma (over 4 yers) , Article 11 e

PS3 - Post-secondary diploma (34years) , Article 11 d

PSM- Post-secondary diploma (more than 4 years ), Art.11 e

Project co financed by the European Social Fund Sectoral Operational Programme Human Resources Development 2007 - 2013 Invest in people! http://www.imipqnet.ro

European Union

PORTUGAL

GOVERNMENT OF ROMANIA Ministry of Labour, Family, Social Protection and Elderly MASOPHRD

European Social Fund SOP HRD 2007-2013

Name of the profession in the MS / generic category in Name of CA Qualification level English / Romanian translation Revisor oficial de contas/ Ordem dos Revisores Officiais de Contas/ Auditor/accountant/ Auditor The Order of the official auditor of Accounts PS3 - Post-secondary diploma (3oficial de conturi 4years) , Article 11 d www.oroc.pt Državni notranji revizor/ Auditor/accountant/ auditor intern de stat

SLOVENIA

SPAIN

GOVERNMENT OF ROMANIA Ministry of Education Structural Instruments 2007 - 2013

Preizkušeni državni notranji revizor/Accountant/ auditor intern de stat instruit Auditor de cuentas/ Auditor/accountant/ auditor de conturi

Ministrstvo za Finance/ Ministry of Finance www.mf.gov.si PS3 - Post-secondary diploma (34years) , Article 11 d

Instituto de Contabilidad y Auditoria de Cuentas (ICAC)/ Institute of Accounting and PS3 - Post-secondary diploma (3Accounts Auditing 4years) , Article 11 d

Source: done by the author with information from the IMI system, the legislative area of professional qualifications, at http://ec.europa.eu/internal_market/qualifications/regprof/ index.cfm?action=profession&id_profession=2100 (at 30.05.2013) By corroborating the information on the regulation of financial auditor profession from several comparative studies conducted at EU level3 and supplementing them with information from national documents (especially in the case of Romania in order to also update them), we will further present the comparative situation on the 9 MS analyzed, on each defining item separately. Specific national legislation, the protected professional titles and the CA In Romania, the financial auditor profession is regulated by Law no. 278 of 7 November 2008 approving the Government Emergency Ordinance (GEO) no. 90/2008 on statutory audits of annual financial statements and consolidated annual financial statements and Law. 26/2010 amending and supplementing GEO no.75/1999 on the financial audit activity, and CA is the Chamber of Financial Auditors of Romania - CAFR. In Austria, the specific law is Wirtschaftstreuhandberufsgesets - WTBG (Statute of professional practice of the Public Accountants) and is protected professional title Wirtschaftsprüfer (Certified Public Accountant / chartered accountant and auditor). The CA 3

Mainly: FEE - Key Features on Structure and Organisation of the Accountancy Profession across 30 European countries, 26 March 2012, to http://www.fee.be/images/publications/qualification/Intro_Structure_and_ Organisation_of_the_Profession2732012401312.pdf - files for the 9 EU MS on witch I realized the comparative analysis, DG Internal Market and Services - Final Report - Study to Provide year Inventory of Reserves of Activities linked to Professional Qualifications & Requirements in 13 Member States Assessing Their economic impact, January 2012 - Annex H of the final report at http://ec.europa.eu/internal_market/qualifications/docs /news/20120214-annex_en.pdf - files for 7 MS analyzed, Romania and Austria being neither part of the sample countries across which the analysis was conducted within the study.

Project co financed by the European Social Fund Sectoral Operational Programme Human Resources Development 2007 - 2013 Invest in people! http://www.imipqnet.ro

European Union

GOVERNMENT OF ROMANIA Ministry of Labour, Family, Social Protection and Elderly MASOPHRD

European Social Fund SOP HRD 2007-2013

GOVERNMENT OF ROMANIA Ministry of Education Structural Instruments 2007 - 2013

for this profession is Kammer der Wirtschaftstreuhänder - KWT (Chamber of Certified Public Accountants). In the Czech Republic, the audit services are regulated by Law No. 93/2009 on auditors and the protected title is Auditorské služby (audit services), . The CA is the Komora auditorů ČR KACR (Chamber of Auditors of the Czech Republic). In Denmark, the professions in the field of financial audit are regulated by Lg. Audit no. 468/17 June 2008. In the field of financial audit there are two protected titles: Statsautoriseret Revisor (auditor / state certified public accountant), and Registrered Revisor (auditor / registered public accountant). For both professions there is only one CA - Erhvervsstyrelsen (Danish Commerce and Companies Agency / Danish Commerce and Company Agency, DCCA). Germany has the same professional title as the Austria, ie. Wirtschaftsprüfer. The auditor may also perform tax consulting activity, i.e. Wirtschaftsprüfer qualification is usually acquired over qualification Steuerberater (tax consultant). But, unlike in Austria (where KWT is CA for both regulated professions) in Germany the two regulated professions have different CA: Wirtschaftsprüfer-Kammer - WPK for auditors and Steuerberaterkammer for tax consultants. The specific legislation for auditing activity consists of the Gesetz über eine der Wirtschaftsprüfer Berufsordnung - WPO (Law on Public Accountants), from 1961, the most recent amended in December 2010, Handelsgesetzbuch - HGB (Commercial Code), from 1897, the most recent amended in March 2011, Berufssatzung WP / vBP (the Charter of Professions), since 1996, amended in November 2009. In Italy there is the protected professional title Revisore legale dei conti (statutory auditor of accounts) that is reserved solely for the activity of legal / statutory financial audit, but in the case of financial audit for other legal persons than those who are required to have legal / statutory audit, this represents an reserved shared activity with Revisore contabile dei conti (auditor of accounts) and the two professional titles in accounting field - Dottore commercialista (certified public accountant) and Esperto contabile (accountant). In the case of the statutory auditor of accounts, the specific legislation is the D.Lgs 27 gennaio 2010, n. 39 “Attuazione della direttiva 2006/43/CE, relativa alle revisioni legali dei conti annuali e dei conti consolidate (transposition into national law of Directive 2006 / 43/CE) and the CA for statutory auditors is the Ministry of Economy and Finance. In the case of the auditor of accounts, according to registry of the IMI system, CA is the Chartered body of Accountants and Commercial Law Experts (in neither of the comparative studies that constituted the main documentary basis for this guide, revisore contabile dei conti profession is however not included in the analysis). The Netherlands has two professions regulated as regards the activity of auditing reservation: Accountant - administratieconsulent (accounting consultant) and Registeraccountant (registered accountant). The main difference between the two professional titles consist of the initial training route (presented in Chapter 2 of the guide) while the services the holders of these two titles can Project co financed by the European Social Fund Sectoral Operational Programme Human Resources Development 2007 - 2013 Invest in people! http://www.imipqnet.ro

European Union

GOVERNMENT OF ROMANIA Ministry of Labour, Family, Social Protection and Elderly MASOPHRD

European Social Fund SOP HRD 2007-2013

GOVERNMENT OF ROMANIA Ministry of Education Structural Instruments 2007 - 2013

provide are common. The specific legislation consists of Wet toezicht accountantsorganisaties (Law on supervision of accounting firms) and the Civil Code from 2010 (Volume 2, Chapters 9 and 11), and also the specific law for each profession - Wet op de AccountantsAdministratieconsulenten (Accounting Consultants Law) and respectively Wet op de registeraccountants (Registered Accountants Law). Currently the two professions have a single CA - NBA Institute, which resulted from the merger of the former professional bodies Nederlandse Orde van Accountants Administratieconsulenten - NovAA (The Netherlands Accounting Consultants Order) and Koninklijk Nederlands Instituut van Registeraccountants NIVRA (Royal Institute of Registered Accountants). In Spain the financial auditor is the only regulated profession among professions in the NACE group 692. The specific legislation is the Royal Decree 1/2011 which approves the revised text of the Law on the financial audit. Title is the protected Auditor de cuentas (Auditor of Accounts) and the CA is the Instituto de Contabilidad y Auditoria de Cuentas - ICAC (Institute of Accounting and Auditing of Accounts). The United Kingdom is a special case, because in most cases, the access to the market is not restricted by reserving activities to certain regulated qualifications / professions, but protection of consumers is ensured by legally protecting the professional titles, the holders these titles are members of professional associations / institutions which are granting titles and which regulates the activity of their members. "Chartered" status of the Body (legally protected) demonstrates that there is a distinct profession in the respective field of activity, and the body awarding the title / titles has the capacity to establish and maintain high ethical and technical standards among its members. "Chartered" status of the Body also confirms that the organization and its members are recognized as experts in their respective field of activity, which is of public interest. In the field of accounting any person in the UK might call itself accountant and can provide accounting services, but there are six legally protected professional titles (chartered) without their owners to have reserved accounting activities. Only the professions of statutory financial auditor and insolvency practitioner are regulated (meaning that these activities can be carried out only by those who hold a certain professional title). Statutory auditing services can be provided only by the Registered Auditors (registered auditors) or by Chartered Certified Accountants (chartered certified accountants) and Chartered Accountants (chartered accountants) who have obtained additional professional qualifications and only the professional associations authorized have the responsibility for supervision of the use of the respective titles may authorize members to conduct statutory financial audit activity. These are the Association of Chartered Certified Accountants - ACCA (Association of Chartered Certified Accountants), Institute of Chartered Accountants in England and Wales ICAEW (Institute of Chartered Accountants in England and Wales) and the Institute of Chartered Accountants of Scotland - ICAS (Institute of Chartered Accountants of Scotland). The regulation of the activity of financial audit is given by transposition into national law of the Directive 2006/43/EC on statutory financial audit of annual accounts and consolidated accounts, trough the Companies Act 2006 (Companies Act), Section 1212 and Scheme 10. The British government has the responsibility and the power to record, monitor and regulate the statutory auditors, but through the Financial Reporting Council (Financial Reporting Project co financed by the European Social Fund Sectoral Operational Programme Human Resources Development 2007 - 2013 Invest in people! http://www.imipqnet.ro

