ORDER OF THE MINISTRY OF FINANCE OF THE REPUBLIC OF MOLDOVA

of March 1, 2001 No. 29

About approval and enforcement of the Code of professional behavior of auditors and accountants of the Republic of Moldova

In pursuance of Article 7 (6) the Law of the Republic of Moldova "About auditor activities" N729-XIII of February 15, 1996 and article 9 of the Law on the financial accounting N426-XIII of April 4, 1995

I ORDER:

1. Approve the Code of professional behavior of auditors and accountants of the Republic of Moldova.

2. Enact in the territory of the Republic of Moldova the Code of professional behavior of auditors and accountants of the Republic of Moldova since January 1, 2002 (according to Item 1 of this order). Recommend early application.

CODE OF PROFESSIONAL BEHAVIOUR OF AUDITORS AND ACCOUNTANTS OF THE REPUBLIC MOLDOVA

GENERAL PROVISIONS

Introduction

1. This Code is drafted on the basis of the Code of ethics of professional accountants (Code of Ethics for Professional Accountants) accepted by the International federation of accountants (IFAC) in edition of 2000.

Purpose

2. The purpose of this Code is establishment of the purposes of profession of the auditor and accountant, and also the fundamental principles and rules of their professional behavior.

3. For lack of any specifically specified restrictions of the purpose and the fundamental principles have equal force for all auditors and accountants irrespective of place of employment (auditing organization, the sphere of production (services), trade, the non-commercial sphere, budgetary institutions or education).

4. The rules of professional behavior established by this Code have general character and can be not always applied in the specific situations arising in practical activities of auditors and accountants.

Determinations

5. In this Code terms with the following content are used:

The economic agent (company - English) - legal entity or physical person, including the head and affiliated companies, irrespective of whether its activities are directed to profit earning or not.

The agreement requiring opinion expression (reporting assignmentangl.) - the agreement requiring expression of opinion of the auditor concerning financial information.

The auditor successor (receiving accountant - English) - the auditor performing auditor activities to whom the acting auditor or his client entrusted and transferred carrying out audit, rendering the accompanying services, services in conducting financial accounting, the taxation, consulting, etc., or the auditor getting advice from the acting auditor for the purpose of achievement of understanding of needs of the client.

The auditor performing auditor activities (professional accountant in public practice - English) (1) - the physical person which is meeting the qualification requirements established by the legislation, and having the qualification certificate of the auditor which renders professional services irrespective of their type (audit, the accompanying services, the taxation, consulting, etc.).

The acting auditor (existing accountant - English) - the auditor who books audit now or renders to the client professional services in the field of financial accounting, the taxation, consulting or other similar professional services.

The regular accountant (employed professional accountant - English) the accountant working on hiring in the field of production (services), trade, the non-commercial sphere, budgetary institutions or education.

The investor (investor - English) - the legal entity or physical person having considerable influence on investment object.

Investment object (investee - English) - the economic agent on which the investor has considerable influence.

Objectivity (objectivity - English) - combination of impartiality, intellectual honesty and freedom from conflicts of interest.

Service offering (solicitation - English) - the address to prospective clients with the offer on rendering professional services.

Auditing organization (practice - English) - the economic agent having the license for the right of implementation of auditor activities.

The publication of information (publicity - English) - informing the public on activities of auditors and accountants which is not directed to intended market promotion them to professional activity.

Advertizing (advertizing - English) - informing the public on qualification or the services rendered by the auditors performing auditor activities for the purpose of expansion of their professional activity.

Professional services (professional services - English) - any services rendered by the auditor or the regular accountant and requiring knowledge of financial accounting or related subjects including services in financial accounting, audit, the taxation, consulting, etc.

Characteristic features of profession of the auditor and accountant

6. As well as any other profession, profession of the auditor and accountant is determined by number of characteristic features, including:

ownership of knowledge acquired in the course of professional training and life-long education;

observance by auditors and accountants of the Code of professional behavior, including maintenance up to standard single objective approach to accomplishment of the obligations;

recognition of obligations before society in general (by means of introduction of restrictions in case of assignment of qualification or on use of rank).

7. Obligations of auditors and accountants before the profession and society can sometimes conflict to momentary private interests or loyalty in relation to the employer.

8. This Code establishes single regulations of professional behavior for the purpose of ensuring the most high-quality performed activities and preserving trust of the public to profession of the auditor and accountant.

Public concerns

9. Distinctive feature of any profession is recognition of obligations before society. From the point of view of profession of the auditor and the accountant society are clients, creditors, state bodies, employers, employees, investors, business and financial worlds and all those who rely upon objectivity and honesty of auditors and accountants for the purpose of maintenance of the corresponding functioning of business activity. This trust imposes on profession of the auditor and accountant responsibility in relation to public concerns. Public concerns are general wellbeing of persons and the organizations to which auditors and accountants render services.

10. Obligations of auditors and accountants are not limited only to requirements satisfaction of separately taken client or employer. Standards of profession of the auditor and accountant are considerably determined by public concerns as, for example, in the following cases:

independent auditors help to confirm truthfulness and efficiency of the financial reporting represented to financial institutions as partial support for receipt of the credits and loans and also to shareholders for the purpose of attraction of the capital;

heads of financial services perform different functions in the field of financial management and promote effective and productive use of resources of the companies;

internal auditors provide confidence in effective functioning of internal control system that increases the level of reliability of the financial information provided by the employer to external users;

specialists in the field of the taxation promote effective and correct application of provisions of the tax legislation;

consultants in the field of management bear social responsibility, promoting acceptance of right management decisions.

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