Kampuchea Institute of Certified Public Accountants and Auditors (KICPAA)

In January 2021, the Law on Organizing and Functioning of Non-Banking Regulators established the Accounting and Auditing Regulator (ACAR), as one of the primary regulators of the accountancy profession in Cambodia under the supervision of the Non-Bank Financial Services Authority. The Non-Bank Financial Services Authority is an entity within the Ministry of Economy and Finance. The ACAR is responsible for monitoring and investigating off-site and on-site inspections to ensure compliance with applicable standards.

An Audit Quality and Monitoring Committee (AQMC) was established to carry out the QA reviews on behalf of the MEF and ACAR. The AQMC’s QA system was developed with the support of consultants from ICAEW and the Asian Development Bank. The AQMC, which was endorsed by a proclamation (“prakas”) of the MEF for its independence, is comprised of representatives from the ACAR, the National Bank, and the Kampuchea Institute of Certified Public Accountants (KICPAA), among other various stakeholders.

In August 2017, the AQMC conducted a pilot round of in-person visits to five firms with the support of the World Bank and PUM Netherlands—a developing agency from the Netherlands. The institute notes that it offered a Train the Trainer workshop on practical audit matters in May 2017 to members as part of the first-round review process. Following the pilot, the AQMC and KICPAA conducted workshops on general findings and in 2018, a QA Manual Program was developed. Pilot reviews of another 19 firms were conducted in 2018 and 2019 until the pandemic paused all activities in 2020. As of 2022, all QA activity has resumed with 13 QA reviews completed in 2021 and KICPAA reports that the system is aligned with SMO 1 requirements. All relevant standards as issued by the IAASB including ISQM 1, 2, and the revised ISA 220 have been adopted.

KICPAA had previously developed and implemented a number of tools to assist firms with quality control standards such as a firm wide quality control questionnaire; an audit engagement review questionnaire; and a quality control documentation guide. In 2021, the institute states that it has been raising awareness of quality management standards in its continuing professional development programs, with some workshops & seminars done in collaboration with foreign PAOs.

KICPAA is requested to complete the SMO 1 self-assessment. KICPAA is encouraged to continue its collaboration with the ACAR to ensure the QA system operates in line with SMO 1 requirements.

Current Status: Review & Improve

Under the Law on Accounting and Auditing and the Sub-Decree (“Anukret”) on the Organization and Functions of the Kampuchea Institute of Certified Public Accountants and Auditors, the Kampuchea Institute of Certified Public Accountants and Auditors (KICPAA) is responsible for establishing initial professional development (IPD) and continuing professional development (CPD) requirements for professional accountants.

KICPAA’s current membership consists of members of other foreign professional accountancy organizations—such as the Association of Chartered Certified Accountants (ACCA), the Chartered Professional Accountants of Canada, the Certified Practicing Accountants of Australia, and the Institute of Chartered Accountants in England and Wales, which have established IPD requirements in line with the latest IES—that must pass the MEF’s examinations and have three years of practical experience.

As of May 2022, a Cambodia CPA qualification has been developed with technical support from the ICAEW and in line with the IES. A working group that oversees the National CPA Program Management Framework Preparation was established and its activities are endorsed by the MEF and ACAR. This group will be responsible for updating, developing, and managing the program. KICPAA reports that the ACAR and MEF had plans to launch the Cambodia CPA Program by end of 2020; however, the pandemic stalled progress and has only begun discussions again in 2022.

KICPAA has also completed the development of an accounting technician program, utilizing the IES as reference as well as other global best practices, that aims to attract young students coming out of university and MOUs have been signed with several universities to promote this program.

Regarding CPD programming, the institute indicates it is active in this area and has stipulated CPD requirements for its members that are in line with IES 7 requirements. KICPAA offers a variety of CPD courses on applicable standards and developments as well as other topics such as cyber security, IT, forensic accounting, and soft skills and publicizes these courses on its website. KICPAA also partners with foreign PAOs to offer CPD to its members.

KICPAA is encouraged to monitor developments around the local qualification and provide updates on when this new program will be operational. KICPAA should be actively involved in ensuring incorporation of the latest IES requirements for this program and working with universities on both this and the ATQ as well as employers around practical experience as part of further filling the SMO 2 requirements.

Current Status: Execute

In January 2021, the Law on Organizing and Functioning of Non-Banking Regulators established the Accounting and Auditing Regulator (ACAR), as one of the primary regulators of the accountancy profession in Cambodia under the supervision of the Non-Bank Financial Services Authority. The Non-Bank Financial Services Authority is an entity within the Ministry of Economy and Finance.

Legislation states that all audits must be conducted in accordance with the standards on auditing as established by ACAR. The Cambodian Auditing and Assurance Standards Board, operating under the ACAR, has adopted all ISA as the Cambodian Standards on Auditing and Assurance (CSAA) and other IAASB pronouncements. These standards were approved by the MEF through Prakas No. 370 MEF. The prakas states that all updates of the standards are automatically adopted.

The KICPAA indicates that as a member of the ACAR it has a participatory role in supporting the standard-setting process and monitoring the implementation of auditing standards in the jurisdiction through its quality control guides and questionnaires.

KICPAA also offers continuing professional development courses on ISA and any updates to the standards.

Previously, KICPAA was encouraged to update the SMO 3 section of its Action Plan to indicate more specific information on actions and efforts to support the adoption and implementation of auditing standards in the jurisdiction. For example, it is encouraged to provide further information on its collaboration with the ACAR as well as examples of implementation support it provides to its members. IFAC reiterates the same recommendation as part of demonstrating KICPAA’s best endeavors to fulfill SMO 3.