European Union

GOVERNMENT OF ROMANIA Ministry of Labour, Family, Social Protection and Elderly MASOPHRD

European Social Fund SOP HRD 2007-2013

GOVERNMENT OF ROMANIA Ministry of Education Structural Instruments 2007 - 2013

Council - FRC), these powers of government are delegated to professional bodies listed above. Therefore, as CA for statutory auditors it occurs the Professional Oversight Board POB (Professional Oversight Board), the structure within the FRC who supervises the entire activity of the professional bodies concerned. Reserved activities and included authorizations The common element of the financial audit professions regulated in the 9 MS analyzed is that they are exclusively reserved (other qualifications / professions are not entitled to carry out the activity) or shared (in Denmark, Netherlands, United Kingdom) auditing activity of statutory / legal annual accounts statement and of the consolidated annual financial statements, reservation resulting from the transposition of Directive 2006/43/EC, and are shared reservation (also other professions are entitled to carry out that activity) or also exclusively (Romania) and non-statutory financial audit. An exception is Italy, where the profession / qualification that is exclusively reserved for statutory audit activity is revisore legale dei conti ,and the other professions (revisore contabile dei conti, dottore commercialista, esperto contabile) have only shared reservation for non-statutory financial audit. In Denmark, of the two professions regulated in the financial audit field, the Statsautoriseret revisor is exclusively reserved the audit activity for public listed companies (at the stock exchange), and in Spain only the statutory audit activity is regulated, not the one of non-statutory audit. The other shared reserved activities as well as the authorizations included (by default) varies from one country to another, especially depending on the interference between the accounting, auditing and tax consulting professions: in Austria and Germany, the holder of the title / qualification Wirtschaftspr端fer is entitled to conduct also the activities reserved to the profession of tax consultant (Steuerberater), in other words it requires a qualification above that of Steuerberater, in Germany, Czech Republic, Denmark, Great Britain, Spain, the expert accounting activities are authorized by default, as the accounting services are not regulated; in Denmark, as there is no separate profession of tax consultant, the two professions of financial audit have also, by default, the authorization for the tax consultancy services, in the Netherlands, as the two professional titles are for accountants (but they are regulated only for the financial audit services), it is stated that the two protected titles also include the right to use the title of accountant, in Spain, auditors have included the authorization for activities of asset valuation and increase/decrease of capital in some cases of restructuring or bankruptcy of some firms. In the case of Romania, Law no. 149/2013, published in Official Journal (OJ) no. 257 of 9 May 2013, complement the normative acts regulating the activities of accounting expertise, of assets valuation, of financial audit, tax consultancy and insolvency practitioner, stating clearly that professionals in these fields can carry out an complementary activity only if they are qualified for it and are members of the organizations that coordinate the liberal professions concerned. More precisely, the Law no. 149/2013 stipulates punctually that "the financial auditors may carry out the activities of accounting expertise, valuation, judiciary reorganization and liquidation as well as tax consultancy only after the acquiring, according to the law, the quality of expert accountant, evaluator, insolvency practitioner or tax consultant, as Project co financed by the European Social Fund Sectoral Operational Programme Human Resources Development 2007 - 2013 Invest in people! http://www.imipqnet.ro

European Union

GOVERNMENT OF ROMANIA Ministry of Labour, Family, Social Protection and Elderly MASOPHRD

European Social Fund SOP HRD 2007-2013

GOVERNMENT OF ROMANIA Ministry of Education Structural Instruments 2007 - 2013

appropriate, and enrolling as member of the organizations that coordinate the liberal professions.” 4. It results, on the one hand, that all the financial audit activities are reserved exclusively for the financial auditor profession, but, on the other hand, that the financial auditors do not have shared reserved activities or authorizations included in the accounting expertise, valuation, judiciary reorganization and liquidation or tax consultancy , because each of these activities are exclusively reserved to one of the other liberal financial professions distinctly regulated in Romania. The oath when it is granted the title of financial auditor The oath is compulsory in Austria, Czech Republic, Germany and Romania. In Denmark, Italy, UK, Netherlands and Spain there is no such requirement. The obligation of registration and the establishment of a regulatory body of public interest These two obligations are set out by the Directive 2006/43/EC, therefore in all the MS analyzed they are met as follows: • Austria - KWT is the CA for recording of all financial auditors, supplemented by Arbeitsausschuss für externe Qualitätsprüfungen –AeQ (Executive Committee for the quality external audits) for the statutory auditors; the supervisory body is Qualitätskontrollbehörde OKB (The Austrian Authority for Auditors Supervision ); • Czech Republic - KACR is the CA for recording (which perceives a registration fee of approx. 200 euro), and the supervisory body is The Public Council of Audit Supervision (APOC); • Denmark - the CA for recording is the Danish Commerce and Companies Agency - DCCA (which does not perceives any registration fee) and the supervising body is The Supervisory Authority on Auditing - DSAA (The Supervisory Authority on Auditing); • Germany - the CA for recording is the Wirtschaftsprüfer-Kammer ((which perceives a fee of 230 euro) and the supervisory body is Abschlussprüfe-raufsichtskommission - Apak (Auditors Supervisory Commission); • Italy - the CA for registration of statutory auditors (revisore legale dei conti) is the Ministry of Economy and Finance (which perceives a fee of approx. 25 euro) and the supervisory body for the public audit firms is the Commissione Nazionale per la Societa it's Borsa - Consob (the Investors Protection Supervisory Authority);

The Law no. 149/2013 for approving of the Government Ordinance no. 23/2012 for amending and supplementing the Government Emergency Ordinance no. 90/2008 on statutory audit of annual financial situations and the consolidated financial situations and the Government Ordinance no. 65/1994 on the organization of accounting expertise activity and of the certified accountants and for amending other acts Official Journal, no. 257, of May 9, 2013.

Project co financed by the European Social Fund Sectoral Operational Programme Human Resources Development 2007 - 2013 Invest in people! http://www.imipqnet.ro

European Union

GOVERNMENT OF ROMANIA Ministry of Labour, Family, Social Protection and Elderly MASOPHRD

European Social Fund SOP HRD 2007-2013

GOVERNMENT OF ROMANIA Ministry of Education Structural Instruments 2007 - 2013

• United Kingdom - the CA for recording are the three professional bodies to whom it was delegated this power: ACCA (membership fee is 193 pounds and the fee for the license to practice is 385 pounds), ICAEW (fee membership - 300 pounds , practicing certificate fee 268 pounds), ICAS (membership fee - 396 pounds, practicing certificate fee - 474 pounds); POB is the supervising body (Professional oversight Board); • Netherlands - the CA for recording is the NBA for both regulated professions (which perceives a fee of approx. 250 euro) and the supervisory body is the AFM (Dutch Authority for the Financial Markets); • Romania - the CA for recording is CAFR (the fee for individuals is about. 150 euro) and the supervising body is in the Council for the Public Interest Oversight of the Accountancy Profession - CSIPPC (by transformation CSPAAS - Council for the Public Oversight for Statutory Auditing into oversight Council not only for public financial auditor profession, but also for accounting professions); • Spain - the CA for recording is ICAC (that does not perceives any fee) being an independent structure, but within the Ministry of Economy and Taxation, ICAC also acts as a public interest supervision body.

