Law 162/2017 in English: appointment, termination, internal audit and penalties, as amended in 2024 and 2025
Updated: 4 days ago
By Dr. Maria Piroi
The short answer
GEO no. 137/2024, in force from 3 December 2024, limited audit contract termination to proper grounds, set a 30-day notice to ASPAAS and introduced ASPAAS administrative penalties for the management of audited entities, including for not organising internal audit. Law no. 137/2025, in force from 25 July 2025, reworded early termination and lowered that penalty's floor to RON 10,000.
How do appointment and early termination work under articles 62 and 63?
The diagram labels are a working translation of the Romanian text in force from 25 July 2025; the Romanian text prevails.
The same procedure, step by step:
The general meeting of the shareholders or associates of the audited entity appoints the financial auditor or audit firm (art. 62 para. 1). Any clause that restricts its choice to certain categories or lists of financial auditors or audit firms is prohibited, and any such existing clauses are null and void (art. 62 para. 2).
The statutory audit contract is concluded in writing after the date of the appointment (art. 62 para. 1). The same applies where the auditor is appointed for the assurance of sustainability reporting (art. 62 para. 1¹).
The audited entity may terminate the contract early only where there are proper grounds (art. 63 para. 1). A divergence of opinions on accounting treatments or audit procedures is not proper grounds (art. 63 para. 2).
Where the contract is terminated early during the term of the appointment, the audited entity and the financial auditor or audit firm inform ASPAAS in writing within 30 days of the date on which the early termination occurred, with an adequate written explanation of their reasons (art. 63 para. 3). This also applies to contracts for the assurance of sustainability reporting (art. 63 para. 4).
A breach of this obligation carries an administrative penalty of RON 10,000 to 20,000, applied by ASPAAS (art. 40 para. 7 letter b).
Key takeaways
The general meeting of shareholders or associates appoints the auditor; art. 62 sets no date for the appointment (art. 62 para. 1, unchanged since 2017).
The audited entity may end the audit contract early only where there are proper grounds, and both sides inform ASPAAS in writing within 30 days (art. 63, as amended by Law no. 137/2025).
Internal audit is mandatory for every entity subject by law to statutory audit (art. 65 para. 7).
Not organising it exposes the entity's management to an ASPAAS penalty of RON 10,000 to 100,000 (art. 40 para. 7 letter a, from 25 July 2025).
What does this translation cover?
This article gives a working English translation of article 62, article 63, article 65 paragraph (7) and article 40 paragraph (7) of Law no. 162/2017 on the statutory audit of annual and consolidated annual financial statements, in the wording in force from 25 July 2025. For each paragraph it shows the date from which that wording applies and the act that introduced it. The appointment rule in art. 62 para. (1) and the internal audit duty in art. 65 para. (7) keep their 2017 wording.
The Romanian text is reproduced from the consolidated text published by ASPAAS (in force from 25 July 2025, covering amending acts published in the Official Gazette up to 22 July 2025) and checked against the amending acts as published: GEO no. 137/2024 and Law no. 137/2025. Some English versions in circulation predate these amendments.
The Romanian text prevails. The English column is a working translation prepared by Piroi for information; it is not an official translation. Where the two differ, rely on the Romanian text published in the Official Gazette (Monitorul Oficial al României).
Article 62: who appoints the statutory auditor
The general meeting of shareholders or associates appoints the auditor, and the audit contract is concluded in writing after the appointment. Article 62 sets who appoints the auditor; it sets no date for the appointment.
