acca myanmar.pdf

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Easy Guide to Setting Up AccountancyPractices in ASEAN Countries

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About ACCA

ACCA (the Association of CharteredCertified Accountants) is the largestand fastest-growing globalprofessional accountancy body with296,000 students and 115,000members in 170 countries. We aimto offer the first choice qualificationsto people of application, ability andambition around the world who seeka rewarding career in accountancy,finance and management.

We support our students andmembers throughout their careers,providing services through a networkof nearly 80 offices and centres.We have established more than 50global accountancy partnerships,through which we deliverqualifications and range of serviceswhich promote global standards,benefit the accountancy professionand enhance the value ofaccountants in the workplace. Wework closely with more than 470registered tuition providers andnearly 8,500 employers ofaccountants and financeprofessionals.

We use our expertise and experienceto work with governments, donoragencies and professional bodies todevelop the accountancy profession.We aim to achieve and promote thehighest professional, ethical andgovernance standards and advancethe public interest. ACCA’s reputationis grounded in over 100 years ofproviding accounting and financequalifications. Our long traditions arecomplemented by modern thinking,backed by a diverse, globalmembership.

For more information please visitwww.accaglobal.com

Contents

1 Introduction 2

2 Executive Summary 4

3 Overview of the Accountancy 5Services Regulation

3.1 Brunei Darussalam 63.2 Cambodia 83.3 Indonesia 133.4 Malaysia 173.5 Myanmar 243.6 Philippines 283.7 Singapore 323.8 Thailand 383.9 Vietnam 42

ACCA National Offices 47

National Accountancy Bodies 48

References and Acknowledgement 49

Disclamer

This guidebook is published in good faith for the benefit of public practitioners in ASEAN countries. Itscontents are intended for general guidance only and should not be used as substitute for seekingprofessional advice.

Neither the contributors nor ACCA, including any of the employees, shall be held liable to any readerof this guidebook for any losses of any kind, however they are caused, including, without prejudice tothe generality herein, losses which are incurred by any reader in acting or failing to act, or advising, orfailing to advise a third party to act or refrain from acting, upon any guidance given or viewsexpressed in the guidebook.

All the information contained in this publication is as at 30 November 2007

© 2007 ACCA Malaysia Sdn Bhd. All right reserved.

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Foreword

In a knowledge-led society information is king! Global players know this – knowledge of local business is a competitiveedge and something market leaders will leverage and apply to their business advantage.

As trade liberalisation advances rapidly across all sectors and services national boundaries continue to be irrelevant,movement of talent becomes easier, and convergence of standards becomes more real – it is very apparent thataccessible to information is paramount in the business environment.

Within the region, bilateral relations between member states have been more rapid resulting in greater need for businessto become global in outlook – supported by knowledge infrastructures that can transmit information in seconds andservices that can apply across national boundaries.

The Big 4 accountancy firms have been the early multinationals to provide services to their clients across the nationalboundaries. Their knowledge of local legislations, customs, and practices has successfully enabled them to deliver theirvalue propositions successfully.

Public accounting landscape today continues to change across the region. The variety and complexity of businesschanges in recent years present challenges and opportunities for accounting professionals. Convergence of IFRScompliance, corporate governance requirement and an overall desire to serve clients that have gone regionally areprompting many public accountants to improve their value propositions including new advisory services and addingpositions that did not exist five years ago. Businesses are also focused on managing risks and financial reportingactivities, internal controls and audits, and financial systems and processes. An increased focus on preventing anddetecting corporate fraud is also driving the demand for professional accounting services.

In today’s constant shifting business environment, it is imperative that public accountants stay ahead to remain relevantand to become partners in business. Across the region mergers and acquisitions are on the rise; investment expansionand opportunities are widespread. Demand for experienced accounting and auditing work are driving up demand forsuch professional services.

Public accounting is an integral part of business. That’s why people in this business will need to enhance and developtheir knowledge and competencies that are demanded of professional accountants so that they effectively serve theirclients across the national boundaries.

Thus it is extremely important for public practitioners to be updated of the legislative changes in various emergingcapital markets. To deliver value, public accountants must go beyond knowing the national law to become partners inbusiness. They must understand their client business – so that they can advise to help their clients achieve theirstrategic goals.

The Easy Guide to Setting Up Accountancy Practices in ASEAN Countries is therefore very timely. It is very readable,informative and has wealth of knowledge for those who wish to take up the unique challenges and opportunities to servetheir business clients, and it is also relevant to corporate executives to plan their strategies in overseas markets. Itprovides easy reference for those busy accountants who want quick answers and cross comparisons in their advisorywork.

ACCA is proud to assist our public practitioners in their quest to become more global and to turn this knowledge intotheir competitive advantage. After all, knowledge is power!

Tay Kay LuanDirector, ASEAN & AustralasiaACCA

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1.0 Introduction

The global liberalisation process of the professional services sector is well under way, with negotiations at a fairlyadvanced stage at both the World Trade Organisation (WTO) and ASEAN levels.

At the WTO level, under the General Agreement on Trade in Services (GATS), Member Countries have been requested totable their respective offers on better market access and national treatment to their trading partners. Under The ASEANFramework Agreement on Services (AFAS), Member Countries will endeavor to offer GATS-plus commitments, with theaim of achieving a free flow of services provided in the ASEAN region earlier than the year 2020.

The liberalisation timeframe will be by year 2010 for the ASEAN-6 (Brunei, Indonesia, Malaysia, Philippines, Singaporeand Thailand) and year 2015 for the CMLV (Cambodia, Myanmar, Laos and Vietnam).

The WTO allows free trade agreements (FTAs) provided that tariffs are eliminated substantially on all trade. One of theimportant principles of a WTO-consistent FTA is that all parties to the agreement must eliminate duties according tomutually agreed rules and timeframes.

After the establishment of the WTO, trade in services has been included in many FTAs. FTAs will provide the means toachieve quicker and higher levels of liberalisation to create effective market access. This will encourage practitionersthat intend to expand services to other countries and facilitate the free flow of services.

To help ASEAN accountancy services providers face the challenges and opportunities that accompany liberalisation,ACCA has taken the initiative to develop this guide book for setting up practices in ASEAN countries. This initiative aimsto provide an easy reference for public practitioners who intend to expand their services to ASEAN Countries; it alsoreaffirms ACCA’s role to assist public practitioners to face the pressures of the globalisation and liberalisation processand understand the necessary steps to be taken in order to move forward and benefit from progressive liberalisation.

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1.1 Overview of the Export of Services

The GATS defines four different ways of providing aninternational service (“Modes of Supply”). These Modes ofSupply are now widely accepted and their applicationsare not only limited to the GATS negotiations, but alsohave extended to the regional and bilateral negotiations.

Mode 1 : Cross-border supplyThis is defined to cover services flows from the territoryof one Member Country into the territory of anotherMember Country (e.g. accounting services provided viatelecommunications, mail or through the internet).

Mode 2 : Consumption AbroadThis refers to a situation where a service consumer movesinto another Member Country’s territory to obtain a service(e.g. a foreign client having its accounts audited inMalaysia)

Mode 3 : Commercial PresenceThis implies that a service supplier of one MemberCountry establishes a territorial presence, includingthrough ownership or lease of premises, in anotherMember Country’s territory to provide a service (e.g. aMalaysian accounting firm setting up a branch in anothercountry).

Mode 4 : Presence of Natural PersonsThis consists of persons of one Member Country (e.g. anaccountant) entering the territory of another MemberCountry to supply a service. The Annex on Movement ofNatural Persons specifies, however, that MemberCountries remain free to operate measures regardingcitizenship, residence or access to the employmentmarket on a permanent basis.

1.1.1 Mutual Recognition Arrangements (MRAs)

For the liberalisation of accountancy services to take place,there is a need for a mechanism where countries would beable to assess and recognise qualifications or licencesgranted to accountants from other countries before theyare allowed to practise in the domestic market. Due to thedifferences in education and examination standards,experience requirements, regulatory influences and variousother matters, implementing recognition on a multilateralbasis would be extremely difficult.

The WTO’s Council for Trade in Services had adopted theguidelines for MRAs in the accountancy sector. Theseguidelines will also serve as an effective means forarbitrating disparities between recognition regimesaround the world.

The guidelines provide flexibility, i.e. whether to pursuethe MRAs based on recognition of qualifications orlicensing and registration.

1.1.2 Elements of MRAs

The MRAs would normally cover the following areas:

• Entry LevelMRAs should set out the minimum level of educationrequired, including entry requirements, duration ofstudy and the subjects offered, among others.

• Practical ExperienceMRAs should also set the minimum three years ofrelevant practical experience required for recognition.

• Mechanism for Entry EligibilityThese mechanisms should be transparent.

• Extent of RecognitionMRAs need to set out the limitations on theapplication of a particular qualification in the hostcountry.

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2.0 Executive Summary

This guidebook aims to be an initial point of reference foraccounting practitioners who wish to expand theirservices across national borders. The publicationprimarily sets out essential information about accountingrules and regulations that accountants should know whenplanning to expand their services to countries in theASEAN region.

The methodology adopted involve extracting informationfrom relevant sources and references. The informationwas reviewed and verified by representatives fromaccountancy organisations in the regions and the ACCAMalaysia Public Practice Committee.

Five main areas were considered for each country :-1 Regulation of the Accountancy Profession2 Commencement of Public Practice3 Accounting and Audit Regulation4 Taxation Requirement5 Mode of Operation and Conduct of Public Practice

Regulation of the Accountancy Profession introduceseach country’s National Accountancy Body and providesdetails on types of memberships available and criteria formembership admission. The section also includes generalconditions that must be met to attain membership tothese accountancy bodies.

The second part on Commencement of Public Practicegives information on rules and requirements to practiceas approved company auditors, approved liquidator orapproved tax agents in the respective countries.Information includes whether a practising certificate orlicence is required and if yes, conditions attached toholding such certificate or licence.

Accounting and Audit Regulation highlights statutoryrequirements of keeping accounting books and records,how financial statements should be prepared, financialreporting standards used and requirements for statutoryaudits. The Taxation Requirement section outlines eachcountry’s taxation structure and rules.

Finally, Mode of Operations and Conduct of PublicPractice provides respective country requirements to setup public practices and to provide professional services.

Overall, the information contained in this publicationprovides an introductory knowledge and general guidanceon accounting rules and regulations in the respectivecountries and the publication aims to provide a one pointeasy reference for its users.

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3.0 Overview of Accountancy Services Regulation

3.1 Brunei Darussalam3.2 Cambodia3.3 Indonesia3.4 Malaysia3.5 Myanmar3.6 Philippines3.7 Singapore3.8 Thailand3.9 Vietnam

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3.1.1 Regulation of the Accountancy Profession

(A) IntroductionThe Brunei Darussalam Institute of Certified PublicAccountants (BICPA) was established on May 6,1987 as a non-profit organisation, managed andrun through the voluntary service of accountants ofBrunei Darussalam.

One of the objectives is to support and advance thestatus and interests of the accountancy professionin line with the aims and objectives of theGovernment of His Majesty the Sultan and Yang Di-Pertuan, Negara Brunei Darussalam.

(B) Membership Admission and Types ofMembershipThe membership of the Institute will fall under thefollowing categories:

(i) Honorary Members(ii) Associate Members(iii) Affiliate Members(iv) Provisional Members

(i) Membership as Honorary MembersHonorary Members, who shall consist of personsnot being members of the Institute who haverendered such service to the Institute as would inthe opinion of the Council entitle them to thedistinction, or upon whom the Council desires toconfer such distinction because of their knowledgeand experience in connection with the profession ofaccountancy, may be admitted by the Council asHonorary Members and their names shall thereuponbe entered in the Register of Members on theHonorary Membership List.

