On 10 July 2020, the Ministry of Economy and Finance (MEF) released Prakas 563 to explain which entities are required to submit financial reports for an independent audit.
This is MEF's efforts to increase compliance. Based on Law on Accounting and Auditing, enterprises and not-for-profit organizations are obliged to prepare their financial statements
Who is needed to have financial reports audited?
- All public enterprises, enterprises with public accountability, and investment projects must submit their ﬁnancial reports for each accounting period for an independent audit. A public enterprise is defined as an entity that is under the eﬀective Law of the General Articles of Association of Public Enterprises. Enterprises with public accountability are defined as: Enterprises that have any debt instruments or equity instruments that are traded in a public market or an enterprise that is preparing to issue such instruments to be traded in a public market (either domestic or foreign stock exchange or domestic or regional OTC (over the counter) market; or Enterprises that hold assets in a ﬁduciary matter for a broad range of outsiders as a primary business such as banks, deposit-taking micro-ﬁnance institutions, credit unions, insurance companies, securities dealers, securities brokers, and mutual funds. Investment projects are defined to include qualiﬁed investment projects (“QIPs“) that have received certiﬁcation and registration from the Council for Development of Cambodia (“CDC“).
- In addition to the enterprises outlined above any enterprise in Cambodia that meets two (2) of the three (3) criteria in the second column of the table below will also be required to submit their financial reports for independent audit for each accounting period:
- Annual Turnover are above KHR 4 billion (approximately USD 1,000,000).
- Total Assets are above KHR 3 billion (approximately USD 750,000) at the date of the close of the accounting period.
- Number of employees is more than 100 referring to the average number for the year.
Enterprises that do not meet two (2) out of the three (3) criteria above can also voluntarily submit their financial reports for independent audit.
Not-for-profit entities must submit their financial reports for each accounting period for independent audit if the not-for-profit entity meets the criteria below:
- Total Annual Expenses more than KHR 2 billion (approximately USD 500,000); and
- Workers/employees of twenty (20) or more individuals, referring to the average number of workers/employees for the year.
Not-for-profit entities that do not meet the two criteria above can voluntarily submit their financial reports for independent audit.
Advance Grand Formula Co., Ltd is licensed audit firm from Accounting and Auditing Regulator (“ACAR”) and member audit firm of Kampuchea Institute of Certified Public Accountants and Auditors (KICPAA).
Should you need any further information or support, please contact us at: email@example.com.