Liberia

The presentation and publication of financial statements of Liberian corporate entities are stipulated in the Liberian Associations Law 1977, while the Liberian Institute of Certified Public Accountants (LICPA) Act of April 2011 authorizes LICPA to adopt and issue accounting standards. LICPA’s by-laws require that all the standards it issues be in line with international standards. Accordingly, LICPA adopted IFRS with an effective date of December 2018 for the following entities:

• banks (micro, commercial, investment, etc.);
• credit unions;
• insurance companies;
• mutual funds;
• dealers of any and every kind (including brokers) in financial securities; and
• any legal entity that is in the process of having its equity or debt instruments listed for trading on any public exchange located anywhere, whether within or outside of Liberia; along with any and all other public interest deposit-taking legal entities.

All other companies may choose between IFRS or the IFRS for SMEs.

Prior to the enactment of LICPA’s regulation adopting IFRS, the Central Bank of Liberia did adopt IFRS for banks and financial institutions in 2013.

Amendments to Title 5 of the Liberian Associations Law outline the conditions for appointing and disqualifying auditors; however, there is no legal requirement for companies—other than banks and financial institutions—to present audited accounts. LICPA is the auditing standard-setting body in Liberia under the LICPA Act 2011. LICPA has adopted the ISA as are issued by the International Auditing and Assurance Standards Board (IAASB).

The accountancy profession is regulated by the Liberian Institute of Certified Public Accountants (LICPA), which was established under the LICPA Act 2011. Sections 7 and 8 of the Act empower LICPA to: (i) set accounting and auditing standards; (ii) license qualified individuals and firms to engage in public practice; (iii) maintain and publish a register of Certified Public Accountants (CPAs), Registered Practicing Accountants (RPAs), and Associate Accounting Technicians (AATs); (iv) develop, implement, and monitor compliance with initial professional development and continuing professional development requirements; (v) set ethical requirements; (vi) adopt quality control standards and implement quality assurance requirements; (vii) establish disciplinary mechanisms for investigating and disciplining members for breach of rules and misconduct; and (viii) advise the Government of Liberia on public sector accounting standards.

LICPA has four membership categories that are recognized under the LICPA Act 2011: (i) Chartered Members, (ii) RPAs, (iii) CPAs, and (iv) AATs/Student Members. The Act permits the grandfathering of individuals who were members of the Institute of Certified Public Accountants, Liberia (ICPAL)—established under the 1933 Act as the predecessor of LICPA—by recognizing the status of Chartered Members and RPAs. Chartered Members include all individuals who were ICPAL members who registered their LICPA membership. Similarly, RPAs are accountants who were already in public practice before the LICPA Act became effective, but do not qualify for admission into the institute as CPAs. Under the Act, they are permitted to continue in public practice provided they had registered with the institute by September 2012. Membership in LICPA is mandatory to publicly practice accountancy in Liberia. Furthermore, only LICPA members who are qualified CPAs and RPAs may conduct audits.

Aspiring candidates for LICPA’s CPA membership must have earned a bachelor’s degree, completed the required practical experience of three or more years under a member of the institute who is authorized to provide such training and experience, passed the final qualifying examinations, and passed an additional paper in Liberian taxation. LICPA began offering its professional examinations in May 2011 through a Memorandum of Understanding with the Institute of Charted Accountants (Ghana) (ICAG). LICPA’s final examinations, therefore, are ICAG’s professional accounting qualification exams. Candidates who pass LICPA’s final examination are then qualified to become CPA members of LICPA and Chartered Accountant members of ICAG.

Associate Accounting Technicians (also known as Student Members) are members who have passed the institute’s technician certification program, which is administered under the Association of Accountancy Bodies of West Africa’s Accounting Technician Scheme, West Africa.

There is no independent audit oversight body in Liberia. Auditors are regulated by the Liberian Institute of Certified Public Accountants (LICPA) in accordance with the LICPA Act 2011. Only members of LICPA who hold the designation of Certified Public Accountant (CPA) or Registered Public Accountant (RPA) are permitted to conduct audits in Liberia.