Project co financed by the European Social Fund Sectoral Operational Programme Human Resources Development 2007 - 2013 Invest in people! http://www.imipqnet.ro

European Union

GOVERNMENT OF ROMANIA Ministry of Labour, Family, Social Protection and Elderly MASOPHRD

European Social Fund SOP HRD 2007-2013

GOVERNMENT OF ROMANIA Ministry of Education Structural Instruments 2007 - 2013

2. COMPETENCES CERTIFICATION PROCEDURES APPLIED BY THE CA IN THE COUNTRIES ANALYZED The provisions related to the necessary qualifications for evaluation / examination of professional competence and continuous vocational training (CVT) of the Directive 2006/43/EC on statutory audits of the annual accounts and consolidated accounts (presented in Chapter 1) provides a relatively high degree of harmonization of the competences certification procedures applied by the CA in all MS, and, with respect to the Directive 2005/36/EC on the recognition of professional qualifications, it can be seen from table 1.1 that the minimum qualification level is post-secondary diploma level 3 - 4 years or, in some cases, more than four years (State Authorized Public Accountant in Denmark and the Internal Financial Auditor in Poland). In this chapter we will present within the synoptic table 2.1, in comparable format, only the situation in the 9 analyzed MS.

Project co financed by the European Social Fund Sectoral Operational Programme Human Resources Development 2007 - 2013 Invest in people! http://www.imipqnet.ro

European Union

GOVERNMENT OF ROMANIA Ministry of Labour, Family, Social Protection and Elderly MASOPHRD

European Social Fund SOP HRD 2007-2013

GOVERNMENT OF ROMANIA Ministry of Education Structural Instruments 2007 - 2013

Table 2.1 The requirements for acquiring the qualification of financial auditor and those regarding CVT in the analyzed MS MS Mandatory training requirements for acquiring qualification

Austria

Czech Denmark Republic University degree or University University equivalent degree degree in + (Bachelor or accountancy 3 years practice in Master) obtained with audit (2 years practice + max. 8 years in audit for Tax min. 3 years before consultants / practice in (master for. Steuerberater) audit Statsautoriseret + (min.35 hrs / Revisor, professional wk.) bachelor for. examination + Registrered professional Revisor) examination + at the 3 years practice Chamber of in audit Auditors + qualifying exam (different on the two professions)

Germany

Italy

University degree (Bachelor or Master) + audit practice (4 years for. the Bachelor, 3 years. for Master) + auditor exam

University degree in economics + 3 years practice in audit + State exam

United Kingdom

Netherlands

University degree (Bachelor ACCA: a) Diploma of Secondary for.Administratieconsulent, Master for Education Registeraccountant) b) university/postuniv. + degree. Part-time postuniv. program c) Certified Accounting Technician qualification (1,5 years for.Administratieconsulent, 1 (CAT) and 2 years for. + Registeraccountant) 14 ACCA qualification + examinations (depending on the route of admission) 3 years of practice + + professional ethical final exam module + 3 years relevant practical experience ICAEW: a) Diploma of Secondary Education b) university/postuniv. degree. c) ICAEW Certificate in Finance, accountancy and business (CFAB) d) AAT qualification + ACA qualification program (Associate Chartered Accountant): 15 training modules, 450 days of practice, early professional development, structured training in ethics

Project co financed by the European Social Fund Sectoral Operational Programme Human Resources Development 2007 - 2013 Invest in people! http://www.imipqnet.ro

Romania

Spain

University degree in Economics + 4 years of experience in the finance - accounting + financial and accounting knowledge test + 3 years practice + Aptitude test for. acquiring the title of financial auditor held to the CAFR with final approval of CSIPPC

University degree + min.3 years practice/ preuniv degree.+ min. 8 years practice + theoretical training + State exam

European Union

GOVERNMENT OF ROMANIA Ministry of Labour, Family, Social Protection and Elderly MASOPHRD

CVT / continuous vocational training.

KWT ensure CVT trough Akademie der Wirtschaftstreuh채nder

Application of the professional standards

KWT is involved by law in the development of professional standards

Quality Assurance

disciplinary measures

Yes, min. 60 hours/year organized by KACR

European Social Fund SOP HRD 2007-2013

GOVERNMENT OF ROMANIA Ministry of Education Structural Instruments 2007 - 2013

ICAS: a) Diploma of Secondary Education b) university/postuniv degree. c) AAT qualification + Practice Agreement with an ICAS authorized employer (usually 3 years) + study and 3 stages of exams (depending on the route of admission) + business ethics course Yes, al the three institutes Yes, NBA organize CVT for Yes, min.40 hours/year, impose CVT to their both professions from which 20 hours members, under CAFR supervision (incl. e-learning)

Yes, min. 120 hours within 3 years reported by the auditor or its employer

Yes, IDW Yes (the professional body) is involved in providing CVT IDW Min. of Econ. FRC is responsible for FSR (Auditors and Finances development of professional body) (Public Auditors and the develops professional standards Institute) Consob in the standards based develops case of audit on the IFAC audit and firms of standards quality public assurance interest standards

KACR develops its own insurance standards and it has adopted all the IAASB standards AeQ and QKB are KACR involved, not the KWT ensure quality under supervision of APOC KWT take disciplinary KACR take If the CVT measures for those of eQ disciplinary missing hours are under 40, they and QKB related to measures must be done quality assurance under supervision of within the time

WPK ensure quality under supervision of APAK -

The three institutes ensure quality under supervision of POB

Min. Econ. The three institutes apply and Finances disciplinary measures to and Consob their members under the in case of supervision of POB audit firms of

NBA develop the professional CAFR has entirely standards adopted the IFAC standards

NBA ensure quality

NBA apply disciplinary measures to their members

Project co financed by the European Social Fund Sectoral Operational Programme Human Resources Development 2007 - 2013 Invest in people! http://www.imipqnet.ro

CAFR ensure quality under supervision of CSIPPC

Yes, ICJCE (Auditors professional body) provides CVT together with its 16 regional branches

ICAC elaborate together with ICJCE the professional standards and is responsible for their adoption

ICAC together with ICJCE ensure quality

ICAC, bat also ICJCE apply CAFR apply disciplinary measures to their members disciplinary measures under the supervision of CSIPPC

European Union

GOVERNMENT OF ROMANIA Ministry of Labour, Family, Social Protection and Elderly MASOPHRD

APOC

European Social Fund SOP HRD 2007-2013

provided by CA; If the CVT missing hours are above 40 or have not been done within the time provided by CA; the CA can withdrawal the Statutory auditor authorization

GOVERNMENT OF ROMANIA Ministry of Education Structural Instruments 2007 - 2013

public interest

Source: FEE – Key Features on Structure and Organization of the Accountancy Profession across 30 European countries, 26 March 2012; DG Internal Market and Services – Final Report – Study to provide an Inventory of Reserves of Activities linked to professional qualifications requirements in 13 Member States & assessing their economic impact, January 2012 – annex H; Chamber of Financial Auditors of Romania – presentation sustained by CAFR for the study visit in Denmark, May 2013

Project co financed by the European Social Fund Sectoral Operational Programme Human Resources Development 2007 - 2013 Invest in people! http://www.imipqnet.ro

European Union

GOVERNMENT OF ROMANIA Ministry of Labour, Family, Social Protection and Elderly MASOPHRD

European Social Fund SOP HRD 2007-2013

GOVERNMENT OF ROMANIA Ministry of Education Structural Instruments 2007 - 2013

3. QUALIFICATIONS RECOGNITION PROCESSES ACQUIRED IN OTHER EU MS IN ORDER TO PRACTICE THE FINANCIAL AUDITOR PROFESSION The statistics in the IMI system, realized based on data on the professionals mobility on the two modalities of performance (through establishment / the exercise with permanent character of their profession in another Member of the EU, EEA and Switzerland, or temporary performance) and for each generic profession category individually, in accordance with the generic categories registered in the database until now, there are not relevant for the financial auditors because, as shown in Chapter 1 of this guide, MS of EU, EEA and Swiss Confederation registered the regulated professions in the financial audit on various generic categories, of which only some cover only the financial auditors, while others reflect not only the mobility of financial auditors, but also the other regulated accounting profession which have been registered in those generic categories. Therefore, the statistics presented below are based on own data processing regarding only the recognition decisions recorded by the MS of the EU, EEA and Swiss Confederation on regulated professions mainly for financial audit. The statement on the establishment / the exercise with permanent character during 1997/98 2012 of the accountancy profession is presented in Table 3.1. Table 3.1 Statistics of decisions on qualifications recognition acquired in other EU MS, EEA and the Swiss Confederation for the profession of financial auditor (1997/8 - 2012) Host Country: regulated professions

The profession for which Qualification Country No. of positive has been adopted the

of Origin

No. of negative

No. of neutral

decisions

Total decisions

recognition decision

Belgium:

