Thus, after credit institutions have adopted IFRS as a basis for their accounts from 1 January 2012 and the National Securities Commission and the Insurance Supervisory Commission have requested entities falling under their regulatory requirements to prepare a set of individual financial statements in line with IFRS for information purposes, IFRS has now become mandatory for all listed entities.
The adoption of IFRS will increase transparency and comparability of financial reporting, offering investors relevant information for their decision-making process. „The provision of high-quality financial information, presented in a language that is widely used internationally and accompanied by the opinion of an independent auditor strengthens investors’ confidence, facilitates access to funds and may even lower financing costs by diminishing the level of perceived risk”, says Aura Giurcăneanu, Head of Audit and Assurance of KPMG in Romania.
According to KPMG specialists, another major step on the way to improving the financial reporting framework in Romania could be made by also allowing other companies to choose IFRS as a single reporting basis. “Many entities are currently required to carry out double reporting, according to Romanian accounting regulations as well as according to IFRS, which requires reconciliation of results and explanations for the differences. This raises questions for investors and banks alike and amplifies the uncertainty generated by the business environment”, says Angela Manolache, Director in the Advisory Department of KPMG in Romania.
According to a KPMG survey, over 80% of its clients (local and multinational companies) prepare IFRS reporting either to comply with legal requirements or at the request of shareholders, financial institutions or other business partners.