Sections 7 and 8 of the LICPA Act 2011 empowers LICPA to: (i) set auditing standards; (ii) license qualified individuals and firms to engage in public practice; (iii) maintain and publish a register of CPAs and RPAs; (iv) develop, implement, and monitor compliance with initial professional development and continuous professional development requirements; (v) set ethical requirements; (vi) adopt quality control standards and establish a quality assurance review system; and (vii) establish disciplinary mechanisms for investigating and disciplining members for breach of rules and misconduct.

Liberian Institute of Certified Public Accountants (LICPA)

LICPA is the successor of the Institute of Certified Public Accountants Limited of Liberia (ICPAL), which was established in 1933. ICPAL was essentially not operational until the 1980s when it was renamed LICPA under an Executive Order. The LICPA Act 2011 empowers the institute to represent, promote, and regulate the accountancy profession in Liberia. LICPA’s membership comprises Chartered Members, Certified Public Accountants (CPAs), Associate Accounting Technicians (AATs), and Registered Public Accountants (RPAs). LICPA membership is mandatory for all individuals publicly practicing accountancy in Liberia.

Sections 7 and 8 of the LICPA Act 2011 authorizes LICPA to: (i) set accounting and auditing standards; (ii) license qualified individuals and firms to engage in public practice; (iii) maintain and publish a register of CPAs, RPAs, and AATs; (iv) develop, implement, and monitor compliance with initial professional development and continuing professional development requirements; (v) set ethical requirements; (vi) adopt quality control standards and implement quality assurance requirements; (vii) establish disciplinary mechanisms for investigating and disciplining members for breach of rules and misconduct; and (viii) advise the Government of Liberia on public sector accounting standards.

In addition to being a member of IFAC, LICPA is a member of the Association of Accountancy Bodies of West Africa and the Pan African Federation of Accountants.

In 2016, LICPA had a twinning arrangement with the Institute of Chartered Accountants (Ghana) to support LICPA’s quality assurance (QA) review system and education and qualification program and provide training and seminars for LICPA members on various standard-related topics. Efforts are being made to seek donor support to extend the twinning arrangement.

As of 2019, the LIPCA has also been engaging with the Institute of Chartered Accountants of Nigeria to receive support around QA reviews, strengthening its secretariat, and public financial management.

Under the 2011 LICPA Act, the Liberian Institute of Certified Public Accountants (LICPA) is responsible for adopting quality control standards and implementing quality assurance (QA) requirements to ensure the quality of work. Per the legislation, the monitoring mechanism is to be compliant with the SMO 1 requirements.

The Act states that mandatory periodic QA reviews be performed for all audits and the reviews must be performed by an experienced, nonresident, independent reviewer that is appointed by LICPA solely to conduct the reviews. Furthermore, the Act requires the establishment of an Audit Quality Assurance Board (AQAB) to, among other functions, receive the QA reports from audit quality reviewers and to ensure that LICPA can take appropriate remedial measures.

Considering the resources needed to establish and operate an AQAB, LICPA estimates it will be able to formally establish the AQAB in 2022. In the interim, in 2019, LICPA formally requested the Institute of Chartered Accountants of Nigeria (ICAN) to carry out QA reviews. ICAN’s Council agreed to the request and in February 2020, ICAN dispatched a team which carried out a QAR of LICPA member firms.

Current Status: Adopted

In accordance with the 2011 LICPA Act, the Liberian Institute of Certified Public Accountants (LICPA) is responsible for setting, implementing, and monitoring compliance with initial professional development (IPD) and continuing professional development (CPD) requirements. Per the legislation, LICPA is to be compliant with the SMO 2 requirements related to adoption of the IES.

LICPA’s IPD requirements for CPAs include earning a bachelor’s degree, completing the required practical experience of three or more years under a member of the institute who is authorized to provide such training and experience, passing the final qualifying examinations, and passing an additional paper in Liberian taxation.

LICPA’s professional qualification program—i.e. its syllabus, learning materials, and exams—is that of Institute of Chartered Accountants (Ghana) (ICAG), which does meet the 2015 revised IES requirements. Members must then fulfill CPD requirements of 32 credit hours per year.

LICPA also utilizes the Accounting Technician Scheme of West Africa (ATSWA) exam for its Accounting Technician designation and has signed a Memorandum of Understanding with a tertiary university to utilize the ATSWA as its curriculum in support of meeting the IES requirements.

One of LICPA’s key strategic priorities for 2022 is to strengthen its practical experience framework to further meet the 2015 IES requirements.