Reviseur d’entreprise/

France

20 = 6 + 12 +2 /

bedrijfsrevisor

Luxembourg

United Kingdom

Netherlands

requests from 4 SM 20=6+12+2

Czech Republic :

Auditorské služby

Germany

8 = 7 + 0 + 1/

8=7+0+1

United Kingdom

Slovakia

Czech Republic

requests from 3 SM Cyprus

Λογιστής

478 positive

478

Greece

decisions for

Ireland

requests from 5 SM

United Kingdom

470

Slovakia

Hungary

Germany

Denmark :

Statsautoriseret

12 = 4 + 1 + 7/

revisor/registered revisor Iceland

requests from 3 SM 12=4+1+7

United Kingdom

Project co financed by the European Social Fund Sectoral Operational Programme Human Resources Development 2007 - 2013 Invest in people! http://www.imipqnet.ro

European Union

GOVERNMENT OF ROMANIA Ministry of Labour, Family, Social Protection and Elderly MASOPHRD

and Iceland

European Social Fund SOP HRD 2007-2013

GOVERNMENT OF ROMANIA Ministry of Education Structural Instruments 2007 - 2013

Netherlands

Germany:

Wirtschaftsprüfer

Denmark

63 = 45 + 14 + 4

63=45+14+4

Switzerland

requests from 11 SM

France

and Switzerland

Greece

Ireland

Italy

Luxemburg

United Kingdom

Netherlands

Spain

Sweden

Hungary

United Kingdom

Chartered accountant

France

14 = 11+1+2

Germany

Italy

United Kingdom

Spain

United Kingdom

Greece:

Orkotós logistís

1 positive decision

1 0 0

for request form 1MS Ireland:

Chartered and certified

22 = 19 + 1 + 2

accountants and other

requests from 5 SM professional accountants registered as auditors 5

Certified public accountant 3 0 Italy:

0 France

12=3+3+6 requests 12=3+3+6

Germany

from 5 SM

Luxembourg

United Kingdom

Spain

France

119 = 53 + 19 + 47 Accountant

Germany

requests from 12 MS 37=21+3+13

Ireland

of EU, Iceland and

Italy

Luxemburg

Denmark

United Kingdom:

Revisore contabile

Chartered Certified

Norway Chartered accountant

Project co financed by the European Social Fund Sectoral Operational Programme Human Resources Development 2007 - 2013 Invest in people! http://www.imipqnet.ro

European Union

GOVERNMENT OF ROMANIA Ministry of Labour, Family, Social Protection and Elderly MASOPHRD

82=32+16+34

European Social Fund SOP HRD 2007-2013

France

GOVERNMENT OF ROMANIA Ministry of Education Structural Instruments 2007 - 2013

(neutral decision = under Germany

examination)

Greece

Ireland

Iceland

Italy

Luxembourg

Norway

Netherlands

Portugal

Spain

Sweden

Hungary

Norway:

Statsautorisert revisor

Denmark

17 = 3 + 3 + 11

17=3+3+11

France

Germany

Italy

United Kingdom

Sweden

requests from 6 SM

Netherlands:

Accountant â&#x20AC;&#x201C;

Germany

2=0+2+0

administratieconsulent

United Kingdom

Portugal:

Revisor oficial de contas United Kingdom

4=3+1+0

Poland

Spain

requests from 2 SM 0 2 0

requests from 3 SM

Romania:

Financial Auditor

Bulgaria

158 positive

158 0

Cyprus

decisions (all

Germany

positive general

Italy

system without

United Kingdom

147

compensatory

Poland

measures) requests

Slovakia

France

United Kingdom

791

927

from 7 SM

Spain:

Auditor de cuentas

11 positive decisions 11 0

requests from 2 SM TOTAL:

17 registered within the 21 countries of origin

14 host countries

IMI system

for the qualification

Source: made by the author with the data from the IMI system, the situation of decisions for permanent provision only for the financial auditor profession in all generic categories in which they were registered, on 16.07.2013, at http://ec.europa.eu/internal_market/ Project co financed by the European Social Fund Sectoral Operational Programme Human Resources Development 2007 - 2013 Invest in people! http://www.imipqnet.ro

European Union

GOVERNMENT OF ROMANIA Ministry of Labour, Family, Social Protection and Elderly MASOPHRD

European Social Fund SOP HRD 2007-2013

GOVERNMENT OF ROMANIA Ministry of Education Structural Instruments 2007 - 2013

qualifications/regprof/index.cfm?action=profession&id_profession=2100&tab=countries&qui d=2&mode=asc&maxRows=*#top From this statistical statement we can say the fact that Romania is among the 14 EEA MS who had received requests for recognition of qualifications acquired in other MS, ranking the second in number of decisions adopted, after Cyprus. If we consider, however, that out of the 158 decisions taken, 147 refers to individuals who have acquired the qualification in the UK, it could in fact be about the Romanian citizens who have obtained the ACCA qualification in Romania, that reflects not necessarily the mobility of professionals, but rather the quality of ACCA qualifications and their international recognition. The same situation could be also in the case of Cyprus, with those 470 decisions for recognition of qualifications gained in the UK, out of the total of 478 decisions adopted by the SM. What can be still noted is that both the case of Cyprus as well as of Romania, all 478, respectively the 158 were positive recognition decisions without compensatory measures. Romania, however, does not appear among the countries of origin of the financial auditor qualifications, according to the records made by the CA included in IMI system. The fact that the UK won the first place with 74% of applicants for recognition of their qualification confirms reputation of British qualifications among the CA of EEA MS. Graphically, the statistics on mobility based on establishing regime / permanent performance of the financial audit professions is as follows:

Chart 3.1. - Structure of financial auditor qualifications recognition based on types of decisions

9% 6%

Dec iz iidecisions poz itive Positive Dec iz ii decisions negative Negative Dec iz iidecisions neutre Neutral

85%

Project co financed by the European Social Fund Sectoral Operational Programme Human Resources Development 2007 - 2013 Invest in people! http://www.imipqnet.ro

European Union

GOVERNMENT OF ROMANIA Ministry of Labour, Family, Social Protection and Elderly MASOPHRD

European Social Fund SOP HRD 2007-2013

GOVERNMENT OF ROMANIA Ministry of Education Structural Instruments 2007 - 2013

Chart 3.2. - Structure per host countries of the financial auditor qualifications recognition decisions

2%2%

C ipru Cyprus R omania Romania MareaKingdom B ritanie United

13%

G ermania Germany 52%

Irlanda Ireland B elgia Belgium R esother tul de 8 tari The 8 countries

17%

Chart 3.3. - Structure per countries of origin of the financial auditor qualifications recognition requests

United Kingdom Marea B ritanie

Italy Italia

France F ranta Ireland Irlanda Germany G ermania The 16 16 countries R esother tul de tari 74%

Source: all three charts are based on the data processed by the author from the EC database with the regulated professions listed in Table 3.1 Among the most mobile professions by permanent provision regime (establishment), during 1997/8 - 2012 the existing generic categories in the IMI system which include also the financial auditor profession were placed on the following positions: â&#x20AC;˘ heading 46 - auditor / accountant, with 815 decisions; Project co financed by the European Social Fund 26 Sectoral Operational Programme Human Resources Development 2007 - 2013 Invest in people! http://www.imipqnet.ro

European Union

GOVERNMENT OF ROMANIA Ministry of Labour, Family, Social Protection and Elderly MASOPHRD

European Social Fund SOP HRD 2007-2013

GOVERNMENT OF ROMANIA Ministry of Education Structural Instruments 2007 - 2013

• heading 74 - accountant / tax advisor with 416 decisions; • heading 121 - company auditor, with 158 decisions (all adopted by Romania); • heading 355 - public finance accountant, with 3 decisions (all taken by Ireland on financial audit). Out of the 448 generic categories listed (for which there have been recognition requests in this period), with those 927 decisions, the financial auditor profession would have been in rank 45, which proves that compared with other accounting professions and tax consultancy included in the generic categories which also include financial auditor profession, the latter were the most mobile. The temporary provision of statutory audit services is considered impossible (because the auditor or the audit firm must be registered within the MS where it provides statutory audit services). Non-statutory audit activity can be done however also temporary, case in which, if the activity is regulated, the CA of the host MS may request cross-border provision notification, but it is not mandatory, it is up to the CA of the respective country. Among the MS analyzed, in the Czech Republic, KACR require written notification prior to providing services, which must include the following information: • name, surname; • correspondence address in the Czech Republic; • copies of formal qualifications which enable of the financial audit provision of services; • the audit services to be provided; • the place of supply and the estimated duration of service provision. The process of qualification recognition is available but only in the case of establishment / permanent provision. As already stated in the Chapter 1 of this guide, the financial auditor profession fall under the general system of qualifications recognition referred to in Directive 2005/36/EC on recognition of professional qualifications. In this case, the recognition is not automatic, but requires a comparison between the training provided in the two states – the one in which the applicant has acquired the qualification (country of origin) and the one in which it wants to permanent practice its profession (host country), and also the possibility, in the case of "substantial differences", of the application of compensatory measures (aptitude test or adaptation period - Article 23 of the Directive). Moreover, in respect of the recognition of qualifications acquired in other MS, also the Directive 2006/43/EC on statutory audits of annual accounts and consolidated accounts provides that the CA of MS must establish procedures for the approval of statutory auditors who have been authorized in another MS and that these procedures should not exceed the requirement to pass an aptitude test according to the provisions of Directive on recognition of professional qualifications test which is held in one of the languages permitted by the language rules applicable in the Member State.5

