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Audit of Financial Statements of the National Commission for Financial Markets

May 22, 2019 views 1441

 

On May 22, the Court of Accounts examined the Audit Report on Financial Statements of the National Commission for Financial Markets (NCFM) at 31 December 2018.

The audit mission was designed to verify in all material respects whether the financial statements of the National Commission for Financial Markets concluded on 31 December 2018, presented a correct and fair view in accordance with the applicable financial reporting framework and as a whole did not contain significant distortions due to fraud or error, as well as issuing an opinion.

The patrimony administered by NCFM, in terms of material existence and composition, amounted to 40.6 million lei at the end of 2018. Income amounted to 52.2 million lei and expenditures - 37.2 million lei.

The audit reveals that the NCFM's financial statements present a correct and fair view, in all material respects, in accordance with the applicable financial reporting framework.

The issues and deficiencies, which would have significantly distorted the financial statements as well as influenced the opinion, identified and communicated to the NCFM management, were remedied during the audit engagement.

Thus, during the audit mission:

  • depreciation and impairment of fixed assets were recalculated and adjusted, as well as the balance sheet value of fixed assets by 1761.2 thousand lei;
  • the share in the capital of the Public Institution "Capital Market Periodical Issue" was recognized, registered and reported in the financial statements in the amount of 310.0 thousand lei;
  • the expenditures related to tangible fixed assets under construction were corrected and reported accordingly by 347.2 thousand lei;
  • some receivables of the affiliated parties were corrected and reported in the amount of 34.3 thousand lei.

Following the audit procedures, the main components of the internal control system were implemented within the entity, with the exception of the internal audit function that was vacant in 2018. Thus, ex-post control activities (detection of errors and non-conformities) with the impact on financial statements.

At the same time, it has been found that some investments in information systems have not achieved their expected objectives or outcomes. In this context, it is mentioned that the information system created in 2011 for the reporting by the participants of the non-bank financial market was not used in the operational activity and therefore, at the end of 2018, it was decided its cassation. The expenditures amounting to 6824.2 thousand lei, for the development of this system, did not produce the planned effects.

In the audit mission, the Court of Accounts verified the implementation of the previously formulated recommendations and noted that they had been fully implemented.

Thus:

  • amendments to the remuneration system have been made;
  • some operational processes related to financial management have been described;
  • the Risk Register has been revised;
  • a methodology has been developed for the formation of fees and payments for other legal sources;
  • the Accounting Policy for 2018 has been revised;
  • the social capital was additionally corrected and disclosed in the amount of 24,848.6 thousand lei;
  • the amortization of intangible assets has been corrected;
  • the method of reflecting in the bookkeeping of the interest income from the placement of state securities;
  • provision was made for unused leave and receivables.