ART. 62 Numirea auditorilor financiari sau a firmelor de audit (Art. 62 Appointment of financial auditors or audit firms)
Para. (1) |
Romanian text in force Auditorul financiar sau firma de audit este numită de adunarea generală a acționarilor sau a asociaților entității auditate. Auditul statutar se efectuează în temeiul contractului de audit statutar care se încheie în formă scrisă, după data numirii auditorului financiar sau firmei de audit de adunarea generală a acționarilor sau a asociaților entității auditate. |
Working English translation The financial auditor or audit firm is appointed by the general meeting of the shareholders or associates of the audited entity. The statutory audit is carried out under a statutory audit contract, concluded in writing after the date on which the general meeting of the shareholders or associates of the audited entity appoints the financial auditor or audit firm. |
In force since: 15 July 2017 Amended by: Original text (Law no. 162/2017); not amended |
Para. (1¹) |
Romanian text in force Prevederile alin. (1) se aplică și în cazul numirii auditorului financiar sau a firmei de audit în scopul asigurării raportării privind durabilitatea. |
Working English translation Paragraph (1) also applies where the financial auditor or audit firm is appointed for the assurance of sustainability reporting. |
In force since: 3 December 2024 Amended by: Inserted by GEO no. 137/2024, art. I point 50 |
Para. (2) |
Romanian text in force Se interzice orice clauză prin care se restricționează, la anumite categorii sau liste de auditori financiari sau firme de audit, posibilitatea adunării generale a acționarilor sau a asociaților entității auditate de a desemna în temeiul alin. (1) un anumit auditor financiar sau firmă de audit pentru a efectua auditul statutar și, după caz, asigurarea raportării privind durabilitatea entității respective. Orice astfel de clauze existente sunt nule. |
Working English translation Any clause that restricts to certain categories or lists of financial auditors or audit firms the possibility of the general meeting of the shareholders or associates of the audited entity to designate, under paragraph (1), a particular financial auditor or audit firm to carry out the statutory audit and, where applicable, the assurance of sustainability reporting of that entity is prohibited. Any such existing clauses are null and void. |
In force since: 3 December 2024 Amended by: Replaced by GEO no. 137/2024, art. I point 51 |
Para. (3) |
Romanian text in force Acționarii sau asociații entităților mijlocii și mari, astfel cum sunt definite în reglementările contabile aplicabile, care intră sub incidența obligației de raportare privind durabilitatea, care reprezintă mai mult de 5% din drepturile de vot sau 5% din capitalul întreprinderii, acționând individual sau colectiv, au dreptul de a prezenta un proiect de hotărâre, propus spre adoptare de adunarea generală a acționarilor sau a asociaților, prin care se solicită ca o terță parte acreditată, care nu aparține aceleiași firme sau rețele de audit din care face parte auditorul financiar sau firma de audit care efectuează auditul statutar, să întocmească un raport cu privire la anumite elemente ale raportării privind durabilitatea și că un astfel de raport este pus la dispoziția adunării generale a acționarilor sau a asociaților. |
Working English translation Shareholders or associates of medium-sized and large entities, as defined in the applicable accounting regulations, that are subject to the sustainability reporting obligation, who represent more than 5% of the voting rights or 5% of the capital of the undertaking, acting individually or collectively, have the right to table a draft resolution, proposed for adoption by the general meeting of the shareholders or associates, requesting that an accredited third party, not belonging to the same audit firm or audit network as the financial auditor or audit firm carrying out the statutory audit, prepare a report on certain elements of the sustainability reporting and that such a report be made available to the general meeting of the shareholders or associates. |
In force since: 3 December 2024 Amended by: Inserted by GEO no. 137/2024, art. I point 52 |
Para. (4) |
Romanian text in force Fac excepție de la prevederile alin. (3) acționarii sau asociații societăților ale căror valori mobiliare sunt admise la tranzacționare pe o piață reglementată. |
Working English translation Paragraph (3) does not apply to the shareholders or associates of companies whose securities are admitted to trading on a regulated market. |
In force since: 3 December 2024 Amended by: Inserted by GEO no. 137/2024, art. I point 52 |
Article 63: when the audited entity may end the audit contract early
The audited entity may end the contract early only where there are proper grounds; a divergence of opinions on accounting treatments or audit procedures is not one; both the entity and the auditor inform ASPAAS in writing within 30 days.
ART. 63 Rezilierea contractelor de audit (Art. 63 Termination of audit contracts)
Para. (1) |
Romanian text in force Contractul de audit statutar sau, după caz, contractul de asigurare a raportării privind durabilitatea poate fi încetat anticipat de către entitatea auditată numai în cazul în care există motive temeinice. |
Working English translation The statutory audit contract or, where applicable, the contract for the assurance of sustainability reporting may be terminated early by the audited entity only where there are proper grounds. |
In force since: 25 July 2025 Amended by: Replaced by Law no. 137/2025, single article point 13 (earlier wording: GEO no. 137/2024, art. I point 53) |
Para. (2) |
Romanian text in force Divergența de opinii cu privire la tratamentele contabile, la procedurile de audit sau, după caz, la procedurile de raportare sau de asigurare privind durabilitatea nu reprezintă un motiv temeinic pentru ca entitatea auditată să înceteze anticipat contractul. |
Working English translation A divergence of opinions on accounting treatments, on audit procedures or, where applicable, on sustainability reporting or assurance procedures is not proper grounds for the audited entity to terminate the contract early. |
In force since: 25 July 2025 Amended by: Replaced by Law no. 137/2025, single article point 13 (earlier wording: GEO no. 137/2024, art. I point 53) |
Para. (3) |
Romanian text in force Entitatea auditată și auditorul financiar sau firma de audit au obligația informării în scris a ASPAAS în legătură cu încetarea anticipată a contractului intervenită pe durata mandatului, în termen de 30 de zile de la data la care a intervenit, și dau o explicație scrisă adecvată pentru motivele acestora. |
Working English translation The audited entity and the financial auditor or audit firm are required to inform ASPAAS in writing of the early termination of the contract occurring during the term of the appointment, within 30 days of the date on which it occurred, and give an adequate written explanation of their reasons. |
In force since: 25 July 2025 Amended by: Replaced by Law no. 137/2025, single article point 13 (earlier wording: GEO no. 137/2024, art. I point 53) |
Para. (4) |
Romanian text in force Obligația de informare menționată la alin. (3) se aplică și contractelor de asigurare a raportării privind durabilitatea. |
Working English translation The obligation to inform referred to in paragraph (3) also applies to contracts for the assurance of sustainability reporting. |
In force since: 3 December 2024 Amended by: Introduced by GEO no. 137/2024, art. I point 53 (article replaced) |
Article 63 does not define proper grounds. Art. 93 of Law no. 162/2017 provides that art. 62 para. (2) and art. 63 para. (2) apply to contracts concluded after the law entered into force (Romanian text: „Prevederile art. 62 alin. (2) și ale art. 63 alin. (2) se aplică pentru contractele încheiate ulterior intrării în vigoare a prezentei legi.”).