Directive 2006/43/EC of the European Parliament and of the Council of 17 May 2006 on statutory audits of annual accounts and consolidated accounts JO L 157, 9.06.2006, p.87 – art. 14

Project co financed by the European Social Fund Sectoral Operational Programme Human Resources Development 2007 - 2013 Invest in people! http://www.imipqnet.ro

European Union

GOVERNMENT OF ROMANIA Ministry of Labour, Family, Social Protection and Elderly MASOPHRD

European Social Fund SOP HRD 2007-2013

GOVERNMENT OF ROMANIA Ministry of Education Structural Instruments 2007 - 2013

For the general system of recognition, the application for recognition is submitted to the CA of the host MS. This application must be accompanied by a series of documents and certificates listed in Annex VII to Directive 2005/36/EC. The documents that can be requested when submitting an application for recognition are: • proof of nationality; • evidence of establishment in another MS of the EU, EEA or Swiss Confederation; • documents regarding professional qualification, competences and practical experience: certificate of competence or evidence of formal qualification issued by the CA of the origin MS; • other documents, if they are required also to financial auditors from the host MS - evidence of reputation, solvency, proof that the applicant is medically fit, financial status, professional insurance. The CA from the host MS may request, only for the most important documents, copies and translations authenticated by a notary, but not for standardized documents (e.g. passport, identity card). Also, there can not be required original documents, only copies. In the case when the applicant can not provide all the requested information, CA of the host country should try to obtain them from the CA of the origin MS trough the IMI system. As recognition procedure, the CA of the host MS shall, within one month, to confirm the receipt of the file and to draw attention to any missing documents, if applicable. The CA deadline to grant recognition or decide to apply an aptitude test is 4 months. Any rejection must be substantiated and the rejection or failing to take a decision within the time limit mentioned above could be challenged before the national courts. The aptitude test can be applied provided that the CA of the host MS, based on the documents received determines the differences between the two qualifications which must be covered by compensatory measures. As financial audit activity requires knowledge of the relevant national legislation, the aptitude test is a compensatory measure used in most cases of recognition of this qualification. In the vision of EC, the CA of the host MS should hold at least two sessions of aptitude tests per year. In order to achieve the recognition and organize the aptitude test, the CA may charge a fee provided that it does not exceed the costs involved and is not discriminatory against its own nationals placed in similar situations. Once obtained the qualification recognition, the financial auditor can practice the profession in the same conditions as those acquired the qualification in the host MS, the professional regulations of the host MS being applicable, including the use of professional titles in that country. In the Table 3.2 we present the characteristics of the qualification recognition process of financial auditor in the 9 analyzed MS

Project co financed by the European Social Fund Sectoral Operational Programme Human Resources Development 2007 - 2013 Invest in people! http://www.imipqnet.ro

European Union

GOVERNMENT OF ROMANIA Ministry of Labour, Family, Social Protection and Elderly MASOPHRD

European Social Fund SOP HRD 2007-2013

GOVERNMENT OF ROMANIA Ministry of Education Structural Instruments 2007 - 2013

Table 3.2 Comparative analysis of the qualification recognition processes of financial audit in the 9 MS MS

Austria

CA for qualification KWT, recognition AeQ Aptitude test Qualification recognition procedure CA for the Aptitude KWT test

Test type

The main topics

2 written exams and one oral exam

Written: general legal doctrine, tax legislation Oral professional law, quality assurance

Czech Republic KACR

DCCA

WPK

Ministry of Justice

ACCA, ICAEW, ICAS

AFM

Aptitude test

KACR

DCCA

WPK

Ministry of economy and finance

ACCA, ICAEW, ICAS

written

oral

written and oral

oral

Commissie CAFR Eindtermen Accountantsopleiding (CEA)for admission for testing NBAfor testing written and oral oral for Registeraccountant, written and oral for Administratieconsulent

Tax, commercial and professional legislation,

On a case by case basis, usually tax, commercial, professional, ethical legislation,

ACCA: written and oral; ICAEW: online testing; ICAS: written and oral Law and Taxation in Civil, commercial, the UK fiscal, professional legislation, accounting law

The financial reporting, the tax and commercial, legislation audit with focus on national regulations

Denmark

Germany

Italy

United Kingdom

Test language

German

Czech

Danish

German

Italian

English

The frequency of organizing the aptitude tests

On request

2 times / year

Once a year

ACCA: 2 times / year written examination, oral examination on request; ICAEW: permanently available online test; ICAS: writing -

Netherlands

Dutch/ English for Registeraccountant, Dutch for Administratieconsulent 2 times / year

Project co financed by the European Social Fund Sectoral Operational Programme Human Resources Development 2007 - 2013 Invest in people! http://www.imipqnet.ro

Romania CAFR

Aptitude test

Financial audit, internal audit, fiscal code, commercial code, accounting law Romanian / English

2 times / year (June and November)

Spain ICAC

Aptitude test

ICAC

written

Spanish legislation applicable to audit

Not specified

Every two years

European Union

The possibility of re-testing

GOVERNMENT OF ROMANIA Ministry of Labour, Family, Social Protection and Elderly MASOPHRD

Yes

Yes, but only within 2 years

European Social Fund SOP HRD 2007-2013

Yes , three times

GOVERNMENT OF ROMANIA Ministry of Education Structural Instruments 2007 - 2013

Yes, two times

Yes

legislation 5 times / year, tax 3 times / year oral examination on request Depending on the professional body

Yes, unlimited

Not specified

Source: FEE â&#x20AC;&#x201C; Key Features on Structure and Organization of the Accountancy Profession across 30 European countries, 26 March 2012

Project co financed by the European Social Fund Sectoral Operational Programme Human Resources Development 2007 - 2013 Invest in people! http://www.imipqnet.ro

European Union

GOVERNMENT OF ROMANIA Ministry of Labour, Family, Social Protection and Elderly MASOPHRD

European Social Fund SOP HRD 2007-2013

GOVERNMENT OF ROMANIA Ministry of Education Structural Instruments 2007 - 2013

One possibility, simpler than legal / statutory approach for complaining against a decision regarding the recognition of qualifications, considered as not in line with Directive 2005/36/EC on the recognition of professional qualifications, is the appeal to the SOLVIT system. The SOLVIT is an online network, operational since July 2002, in which the EU MS are working together to solve in a pre-legal stage, problems caused by the misapplication or nonapplication of Internal Market Community legislation by the public authorities. There is a SOLVIT centre in every EU MS, as well as in Norway, Iceland and Liechtenstein. The centers are part of the central government and must give solutions to the problems raised by citizens or companies within 10 weeks, and the network utilization is free. The Romanian SOLVIT Centre is located within the Ministry of European Affairs (can be contacted at e-mail solvit@dae.gov.ro ). The SOLVIT mechanism operating conditions are: • to be about the failure or misapplication of EU legislation by a Member State administration, • to be about a cross border case • that there is no action already in place for its settlement. The cross border nature does not imply the petitioner to be in another MS than the one where the problem has occurred. It is enough to have an international element that could make applicable the provisions of Community legislation (e.g., a Romanian citizen wants to practice in Germany and has difficulty on engagement). The functioning of the SOLVIT system is shown in the diagram below. How does it work Country A

Country A

Home SOLVIT centre

Work together to find solutions

Work together to present problem and find solutions

Lead SOLVIT centre Work together to negotiate problem

Problem Natural or legal person

Public Authority

Source: http://www.romania-actualitati.ro/conceptul_de_cetatenie_europeana-50325 (as of 07/17/2013) Project co financed by the European Social Fund 31 Sectoral Operational Programme Human Resources Development 2007 - 2013 Invest in people! http://www.imipqnet.ro

European Union

GOVERNMENT OF ROMANIA Ministry of Labour, Family, Social Protection and Elderly MASOPHRD