(ii) Membership as Associate MembersAssociate Members shall not be less than 21 yearsof age, and must be a member of one of thefollowing associations of accountants:

• The Institute of Chartered Accountants of:AustraliaCanadaEngland and WalesIrelandScotlandNew Zealand

• The Chartered Association of CertifiedAccountants;

• Australian Society of Accountants;• New Zealand Society of Accountants; or• Members of any other associations of

accountants who, in the opinion of the Council,are of a standard in educational qualification andpractical experience acceptable to the Council,with such admission to be decided on a case bycase basis and on individual merit. An AssociateMember shall not be entitled to sign auditreports on accounts of limited liability companiesunless he is a Brunei Darussalam RegisteredAuditor.

The foregoing provisions relating to the admissionof Associates notwithstanding, the Council of theInstitute may in its absolute discretion admit toAssociate Membership any person whom it deemsespecially qualified for admission.

(iii) Membership as Affiliate MemberAffiliate Members shall consist of persons who haveacademic qualifications in accounting or business andfinance of at least degree standard recognised byand acceptable to the Council. Provisional memberswho hold an Higher National Diploma majoring inbusiness and finance or who are members of theAssociation of Accounting Technicians and have atleast 3 years appropriate work experience are eligibleto apply to be affiliate members of the Institute.

(iv) Membership as Provisional MemberProvisional Members shall consist of all otherpersons involved in the profession of accountingbut who do not qualify as Associate or AffiliateMembers, including the following:

• Persons who have one of the following qualifications in accounting:

Higher National Diploma;Higher National Certificate;Ordinary National Diploma;Association of Accounting Technicians; orAny other smaller academic qualification inaccountancy recognised by andacceptable to the Council.

• Students not less than 16 years of age who areenrolled in and are undergoing a course ofstudy in accountancy.

(C) Other general conditions applicable for allcategories of membershipsNone

3.1 Brunei Darussalam

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3.1.2 Commencement of Public Practice

(A) Practicing CertificateNone

(B) Criteria for Applying for the Practicing CertificateNone

(C) Conditions for Holding a Practicing CertificateNone

(D) RenewalNone

(E) CessationNone

(F) Conditions to Practice as Authorised CompanyAuditorShould be a member of any of the nine professionalinstitutes mentioned in 3.1.1 sub B (ii) and alsomeets the requirements of the Ministry of Financefor audit experience and residency.

(G) Conditions to Practice as Approved Tax AgentNone

(H) Conditions to Practice as Approved LiquidatorSame requirement as Authorised Auditors in 3.1.4

(I) Conditions to Practice as Others None

(J) Compliance with LegislationCompliance with the Brunei Companies Act ismandatory to all limited companies. Auditors arerequired to qualify their report for those companiesnot in compliance with IAS.

3.1.3 Accounting and Audit Regulation

The Ministry of Finance is reviewing the current generallyaccepted accounting policies and auditing standards witha view to replacing them with international standards.

All Brunei Darussalam incorporated companies, whetherprivate or public must appoint Brunei DarussalamAuthorised Auditors who are approved by the Sultan inCouncil to practise in Brunei.

These authorised auditors have a duty to report to theshareholders whether they have obtained all the informationand explanations required and whether the Balance Sheet

submitted to the Annual General Meeting of the shareholdersgives a true and fair view. The disclosure requirements setout in the Companies Act are minimal with the format andmanner of accounts presentation not prescribed.

Branches of foreign companies would be required to preparebranch accounts which are not required to be audited but arerequired, however, to support the tax computation.

Private limited companies which are incorporated inBrunei, other than public companies, are not required tofile their annual accounts with the Registrar ofCompanies. However, most business organisations arerequired to submit accounting data annually to theEconomic Planning Unit for statistical purposes.

3.1.4 Taxation Requirement

Sole proprietorships and partnerships are not subject totax in Brunei and must be registered with the Registrar ofBusiness Names unless the full name of all individualsconcerned is used for the business.

Registration approval is generally not granted toforeigners. A partnership may consist of individuals, localcompanies and branches of foreign companies, but thenumber of partners must not exceed twenty.

All corporations whether incorporated locally orregistered as a branch of a foreign company, are taxedat the rate of 30% on income accrued in, derived from,or received in Brunei Darussalam.

There is no export tax, sales tax, personal income tax ormanufacturing tax in Brunei Darussalam.

3.1.5 Mode of Operation and Conduct of Public Practice

Although sole proprietorships and partnerships are notsubject to tax, they are required to register with theRegistrar of Business Names. Approval for businessregistration may not be given when proprietors are notcitizens or permanent residents of Brunei.

Every foreign company which establishes a place ofbusiness in Brunei but does not incorporate locally isrequired to register as a branch of a foreign company.

(A) Professional ServicesNone

(B) OthersNone

Brunei Darussalam

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(A) IntroductionKampuchea Institute of Certified Public Accountantsand Auditors (KICPAA), has assumed the authorityempowered by law to manifest itself as theauthoritative body regulating the accountingprofession. Anukret (a sub-decree adopted by thePrime Minister and counter-signed by the interestedMinister) will determine the organisation andfunctions of the KICPAA as well as the conditionsregulating the profession of Certified PublicAccountant and Statutory Auditor exercising in theKingdom of Cambodia, whose functions are:

• to provide a national professional body torepresent its members, and to participate inpromoting and defending the statute andinterests of the profession;

• to participate as a working member of theNational Accounting Council (the Council);

• to prepare the regulations and duties of theprofession and ensure their application; and

• to organise accounting professional training forKhmer citizens who wish to enter the professionof Certified Public Accountant or Auditor.

The Council is thereby mandated to be aconsultative body which will:

• review and give its opinion on all draft laws andregulations which consist of provisionspertaining to the preparation of accountingwork for all enterprises or economic activities;

• develop the conceptual framework and theAccounting Standards, their audit and theaccounting profession;

• propose measures for the improvement ofaccounting techniques; and

• be a representative of the Kingdom of Cambodiaat international organisations’ forums andmeetings and in debating on accounting.

KICPAA represents its members, and promotes anddefends the statute and interests of the profession.As a member of the Council, KICPAA prepares theregulations, ensures their application and organisesaccounting training.

(B) Membership Admission and Types ofMembershipThe members of the Institute shall be classified as: (i) Affiliated Member (ii) Active Member (iii) Trainee Member

(i) Membership as Affiliated MemberAn Affiliated Member is any person holdinguniversity qualifications in accounting, business orfinance of a standard recognised by and acceptableto the Registration Committee.

(ii) Membership as Active MemberAn Active Member is any Affiliated Member meetingthe requirements to be registered on the list specifiedin Article 9 of the Anukret on Organisation andFunction. This Article states the RegistrationCommittee of Certified Public Accountants andRegistered Auditors shall have the powers toestablish the list of Certified Public Accountants andthe list of Statutory Auditors who are members of theInstitute, practicing either individually or within a firm.Both lists shall make the official register of theInstitute and shall be supplied on a free basis to thevarious categories of members and State Institutions.

The foregoing provisions relating to the admissionof Active Members notwithstanding, the GoverningCouncil may in its absolute discretion admit toactive membership any person whom it deemsespecially qualified for admission.

(iii) Membership as Trainee MemberA Trainee Member is any person having accountingand financial knowledge deemed sufficient by theRegistration Committee to follow a professionaltraining period or carry out studies leading to theprofession of Certified Public Accountant and/ orStatutory Auditor. A Trainee Member shall notpractice as a Certified Public Accountant and/ orStatutory Auditor. A Trainee Member shall have avoting right without being eligible to be elected.

(C) Other general conditions applicable for allcategories of membership• The functions of the Institute members

practicing the profession of Certified PublicAccountant or Statutory Auditor shall beincompatible with any occupation or actionlikely to impair his independence. It isforbidden for members of the Institute to holda salaried occupation, except with anothermember of the Institute or in a Certified Public

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Accounting and/ or auditing firm which is amember of the Institute. Members of theInstitute shall however be entitled to acceptengagements as experts which they areentrusted with by decision of justice, and/ orby state institutions to fulfill the functions as anarbitrator or a university lecturer.

• The membership of the Institute is open toprofessionals registered on at least one of thelists described under Article 9 of the Anukreton Organisation and Function. These lists shallbe regularly updated and brought to theattention of the Supervising ministry and thepublic by the courtesy of the GoverningCouncil.

• The rights allocated to and obligationsimposed upon members of the Institute extendto the firms registered on the Institute’s list ofCertified Public Accountants except for theright to vote and eligibility to run for office.


(A) Practicing Certificate

(i) The Profession of Certified Public Accountant

A Certified Public Accountant (CPA) means a person inpublic practice who has the usual profession to offer tohis clients to whom he is not bound by an employmentcontract and services in relation to the preparation ofthe accounts. A CPA shall also be entitled to certify thefair presentation of financial statements. No personshall exercise the profession of CPA unless that personis registered on the list of CPAs of the Institute.

Natural and/ or legal persons can be registered onthe list of the accounting firms provided that theyfulfill the eligible conditions defined by the internalregulations of the Institute. Moreover, the provisionsof companies' statutes shall be in compliance withthose of the internal regulations.

CPAs registered with the Institute shall be required,under the conditions to be set out in the internalregulations of the Institute, to take in charge TraineeAccountants and to provide for their professionaltraining.

(ii) The Profession as Statutory AuditorA Statutory Auditor shall be the person who in hisown name and under his own responsibility certifiesthe true and fair presentation of the accounts ofnatural and legal persons which have entrusted himwith this engagement as a result of regulatoryprovisions in force or a contractual agreement.

No person shall exercise the profession ofStatutory Auditor, unless that person is registeredon the list of Statutory Auditors of the Institute.Registration as Statutory Auditor on the list of theInstitute shall be governed by observance of thesame criteria as those defined in the Profession asCPA.

(B) Criteria for Applying for the PracticingCertificateWith the exception of the specific provisions set bythe internal regulations regarding the admission offoreign professionals, the registration as a CPA onthe list maintained at the Institute is subjected tocompliance with the following conditions:

• be of Cambodian nationality;• be more than twenty five (25) years old on the

day of admission as a member of the Institute;• be in full possession of civil rights;• has not been found guilty of any crime or

offence witnessed by a clean record deliveredby the relevant authorities; and

• holds the CPA diploma or a diploma deemedequivalent by the Registration Committee ofCPA and Statutory Auditors.

(C) RenewalTo renew, each member shall pay annual fee.

(D) CessationMembership shall be lost in case of a:

• Voluntary resignation• Death• Suspension or exclusion pronounced by the

Disciplinary Committee• Criminal conviction leading to imprisonment

with no remission of the Institute’s member

Except in the event of exclusion decided by theDisciplinary Committee, a member who hasresigned or been suspended is entitled to apply forhis/ her re-admission on the list of members. Theadmission procedure shall be the procedure as forthe first application.

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(E) Conditions to Practice as Approved AuditorAn Affiliated and Active Member registered on thelist provided for in Article 9 of the Anukret onOrganisation and Function is considered as aCertified Public Accountant or an Auditor and assuch is entitled to use the acronym CPA (CertifiedPublic Accountant/ Auditor) following his or hername. This title is mandatory to practice theprofession of Certified Public Accountants orAuditors in the territory of the Kingdom ofCambodia.