Article 65 paragraph (7): internal audit
Every entity whose annual financial statements are subject by law to statutory audit must organise and ensure the exercise of internal audit. The wording has not changed since 2017; since 3 December 2024 its breach carries an ASPAAS penalty under article 40 paragraph (7) letter a).
ART. 65 Comitetul de audit, alin. (7) (Art. 65 The audit committee, para. (7))
Para. (7) |
Romanian text in force Entitățile ale căror situații financiare anuale sunt supuse, potrivit legii, auditului statutar sunt obligate să organizeze și să asigure exercitarea activității de audit intern, potrivit cadrului legal. |
Working English translation Entities whose annual financial statements are subject by law to statutory audit are required to organise and ensure the exercise of internal audit activity, in accordance with the legal framework. |
In force since: 15 July 2017 Amended by: Original text (Law no. 162/2017); not amended |
Article 40 paragraph (7): penalties for the management of audited entities
ASPAAS applies these sanctions, after an administrative procedure, to the management of entities subject to statutory audit and to members of the administrative or management body of a public-interest entity or audit firm.
ART. 40 Răspunderea administrativă, alin. (7) (Art. 40 Administrative liability, para. (7))
Para. (7), introductory wording |
Romanian text in force În urma derulării procedurii administrative, ASPAAS aplică conducerii entităților ale căror situații financiare anuale sunt supuse, potrivit legii, auditului statutar, membrilor organului administrativ sau de conducere al unei entități de interes public sau al unei firme de audit următoarele sancțiuni: |
Working English translation Following the administrative procedure, ASPAAS applies the following sanctions to the management of entities whose annual financial statements are subject by law to statutory audit, and to members of the administrative or management body of a public-interest entity or of an audit firm: |
In force since: 3 December 2024 Amended by: Inserted by GEO no. 137/2024, art. I point 42 |
Para. (7) a) |
Romanian text in force penalitate administrativă cuprinsă între 10.000 lei și 100.000 lei pentru încălcarea de către entitățile ale căror situații financiare anuale sunt supuse, potrivit legii, auditului statutar a prevederilor art. 62 alin. (2) și art. 65 alin. (1), (3) și (7) din prezenta lege și ale art. 16 din Regulamentul (UE) nr. 537/2014; |
Working English translation an administrative penalty of between RON 10,000 and RON 100,000 for a breach, by entities whose annual financial statements are subject by law to statutory audit, of art. 62 para. (2) and art. 65 paras. (1), (3) and (7) of this law and of art. 16 of Regulation (EU) No 537/2014; |
In force since: 25 July 2025 Amended by: Replaced by Law no. 137/2025, single article point 8 (from 3 December 2024 to 24 July 2025: RON 50,000 to 100,000, GEO no. 137/2024) |
Para. (7) b) |
Romanian text in force penalitate administrativă cuprinsă între 10.000 și 20.000 lei pentru încălcarea de către entitățile ale căror situații financiare anuale sunt supuse, potrivit legii, auditului statutar sau de către auditorii financiari sau firmele de audit, după caz, a prevederilor art. 63 alin. (3), ale art. 65 alin. (2) și (4)-(6) și ale art. 76; |
Working English translation an administrative penalty of between RON 10,000 and RON 20,000 for a breach, by entities whose annual financial statements are subject by law to statutory audit or by financial auditors or audit firms, as the case may be, of art. 63 para. (3), art. 65 paras. (2) and (4) to (6) and art. 76; |
In force since: 3 December 2024 Amended by: Inserted by GEO no. 137/2024, art. I point 42 |
Para. (7) c) |
Romanian text in force interdicție temporară, de până la 3 ani, pentru un membru al firmei de audit sau un membru al organismului administrativ sau de conducere al unei entități de interes public să exercite funcții la firme de audit sau la entități de interes public. |
Working English translation a temporary prohibition, of up to 3 years, on a member of the audit firm or a member of the administrative or management body of a public-interest entity exercising functions in audit firms or in public-interest entities. |
In force since: 3 December 2024 Amended by: Inserted by GEO no. 137/2024, art. I point 42 |
What changed in 2024 and 2025
3 December 2024, GEO no. 137/2024
Art. 40 para. (7) inserted: ASPAAS sanctions for the management of audited entities. Letter a) set RON 50,000 to 100,000 for breaches of art. 62 para. (2) and art. 65 paras. (1), (3) and (7), which include the obligation to organise internal audit; letter b) set RON 10,000 to 20,000, among others for a missed notice under art. 63 para. (3); letter c) set a temporary prohibition of up to 3 years.
