Watchdogs and Audits: A Powerful Combination for Romania's Economic and Governance Transformation.

Audits: The Silver Bullet to Transform an Entire Economy. 

Why Romania needs an audit revolution?

Romania is a country with many challenges and opportunities, but also with many problems and inefficiencies. One of the main sources of these problems is the lack of transparency and accountability in the public and private sectors. Corruption, fraud, mismanagement, waste and abuse of power are rampant and undermine the trust and confidence of the citizens, investors and partners.

How can Romania address these issues and improve its governance, performance and reputation? One possible solution is to adopt a culture of audit, based on the principles of independence, professionalism, integrity and quality. Audit is not only a tool for compliance and control, but also for improvement and innovation. Audit can help identify and prevent risks, detect and correct errors, improve processes and systems, enhance efficiency and effectiveness, and provide assurance and credibility.

However, not all audits are created equal. In order to achieve these benefits, audits need to be conducted by qualified, competent and independent auditors, who follow high standards of ethics and quality. Unfortunately, this is not always the case in Romania, where the audit profession is often influenced by political or personal interests, or compromised by low competence or integrity.

This is why Romania needs an audit revolution, inspired by the best practices of other countries, such as Norway. Norway is a country that has a strong tradition of audit, both in the public and private sectors. Norway has a supreme audit institution (SAI), which is an independent constitutional body that audits the government's accounts and activities, reports to the parliament and the public, and contributes to good governance and democracy. Norway also has a robust market of private audit firms, dominated by the so-called big four (EY, Deloitte, KPMG and PwC), which provide high-quality audit services to large companies and organizations.

The big four are global leaders in audit and assurance, with extensive experience, expertise and resources. They have rigorous methodologies, standards and tools for conducting audits, as well as strict codes of ethics and quality control. They are subject to external oversight and regulation by national and international bodies. They are also accountable to their clients, shareholders, regulators and the public for their work.

The big four have a significant presence in Romania, but their potential is not fully exploited. Many state-owned enterprises (SOEs) and large private companies do not use their services, either because they are not required by law or because they prefer cheaper or more compliant alternatives. This is a missed opportunity for Romania, as the big four could bring many benefits to these entities and to the country as a whole.

By using the big four as their auditors, SOEs and large private companies could improve their financial reporting, internal control, risk management, governance and performance. They could also enhance their transparency, accountability, reputation and trustworthiness. They could also avoid or mitigate scandals, controversies or legal problems that could damage their image or operations.

Moreover, by using the big four as their auditors, SOEs and large private companies could contribute to the development of the audit profession in Romania. They could create demand for high-quality audit services, stimulate competition among audit firms, raise the standards of audit practice and education, foster a culture of audit among managers and employees, and support the role of audit in society.

Therefore, Romania should consider introducing a legal requirement for SOEs and large private companies to have an annual audit by one of the big four firms. This would be a bold but beneficial move for Romania's economy, governance and democracy. It would also be a sign of Romania's commitment to European values ​​and norms.

Romania needs an audit revolution. The big four can be part of the solution.