Natural and/ or legal persons can be registered onthe list of the accounting firms provided that theyfulfill the eligible conditions defined by the internalregulations of the Institute. Moreover, the provisionsof companies’ statutes shall be in compliance withthose of the internal regulations.

(F) Conditions to Practice as Approved TaxLicenseNothing mentioned at this stage

(G) Conditions to Practice as Approved LiquidatorNothing mentioned at this stage

(H) Conditions to Practice as Others Nothing mentioned at this stage

(I) Compliance with LegislationThe Law on Corporate Accounts, Audit and theAccounting Profession, which is adopted by theNational Assembly of the second legislature andentirely approved by the Senate on its form andlegal concepts.

The accounting records referred to in Article 12 ofthe Anukret shall be prepared in the Khmerlanguage and expressed in Riels.

3.2.3 Accounting and Audit Requirement

The Cambodian government also inaugurated in early2003 the process for full implementation of a single setof high-quality accounting standards for both domesticand cross-border financial reporting.

Article 1 of the Prakas of the Ministry of Finance: “Inaccordance with Article 16 of the Law on CorporateAccounts, their Audit and the Accounting Profession, allenterprise, natural persons and legal entities with Khmeror foreign nationality, domiciled in the Kingdom ofCambodia that meet two of the following criteria have an

obligation to submit for audit by independent auditorsregistered in the statutory auditor list of the KICPAA theirannual financial statements:

• Criterion 1 : Annual turnover of three billion Riels andabove.

• Criterion 2 : Total assets of two billion Riels andabove, based on the average value of assets heldduring the year subject to audit.

• Criterion 3 : Number of employees of hundred andabove, based on the average number of employeesemployed during the year subject to audit.

The Ministry of Economy and Finance asked the WorldBank for technical assistance to develop the CambodianAccounting Standards (CAS) based on InternationalAccounting Standards and, as a result, 15 CAS and 10Cambodian Standards on Auditing (CSA) were developedand finally approved by the NAC on April 11, 2003.

Article 3 of The Law on Corporate Accounts, The Auditand The Accounting Profession stated that in compliancewith current laws, all enterprises, whether natural or legalentities, are required to keep books and accounts andhave them audited in accordance with the terms andconditions provided for under this Law.

Article 4 requires enterprises to prepare financialstatements on a yearly basis that are in compliance withboth the conceptual framework and CambodianAccounting Standards, the principles of which are set outby Prakas proclaimed by the Minister of the Ministry ofEconomy and Finance and in line with the InternationalAccounting Standards.

The financial statements shall include the balance sheet,the income statement, the cash flow statement andexplanatory notes. They shall be considered as anintegral part of the financial statements.

According to Article 9 of this Anukret, the accountingrecords shall be prepared in the Khmer language andexpressed in Riels. Enterprises carrying out business withforeign countries or which are subsidiaries of foreigncompanies may be authorised to prepare accountingrecords in English and/ or in a currency other than Rielsalong with the accounting records in the Khmer languageand Khmer Riels. This must be compliance with theconditions set out by the Ministry of Economy andFinance. However, the financial statements referred to inArticle 4 shall be prepared in the Khmer language and inRiels.

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(A) Basis of TaxationThe Law on Taxation of 1997 (amendments 2003)governs taxation in Cambodia. Taxpayers arecategorised into three main regimes, i.e. the realregime, simplified and estimate regime. Legalpersons, defined as "an enterprise or organisationcarrying on a business whether or not officiallyorganised by the competent authority."

Legal persons are resident of Cambodia if they areorganised or managed in Cambodia, or have theirprincipal place of business, or a permanentestablishment (PE) in Cambodia. For non-residents,the term "legal persons" means any permanentestablishment or a fixed place of business, thebranch of a foreign company or an agent residentin Cambodia through which the non-resident personcarries on business.

Resident legal persons are subject to tax onworldwide income, whereas non-resident legalpersons are subject to tax only on Cambodiansource income. Resident individuals are liable forpersonal income tax on income from Cambodiansources and foreign sources. Non-resident personsare liable for income tax on income fromCambodian source only and subject to thewithholding tax at a flat rate of 20%.

(B) Value Added TaxValue Added Tax (VAT) is chargeable on a widerange of goods/ services supplied in Cambodia andon importation of goods. Taxable supplies attractVAT at either the standard rate of 10% or at thezero rate. Zero rating applies to export of goodsand services, and certain charges in relation tointernational transportation of people and goods.Exempt supplies are not subject to VAT, includingpostal services, hospitals/ medical services,insurance and financial services.

VAT registration must be made at thecommencement of business operations or within30 days in which the taxpayer becomes a taxableperson. VAT returns and payment are due to befiled and paid to the Tax Department by the 20thday of the following month.

VAT is payable at 10% on imports by reference tothe value of the import, including any customs duty,insurance and freight charges.

When a tax officer has been led to carry out a taxadjustment relating to a firm audited by a CertifiedPublic Auditor, the Tax Authorities are entitled toforward a report mentioning the findings havinginduced them to operate such adjustment to theSupervising Committee after ascertaining that theCertified Public Auditor may have had theknowledge of tax irregularities in the performanceof his/ her auditing work.

3.2.5 Mode of Operation and Conduct ofPublic Practice

The Statutory Auditors registered with the Institute shall beentitled to form limited companies in accordance with theinternal regulations and the provisions of the laws currently inforce. Certified Public Accountants who are members of theInstitute shall be entitled to incorporate as legal entities topractice their profession on two conditions:

• all the partners are individually members of theInstitute; and

• the companies thus incorporated are recognised asbeing authorised to practice the profession of publicaccountant by the Institute and are on the list referredto in Article 9 of the Anukret.

In order to practice their profession, CPAs shall also beallowed to incorporate limited liability firms if such firmsmeet the following requirements:

• their purpose is to practice the profession of certifiedpublic accountant;

• they establish that the partners, members of theInstitute, are a majority numerically and hold themajority of corporate share capital;

• they choose their chairman, executive director,managers and delegated officers from amongpartners that are members of the Institute;

• in the case of share companies, their shares must benon-negotiable and, in all cases, admission of anynew partner shall be subject to prior authorisationfrom either the board of directors of the firm or fromthe majority of shareholders;

• they convey to the Institute’s Governing Council thelist of their partners, as well as any change to suchlist, make this information similarly available to thepublic authorities and all concerned third parties. TheInstitute’s Governing Council may withdraw itsapproval if it deems that the conditions for admissionare no longer being fulfilled;

• they are not controlled, even indirectly, by any specialinterest person or group;

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• they do not hold, directly or indirectly, any financialshare in industrial, commercial, agricultural, bankingor civil society businesses except for firms whosecorporate purpose is related to accountancy orauditing; and

• they are recognised as being authorised to practicethe public accountant profession and are on the listreferred to in Article 9 of the Anukret.

Foreign nationals may also be authorised to practice theprofession of CPA in Cambodia if an agreement or treatyto such effect has been entered into with the professionalorganisation of the country they come from.

In order to be authorised to practice in Cambodia, foreignprofessionals shall be on the list referred to in Article 9 ofthe Anukret and meet any applicable requirementsstipulated in the laws and regulations in force governingthe profession.

The rights assigned to and the obligations imposed uponInstitute members shall extend to foreign firms andprofessionals. Firms in which foreign nationals, personallyor through another party, hold the majority of the firms’share capital or who choose from among these eithertheir chairperson, executive director or the majority oftheir managers or delegated officers are subject to theprovisions of the Article herewith.

(A) Professional ServicesNot mentioned

(B) Others

(i) AdvertisingMembers of the Institute are prohibited from anypersonal advertising. They shall be entitled todisplay only credentials or diplomas issued by thestate, or local and foreign institutions.

However, the Governing Council of the Instituteshall be entitled to perform or to authorise anycollective advertising as it may deem beneficial tothe profession. The details and implementationprocedures of this Article are determined in thecode of professional ethics.

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(A) IntroductionThe Indonesian Institute of Accountants (IAI) wasestablished in Jakarta on December 23, 1957, andis the only professional accountancy body inIndonesia acknowledged by the Ministry of Finance.

The IAI is also a founder of the ASEAN Federationof Accountants and a full member of theInternational Federation of Accountants (IFAC) whichsteers the development of the accountingprofession towards the needs of the private sectoras well as the Indonesian community. It workstowards its objective by providing trainingprogrammes and research related to Indonesia’saccounting system.

As a self-funded accountants’ professional body, IAIis responsible for setting up a code of ethics,accounting and auditing standards, conductingexams for Certified Public Accountants (CPA), andrunning programs for professional education.Membership in IAI is strictly limited to holders ofthe “accountant” title. The IAI members originatefrom all accounting backgrounds, includingauditors, academics and public sector accountants.

The Public Accountants Professional StandardsBoard (DSPAP), under IAPI auspices, promulgatesgenerally accepted auditing standards (SPAPs).Indonesian private sector accounting and auditingpractices and standards are largely consistent withinternational best practice.

The current oversight responsibilities are dividedamong various agencies:

• Ministry of Finance (MOF) supervises publicaccountants and accounting firms.

• Bapepam (Securities Commission) registers andsupervises public accountants and publicaccounting firms engaged in capital marketactivities.

• Bank Indonesia registers public accountantsand public accounting firms for financial sectoraudits and supervises their activities.

• IAI is involved in accounting and auditingstandard setting, certification, ethics anddiscipline, and continuing professionaleducation.

(B) Membership Admission and Types ofMembershipThe Accountant Title Law sets forth therequirements for becoming an accountant and forlicensing public accountants. Only those whograduate in accounting and undertake theProfessional Education Program may earn an“accountant designation” and obtain a StateRegistered Accountant (SRA) Certificate.

The IAI requires public accountants to attendminimum credit hours of continuing professionaleducation (CPE) every three years. Of thoserequired credits, 30 percent of those credit hourscan be claimed from training providers other thanthe IAI, but only if the IAI and/or MOF recognise thetraining providers.

The MOF, Bapepam, and Bank Indonesia also havesimilar requirements for continuing professionaleducation. At the beginning of every year, all publicaccountants receive notification about the standingof their CPE credit hours.

The IAI requires CPE-non-compliant members tofulfill any shortfall of credit hours in the next year.Monitoring of non-compliance and sanctionmeasures are also set out by the MOF andBapepam.

In 2006, IAI has also entered into a MutualRecognition Agreement with the Malaysian Instituteof Accountants (MIA) that allows admission ofqualified MIA members to be members of IAI.

There are two types of memberships:(i) Associate member(ii) Honorary member

(i) Membership as Associate MemberRequirements:

• Passed from university degree in accounting;or

• Passed the final exam of accounting bodies.

(ii) Membership as Honorary MemberRequirements:

• Indonesia citizens who contributes significantly tothe development of accounting profession inIndonesia.

(C) Other general conditions applicable for allcategories of membershipNot mentioned

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(A) Audit LicensingOnly SRA holders are eligible for the CPA exam,which is administered by the IAI twice a year. TheCPA exam is mandatory to get an Auditor Licensefrom the MOF and become an auditor member of theInstitute. The CPA Board of Examiners wasestablished by the IAI and the IAI National Councilappoints the Board’s members. The Directorate ofAccountants under the Directorate General ofFinancial Institutions in the Ministry of Finance willgrant an Audit License when requirements are met.