Art. 62: paras. (1¹), (3) and (4) inserted; para. (2) reworded to cover any clause, not only contractual clauses, and to extend the ban to the assurance of sustainability reporting.
Art. 63 replaced: the contract may be terminated only where there are proper grounds; the notice to ASPAAS must be given within 30 days; para. (4) extends the notice to sustainability assurance contracts. The 2017 wording allowed termination "în condițiile legii" (as provided by law) and set no deadline for the notice.
25 July 2025, Law no. 137/2025 (approving GEO no. 137/2024 with amendments)
Art. 40 para. (7) letter a): the penalty band became RON 10,000 to 100,000 (previously RON 50,000 to 100,000).
Art. 63 paras. (1) to (3): termination is now worded as early termination by the audited entity; the 30 days run from the date on which the early termination occurred; the notice covers early termination during the term of the appointment.
Not amended since 2017
Art. 62 para. (1) and art. 65 para. (7) keep their original wording, in force since 15 July 2017.
Who uses this translation?
Finance directors and group auditors of Romanian subsidiaries who need the current wording in English; shareholders and boards preparing the appointment or replacement of the auditor; companies preparing their first statutory audit. For the wider picture, see the Audit in Romania guide, the first statutory audit timeline and, for group auditors, working with a Romanian component auditor under ISA 600 (Revised).
FAQ
Who appoints the statutory auditor of a Romanian company?
The general meeting of the shareholders or associates of the audited entity (Law no. 162/2017, art. 62 para. 1). The statutory audit contract is concluded in writing after the appointment.
Does article 62 set a deadline for appointing the auditor?
No. Art. 62 para. 1 provides who appoints the auditor and that the contract is concluded in writing after the appointment, without setting a date.
Can a Romanian company end its audit contract early?
Only where there are proper grounds (Law no. 162/2017, art. 63 para. 1, as amended by Law no. 137/2025). A divergence of opinions on accounting treatments or audit procedures is not proper grounds (art. 63 para. 2).
How long do the company and the auditor have to inform ASPAAS of an early termination?
30 days from the date on which the early termination occurred, in writing, with an adequate written explanation of the reasons (art. 63 para. 3). A breach of this obligation by the entity or by the auditor or audit firm carries an administrative penalty of RON 10,000 to 20,000, applied by ASPAAS under art. 40 para. 7 letter b.
Is internal audit mandatory for a company subject to statutory audit?
Yes. An entity whose annual financial statements are subject by law to statutory audit must organise and ensure the exercise of internal audit (Law no. 162/2017, art. 65 para. 7).
What is the penalty for not organising internal audit?
An administrative penalty of RON 10,000 to 100,000, applied by ASPAAS to the management of the entity (art. 40 para. 7 letter a, as amended by Law no. 137/2025, in force from 25 July 2025). From 3 December 2024 to 24 July 2025 the band was RON 50,000 to 100,000.
Is this an official translation of Law 162/2017?
No. It is a working translation prepared by Piroi for information. The Romanian text published in the Official Gazette prevails.
Sources
Last updated: 2 November 2026. This article is for general information. It is not advice on a specific case and does not replace an analysis of your company's situation. Drafted with AI assistance; references were verified against the primary sources.
Questions about Law 162/2017 and your company's audit obligations? Primary contact: Bogdan Năstase · Managing Partner, International Lead