European Social Fund SOP HRD 2007-2013

GOVERNMENT OF ROMANIA Ministry of Education Structural Instruments 2007 - 2013

For instance, if a Romanian citizen has a complaint regarding the rules of the internal market, it will address SOLVIT ROMANIA (the organization that can handle the case depending on the nationality of the person who submitted the complaint). If a Romanian citizen has obtained the qualification in Austria, wishing to be employed in Germany and has a complaint in this regard, it will address the centre in Austria. The application will be analyzed and if deemed that the case is a breach of the Community law, it will contact LEAD SOLVIT centre (responsible SOLVIT Centre). If they agree with the proposal, it will go further to the respondent authority. The client is assisted in a language he understands, but more important is that there is a SOLVIT centre responsible who knows what procedures should be followed and which authorities should be contacted to resolve the issue. In order to obtain a good result, SOLVIT rely on the relationship with the respondent authority. This is because it is an informal network and does not have the authority of a judge. The reasons for which not all the petitions are addressed include: â&#x20AC;˘ certain issues related to the Member State legislation, if it can not give a quick solution, the case is considered unsolved; â&#x20AC;˘ the respondent authority is not willing to cooperate, in which case the petitioner is advised to consult the courts which are able to oblige the CA to modify their behavior accordingly to the reported aspect.

Project co financed by the European Social Fund Sectoral Operational Programme Human Resources Development 2007 - 2013 Invest in people! http://www.imipqnet.ro

European Union

GOVERNMENT OF ROMANIA Ministry of Labour, Family, Social Protection and Elderly MASOPHRD

European Social Fund SOP HRD 2007-2013

GOVERNMENT OF ROMANIA Ministry of Education Structural Instruments 2007 - 2013

4. EXERCISE OF THE FINANCIAL AUDITOR PROFESSION IN THE EU The financial auditor is part of the financial liberal professions category, as the financial audit can be performed either with a freelancer status, either as a partner or employee of a financial audit firm (or accounting, financial audit, tax advice according to CAEN code 692, who is registered and authorized to provide financial audit). Therefore, all national registries in which are mandatorily registered the financial audit service providers, include both individuals and legal auditor entities - companies authorized for financial audit. At the EU level, also the manner of exercise of the financial auditor profession has a high level of harmonization (compared to other categories of professionals in accounting and tax consultancy services) provided by the transposition of the Directive 2006/43/EC on statutory audits of annual accounts and consolidated accounts into the MS national legislation. Thus, with respect to the exercise of the profession of statutory auditor, the minimum obligations set out in Directive 2006/43/EC are the following:  The competent authorities of a Member State may grant approval only to natural persons or firms of good repute. (art.4);  statutory auditors and audit firms are subject to principles of professional ethics, covering at least their public-interest function, their integrity and objectivity and their professional competence and due care. (art.21);  statutory auditors and audit firms must be independent when carrying out a statutory audit, the statutory auditor and/or the audit firm is independent of the audited entity and is not involved in the decision-taking of the audited entity, and if the significance of the threats to her or its independence(direct or indirect financial interest to the audited entity, provision of additional non-audit services the level of fees received from one audited entity and/or the structure of the fees) even after the safeguards applied to mitigate those threats, is to high, they must to resign or abstain to accept the audit mission; (art.22) the owners or shareholders of an audit firm as well as the members of the administrative, management and supervisory bodies of such a firm, or of an affiliated firm, do not intervene in the execution of a statutory audit in any way which jeopardizes the independence and objectivity of the statutory auditor who carries out the statutory audit on behalf of the audit firm. (art.24);  statutory auditors and audit firms have the obligation to follow strict rules on confidentiality and professional secrecy (art.23);  statutory audits to be carried out in compliance with international auditing standards adopted by the Commission, Member States may adopt a national auditing standard as long as the Commission has not adopted an international auditing standard covering the same subject-matter (art. 26);  statutory auditors and audit firms are subject to a system of quality assurance which shall be organized in such a manner that it is independent of the reviewed statutory auditors and audit firms and subject to public oversight (art.29);  Statutory auditors and audit firms are responsible for carrying out their work with due care and thus should be liable for the financial damage caused by a lack of the care owed, but the auditors' and audit firms' ability to obtain professional indemnity insurance cover may Project co financed by the European Social Fund 33 Sectoral Operational Programme Human Resources Development 2007 - 2013 Invest in people! http://www.imipqnet.ro

European Union

GOVERNMENT OF ROMANIA Ministry of Labour, Family, Social Protection and Elderly MASOPHRD

European Social Fund SOP HRD 2007-2013

GOVERNMENT OF ROMANIA Ministry of Education Structural Instruments 2007 - 2013

be affected by whether they are subject to unlimited financial liability; for its part, taking into account the fact that liability regimes of the Member States may vary considerably, the Directive 2006/43/CE provide the EC commitment to make a report on the impact of the liability limits, and to carry out, where appropriate, public consultation and , if appropriate, to submit recommendations to the Member States (art.31). This level of harmonization of the exercise of financial auditor profession in all EU MS, facilitate the mobility of professionals across the single market, provided that any auditor who wishes to establish themselves in another MS than that in which it acquired the qualification and practiced the profession knows that: • it must follow the process of recognizing of its qualification as detailed in Chapter 3 of this guide; • it will not be authorized by the CA of the host MS unless it has a good reputation; • it will have to respect the code of ethics and professional conduct adopted by the MS CA • it will exercise his profession on the same principles of independence, objectivity, confidentiality and professional secrecy; • it will continue to apply international auditing standards adopted by the EC (and published in all languages in the Official Journal of the EU MS); • it will have to undergo quality assurance reviews at least once every six years or every three years if it carry out statutory audits for the public interest entities; • it will need to be informed of the specific requirements of professional liability insurance, because the liability regime still vary from one MS to another. But an even higher degree of harmonization / standardization was achieved at the sectoral level, through the efforts of international and european professional organizations of professionals in the accounting and financial audit. The International Federation of Accountants - IFAC (International Federation of Accountants), established in 1977 by 63 founding members from 51 countries, has now reached 173 members and associated organizations from 129 countries and jurisdictions around the world, representing thus about 2.5 million professionals in accounting and financial audit in the public sector, education, government and private sectors. In turn, the Fédération des Experts-comptables Européens / Federation of European Accountants - FEE (Federation of European Accountants) represents more than 700,000 professionals in Europe through its 45 member organizations from 33 European countries, and also plays the role of Regional Organization of IFAC. IFAC ensures the development of the accounting professions in the public interest by: • development of international accounting standards for the public sector (IPSA), financial audit (ISA), Ethics and Training (IES) , also provision of technical assistance for their adoption and use; • facilitating collaboration and cooperation between the member professional bodies; • collaboration and cooperation with other international organizations; Project co financed by the European Social Fund Sectoral Operational Programme Human Resources Development 2007 - 2013 Invest in people! http://www.imipqnet.ro

European Union

GOVERNMENT OF ROMANIA Ministry of Labour, Family, Social Protection and Elderly MASOPHRD

European Social Fund SOP HRD 2007-2013

GOVERNMENT OF ROMANIA Ministry of Education Structural Instruments 2007 - 2013

• representing the interests of accounting and financial audit professionals internationally. Therefore, practically there have been adopted at international level: • IFAC Code of Ethics developed by The International Ethics Standards Board for Accountants (IESBA), an independent body for development of standards on ethics and professional conduct for accountants and auditors; • International Standards on Auditing (ISAs) developed by the International Auditing and Assurance Standards Board (IAASB) independent body; • International Training Standards (IESS) developed by the International Accounting Education Standards Board (IAESB). The 8 International Training Standards, currently under review, are:  IES 1, Entry Requirements to Professional Accounting Education  IES 2, Initial Professional Development-Technical Competence  IES 3, Initial Professional Development-Professional Skills  IES 4, Initial Professional Development-Professional Values, Ethics, and Attitudes  IES 5, Initial Professional Development—Practical Experience  IES 6 Initial Professional Development – Assessment of Professional Competence  IES 7 Continuing Professional Development  IES 8 Professional Development for Engagement Partners Responsible for Audits of Financial Statements

In the Table 4.1, we took from the FEE study and from national sources some additional information on conditions governing the financial auditor profession as well as statistical data which suggests the size of the professional community of auditors in the 9 analyzed MS.