(B) Criteria for Applying as Practicing CertificateIn order to qualify as an accountant or full member,Public Accountant (PA) need to meet the followingcriteria:

(i) Qualification• Registered as accountants in the State

Registered administered by MOF; or• Passed the final examination of accounting

bodies recognised by IAI.

(ii) Work experience• Working experience is not required to become

a member.

(C) RenewalNot mentioned

(D) CessationNot mentioned

(E) Conditions to Practice as Tax AgentPA need to be in possession of Tax License grantedby the Tax Office in order to practise as Tax Agentin Indonesia.

(F) Conditions to Practice as LiquidatorTo be as a liquidator, PA must be in possession ofLiquidator License granted by the Ministry ofJustice and Human Rights.

(G) Conditions to Practice as Other In order to render services in capital market andbanking industry, PA must be registered withBapepam and Bank Indonesia (Central Bank).

(H) Compliance with LegislationThe Indonesian Financial Accounting Standards Board(DSAK), which is under the auspices of the IAI, is theaccounting standard setter. The Indonesian FinancialAccounting Standards Board has been settingaccounting standards since 1973.

The Capital Market Law is the only law that specificallyprovides the Indonesian Financial Accounting Standards(PSAK) set by the Indonesian Financial AccountingStandards Board. In addition, the law authorisesBapepam to establish accounting regulations withrespect to capital markets when necessary.

The Capital Market Law requires all publicaccountants to submit a report to Bapepam undercertain circumstances. The report must besubmitted confidentially within three working daysafter a public accountant discovers either:

(a) any violation of the Capital Market Law and/orregulation in the capital market; or

(b) any matter which may jeopardize the financialcondition of the public companies, securitiesexchanges, clearing guarantee companies,central securities depository, and otherpersons engaged in capital market.

The Supreme Audit Agency (BPK) is required by law toperform compliance audits for all state-ownedenterprises, both listed and unlisted. A publicaccountant who audits financial statements of a state-owned enterprise should also conduct a complianceaudit of laws/regulations and internal controls. This isto ensure that the state-owned enterprises arecomplying with the various laws and regulations.Listed state-owned enterprises have to follow therequirements in Capital Market Law regarding financialreporting as well as other state financial laws.

To qualify as an accountant in Indonesia, theregulatory bodies are Ministry of Finance,Directorate of Accountants and AppraisalsSupervision and IAI. Others relevant legislations are:

• Accountants Law 1954 • Ministry of Finance Decree

No. 423/KMK.06/2002 andNo. 359/KMK.06/2003

• IAI’s rules and regulations:By Laws 2003Code of Ethics 1998Public Accountants Rules 2004Disciplinary Rules 2004

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• Other relevant laws:Companies Law


Indonesian accounting pronouncements are issued by theIndonesian Accounting Standards Board (abbreviated DSAKin Indonesian) of the Indonesian Institute of Accountants.

The Law on Limited Liability Companies (No.1) 1995(PT Law) requires that financial statements must beprepared in compliance with PSAKs. Non-compliancemust be disclosed and the reasons for non-complianceshould be provided. The PT Law 1995 requires that thefinancial statements of the following types of companiesbe audited by a public accountant:

• Companies in a field connected with the mobilisationof funds from the public (i.e. banks, investment fundsand insurance companies).

• Companies that have issued debt instruments.• Publicly held companies.

This regulation requires the following companies to fileaudited financial statements:

• those incorporated under the PT Law 1995• those that accumulate funds from the public• those that issue debt instruments• those that have total or net assets exceeding Rp 25

billion.

In accordance with the regulation:

• Audited financial statements, comprising a balance sheet,income statement, cash flow statement, statement ofchanges in equity, and notes to the financial statements(including a list of liabilities and capital participation) mustbe reported.

• Information is more easily available, including throughthe Internet and in hard copy at local CompanyRegistry Offices.


Article 14 (2) of the Income Tax Act (Law No. 10 of1994) allows taxpayers whose gross business income isless than Rp 600 million a year not to keep completeaccounts, but the taxpayers should make a report on theprojection of its Net Income in accordance with the NetIncome Calculation Standards stipulated by the Ministerof Finance.

Article 28 (1) and 28 (4) require the taxpayer to haveadequate systems of accounts which allows easycalculation of profits or the acquisition price of goodsand services, records of cash in bank, a list of accountspayable and receivables, and inventory. A Balance Sheetand Profit and Loss Statement must also be presented.

The law does not clearly require certification by anauditor. Accounts should be based on the Indonesiaaccounting principles promulgated by the IAI. Forpurposes of Article 28 (4), an auditor’s report orcertification of accounts will be adequate proof of thefulfillment of the requirement.

(A) Basis of TaxationA corporation, for tax purposes, is classified as“resident” or “non-resident”. Residency is determinedon the basis of place of incorporation. A corporationis therefore considered “resident” if incorporated inIndonesia and non-resident if otherwise.

Resident corporations are taxed on their worldwideincome. Tax credits are allowed for income thatwas taxed outside the country. Non-residents aretaxed only on income derived from Indonesiansources, subject to any relief available underdouble taxation agreements. Income attributable toa PE of a company that is resident of a treatycountry should refer to the relevant treaty.

For individual taxpayers, both resident and non-resident taxpayers are subject to national income tax(Indonesia has neither federal nor state income tax).Residents are taxed on their worldwide income andare generally allowed a credit for taxes paid abroad,whereas non-residents are taxed only on theirIndonesian-source income.

(B) Value Added Tax VAT is imposed on most goods and services at arate of 10%. Government regulations can adjust therate to as low as 5% and as high as 15%. The taxis generally collected by “VAT-able firms” (entitieswhich deliver taxable goods or services). Thesefirms are required to submit VAT returns monthly.There are goods and services, however, which areexempt from VAT.

Primary production companies and small businesses(corporations or individuals) with annual sales of lessthan Rp. 180 million for services and Rp. 360 millionfor goods have the option to be exempted fromimposing VAT.

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(C) Tax AdministrationMost Indonesian companies adopt the calendar year astheir financial and tax year. They have to file monthlyand annual tax returns. Monthly returns have to be filedno later than the 20th day of the month following themonth of payment or accrual of the related expenses.The deadline for filing annual income tax returns isthree months from the end of the company’s financialyear, typically March 31.


Indonesian accountants may practice as soleproprietorship, civil law partnerships or partnership. Auditservices of PA can only be rendered by accounting firm.

Current law does not provide for mutual recognitionarrangements for foreign accountancy qualificationsexcept for MIA members. Therefore, foreign accountantsor foreign accounting firms are not allowed to renderattestation services in Indonesia. However, local publicaccountants and accounting firms may cooperate withforeign accounting firms in terms of technical assistance.

(A) There are essentially three types ofpartnership:(i) basic partner(ii) open partner(iii) limited partner

(i) Partnership as basic partnerIn the basic partnership, partners are jointly andseverally liable and their liability for the partnership’sdebts is unlimited. The provisions of the IndonesianCivil Code 1847 govern partnership. This type ofpartnership is most common among professionals,including accountants.

(ii) Partnership as open partnerThe partners in an open partnership are jointly andseverally liable and their liability for the partnership’sdebts is unlimited. In addition, each partner has theright to bind the partnership to third parties, unlessthat right has been specifically denied. Thispartnership is most commonly used by trading andservice enterprises.

(iii) Partnership as limited partnerIt is similar to the open partnership but permits theadmission of silent partners. These are governedprimarily by the provisions of the Commercial Code.General requirements for setting up public practicein Indonesia are:

• must be an accountant;• the PA has never been revoked;• domicile in the Republic of Indonesia which can

be proofed by producing valid ID card;• posses State Register Number of Accountant;• member of IAI and IAI-PA Compartment;• passes CPA Exam conducted by IAI; and• accumulated a minimum 1000 hours practical

experience in general audit in the last 5 yearsprovided that 500 hours of those was incharge/ supervised general audit engagement;

• completed the relevant applications form.

(B) Professional ServicesOther professional services may be providedsubject to relevant rules and regulations, if any.

(C) OthersNot mentioned

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(A) IntroductionThe Malaysian Institute of Accountants - MIA (“TheInstitute”), established under the Accountants Act,1967 (“Act”) has assumed the authority empoweredby law to manifest itself as the authoritative bodyregulating the accounting profession.

At the helm of stewardship is the Councilrepresented by the Accountant General, theRegistrar and accountants in the public practice,private sector and from academia.

The Institute is a member body of regional andinternational professional bodies which play asignificant role in the development andadvancement of the accounting profession globally.Its membership in such bodies include the:

• Asean Federation of Accountants (AFA)• Confederation of Asian and Pacific Accountants

(CAPA)• International Federation of Accountants (IFAC)• Intergovernmental Working Group of Experts on

International Standards of Accounting andReporting (ISAR)

The Prime Minister, Dato’ Seri Abdullah AhmadBadawi had announced in the Budget 2008 that theGovernment will establish the Public CompaniesAccounting Oversight Board under the auspices ofthe Securities Commission to further strengthencorporate governance practices.

(B) Membership Admission and Types of MembershipThe accountancy profession in Malaysia isregulated by the Institute. Any person in Malaysiawho wishes to be an accountant must first beadmitted as a member of the Institute. All membershave to comply with the Rules and By-Laws of theInstitute. All new members are required to attendthe Institute’s induction course within 6 monthsafter being admitted as a member.Subject to subsections (3) and (6) of Accountants Act1967, every person on payment of the prescribed feeshall be entitled to be admitted as a member of theInstitute depending on the category of membership asfollows:

(i) Chartered Accountants(ii) Licensed Accountants (iii) Associate Members

In addition, within the category of CharteredAccountants and Licensed Accountants, there arethose members who are in public practice and whoare required to have a valid practicing certificate andthose members who are not in public practice.

(i) Membership as Chartered AccountantsAn applicant shall, before admission as a CharteredAccountant, satisfy the Council that:

• He has passed any of the final examinationsspecified in Part I of the First Schedule and hasnot less than three years’ practical accountingexperience in the service of a CharteredAccountant or in a Government department,bank, insurance company, local authority orother commercial, financial, industrial orprofessional organisation or other undertakingapproved by the Council;

• He is a member of any of the recognised bodiesspecified in Part II of the First Schedule;

• He is eligible to sit for and has passed theMalaysian Institute of Accountants QualifyingExamination and has not less than three years’practical accounting experience in the service ofa Chartered Accountant or in a Governmentdepartment, bank, insurance company, localauthority or other commercial, financial, industrialor professional organisation or other undertakingapproved by the Council;

• He has authority under section 8(2) and (6) ofthe Companies Act, 1965 [Act 125] to act as acompany auditor without limitation or conditions;or

• He meets the admission criteria stated in theMutual Recognition Agreement entered into byMIA with other professional or regulatory bodies.

(ii) Membership as Licensed AccountantsSubject to the relevant provisions of the Act, everyperson on payment of the prescribed fee shall beentitled to be admitted as a member of the Instituteas a Licensed Accountant:

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• If he has been granted limited or conditionalapproval to act as an auditor of companiesunder section 8(6) of the Companies Act 1965,or if he has been in public practice as anaccountant, a tax consultant or a tax adviserimmediately before the coming into operationof this Act; or

• If he is a member of the Malaysian Society ofAccountants and has passed any of the finalexaminations of that body last held inDecember 1992 and has not less than threeyears’ practical accounting experience in theservice of a Chartered Accountant or in aGovernment department, bank, insurancecompany, local authority or other commercial,financial, industrial or professional organisationor other undertaking approved by the Council.