Current Status: Partially Adopted

Section 8 of the LICPA Act authorizes the Liberian Institute of Certified Public Accountants (LICPA) to adopt internationally comparable auditing standards. The Act further states LICPA should follow the requirements of IFAC’s SMO 3. In July 2015, LICPA issued Regulation 1: Professional Standards and Related Practice Statements, which adopted the ISA. All subsequent standards and revisions issued by the IAASB automatically become adopted for application.

Current Status: Adopted

Sections 8, 9, and 16 of the LICPA Act stipulate that the Liberian Institute of Certified Public Accountants (LICPA) is responsible for the adoption of ethical requirements and that the Code of Professional Ethics is appropriately responsive to needs of stakeholders that rely on the work of accountants. Furthermore, Section 16 stipulates that LICPA should be in compliance with the requirements of IFAC’s SMO 4 relating to the adoption of the IESBA Code of Ethics.

The institute first issued Regulation 1 in July 2015 adopting the 2015 IESBA Code of Ethics for its members. In January 2020, LICPA formally adopted the 2018 International Code of Ethics.

Current Status: Adopted

The Ministry of Finance and Development Planning (MFDP) is responsible for adopting public sector accounting standards while, under the 2011 LICPA Act, the Liberian Institute of Certified Public Accountants (LICPA) is responsible for advising the government on public sector financial management.

In 2009, the government enacted the Public Financial Management Act, which adopted and established cash-basis IPSAS as the official standards for public sector accounting in Liberia, with the aim of transitioning to accrual-basis IPSAS in 2014. However, at the time of the intended transition, the Ebola virus outbreak delayed the transition. As of 2019, LICPA indicates it is engaging with the MFDP to set a new timeline for moving to accrual IPSAS.

Current Status: Partially Adopted

Sections 3 and 16 of the 2011 LICPA Act authorize the Liberian Institute of Certified Public Accountants (LICPA) to establish mechanisms for investigation and discipline (I&D). Furthermore, Section 16 stipulates that LICPA should be in compliance with the requirements of IFAC’s SMO 6. LICPA has established an Ethics, Investigation, and Discipline Committee (EIDC) that is responsible for investigating allegations of professional misconduct. Based on its investigations, the EIDC recommends appropriate sanctions to LICPA’s Council. The Council must approve any sanctions before the EIDC can impose them.

LICPA indicates that the EIDC is functional and its system incorporates some elements of the revised SMO 6 requirements. Certain components, however, such as a separate entity to make disciplinary decisions, an appeals mechanism, certain administrative processes, and making results publicly available, require further implementation efforts.

Current Status: Partially Adopted

The Liberian Institute of Certified Public Accountants (LICPA) Act of April 2011 authorizes the Liberian Institute of Certified Public Accountants (LICPA) to adopt and issue accounting standards for the private sector. The Act further states LICPA should be in compliance with the requirements of IFAC’s SMO 7 relating to adoption of IFRS. LICPA’s by-laws require that all the standards it issues be in line with international standards. Accordingly, LICPA adopted IFRS with an effective date of December 2018 for the following entities:

• banks (micro, commercial, investment, etc.);
• credit unions;
• insurance companies;
• mutual funds;
• dealers of any and every kind (including brokers) in financial securities; and
• any legal entity that is in the process of having its equity or debt instruments listed for trading on any public exchange located anywhere, whether within or outside of Liberia; along with any and all other public interest deposit-taking legal entities.

All other companies may choose between IFRS or the IFRS for SMEs.

Current Status: Adopted

Relevant Organizations

• Liberian Institute of Certified Public Accountants (LICPA)

Relevant Legislation

• Liberian Institute of Certified Public Accountants (LICPA) Act, 2011
• Liberian Associations Law, 1977
• Amendments to Title 5, Associations Law, 2002

Relevant Publications

• Harmon, William Q. “LICPA, Stella Maris Partner to Enhance Accounting Education,” in Daily Observer. 1 Feb 2019.
• LICPA, SMO Action Plan, April 2020.
• Legislature of Liberia, Liberia: House Passes New Insurance Law, July 1, 2014.
• World Bank, Report on the Observance of Standards and Codes (ROSC), Republic of Liberia: Accounting and Auditing, February 2011.