Project co financed by the European Social Fund Sectoral Operational Programme Human Resources Development 2007 - 2013 Invest in people! http://www.imipqnet.ro

European Union

GOVERNMENT OF ROMANIA Ministry of Labour, Family, Social Protection and Elderly MASOPHRD

European Social Fund SOP HRD 2007-2013

GOVERNMENT OF ROMANIA Ministry of Education Structural Instruments 2007 - 2013

Table 4.1 Requirements for the exercise the financial auditor profession in the MS analyzed MS Professional address Business

Austria Yes, in any MS of SEE

Czech Republic

is requested for Not required Czech residents, (establishment / not to foreigners residence in a MS is sufficient)

Yes

infrastructure required Professional

Yes

Denmark

Yes

Germany

Italy

United Kingdom

Not required (establishment / residence in a MS is sufficient)

Yes, it is required

Not necessary. only the contact address is required

Not required (establishment / residence in a MS is sufficient)

Yes

Yes, for certain activities

4.461 (both professions in 2009)

aprox. 15.000

aprox. 149.000 revisore legale

220 (both professions in 2009)

aprox. 500

aprox. 13.000 revisore legale

liability

" stable infrastructure " (there is no definition)

Netherlands Yes, in the Netherlands

qualified

2.711 natural and 1.350 (march legal persons 2012) (1.01.2011)

auditors

Number of trainees / year

80 - 90

Yes, it is required

Spain Yes, necessary for registration into register

Not necessary

Not necessary The auditor must be Yes, authorized in the service of an person or within a audit firm authorized financial audit firm by AFM

Yes

yes, for statutory audit

Yes, for. statutory audit and the nonstatutory financial audit

Yes, 300.000 euro/auditor

aprox. 20.500 both professions

4.251 natural persons 975 firms (may 2013)

19.616 (March 2011)

aprox. 900 both professions

1.640 (may 2013)

900 (aprox. 1.800 every 2 years)

insurance Number of

Romania

7,239 registered audit firms (31/12/2012) Members from the United Kingdom and Ireland 2012: ACCA =77.269 ICAEW=119.179 ICAS=16.933 No. members who have obtained the qualification in the audit, 2012: ACCA = 147 ICAEW= 484 ICAS=1.209

Source: FEE â&#x20AC;&#x201C; Key Features on Structure and Organization of the Accountancy Profession across 30 European countries, 26 March 2012; the CA in the 9 MS For information about the number of members and trainees Project co financed by the European Social Fund Sectoral Operational Programme Human Resources Development 2007 - 2013 Invest in people! http://www.imipqnet.ro

European Union

GOVERNMENT OF ROMANIA Ministry of Labour, Family, Social Protection and Elderly MASOPHRD

European Social Fund SOP HRD 2007-2013

GOVERNMENT OF ROMANIA Ministry of Education Structural Instruments 2007 - 2013

5. CONCLUSIONS The regulation of professions from the field of accounting, financial audit and tax consultancy (NACE code 692) is quite diversified in the EU MS - from the distinct regulation of the accounting profession, of financial auditor profession and that of the tax consultant (e.g. Romania) to the lack of regulation of any profession except those who have reserved the statutory audit activity (e.g. Spain). For the statutory audit services it was reached a high level of harmonization within the EU, through the transposition of the Directive 2006/43/EC on statutory audits of annual accounts and consolidated accounts into national legislation of the MS, which provides also the regulatory framework for the profession of financial auditor, including requirements for professional qualifications and mutual recognition of qualifications acquired in another MS than that of establishment / permanent performance of statutory audit services. The CA for auditors are public bodies in some MS or associations invested by law in other MS. If it is a ministry or government agency (e.g. Denmark, Italy, UK), the professional organizations may be invited to become involved in the decisions or have delegated tasks for competences assessment and certification, registration, continuing professional development (ex. Great Britain). In the field of education and continuous vocational training, the assessment of learning results is already widely used, especially due to the development of procedures independently on sectoral level at international level (international training standards developed by the IAESB, professional code of ethics developed by IESBA, international auditing standards developed by the IAASB, high quality qualifications offered by British institutions, especially the ACCA, and recognized at international level). Therefore, national authorities tend to have confidence in the diplomas and the certificates issued by national bodies of other MS, thus facilitating the mobility of the financial auditors in the EU's internal single market. According to the Directive 2005/36/EC on the recognition of qualifications, the financial auditor profession fall under the general system of recognition of qualifications, to a level of qualification that certifies successful completion of training courses at post-secondary education level, university level with a duration of 3-4 years or more than four years. Taking into account the fact that the financial audit services implies knowledge of commercial, fiscal and labor legislation of the host MS, the aptitude test as a compensatory measure in the process of recognition of qualification acquired in another MS is widely used. The statistics in the IMI system regarding qualifications recognition processes during 1997/8 2012 for the establishment / permanent performance demonstrates that the financial auditor profession is relatively mobile in general terms and among the most mobile professions in the field of accounting, auditing financial and the tax consultancy (position 45 of the 448 generic categories of professions for which were recorded decisions of recognition during this period, if we consider the 927 decisions were adopted strictly for financial auditor qualification Project co financed by the European Social Fund Sectoral Operational Programme Human Resources Development 2007 - 2013 Invest in people! http://www.imipqnet.ro

European Union

GOVERNMENT OF ROMANIA Ministry of Labour, Family, Social Protection and Elderly MASOPHRD

European Social Fund SOP HRD 2007-2013

GOVERNMENT OF ROMANIA Ministry of Education Structural Instruments 2007 - 2013

recognition, regardless of the generic category in which the respective regulated professions were registered). Moreover, the process of globalization, on the one hand and the international re-regulation of financial services, from the financial and economic crisis in 2007, on the other hand, determines the need for financial and audit professionals to follow the clients within the internationalization process of their businesses.

Project co financed by the European Social Fund Sectoral Operational Programme Human Resources Development 2007 - 2013 Invest in people! http://www.imipqnet.ro

GOVERNMENT OF ROMANIA Ministry of Labour, Family, Social Protection and Elderly MASOPHRD

European Union

GOVERNMENT OF ROMANIA Ministry of Education

European Social Fund SOP HRD 2007-2013

Structural Instruments 2007 - 2013

BIBLIOGRAPHY  Directive 2006/43/EC of the European Parliament and of the Council of 17 May 2006 on statutory audits

annual

accounts

and

consolidated

accounts,

157,

9.6.2006,

http://www.justice.gov.md/file/Centrul%20de%20armonizare%20a%20legislatiei/Baza%20de%20 date/Materiale%202010/Legislatie/32006L0043-Ro.PDF 

European Commission, Internal Market and Services DG (2010) – Group of Coordinators for the Recognition of Professional Qualifications – Frequently Asked Questions (Update 22 October 2010 – MARKT D/3418/6/2006-EN) at http://ec.europa.eu/internal_market/qualifications/docs/future/f aq_en.pdf



European Commission – User Guide, Directive 2005/36/EC, at http://ec.europa.eu/internal_market/ qualifications/docs/guide/users_guide_en.pdf



European Commission – Code of Conduct approved by the Group of Coordinators for the Directive 2005/36/EC on the Recognition of Professional Qualifications – National Administrative Practices falling under Directive 2005/36/EC – at http://ec.europa.eu/internal_market/qualifications/docs/ future/cocon_en.pdf



European Commission – Commission Staff Working Document on the Transposition and Implementation of the Professional Qualifications Directive (Directive 2005/36/EC), Brussels, 22 /10/2010, SEC(2010) 1292, at http://ec.europa.eu/internal_market/qualifications/docs/evaluation/ staff-working-doc_en.pdf



DG Internal Market and Services – Revised Final Report – Study Evaluating the Professional Qualifications Directive against recent educational reforms in EU Member States, 28 October 2011, at http://ec.europa.eu/internal_market/qualifications/docs/policy_developments/final_report_en.pdf



DG Internal Market and Services - Final Report – Study to provide an Inventory of Reserves of Activities linked to professional qualifications requirements in 13 Member States &assessing their economic

impact,

January

2012,

http://ec.europa.eu/internal_market/qualifications/docs/news/20120214-report_en.pdf; annex H of the

final

report

http://ec.europa.eu/internal_market/qualifications/docs/news/20120214-

annex_en.pdf 

FEE - Key Features on Structure and Organization of the Accountancy Profession across 30 European countries, 26 March 2012, at http://www.fee.be/images/publications/qualification/ Intro_Structure_and_Organisation_of_the_Profession2732012401312.pdf

Project co financed by the European Social Fund Sectoral Operational Programme Human Resources Development 2007 - 2013 Invest in people! http://www.imipqnet.ro

European Union



GOVERNMENT OF ROMANIA Ministry of Labour, Family, Social Protection and Elderly MASOPHRD

European Social Fund SOP HRD 2007-2013

GOVERNMENT OF ROMANIA Ministry of Education Structural Instruments 2007 - 2013

FRC – Key Facts and Trends in the Accountancy Profession, June 2013, at http://www.frc.org.uk/ Our-Work/Publications/Professional-Oversight/Key-Facts-and-Trends-in-the-AccountancyProfession.aspx