Other Conditions:

• A Licensed Accountant admitted under thissection shall be subject to the same restrictions,limitations or conditions as have been imposedupon him under the Companies Act 1965.

• A Licensed Accountant who has been certified bythe Council, acting on a report by a Committeeappointed under relevant provision, as fit to beadmitted as a Chartered Accountant, shall beentitled to be admitted as such.

(iii) Membership as Associate MembersAny person who is closely associated with theprofession of accountancy or who has participatedin the advancement of accountancy training andeducation but is otherwise not qualified under thisAct to be admitted as a Chartered Accountant maybe admitted as an Associate Member of theInstitute on payment of the prescribed fees if hesatisfies the requirements of the rules.

An Associate Member is entitled to all the privilegesaccorded to a member who is a Chartered Accountantor a Licensed Accountant but is not entitled to vote atthe meetings of the Institute held under paragraph 8 ofthe Second Schedule nor request for a generalmeeting under paragraph 8(2) of that Schedule.

(C) Other general conditions applicable for allcategories of membership• No person shall be admitted by the Council as a

member of the Institute if he is less than twenty-one years of age or if in the opinion of theCouncil he is not a fit and proper person to beadmitted as a member.

• A body corporate shall not be eligible formembership of the Institute.


(A) Practicing CertificateA member shall not hold himself out as a memberin public practice unless he holds a valid practicingcertificate issued by the Institute. Therefore,members who should apply for a practicingcertificate are those who intend to:

• set up an audit or non-audit firm to beregistered with MIA;

• be a partner of an existing audit or non-auditfirm registered with MIA; or

• be a director and/ or shareholder in a limitedor unlimited company which offers taxation, taxadvisory and tax consultancy services.

The Institute’s By-Laws requires all professionalaccountants applying for a practicing certificate forthe first time to attend and complete the Institute’sPublic Practice Program (PPP), prior to hisapplication.

(B) Criteria for Applying for the Practicing CertificateTo be registered as a Chartered Accountant with avalid practicing certificate, a member must:

• have obtained at least 3 years of his/ her pre-requisite practical accounting experience in theoffice of a Chartered Accountant or if in theoffice of a non-resident practice, the partnersof that non-resident practice should bemembers of one of the recognisedprofessional bodies set out in the Act or holdsuch other experience in any areas of thepublic practice services as may be approvedby the Council;

• be in full time practice; and • practice as a sole proprietorship or in a

partnership with other members.

(C) Conditions for Holding a Practicing CertificateThe conditions for holding a Practicing Certificate are:

• The members must commence public practicewithin six months of the date of issuance of thepracticing certificate and shall practice on afull time basis. A member issued with apracticing certificate but who is unable tocommence practice within the 6 months is to

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return the practicing certificate to the Instituteimmediately upon the expiry of the period.

• However, in a case where the member has notbeen successful in his Audit License applicationand wishes to re-apply for an Audit License, hemay apply for an extension of time from theInstitute to commence public practice.

• A member shall cease to be entitled to apracticing certificate by the last day of Decemberin the year in which it becomes due and payable,unless the Council decides otherwise.

(D) RenewalA practicing certificate will be renewed automaticallyon a year to year basis for a period of twelve months,each commencing on the month of July next followingwhereupon the annual practicing certificate fee shallbecome due and payable.

(E) CessationMembers who wish to resign from the Institute may doso by writing officially to the Institute. Upon applying forresignation, members are required to settle alloutstanding annual subscription fees due which includethe current financial year when the application forresignation is made. There is no provision for proratedannual subscription.

A practicing certificate holder who is unable tocommence public practice within six months of theissuance of the practicing certificate should surrenderhis practicing certificate to the Institute forcancellation purposes. This also applies to those whohave ceased to be in practice.

A member’s name will be removed from theMembership Register due to the non-payment ofthe annual subscription within 6 months of the duedate, which is 1 July of each year.

(F) Conditions to Practice as Approved CompanyAuditor To be an approved company auditor, a membermust be in possession of an Audit License grantedby the Treasury pursuant to the Companies Act1965. The license is only granted to members whoare Chartered Accountants with valid practicingcertificates and who have passed an interviewconducted by the Treasury.

For the Audit License interview, there is anadditional requirement in respect of audit workexperience in firms of Chartered Accountants forthe candidates:

• Applicants must possess three (3) years ofcontinuous relevant and sufficient auditexperience; and

• Applicants must have attended the PublicPractice Programme organised by the Instituteprior to the submission of the application.

For applicants who possess the relevant auditexperience but are no longer in the audit field, atthe point of submission, he/ she must:

• Possess three (3) years of continuous auditexperience in the time period of four (4) yearsbefore submission of the application; and

• Have attended the Public Practice Programmeorganised by the Institute.

The three (3) years of continuous experience asmentioned above must be post membership of theInstitute. The existing requirements to apply for theaudit licence whereby applicants must be membersof the Institute registered as a “CharteredAccountant” and applicants must hold valid practisingcertificates as a “Chartered Accountant” still remain.

(G) Conditions to Practice as Approved LiquidatorTo be a liquidator, an individual has to possess anAudit License with valid practicing certificate for atleast one (1) year prior to the application and havepassed an interview conducted by the Treasury.Licenses are issued by the Treasury pursuant to theCompanies Act 1965.

The Liquidator License is renewable every two (2)years and the application for renewal must be madeat least three (3) months before the expiry date.

(H) Conditions to Practice as Approved Tax Agent The issuance of a license to be a tax agent isgoverned by the Income Tax Act, 1967. A license isonly granted after the applicant has passed aninterview conducted by the Inland Revenue Board.

Tax License is renewable every three (3) years andthe application for renewal must be made at leastfour (4) months before the expiry date.

The Service Tax Act, 1975 together with ServiceTax Regulation, 1975 require all companies thatprovide accounting, auditing and taxation servicesto obtain a Service Tax License.

The rate of the service tax is 5% on the value ofthe services rendered. Professional services

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provided by a company to companies within thesame group will be exempted from the currentservice tax of 5%.

Application for Service Tax License shall be submittedto the Royal Malaysian Customs & ExciseDepartment.

(I) Conditions to Practice as other ProfessionalService ProvidersThe table below illustrates the list of otherprofessional service providers licensed by therespective Regulators:

Professional Service Regulatory BodyProviderInvestment Advisor/ Securities CommissionRepresentativeFinancial Planner Securities CommissionFinancial Adviser Central Bank of Malaysia

(J) Compliance with LegislationIt is incumbent upon members who are in practiceto have the requisite knowledge and to comply withall the ethical and statutory requirements. Thestatutory enactments and the subsidiary legislationspassed pursuant to the powers provided under therespective Acts should be referred to consistently.

The following Acts and the subsidiary legislationsthereto should be referred to:

• Accountants Act 1967 (as amended) • Institute’s (Membership and Council) Rules 2001 • Institute’s (Disciplinary) Rules 2001 • Institute’s Qualifying Examination Rules 2001 • Institute’s By-Laws (On Professional Conduct

and Ethics) (as amended and revised from timeto time)

• Companies Act 1965 (Revised 1973)• Capital Markets Services Act 2007• Rules and Listing Requirements of Bursa

Malaysia Securities Berhad• Banking and Financial Institutions Act 1989• Anti-Money Laundering Act 2001• Housing Development (Control & Licensing) Act

1966• Co-operative Societies Act, 1993• Partnership Act 1961 (Revised 1974)• Legal Profession Act, 1976• Income Tax Act 1967 (Revised 1971)• Service Tax Act 1975 • By-Laws of the Local Authorities

• Employment Legislation• Audit Act 1957 (Revised 1972) • Labuan Offshore Financial Services Authority Act,

1966

In addition, members should be aware of legislativerequirements of specific services provided by thepractice such as the recruitment of personnelwhich requires the practice to be licensed underthe Private Employment Agencies Act, 1981.Generally members should keep themselvesinformed of current laws and applicable legislationrelevant to their practice and work.


(A) Statutory RequirementsAccounting and audit requirements are set out inthe Companies Act 1965. The financial statementsof a limited liability company incorporated under theCompanies Act 1965 must be audited at least oncea year by an approved company auditor. Thecompany’s directors have a duty to prepare itsfinancial statements. An appointed auditor mustprepare an audit report on the financial statementsfor the shareholders of the company.

The accounting standards are set by the MalaysianAccounting Standards Board (MASB).

The MASB uses the International AccountingStandard (IAS) as a basis for most of its standards.All financial statements prepared pursuant to anylaw administered by the Securities Commission, theCentral Bank of Malaysia, and the CompaniesCommission of Malaysia (CCM) will have to complywith MASB approved accounting standards, whichhave the force of law.

The law empowers the CCM, Bursa Malaysia andthe Securities Commission to monitor compliancewith MASB Standards.

(B) Financial Statements and Directors’ ReportsIn every financial year, a company shall lay at itsannual general meeting:

• The audited income statement;• The audited balance sheet; and• The directors’ report on the state of affairs of

the company.

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In addition, copies of the audited financialstatements together with the auditors’ report mustbe sent to all shareholders of the company not lessthan 14 days before the date of the annual generalmeeting.

(C) MASB StandardsIn Malaysia, directors are required to preparefinancial statements that give a true and fair view ofthe state of affairs of the company (and whereapplicable the group) at the end of the financialyear and of the income statement and cash flowsof the company (or the group) for the financial year.

According to Section 166A of the Companies Act,1965, approved accounting standards are to beapplied in relation to any published financialstatements of the commercial, industrial orbusiness enterprises in Malaysia and of overseassubsidiaries and associated corporations wherethose financial statements are to be incorporated inconsolidated financial statements in Malaysia.

For the purpose of both the Companies Act 1965and the Financial Reporting Act, 1997, MASBStandards issued, International AccountingStandards (IASs) and Malaysia AccountingStandards (MASs) adopted by the MalaysianAccounting Standards Board are “ApprovedAccounting Standards”.

With the publication in the Gazette of the FinancialReporting (Publication of Approved AccountingStandards) Regulations 1999, the legal status ofMASB’s Approved Accounting Standards, pursuantto this Act, has been further clarified. Hence,compliance with these approved accountingstandards is mandatory and legally enforceable.

There are two separate sets of AccountingStandards applicable to different categories ofcompanies which are Financial Reporting Standard(FRS) and Private Entity Reporting Standard (PERS).FRS is a set of accounting standards issued oradopted by MASB for application by all entitiesother than private entities while PERS is a set ofaccounting standards issued or adopted by MASBfor application by all private entities.

A private entity is a private company, incorporatedunder the Companies Act, 1965, that:

• is not itself required to prepare or lodge anyfinancial statements under any lawadministered by the Securities Commission orthe Central Bank of Malaysia; and

• is not a subsidiary or associate of, or jointlycontrolled by, an entity which is required toprepare or lodge any financial statementsunder any law administered by the SecuritiesCommission or the Central Bank of Malaysia.

(D) Books and RecordsEvery company must keep such accounting andother records that will:• Sufficiently explain the transaction and the

financial position of the company; and• Enable a true and fair view of the income

statement, balance sheet and any documentsrequired to be attached thereto to be preparedfrom time to time.

The financial statements must be recorded andkept:

• In such a manner as to enable them to beconveniently and properly audited;

• Within 60 days of the completion of transactionto which they relate;

• For 7 years after the completion of the relatedtransactions or operations; and

• At the registered office, or at such other placein Malaysia as the directors think fit.

All amounts shown in the financial statements mustbe expressed in Malaysian currency. Thecorresponding amount for the prior year must beshown. The financial statements shall include astatement of accounting policies adopted by thecompany.


