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July 26, 2009

Romanian audit institute celebrates 10th anniversary

The Chamber of Financial Auditors of Romania (Camerei Auditorilor Financiari din România – CAFR) is celebrating its 10th anniversary this year and reflecting on achievements that include being admitted as a full member of the International Federation of Accountants (IFAC).

The chamber also recently signed a memorandum of understanding (MoU) with the Institute of Chartered Accountants of Scotland (ICAS).

The relationship between CAFR and ICAS dates from the foundation of the Romanian organisation. ICAS, aided by funding from the UK Department of International Development, helped establish CAFR.

This assistance included setting up quality control and audit inspection systems. CAFR president Ion Mihailescu said the chamber was the first Romanian professional body to establish a special operational department designed to monitor the activity of its members.

ICAS also monitored the chamber’s activity and supported its application to join IFAC.

The new MoU focuses on areas for future co-operation, again including quality control and audit monitoring, plus assistance from ICAS in improving various CAFR departments and policies.

The two organisations will also work together on education.

Commenting on the arrangement, ICAS chief executive Anton Colella said: “The accounting profession is increasingly a global profession and strong European institutes are vital to ensuring that investors, wherever they are, can have confidence in the financial information that they use. Sharing experience can only help to improve this.”

CAFR was established following recognition that reform of the accounting profession was an essential part of the wider Romanian economic and institutional reform that was needed to build a functional and competitive market economy, Mihailescu told The Accountant.

At the time, Romania’s financial institutions were pushing for the development of modern legislation that complied with European standards on audit.

They also wanted a reliable professional institution that would be capable of ensuring the effective administration of the audit profession.

As a result, the Romanian Government passed legislation in 1999 that brought the chamber into being.

CAFR’s responsibilities include organising qualifying exams for auditors, co-ordinating audit activity, overseeing continuous professional development programmes, monitoring audit activity and updating auditing procedures in line with the changes in the regulations at a European and international level.

The chamber has 3,100 individual members, more than 900 audit firms and more than 2,000 trainees.

There is a second professional accountancy body in Romania, the Body of Expert and Licensed Accountants of Romania, plus two other professional bodies in related fields – the Chamber of Tax Advisors or the National Association of Romanian Appraisers.

The challenges facing the Romanian profession are much the same as those facing the rest of the world, according to Mihailescu.

For example, the global economic crisis has spread to Romania and this has brought to the fore the importance of audit engagements that provide quality and reliable information, Mihailescu said.

Other high priorities for the chamber include the continual improvement of auditors’ professional competence through sustained effort in education and continuous professional development.

Also, the proper observance of ethical principles and international standards issued by IFAC and the assurance of the quality control within audit firms through monitoring by the CAFR and Romania’s Public Oversight Board.

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