IFAC, IAASB – 2012 Handbook of International Quality Control, Auditing, Review, Other Assurance, and Related Services Pronouncements, July 31, 2012, at http://www.ifac.org/ publications-resources/2012-handbook-international-quality-control-auditing-review-otherassurance-a



IFAC, IESBA™ - Handbook of the Code of Ethics for Professional Accountants, 2013 Edition, May 2013, at http://www.ifac.org/sites/default/files/publications/files/2013-IESBA-Handbook.pdf



IFAC, International Accounting Education Standards Board - Handbook of International Education Pronouncements, 2010 Edition, August 2010, at http://www.ifac.org/sites/default/files/publications/ files/handbook-of-international-e-2.pdf



IFAC, IAESB - 2012 IAESB Annual Report: Enhancing Professional Accounting Education, August 2013, at https://www.ifac.org/sites/default/files/publications/files/IAESB-2012-AnnualReport_0.pdf



IFAC - Handbook of International Public Sector Accounting Pronouncements, 2013 Edition, vol. I at http://www.ifac.org/sites/default/files/publications/files/Volume%201_0.pdf



CFE Professional Affairs Committee, editor Rudolf Reibel - European Professional Affairs Handbook for Tax Advisers, 2nd edition, March 2013



The Law no. 149/2013 for approving of the Government Ordinance no. 23/2012 for amending and supplementing the Government Emergency Ordinance no. 90/2008 on statutar audit of annual financial situations and the consolidated financial situations and the Government Ordinance no. 65/1994 on the organization of accounting exprtise activity and of the certified accountants and for amending other acts was published in the Official Journal, Part I, no. 257, of May 9, 2013.

Project co financed by the European Social Fund Sectoral Operational Programme Human Resources Development 2007 - 2013 Invest in people! http://www.imipqnet.ro

European Union

GOVERNMENT OF ROMANIA Ministry of Labour, Family, Social Protection and Elderly MASOPHRD

European Social Fund SOP HRD 2007-2013

GOVERNMENT OF ROMANIA Ministry of Education Structural Instruments 2007 - 2013

ABBREVIATIONS AAT - Association of Accounting Technicians (Association of Accounting Technicians from United Kingdom witch award the AAT qualification) AC/CA – Competent Authority (for one or more regulated professions) ACA - Associate of the Institute of Chartered Accountants in England and Wales (intermediate qualification of ICAEW) ACCA – Association of Chartered Certified Accountants (Association of Chartered Certified Accountants in the United Kingdom) AeQ - Arbeitsausschuss für externe Qualitätsprüfungen (Executive Committee for quality external

audits in Austria) AFM - Dutch Authority for Financial Markets ANC/NAQ – National Authority for Qualifications (from Romania) APAK - Abschlussprüfe-raufsichtskommission (Supervisory Commission of Auditors in Germany) APOC - Audit Oversight Public Council (in Czech Republic) CAEN/NACE - National Classification of Economic Activities CAFR – Chamber of Financial Auditors of Romania CAT - Certified Accounting Technician (Certified Accounting Technician, qualification in the United Kingdom) CE/EC – European Commission CEA - Commissie Eindtermen Accountantsopleiding (Commission for admission to the aptitude

test held by the NBA in the Netherlands) CFAB – Certificate in Finance, Accountancy and Business (Certificate in Finance, Accounting and

Business - qualification from the United Kingdom) Consob - Commissione Nazionale per la Societa e la Borsa (Investor Protection Supervisory

Authority in Italy) CSIPPC – Council for the Public Interest Oversight of the Accountancy Profession (in Romania) CSPAAS - Council for the Public Oversight for Statutory Auditing (in Romania, transformed to CSIPPC) DCCA - Erhvervsstyrelsen/Danish Commerce and Company Agency (Danish Commerce and

Companies Agency) Project co financed by the European Social Fund Sectoral Operational Programme Human Resources Development 2007 - 2013 Invest in people! http://www.imipqnet.ro

European Union

GOVERNMENT OF ROMANIA Ministry of Labour, Family, Social Protection and Elderly MASOPHRD

European Social Fund SOP HRD 2007-2013

GOVERNMENT OF ROMANIA Ministry of Education Structural Instruments 2007 - 2013

DG/GD – General Directorate DSAA - The Supervisory Authority on Auditing (he Supervisory Authority on Auditing in Denmark) EFP/EVT - Education and vocational training FEE – Fédération des Experts-comptables Européens/ Federation of European Accountants (Federation of European Accountants) FPC/CVT – Continuous Vocational Training FRC – Financial Reporting Council (Financial Reporting Council in United Kingdom) HGB - Handelsgesetzbuch (German Commercial Code) IAASA - The Irish Auditing and Accounting Supervisory Authority IAASB - International Auditing and Assurance Standards Board IAESB – International Accounting Education Standards Board ICAC - Instituto de Contabilidad y Auditoria de Cuentas (Institute for Accounting and Auditing of

Accounts in Spain) ICAEW - Institute of Chartered Accountants in England and Wales ICAS - Institute of Chartered Accountants of Scotland IESs – International Training Standards (developed by IAESB) IESBA - The International Ethics Standards Board for Accountants IFAC – International Federation of Accountants IMI – Internal Market Information system (Internal Single Market Information system in EU) IMM/SMEs – Small and Medium Enterprises IPS - Institute for Social Policy (in Romania) JO – Official Journal of UE KACR - Komora auditorů ČR (Chamber of Auditors of the Czech Republic) KWT - Kammer der Wirtschaftstreuhänder (Austrian Chamber of Public Accountants) MEN – Ministry of National Education (in Romania) MO – Official Journal (in Romania) NBA - The Institute which is the CA for financial audit regulated profession in the Netherlands NIVRA - Koninklijk Nederlands Instituut van Registeraccountants (Royal Institute of Chartered

Registered Accountants in the Netherlands, which merged with NovAA forming the NBA Institute)

Project co financed by the European Social Fund Sectoral Operational Programme Human Resources Development 2007 - 2013 Invest in people! http://www.imipqnet.ro

European Union

GOVERNMENT OF ROMANIA Ministry of Labour, Family, Social Protection and Elderly MASOPHRD

European Social Fund SOP HRD 2007-2013

GOVERNMENT OF ROMANIA Ministry of Education Structural Instruments 2007 - 2013

NovAA – Nederlandse Orde van Accountants Administratieconsulenten (The Netherlands Order of

Accounting Consultants in the Netherlands, which merged with NIVRA forming NBA Institute) OG/GO - Government Ordinance (in Romania) OKB - Qualitätskontrollbehörde (Austrian Auditors Supervisory Authority) OUG/GEO - Government Emergency Ordinance (in Romania) POB - Professional Oversight Board (Professional Oversight Board in the United Kingdom) SEE/EEA – European Economic Area (all EU MS + Iceland, Liechtenstein, Norway) SM/MS – Member State (of the European Union) UE/EU – European Union WP/vBP - Berufssatzung (Charter of Professions in Germany) WPK - Wirtschaftsprüfer-kammer (Chamber of Public Accountants, CA for financial auditors in

Germany) WPO - Gesetz über eine Berufsordnung der Wirtschaftsprüfer (Law on Public Accountant in

Germany) WT-Arl - Directive on practice of public accounting profession in Austrasia WTBG - Wirtschaftstreuhandberufsgesets (Statute of public accountants’ professional practice in

Austria)

Project co financed by the European Social Fund Sectoral Operational Programme Human Resources Development 2007 - 2013 Invest in people! http://www.imipqnet.ro

European Union

GOVERNMENT OF ROMANIA Ministry of Labour, Family, Social Protection and Elderly MASOPHRD

European Social Fund SOP HRD 2007-2013

GOVERNMENT OF ROMANIA Ministry of Education Structural Instruments 2007 - 2013

USEFUL LINKS • List of national supervisory bodies of public interest http://ec.europa.eu/internal_market/auditing/links/index_en.htm • EC Regulations adopting international accounting standards http://ec.europa.eu/internal_market/accounting/legal_framework/regulations_adopting_ias/ori ginal_text_en.htm • EC database of the regulated professions in the MS – http://ec.europa.eu/internal_market/qualifications/regprof/index.cfm?newlang=en • National Contact Points for qualifications recognition from MS http://ec.europa.eu/internal_market/qualifications/contact/national_contact_points_en.htm • MS SOLVIT Centers http://ec.europa.eu/solvit

Project co financed by the European Social Fund Sectoral Operational Programme Human Resources Development 2007 - 2013 Invest in people! http://www.imipqnet.ro