(A) Tax StructureThe tax structure in Malaysia can be classified intotwo categories i.e. direct taxes and indirect taxes.Direct taxes are administered by the Inland RevenueBoard (IRB) whereas the indirect taxes areadministered by the Royal Malaysia Customs &Excise Department. The law governing income taxis the Income Tax Act, 1967.

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The following is a summary of these two taxes:

(I) Direct Taxes• Income Tax• Real Property Gains Tax• Petroleum Income Tax• Stamp duty

(II) Indirect Taxes• Sales Tax• Service Tax• Customs Duty• Excise Duty• Import Duty

(B) Basis of TaxationMalaysia has shifted from the preceding year basis tothe current year basis of taxation with effect from theyear 2000. With the change, the taxation period andthe year of assessment would be the same calendaryear. However, for companies, the taxation period fora year of assessment (except the cases where theaccounts are prepared for less than twelve months) isusually the financial year of the company.

Companies came under the self-assessmentsystem of taxation with effect from the year 2001.The self-assessment system for salaried individuals,businesses, partnerships, trust bodies and co-operative societies has been implemented in theyear 2004. Under the self-assessment regime, theresponsibility of computing the tax liability is shiftedfrom the IRB to the taxpayer and accordingly thetaxpayer is expected to submit tax returns andcompute the tax liability based on the tax laws,guidelines and regulations issued by the IRB.

Under the self-assessment system, it is a statutoryrequirement for companies, trust bodies and co-operative societies to notify its estimate of taxpayable for a year of assessment to the IRB inadvance and settle the estimated tax payable intwelve equal monthly installments payable by thetenth day of each month. The first installment is dueand payable by the tenth day of the second month inthe financial year.

Under the 2008 Budget, it is proposed that wherea Small Medium Enterprise (SME) first commencesoperations in a year of assessment, the SME is notrequired to furnish an estimate of tax payable ormake installment payments for a period of 2 yearsbeginning from the year of assessment in which theSME commences operations.

The tax payable for the relevant years ofassessment have to be settled upon thesubmission of the income tax returns which is notlater than seven months from the date of thecompany’s financial year-end. Penalties will beimposed for late payment. A 10% penalty isimposed on any tax not paid on due date and anadditional 5% penalty if such tax is still not paidwithin the next 60 days.

In the case of an individual however, the tax returnhas to be submitted to the IRB by 30 April in the yearfollowing the year of assessment. Since the returnsubmitted is a deemed notice of assessment, thebalance of tax payable must be paid by 30 Aprilfailing which a 10% penalty will be imposed with afurther 5% penalty if such tax is not paid within thenext 60 days.

(C) Tax Filing RequirementsEvery company, private or public, resident or non-resident, carrying on a business in Malaysia mustfile an annual return of income if it is chargeable totax.


Public practice is governed by the Act, the Rules and theBy-Laws (On Professional Conduct and Ethics) of theInstitute.

Under the Act, the person must be a member of theInstitute, and is prohibited from public practice through abody corporate except where it is allowed by other statutesfor limited areas of public practice, such as provision of taxservices, corporate secretarial services and even asinvestment advisors.

A member, in most instances, is allowed to be engaged inpublic practice as a sole practitioner or in partnership onlywith another member(s) as the Act and By-Laws prohibitsthe sharing of profits with non-members. All firms in publicpractice are described as firms of Chartered Accountants(or Licensed Accountants, where applicable).

Members in public practice may carry out public practiceservices such as accounting, audit, liquidation, tax andother related services. The practice of audit, liquidation andtax are licensed under relevant legislation. Members justneed to have their principal or only place of residence inMalaysia to be in public practice in Malaysia.

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A member may also establish a branch office to carry outpublic practice services but the branch office must bemanaged by a member of MIA.

Members who wish to set up a practice must first obtain theapproval of the Institute on the use of the firm’s name. Itshould not be a trade or association name. Upon the settingup of his firm, the practice must be registered with theInstitute.

The setting up of a tax consultancy practices requires theintended professional to register with CCM under theRegistration of Business Ordinance, 1956, or incorporatea company under the Companies Act 1965, or registerwith the Malaysian Institute of Accountants. A foreigncompany cannot carry on business in Malaysia unless itincorporates a local company or registers the companyin Malaysia with CCM. For a foreign company to registera company in Malaysia, the same registration procedurespertaining to the registration of a locally incorporatedcompany apply.

All firms registered with MIA are required to update theirrecords with MIA by submitting an annual return onparticulars of their firm and branch/ branches (whereapplicable) on a yearly basis. Submission of the annualreturn to the Institute is mandatory. An annual return formwill be sent (by MIA) to all member firms on a yearlybasis.

(A) Professional ServicesThe following is a list of professional servicesprescribed under the Accountants Rules that shallbe offered by Practicing Certificate holders to thepublic:

• accounting and all forms of accounting relatedconsultancy;

• accounting related investigations or duediligence;

• auditing including internal auditing;• bookkeeping;• costing and management accounting;• forensic accounting;• insolvency, liquidation and receiverships;• provision of secretarial services under the

Companies Act, 1965 [Act 125];• taxation, tax advice and consultancy;• such other services as the Council may from

time to time prescribe;

Further to the above, MIA By-Laws provide that wheremembers participate as directors and/ orshareholders in limited or unlimited companies whichoffer taxation, tax advice and taxation consultancyservices, such members shall be deemed to bemembers in public practice.

For statutory audit services for all companies andreporting accountants’ services for public listedentities, the practitioners must practice under asole proprietorship or partnership. Other servicescould be offered under incorporated bodies.

Only members who hold themselves out asChartered Accountants with valid practicingcertificates may use these descriptions under asole proprietorship or a partnership. A bodycorporate cannot be described as CharteredAccountants and it cannot be registered as amember firm of the Institute.

(B) Others

(i) Title• Any member who has been registered as a

Chartered Accountant shall, so long as he is soregistered and continues to act as a CharteredAccountant, describe himself as a "CharteredAccountant", and may use the letters "C.A.(M)"after his name.

• Any member who has been registered as aLicensed Accountant shall, so long as he is soregistered, describe himself as a "LicensedAccountant", and may use the letters "L.A.(M)"after his name.

• Any person who is registered as an AssociateMember shall, so long as he is so registered,describe himself as an "Associate Member",and may use the letters "A.M.(M)" after hisname.

(ii) Advertisement• A member who is a Chartered Accountant or a

Licensed Accountant may advertise himself asbeing engaged in practice as a CharteredAccountant or Licensed Accountantrespectively in accordance with By-Laws madeby the Council of the Institute.

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(A) Introduction The government promulgated the BurmaAccountancy Council Act in 1972 which created thecadre of Certified Public Accountants (CPA) inBurma. In 1994, the government passed theMyanmar Accountancy Council (MAC) Law replacingthe Burma Accountancy Council Act and allowingthe old Registered Accountants (RA) to becomeCPAs. The professional ethics of auditors arerecapitulated again in the new Act.

The objectives of the MAC’s functions can beclassified as follows:

• generating qualified accountants;• contributing to the development of the

accounting profession; and• governing for assurance of observance on

codes of ethics in accounting profession.

Under the supervision of MAC, the MyanmarInstitute of Certified Public Accountants (MICPA)was formed in 2003. The principle objectives ofMICPA are:

• to develop accounting and auditing knowledge;• to obtain international recognition for Myanmar

professional accountants;• to encourage members to observe the

professional codes of ethics; and• to develop the technical competence of

members.

(B) Membership Admission and Types ofMembershipsThe Ministry of Education, through the BurmaAccountancy Board, conducts the RA TrainingCourse. The training duration is fixed at two years.

Members are categorised by the Act into differentclasses of membership. These are:(i) Registration as Apprentice Accountant(ii) Registration as Certified Public Accountant(iii) Registration as Practicing Accountant

(i) Registration as Apprentice AccountantA citizen desirous of registration as an ApprenticeAccountant may apply to the Council in accordancewith the stipulations of the Council. If after scrutinythe Council finds that the application is inconformity with the stipulations it shall:

(a) select and allow registration as an ApprenticeAccountant;

(b) cause the prescribed registration fees, tuitionfees, examination fees, to be paid; and

(c) enroll the citizen as Apprentice Accountant inthe Register.

The Apprentice Accountant shall pursue his studiesduring the period of apprentice service inaccordance with the procedures.

The Council shall issue the Certified PublicAccountant (CPA) Certificate to any person who,after having passed the CPA examination, hassatisfactorily completed the practical training duringthe period of apprentice service.

(ii) Registration as Certified Public AccountantA citizen desirous of registration as a CPA mayapply to the Council for such registration, if hepossesses any of the following qualifications:

• a person who holds the CPA certificate;• a person who, having passed the RA

examination, has satisfactorily completed thepractical training within the period ofArticleship;

• a person who holds an Accountancy Certificateor degree conferred by any foreign countryand recognised by the Council; and

• a person who has been registered as a RAunder the Myanmar Accountancy Law, 1972 ora person who is entitled to register.

According to Section 13 of Myanmar AccountancyCouncil Law, if after scrutiny the Council finds that theapplication is in conformity with the stipulations itshall:

• allow registration;• cause the prescribed registration fees to be

paid; and• issue a Certificate of Registration as a CPA,

after entering the name in the register.

On expiry of the tenure of the Certificate ofRegistration as a CPA, a person desirous of extendingsuch tenure may apply to the Council in the mannerprescribed. The Council may extend the tenure aftercausing payment of the prescribed fees to be made.

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(iii) Registration of the Practicing AccountantIf the Certified Public Accountant who is registeredunder section 13 is desirous of Practicing Accountancyas a main profession, he may apply to the Council tobe so registered in the manner prescribed. If afterscrutiny the Council finds that the application is inconformity with the stipulations it shall:

• allow registration;• cause the prescribed registration fees to be

paid;• issue a Certificate of Practice as a Practicing

Accountant, after entering the name in theregister.



(A) Practicing Requirement and Certificate ofPracticeNo person shall act as an auditor of any companyestablished under the Myanmar Companies Act orthe Special Company Act, 1950, without holding aCertificate of Practice as a Practising Accountant.

Any Certified Public Accountant who wishes topractise accountancy as a profession must apply tothe MAC for enrolment in the Register of PractisingAccountants.

After payment of the prescribed registration fees,he or she will be allowed to be enrolled in theRegister of Practising Accountants and be issued aCertificate of Practice as a Practising Accountant.No CPA can take on any audit engagement withoutholding the above Certificate of Practice. Under thislaw, only the citizens of the Union of Myanmar whohold the Certificates of Practice are allowed topractise Professional auditing.

(B) Renewal On expiry of the tenure of the Certificate ofPractice as a practicing Accountant, a persondesirous of extending such tenure may apply to theCouncil in the manner prescribed. The Council mayextend the tenure after causing payment of theprescribed fees to be made.

(C) Cessation Subject to Section 21 of the MAC Law, the Councilmay form and assign a three-member InquiryCommittee, consisting of at least one Councilmember to investigate the Practising Accountant whois alleged to have failed in any one of the dutiesprescribed in Section 18, or to have violated any oneof the professional ethics prescribed in Section 19.

The Inquiry Committee shall submit a report of itsfindings to the Disciplinary Committee, consistingof 5 Council members, formed for this purpose bythe Council. The Disciplinary Committee may meteout any of the following administrative penalties:

• giving a warning;• withdrawing the right to practise as a

Accountant for a fixed period of time:• cancelling the Certificate of Practice as a

Practising Accountant.