Current Status: Review & Improve

In January 2021, the Law on Organizing and Functioning of Non-Banking Regulators established the Accounting and Auditing Regulator (ACAR), as one of the primary regulators of the accountancy profession in Cambodia under the supervision of the Non-Bank Financial Services Authority. The Non-Bank Financial Services Authority is an entity within the Ministry of Economy and Finance.

ACAR has legal responsibility for setting ethical requirements for professional accountants in Cambodia. The ethical requirements are to be consistent with international standards. The Ministry of Economy and Finance (MEF) will subsequently issue a proclamation (“prakas”) approving the requirements.

As of October 2022, the International Code of Ethics issued by the IESBA has been adopted. These standards were approved by a prakas, which states that all updates of the standards are automatically adopted.

KICPAA indicates that it promotes the IESBA Code to members via its website. CPD around ethical requirements has also been offered by KICPAA in collaboration with foreign PAO counterparts.

Previously, KICPAA was encouraged to update the SMO 4 section of its Action Plan to indicate more specific information on actions and efforts to support the adoption and implementation of ethical standards in the jurisdiction. For example, it is encouraged to provide further information on its collaboration with the ACAR as well as examples of implementation support it provides to its members. IFAC reiterates the same recommendation as part of demonstrating KICPAA’s best endeavors to fulfill SMO 4.

Current Status: Review & Improve

KICPAA has no direct responsibility for the adoption of public sector accounting standards, which are set by the ACAR.

In 2012, after receiving assistance from the World Bank, the government agreed to adopt reporting standards following cash-basis IPSAS and gradually transition to accrual-basis IPSAS. Subsequently, in 2014, the KICPAA co-organized a workshop on IPSAS with the Institute of Chartered Accountants in England and Wales for officials of the Ministry of Finance and Economy. The institute reports that it continues to use its best endeavors to promote the benefits of IPSAS and circulate guidance issued by IPSASB.

The Accounting and Auditing Regulator (ACAR) partnered with Ecorys to train ACAR staff and to work with the local government to establish a roadmap to eventually adopt and implement accrual-based accounting. As of October 2022, KICPAA reports that the government has adopted cash-basis IPSAS and is considering how to move to accrual-based IPSAS by 2030.

KICPAA may consider if it is within its capacity to have a further participatory, advisory, and/or advocacy role in the IPSAS adoption and implementation process as part of further fulfilling the SMO 5 obligations.

Current Status: Review & Improve

In January 2021, the Law on Organizing and Functioning of Non-Banking Regulators established the Accounting and Auditing Regulator (ACAR), as one of the primary regulators of the accountancy profession in Cambodia under the supervision of the Non-Bank Financial Services Authority. The Non-Bank Financial Services Authority is an entity within the Ministry of Economy and Finance.

Under the law, the ACAR is authorized to take disciplinary measures or administrative punishments against professional accountants who violate accounting and auditing regulations. The law specifies the applicable penalties for violations.

Per the Decree (“Anukret”) on the Organization and Functions of the Kampuchea Institute of Certified Public Accountants and Auditors, KICPAA is also mandated to establish an investigative and disciplinary mechanism for its members – which, as a mandatory membership institute, includes all professional accountants in Cambodia.

As of 2023, as established in KICPAA’s By-laws and relevant prakas, KICPAA has created a single Investigation & Disciplinary committee which includes representatives from ACAR, KICPAA council members, and staff. This committee has already formulated processes for investigating complaints and issuing sanctions. Currently, KICPAA is developing the I&D Standard Operating Procedure (SOP), with the initial draft completed. This draft will undergo further revisions before being submitted for formal approval by the Governing Council, expected in October 2024.

KICPAA is encouraged to continue with the recent implementation of its I&D system and to ensure that the system incorporates the requirements of SMO 6. The SMO 6 self-assessment will be important for both KICPAA and ACAR to adhere to. Enforcement mechanisms that meet the SMO 6 benchmark for all professional accountants are a key component of public trust and confidence in the accountancy profession. Collaborating and learning from AFA members and other foreign PAOs would be a constructive approach finalizing KICPAA’s I&D mechanism.

Current Status: Execute

In January 2021, the Law on Organizing and Functioning of Non-Banking Regulators established the Accounting and Auditing Regulator (ACAR), as one of the primary regulators of the accountancy profession in Cambodia under the supervision of the Non-Bank Financial Services Authority. The Non-Bank Financial Services Authority is an entity within the Ministry of Economy and Finance.

The legislation authorizes the ACAR to propose and update applicable accounting standards that are consistent with international standards as issued by the IASB. The Ministry of Economy and Finance (MEF) subsequently issues a proclamation (“prakas”) approving the standards for application in the jurisdiction.

The Cambodian Accounting Standards Board under the ACAR has fully adopted IFRS as issued by the IASB, without modifications as the Cambodian International Financial Reporting Standard (CIFRS) and IFRS for Small- and Medium-sized Entities (SMEs) as Cambodian International Financial Reporting Standards for SMEs (CIFRS for SMEs). The prakas state that all updates of the standards are automatically adopted. Public interest entities (PIEs) such as listed companies, banks, microfinance institutions, and insurance companies as well as large private companies are required to apply CIFRS during the preparation of their financial statements. All SMEs and non-PIEs are permitted to use the CIFRS for SMEs or full IFRS.

KICPAA has no legal authority in adopting national accounting standards and reports that it supports the ACAR in the development of standards by providing technical assistance.

KICPAA also supports its members with the implementation of the standards by offering workshops and continuing professional development courses.

Additionally, the institute has stated that it is working with the government to establish a company registrar for companies to file statutory audited financial statements.

Current Status: Sustain