ORDER OF THE GOVERNMENT OF THE REPUBLIC OF MOLDOVA

of December 31, 2008 No. 1507

About approval of the Development plan for financial accounting and audit in the corporate sector for 2009-2014

For the purpose of realization of provisions of the Law on financial accounting No. 113-XVI of April 27, 2007. (The official monitor of the Republic of Moldova, 2007, No. 90-93, of the Art. 399) and the Law on auditor activities No. 61-XVI of March 16, 2007. (The official monitor of the Republic of Moldova, 2007, No. 117-126, of the Art. 530), and also creating favorable conditions for reduction of financial accounting and audit in compliance with requirements of European Union directives, International accounting standards and International standards of audit the Government DECIDES:

1. Approve the Development plan for financial accounting and audit in the corporate sector for 2009-2014 it (is applied).

2. To assign monitoring and coordination of implementation process of the Development plan for financial accounting and audit in the corporate sector for 2009-2014 to the Ministry of Finance.

3. To the Ministry of Finance to initiate negotiations with the World Bank, the international institutes and donors concerning allocation of financial resources for implementation of the Development plan for financial accounting and audit in the corporate sector for 2009-2014.

4. Declare invalid the Order of the Government No. 1187 of December 24, 1997. "About financial accounting reform" (The official monitor of the Republic of Moldova, 1997, No. 88-91, of the Art. 890).

Approved by the Order of the Government No. 1507 of December 31, 2008

THE DEVELOPMENT PLAN FOR FINANCIAL ACCOUNTING AND AUDIT IN THE CORPORATE SECTOR FOR 2009-2014

I. Introduction

1. The development plan for financial accounting and audit in the corporate sector for 2008-2011 (further - the Plan) is the conceptual document determining priorities of development of financial accounting and audit in the Republic of Moldova and establishes necessary measures and actions for achievement of these priorities.

2. The main goal of this Plan consists in improvement of quality of the financial reporting of subjects of the Republic of Moldova that will significantly and positively influence national economy thanks to:

1) to strengthening of financial stability of the country and reduction of risk of crises in the financial market;

2) to contribution to attraction of direct foreign investments;

3) to creation of conditions for access of small and medium scale enterprises to the credits by means of reduction in cost of financial information and receivable percent;

4) to growth of budget incomes by means of the taxes and fees estimated on the basis of booking data;

5) to improvement of process of monitoring and control over activities of the state companies;

6) to creating favorable conditions for assessment and adoption of reasonable decisions by investors on the prospects of development of subjects;

7) to providing open entry of all categories of users to information on activities of subjects, promoting, thus, active market development of the capital;

8) supports of economic integration of the state to the European Union (EU) both on regional, and on global levels.

3. Provisions of this Plan correspond to the National strategy of development for the Republic of Moldova for 2008-2011 approved by the Law No. 295-XVI of December 21, 2007, to the Action plan the Republic of Moldova - the European Union, approved by the Order of the Government No. 356 of April 22, 2005, to the Order of the Government No. 191 of February 25, 2008. "About approval of the Action plan on implementation of the National development strategy for 2008-2011".

4. Implementation of the Plan will promote decrease in influence of shadow economy thanks to fight against illegal transactions and corruption.

5. Plan development is caused by need to continue the reforms initiated by two important legal acts - the Law on financial accounting No. 113-XVI of April 27, 2007 and the Law on auditor activities No. 61-XVI of March 16, 2007, become effective on January 1, 2008. Implementation of these legal acts requires number of the actions directed to reduction of financial accounting and audit in compliance with requirements of Directives of the EU and the standards accepted in the international and advanced practice. In this context this Strategy is intended to continue the begun reforms which finally will lead to creation of favorable business environment, growth of culture of financial accounting and audit in the corporate sector, and also to growth of prestige of profession of the accountant and auditor in the Republic of Moldova.

6. In case of plan development the progress made within various projects and actions performed in the field in recent years and also the similar documents developed in EU Member States and in the countries which are in process of accession to the EU was taken into account.

7. This Plan confirms participation of the Government of the Republic of Moldova in the course of integration of national economy into the European economy and, according to the Action plan the Republic of Moldova - the European Union, in accomplishment of economic and institutional conditions for receipt of the status of prekanditat on the accession to this European body.

II. The current provision in the field of financial accounting and audit, SWOT analysis and implementation cost of the Plan

2.1. The analysis of the existing regulatory base in the field of financial accounting

8. The present regulatory base in the field of financial accounting contains: The law on financial accounting, Conceptual bases of preparation and submission of financial statements, the National Accounting Standards (NAS), Comments on application of NSBU, the General plan of accounts of financial accounting, and also provision and other documents approved by the bodies responsible for regulation of financial accounting according to the current legislation.

9. The law on financial accounting is the organic law establishing legal regulations, single requirements and the mechanism of regulation of financial accounting and the financial reporting in the Republic of Moldova. For the purpose of improvement of the financial reporting and ensuring its comparability at the international level the Law on financial accounting contains number of new requirements, main of which treat the terminology used in financial accounting; to the state bodies which are responsible for financial accounting regulation; competences of professional associations on protection of the rights and increase in skill level of their members; to obligations and the rights of subjects on financial accounting and financial reporting preparation; to application of the International Accounting Standards (IAS) some categories of subjects according to Directives of the EU; to use of the booking data corrected according to provisions of the Tax code for creation of tax declarations; to introduction of internal control system and internal audit; to approach of structure, method of creation, signing and submission of financial statements to the international requirements.

10. The above-stated provisions of the Law on financial accounting correspond in general to Directives of the EU, IFRS, and also present level of economic development of local subjects. At the same time the Law on financial accounting contains only general methodological regulations on financial accounting and the financial reporting. The exact method of financial accounting and the financial reporting is established in accounting standards and other regulations which do not conform fully to the international requirements now.

11. Conceptual bases of creation and submission of financial statements, NSBU, Comments on application of NSBU and the General plan of accounts of financial accounting were developed, mainly, in 1996-2000 by working group under the Ministry of Finance which was financed from the means provided in the government budget for the corresponding years.

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