(D) Conditions to Practice as Approved Liquidator Practicing Accountant or Practicing Lawyer can bean official Liquidator.

(E) Conditions to Practice as OthersNot mentioned

(F) Compliance with Legislation The Burma Auditor’s Certificates Rules 1939 wasissued under the provisions of Section 144 (2) ofthe Burma Companies Act. The profession wasregulated by the Auditor’s Certificates Rules 1939under the Indian Companies Act. The provisions ofthe Myanmar Companies Act regulated the conductof professional auditors, especially in regard tocommercial enterprises.

The Myanmar Auditor’s Certificates Rules weremore or less based on the Indian Auditor’sCertificates Rules. However, according to the 1956Rules, enrolment in the Register of Accountantswas limited to citizens of the Union of Myanmar,other than those already on the register.

The Laws vests the MAC with the powers toconduct the Certified Public Accountants (CPA) andDiploma in Accountancy (DA) training courses and toregulate the accounting profession by maintainingthe Registrar of Certified Public Accountants and theRegistrar of Practicing Certified Public Accountantsand, to take disciplinary action against the CPAswho fail to observe the code of professional ethicscontained in the Law.

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(A) Statutory Requirements

(i) CompaniesEvery company must appoint one or more auditorsto report to the members on the accounts of thecompany. The directors may appoint the firstauditor. The shareholders make subsequentappointments at the annual general meeting. Ateach general meeting, the directors of thecompany are required to present an auditedbalance sheet and profit and loss account that givea true and fair view of the profit and loss for thecompany’s preceding financial year.

The first annual general meeting is required to beheld within 18 months from the company’sincorporation and in subsequent calendar years, atintervals of not more than 15 months.

At the annual general meetings, the shareholderselect directors, appoint auditors and set theirremuneration, approve the audited financialstatements and the directors’ report, and considerany other relevant matters. Within 21 days of theannual general meeting, all companies are requiredto file with the Registrar an annual return (Form E)containing the following information:

• The meeting date• Details of capital structure of the company• A list of amount due on mortgage• Information on shareholders; and• A list of directors and managers.

A private company is required to send, with theannual return, a certificate signed by a director orother officer that the company has not issued anyinvitation to the public to subscribe for any sharesor debentures of the company. In the case of apublic company, a copy of the balance sheetsigned by the manager or secretary of thecompany shall be filed with the annual return.

(ii) A foreign branch companyA foreign branch company shall every year file withthe Registrar: A copy of the balance sheet of theHead Office company incorporated outsideMyanmar, together with a statement of all holdingsof shares classified according to the nationality ofthe holder of such shares, and if the balance sheetdoes not contain all the information provided inForm H in the Third Schedule of the Myanmar

Companies Act, such supplementary statementsshall furnish such information; or where no suchprovision to file a balance sheet is made by the lawof the country in which the company isincorporated, such a statement in the form of abalance sheet, together with a statement showingthe holding of its shares classified according to thenationality of the holding of such shares.

(B) Myanmar Accounting StandardMAC has created a Myanmar Accounting StandardsCommittee (MASC) to establish accounting standardsfor the country. MASC have approved up to MAS 34.

(C) Book and RecordsSection 145 (1) of the Myanmar Companies Actrequires the auditor to make a report to themembers of the company on the accountsexamined by him at the annual general meeting.This report must include the Company's balancesheet and the profit and loss statement, and inaddition, must state:

• Whether or not the auditors have obtained allthe information and explanations they require;

• Whether or not in their opinion the balancesheet and the profit and loss account referredto in the report are drawn up in conformity withthe law;

• Whether or not such balance sheet exhibits atrue and correct view of the state of thecompany's affairs according to the best oftheir information and the explanations given tothem, and as shown by the books of thecompany; and

• Whether in their opinion, books of accounts havebeen kept by the company as required by law.

Auditors have the right to attend annual generalmeetings of companies and to comment on theirreports which have been presented to themembers. Stringent provisions for negligence areincluded in the Auditor’s Certificates Rules.


(A) Basis of TaxationA person or an enterprise operating under theForeign Investment Law is liable to income tax on theincome accruing or derived from all sources withinthe Union of Myanmar. At present, there are fifteentypes of taxes and duties under the four maincategories which are individual income tax, corporate

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income tax, capital gain tax and commercial tax.Income is computed on the basis of one fiscal yearwhich starts on April 1 and ends on March 31 of thefollowing year. A flat tax rate of 30 percent isapplicable to an enterprise operating under theForeign Investment Law and those operating underthe Myanmar Companies Act. A foreign employee ofan enterprise operating under the Foreign InvestmentLaw, for income tax purposes, could be treated as aresident citizen. As a consequence, progressive taxrates starting from 3 percent to a maximum ceiling of30 percent is applicable.

A person or an enterprise operating under theForeign Investment Law is liable to income tax onthe income accruing or derived from all sourceswithin the Union of Myanmar.

Persons who spend 90 days or less in Myanmar inany tax year are normally exempt from tax. If theindividual is in any form of employment in Myanmar,this rule does not apply.

Corporate bodies registered outside Myanmarhaving registered branches in Myanmar areregistered as non-resident and are taxed on incomeonly arising or accruing in Myanmar at the minimumnon-resident rate of 35% or at graduated residentrates of 3%-50% whichever is higher.

(B) Tax AdministrationThe return on income is to be filed with the officeof the Inland Revenue in the respective township onor before 30th June following the income year, buton the business being discontinued, it is to be filedwithin one month from the date of discontinuation.Returns for capital gains are also to be submittedwithin one month of the disposal of the capitalassets concerned.


Business organisations such as partnership firms, limitedcompanies and associations not for profit which areformed in Myanmar shall register at the CompanyAdministration Department of the Directorate ofInvestment and Company Administration.

The rights and obligations of a partnership firm aregoverned by the partnership agreement and thePartnership Act of 1932. Registration of a partnershipfirm is optional. However, if registered, it shall have the

right to sue and to be sued. Registration of limitedcompanies is compulsory. The governing laws for thelimited companies are the Myanmar Companies Act1914; Special Company Act 1950; Myanmar Companies(Amendment) Act 1955 and Myanmar CompaniesRegulations 1957.

Limited companies are classified into Myanmarcompanies, foreign companies and joint venturecompanies. Foreign companies are required to apply fora PERMIT, before registration, under Section 27A of theMyanmar Companies Act. A joint venture with theparticipation of the State capital shall be registered underthe 1950 Special Company Act and the MyanmarCompanies Act. Associations not for profit shall registerunder Section 26 of the Myanmar Companies Act withprohibition of payment of dividend to its members.

It is also learnt that some of the foreign branch offices tobe newly registered in Myanmar have been requested bythe Companies Registration Office to increase the HeadOffice’s Issued & Paid-up Capital to the prescribedminimum capital requirement amount depending on thetype of business.

However, the Companies Registration Office has notrequested the foreign branch offices to increase theminimum capital to be brought into Myanmar.

Only 'Registered Accountants in Practice’ may employArticled Clerks. A list of such accountants is publishedeach year by the Government. It should be noted that theamended Auditors’ Certificates Rules do not specify thelength of practice needed for eligibility to take on articledclerks.

(A) Professional ServicesProfessional services that shall be offered byPracticing Accountant to the public are taxation andothers financial matters.

(B) Others

(i) ProhibitionA person whose Certificate of Practice as aPractising Accountant has been withdrawn for afixed period of time or whose Certificate ofPractice has been cancelled shall not fail tosurrender the Certificate of Practice within 30 daysof the date on which the Disciplinary Committeehas made the order or the decision.

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(A) IntroductionThe Accountancy Act, 1923 created the Board ofAccountancy (BOA) and gave it the authority toissue Certified Public Accountant (CPA) Certificates.Six years later, the Philippine Institute of CertifiedPublic Accountants (PICPA) was established withinthe private sector to represent professionalinterests.

PICPA was formed in 1929 and recognised in 1975by the Professional Regulations Commission (PRC) asan official body represented by members in the publicpractice, industry, government and education sectorsin Philippines.

Before the formation of the Accounting StandardsCouncil (ASC), PICPA was the main source forrecommendations on the accounting practices andauditing standards. It also issued rules of professionalconduct for its members. In November 1981, PICPAformed the ASC as an independent body to formalisethe accounting standard-setting function in thePhilippines.

The International Accounting Standard became thebasis for Philippine accounting standards since 1996.


(A) Practicing CertificateAccording to Section 26 of BOA, no person shallpractice accountancy in this country, use the title"Certified Public Accountant", or other device toindicate such person practices or offers to practiceaccountancy, unless such person shall have receivedfrom the Board a Certificate of Registration and beissued a professional identification card or a validtemporary/special permit duly issued to him/her bythe Board and the Commission.

The BOA will issue a practicing certificate afterthree years of meaningful experience. MandatoryContinuing Professional Education (CPE) complianceis required for all CPAs.

A Certificate of Registration shall be issued toexaminees who pass the licensure examination, orwho are admitted without examination underreciprocity or other international agreementssubject to payment of fees prescribed by theCommission.

The Certificate of Registration shall bear thesignature of the Chairperson of the Commissionand the Chairman and Members of the Board,stamped with the official seal of the Commissionand of the Board, indicating that the person namedtherein is entitled to the practice of the professionwith all the privileges appurtenant thereto. The saidcertificate shall remain in full force and effect untilwithdrawn, suspended or revoked in accordancewith Republic Act (RA) No. 9298.

A Professional Identification Card bearing theregistration number, date of issuance, expiry date,duly signed by the chairperson of the Commission,shall likewise be issued to every registrant. Provided,that the registrant has paid the prescribed fee for theannual registration for three (3) years.

(B) Criteria for Applying for the PracticingCertificateThe Accountancy Act, 2004 and its implementingregulations, provide that all CPAs must be membersof an accredited professional organisation. The Actimposed a three-year experience requirementbefore a new CPA could practice as a publicaccountant.

Single practitioners and partners of partnershipsorganised for the practice of public accountancyshall be CPA in the Philippines pursuant to RA No.9298. A Certificate of Accreditation shall be issuedto CPA in public practice only upon showing, inaccordance with rules and regulations promulgatedby the Board and approved by the Commission.

Such registrants should have acquired a minimum ofthree (3) years meaningful experience in any of theareas of public practice including taxation. Thisrequirement shall not apply to those already granteda Certificate of Accreditation prior to the effectivedate of RA No. 9298.

(C) RenewalThe PICPA shall renew its Certificate of Accreditationonce every three (3) years after the date of theResolution granting the petition for re-accreditationand the issuance of the said certificate uponsubmission of the requirements enumerated hereof, areport on significant achievements as a corporatebody in attaining the objectives of the organisation, inthe enhancement of the welfare of its members andthe stature/prestige of the profession to be signed byBoard Directors/Trustee and a proof of payment ofthe prescribed renewal fee.

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The Board shall not renew a Professional IdentificationCard, or shall suspend, or revoke, any Certificate ofRegistration obtained by false swearing or by anymisrepresentation made in applying for registration orexamination and shall not renew nor grant registrationto any applicant whose application contains such falseevidence or information.

