INTERNAL AUDIT OF PROVISIONS IN THE REPUBLIC OF MOLDOVA: FROM HARMONISATION WITH EUROPEAN STANDARDS TO THE IMPLEMENTATION OF APPLIED ANALYTICAL PROCEDURES
Mirela MOLDOVAN, PhD Student
Free International University of Moldova
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Igor BALAN, Assoc. Prof., PhD
Free International University of Moldova
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Universal Decimal Classification: 65.012.12(478)
JEL Classification: M42, M41
Abstract
The need to recalibrate financial reporting systems in the context of the Republic of Moldova’s European integration agenda provides the conceptual foundation for this study. The ongoing harmonization with the European Union acquis has transformed auditing from a formal compliance requirement into a strategic governance mechanism that enhances investor confidence and strengthens the credibility of financial information for international stakeholders. Within the framework of financial reporting, provisions constitute one of the most judgment-intensive accounting categories, as their recognition and measurement rely extensively on management estimates, professional judgment, and uncertainty surrounding future obligations. Accordingly, the internal audit
of provisions assumes a pivotal role by assessing the validity of accounting estimates, verifying compliance with accounting policies, and ensuring the faithful representation of financial information. The research adopts a systemic methodological approach that integrates advanced diagnostic instruments, including risk mapping and internal control questionnaires, to identify and prioritise operational vulnerabilities. The principal scientific contribution of the study consists in the development of a structured audit algorithm comprising three analytical procedures (PA-01, PA-02, and PA-03) specifically designed to enhance the effectiveness of the internal audit of provisions. These original procedures facilitate a rigorous assessment of the consistency of accounting policies and the actual impact of estimated liabilities (provisions) on an entity’s financial performance. The findings demonstrate that repositioning internal audit as a managerial support function enables the timely identification of reporting distortions, strengthens asset integrity, and improves the reliability of financial information. By proposing practical and operational solutions, the study establishes a robust internal audit framework that reinforces corporate governance, enhances organizational transparency, and increases the credibility of the domestic business environment, thereby facilitating broader integration into international capital markets.
Keywords: audit, internal audit, provisions, analytical procedures, corporate governance
2025.PNG)
