Audit of a Romanian company, financial statements, accounting, consulting in Romania

Romania is a European country in Eastern Europe, part of the European Union, and its economy is developing at a good pace. Romania offers the most attractive preferential tax regime for micro-enterprises in Europe (1-3% income tax). Financial statements of micro and small companies are not subject to audit.

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150-400 USD per hour

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+44 0 207 822 85 93

General requirements

Accounting, auditing and financial reporting requirements are regulated by the Accounting Act (GEO 13/2021) and rules set out in EU directives. The Accounting Act reads that preparation of annual financial statements is compulsory. The form and content of annual financial statements are determined by the Ministry of Public Finance.

Micro and small companies can file condensed accounts.

Romania offers small enterprises the most attractive tax regime in the EU. An enterprise is considered small if the company’s income for the previous years is not more than 1 000 000 EUR (from January 1, 2023 - 500 000 EUR).

Condensed annual financial statements must include a condensed balance sheet, profit and loss statement and explanatory notes to condensed financial statements.

Medium-sized and large enterprises must file full financial statements. Full annual financial statements must also include a statement of changes in equity, cash flow statement and notes to annual accounts.

Accounting records must be in Romanian and in the national currency RON (lei).

Audit of accounts

Companies must be audited by auditors that are legal entities authorized by the Chamber of Financial Auditors of Romania in accordance with auditing standards adopted by the Chamber of Financial Auditors of Romania, which are analogous to international auditing standards.

Enterprises that exceed at least two of the following criteria on the reporting date and during two consecutive financial years are subject to compulsory audit:

total assets are 16 000 000 RON (~ 3 650 000 EUR);
net turnover is 32 000 000 RON (~ 7 300 000 EUR);
average number of employees during the financial year is 50.

Two consecutive financial years mean the previous financial year and the current financial year for which annual financial statements are made.

Time frame for preparation and submission of financial statements

Financial statements must be filed within 150 days after the end of the financial year.

A profit tax return shall be filed quarterly on the 25th day of the month following the reporting quarter. An annual tax return shall be filed by 25 March (for the years 2021-2025 the deadline is extended to 25 June).

Liability for late filing

Penalties can be imposed as a result of failure to comply with the rules of preparation and presentation of annual financial statements and annual consolidated financial statements within the period set by law. The amount of the penalty depends on the duration of delay.

A late payment fee of 0,08% is charged for each day of delay in filing a tax return.

Consolidated financial statements

Consolidated financial statements are prepared in accordance with Seventh Council Directive 83/349/EEC.

A parent company must make consolidated financial statements if it is part of a group of companies.

A parent company is exempt from consolidation of financial statements if enterprises that are subject to consolidation do not exceed two of the following three criteria on the date of making financial statements:

balance sheet total is 17 250,000 EUR;
sales are 35 040 000 EUR;
average headcount of employees in the reporting year is 250.

All companies whose securities are traded on a regulated market must apply IFRS adopted by the EU to their consolidated financial statements.

Frequency Asked Questions

What accounting standards are used in Romania?

The accounting standards used in Romania are known as Romanian Generally Accepted Accounting Principles (RO GAAP), which are based on International Financial Reporting Standards (IFRS) with some local adaptations. The Ministry of Finance issues accounting regulations and guidelines in Romania. In addition, publicly traded companies in Romania are required to prepare their financial statements in accordance with IFRS.

Does Romania use IFRS?

Yes, Romania adopted IFRS (International Financial Reporting Standards) in 2012 for the preparation of consolidated financial statements of listed companies and some other entities, while for the separate financial statements, the Romanian Accounting Standards (RAS) are still used.

What is the Chamber of financial Auditors in Romania?

The Chamber of Financial Auditors of Romania (CAFR) is a professional body that represents and regulates the audit profession in Romania. It was established in 1999 and operates under the supervision of the Ministry of Finance. The main objectives of CAFR are to promote and ensure the quality of audit services, provide guidance and support to its members, and maintain the professional standards and ethics of the audit profession in Romania.

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