Moldova’s government and institutions were well aware that to accomplish the transition to a more market-oriented system, their accounting and auditing systems had to be reformed. The various steps called for included:

While accomplishing all this is not easy—indeed, it requires nothing less than a full-scale reorganization of the way companies and individuals do business—its success is critical to the Moldovan economy. A major implementation and assistance vehicle has been the Moldovan Accounting Reform Project (MARP), funded by the U.S. Agency for International Development and managed under the auspices of the East-West Management Institute, a Soros Foundation affiliate. MARP is providing assistance to Moldova’s transition to international accounting and auditing practices using the following three-pronged approach:

The government estimates that 22,000 enterprises have converted to the national accounting standards, representing 95 percent of those mandated to do so. The enterprises using the national accounting standards require trained professional accountants, and MARP recognizes that this need can be met most effectively by local institutions. To this end MARP has helped develop the Association of Professional Accountants and Auditors, a self-regulating accounting and auditing association responsible for professional development, training, certification, and other programs. The association’s membership is growing steadily, and today it has more than 1,600 registered members. This association was the first accounting association in the FSU to be inducted as an associate member into the International Federation of Accountants.

Aided by MARP, the association offers comprehensive training programs for accountants, auditors, and enterprise managers, including a continuing professional education program for certified public accountants, and has developed a professional testing and certification program, a code of professional ethics, and other professional guidelines. It has published three training manuals on the new accounting system, on managerial accounting techniques, and on tax accounting. These manuals describe the conversion to the new national accounting standards, the maintenance of an accounting system, and the preparation of financial statements and address tax accounting and reporting and disclosure issues in relation to annual financial statements.

The accounting and auditing profession, and the economy as a whole, depend heavily on students in the field receiving a high-quality education. MARP is working with the Moldovan Ministry of Education, the Academy of Economic Studies, and a number of universities to assess and improve their accounting and auditing curricula to bring their standards to international levels.

MARP clearly shows that all parties involved in this kind of transformation process, including the government and its institutions, professional and academic bodies, and international development agencies, need to work closely together to accomplish the desired objectives. The circumstances under which all these parties had to operate, especially initially, was difficult, but commitment by all those involved has led to success. MARP’s sound management and activities are a potential model for other transition economies, although each country may require somewhat different approaches and vehicles.