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Business Intelligence Companies Without Internal Audit Are Reported by Their Own Financial Auditors

Companies Without Internal Audit Are Reported by Their Own Financial Auditors

by NOA June 6, 2024


Companies Without Internal Audit Are Reported by Their Own Financial Auditors

Financial auditors are now required to report their own clients who do not have an established internal audit function, under currently enforced changes to the legal obligations on the annual reporting requirements for financial audit activities to ASPAAS (the "Authority for Public Supervision of Statutory Audit Activity," operating under the Ministry of Finance).

Thus, financial auditors who, during the audit assignment, identify companies without an internal audit function are compelled to report these companies through the Financial Auditors' Activity Report.

What are the premises for reporting?

We remind you that according to Article 65, paragraph (7) of Law no. 162/2017, all entities subject to Statutory Audit are required to establish a functional Internal Audit. According to Article 44 of the same law, failure to comply with this obligation may result in fines ranging from RON 50,000 to RON 100,000.

According to the provisions of Government Emergency Ordinance 75/1999, individuals responsible for organizing Internal Audit activities must be active financial auditors certified by CAFR ("The Chamber of Financial Auditors of Romania").

What will be the effects of reporting?

Currently, there is no framework for how the disclosed information will be used, but it is anticipated that this may lead to tax audits performed by authorities that are organized under the Ministry of Finance, and potential imposition of sanctions and other tax liabilities.

What can you do?

If you do not have an internal audit function, despite being obligated to do so, we recommend you prioritize this matter to mitigate potential consequences.

NOA may assist you in this endeavor. To start establishing the internal audit function, you may email us at or, and a colleague will provide you with additional information and a presentation of our internal audit services.

For more details about the internal audit function (legislation, methodology, practical aspects), please access the links below in Romanian (see here) or English (see here).

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