(D) CessationThe PICPA certificate of accreditation shall becancelled or suspended by the Commission uponrecommendation by the Board after due hearingunder any of the following grounds/causes:

• It has ceased to possess any of thequalifications for accreditation;

• It no longer serves the best interest of theCPAs;

• It did not achieve its plan provided in paragraph2 to enlist into active membership within three(3) years, majority of the CPAs in the practice ofaccountancy as defined in the Section 4, Rule Ihereof or even if it achieves such plan but fails tosustain it over time such that its membership nolonger represents a significant portion of theaforesaid CPAs in the practice of accountancy;

• It has committed acts inimical to its membersand to the profession;

• It has not renewed its certificate ofaccreditation after a lapse of an unreasonableperiod for the date of its scheduled renewal; or

• It has not submitted the required auditedfinancial statements.

(E) Conditions to Practice as Approved AuditorAll applicants for registration for the practice ofaccountancy shall be required to undergo alicensure examination to be given by the Board insuch places and dates as the Commission maydesignate subject to compliance with therequirements prescribed by the Commission inaccordance with Republic Act No. 8981.

Any person applying for examination shall establishthe following requisites to the satisfaction of theBoard that he/she:

• is a Filipino citizen;• is of good moral character;• is a holder of the Degree of Science in

Accountancy conferred by a school, college,academy or institute duly recognized and/oraccredited by them or other authorisedgovernment offices;

• has not been convicted of any criminal offenseinvolving moral turpitude or misrepresentationmade in applying for registration or examination.

Individual practitioners and firms or partnerships inpublic accountancy, including their partners andstaff, are required to be accredited by the PRC andthe BOA every three years. Only individual externalauditors and auditing firms that are accredited bythe Securities and Exchange Commission (SEC) canperform statutory audits of financial statements ofSEC-registered entities.

(F) Conditions to Practice as Tax AgentNot mentioned

(G) Conditions to Practice as LiquidatorNot mentioned

(H) Conditions to Practice as OthersNot mentioned

(I) Compliance with LegislationThe legislative and institutional framework thatgoverns Philippine accounting and auditingarrangements are the Revised Accountancy Law1975 (replaced Accountancy Act, 1967), theCorporation Code, the Revised Securities Act2000, and the National Internal Revenue Code1999. The Philippine accounting and auditingregulatory framework includes both governmentaland a supervised form of self-regulation. TheAccountancy Act 1967 governed thestandardisation of accounting education, stipulatedthe examination process for CPA registration, andregulated the practice of accountancy.

The Act allowed only Philippine citizens, and citizensof foreign countries extending similar privileges toPhilippine citizens with respect to the practice ofaccountancy, to take the CPA exam and to practiceaccountancy.

Professional firms are regulated by SEC and theBoard of Accountancy, through the PRC, has recentlybegun to review and license accountancy firms.Accountancy firms cannot be corporations and theRevised Accountancy Law 1975 requires that allpartners of accountancy firms must be registeredPhilippine CPAs. All of the large internationalaccountancy firms are represented in the Philippines.

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Accounting standards in the Philippines are approved bythe Securities and Exchange Commission (SEC).

The Philippines adopted all International FinancialReporting Standards (IFRS) in 2005 without modification.These Philippine equivalents to IFRSs apply to all entitieswith public accountability. That includes:

• entities whose securities are listed in a public marketor are in process of listing;

• all financial institutions including banks, insurancecompanies, security brokers, pension funds, mutualfunds, and investment banking entities;

• public utilities; and • other economically significant entities, defined as total

assets in 2004 of at least 250 million Pesos (US$5million) or liabilities of at least 150 million Pesos (US$3million).

Non-publicly accountable entities (NPAEs, sometimes calledSMEs) have been given a two-year deferral (2005 to 2007)from the transition to IFRS equivalents. Instead, they arepermitted to use Philippines Accounting Standards that werein effect in 2004.

The Philippines distinguish publicly accountable entitiesfrom non-publicly accountable as follows:

• publicly listed;• holds assets in a fiduciary capacity;• public utility; or • economically significant.

For Philippines purposes, economic significance meanstotal assets over Pesos 250 million (approximately US$ 5million) or total liabilities over Pesos 150 million in 2004.

The Corporation Code, which is enforced by theSecurities and Exchange Commission (SEC), governs thecreation and operations of limited liability corporations.Unless companies are classified as closed corporationswhich are those with 20 or fewer shareholders, they areobliged to abide by all the reporting and otherrequirements of a limited liability corporation. Thesecorporations must submit audited financial statements tothe SEC and the Bureau of Internal Revenue (BIR).

The statutory financial statements include the BalanceSheet, Income Statement and Cash Flow Statementtogether with notes to the financial statements. The Rulesrequire the disclosure of all matters that might affect aninvestor’s decision to buy or sell a company’s securities.

All companies with quarterly sales exceeding Pesos100,000 (about $2,000) must have their financialstatements audited and signed by a CPA. Corporationswhose securities are listed at the exchange must preparetheir financial statements according to the accountingstandards promulgated by the Accounting StandardCouncil.

The Revised Accountancy Law 1975 regulates theauditing profession – only CPAs are allowed to conductstatutory audits. The following laws and regulationsdetermine audit requirements:

• Sections 75 and 141 of the Corporation Code requirecorporations with paid-up capital of Pesos 50,000and above to submit audited annual financialstatements to shareholders and to the SEC.

• The National Internal Revenue Code (NIRC) requirescorporations, partnerships and persons with grossquarterly earnings of more than Pesos 150,000 tofile audited financial statements with their tax returns.


The National Internal Revenue Code 1999 requires allcorporations, partnerships and persons that file incometax returns to prepare and submit financial statements. Italso requires that tax agents, including CPAs, beaccredited by the BIR.

Annual registrations of both Value Added Tax (VAT) andNon-VAT enterprises are required and the classification isdependent on the aggregate annual sales. The final annualincome tax returns must be accompanied by the BalanceSheet, Income Statement, Cash Flow Statement and allother documents relevant to computation of taxes due andpayable. Partnership and corporations, as well as singleproprietorships attaining a certain quarterly sales level musthave their financial statements audited and attested to byindependent external auditors.


The partnership engaged in the practice of publicaccountancy may be carried on in the form of a generalpartnership (GP) or a limited liability partnership (LLP)organised in accordance with Philippine laws. The SECshall not register any corporation organised for thepractice of public accountancy.

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Existing Rules that Allow Practice of Foreign Professionals(Cons reserves practice for Filipino citizens except asprovided by law):

(I) RA 8981: PRC Modernization Law of 2000.Certificate of Registration/temporary permit forforeigners:

• reciprocity/International Agreements• consultants in foreign-funded, joint venture or

foreign assisted projects of government.• employees of Philippine/foreign private

firms/institutions pursuant to law• health professionals engaged in humanitarian

missions

(II) Sec 34, Art.IV, RA 9298 (CPA law) of ForeignReciprocity. Citizen of countries maybe allowedpracticing accountancy in the Philippines inaccordance with:

• existing laws• International treaty obligations including Mutual

Recognition Agreements (MRAs) entered intoby the government with other countriesprovided that foreign country admits Filipinosto practice the same profession withoutrestriction.

Special / temporary permit may be issued to the foreignerby the Board subject to the approval of the Commissionand payment of the fees the latter has prescribed andcharged thereof to the following persons:

• a foreign CPA called for consultation or for a specificpurpose which, in the judgment of the Board, isessential for the development of the country. Thepractice shall be limited only for the particular work thatis being engaged and provided that there is no FilipinoCPA qualified for such consultation or specific purposes;

• a foreign CPA engaged as professor, lecturer or critic infields essential to accountancy education in thePhilippines and the engagement is confined to teachingonly; and

• a foreign CPA that is an internationally recognisedexpert or with specialisation in any branch ofaccountancy and such service is essential for theadvancement of accountancy in the Philippines.

Citizens of foreign countries may be allowed to practiceaccountancy in the Philippines in accordance with theprovisions of existing laws, and international treaty obligationsincluding Mutual Recognition Agreements entered into by thePhilippine government with other countries.

A person who is not a citizen of the Philippines shall notbe allowed to practice accountancy in the Philippinesunless he can prove, in the manner provided by the rulesof court that, by specific provision of law, the country ofwhich he is a citizen, subject or national admits citizensof the Philippines to the practice of the same professionwithout restriction.

(A) Professional ServicesNot mentioned

(B) Others Participation in the audit quality review program ofthe Philippine Accounting Oversight Board (PAOB) isa requirement for all accredited accounting firmsconducting audits in accordance with theInternational Standards on Auditing/PhilippineStandards on Auditing. Audit quality reviews arerequired as follows:

• Annually for accounting firms that audit morethan 100 public interest companies.

• Once every three years for all others.

If violations are found in the requirement of initialaccreditation and renewal of accreditation, thePAOB shall recommend sanctions.

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(A) IntroductionThe Accounting and Corporate Regulatory Authority(ACRA) came into existence by the enactment of theAccounting and Corporate Regulatory Act in 2004.The mission of ACRA is to provide a responsive andforward looking regulatory environment forcompanies, businesses and public accountants,conducive to enterprise and growth in Singapore.

ACRA administers the Companies Act and theAccountants Act. Pursuant to this, it monitors directors’compliance with approved accounting standards andfiling requirements in connection with the preparationand filing of statutory financial statements requiredunder the Companies Act and ensures that publicaccountants, who perform statutory audits, audit thesefinancial statements in compliance with relevantauditing and quality control standards.

The Institute of Certified Public Accountants ofSingapore (ICPAS) is the largest accounting body inSingapore in terms of membership. It is a societyconstituted under the Societies Act. Membership inthe ICPAS is mandatory if a person wishes topractice as a public accountant (or approvedcompany auditor) or to provide services as acompany secretary to a public corporation. In thelatter case, however, memberships in certain otherbodies are also accepted. The majority, however,obtain the ICPAS membership in order to use thedesignation “CPA Singapore”.

The ICPAS is headed by a Council which sets outthe direction of its development and oversees itsoperations. The Secretariat is accountable to theCouncil and is responsible for the generaladministration. ICPAS is a member of the:

• International Federation of Accountants (IFAC).• Asia-Oceania Tax Consultants Association (AOTCA)• ASEAN Federation of Accountants (AFA)• Insolvency Practitioners Association of

Singapore Limited (IPAS)

The mission of the ICPAS is to develop, supportand enhance the integrity, status and interests ofthe accountancy profession in Singapore. Besidesadministering the Institute's membership, it catersfor the training and professional development of itsmembers through regular courses conducted by itstraining arm, the Singapore Accountancy Academy(SAA).

The ICPAS has signed Mutual RecognitionAgreements (MRA) with the Association ofChartered Certified Accountants (ACCA) and CPAAustralia. It has also signed a Memorandum ofCooperation (MOC) with the Kampuchea Institute ofCertified Public Accountants and Auditors (KICPAA)and the National Accounting Council (NAC) inCambodia with KICPA.

(B) Membership Admission and Types ofMembershipThe main membership categories are as follows: (i) Provisional members(ii) Non-practicing members(iii) Practicing members

Practicing and non-practicing members are entitledto use the designation “Certified Public AccountantSingapore” or the initials “CPA Singapore” or “FCPASingapore” (Fellow of the Institute of CertifiedPublic Accountants of Singapore).

(i) Membership as Provisional MembersProvisional members are those who have passedthe recognised professional examinations or aregraduates of local universities (or other recognisedlocal educational bodies) but have yet to fulfillrelevant work experience to hold a “CPA Singapore”designation. Various professional examinations arerecognised. This includes the ICPAS ProfessionalExamination and examinations set by variousoverseas professional bodies. Graduates of thelocal universities (or similar educational bodies) andgraduates under the local Joint Examination Schemewith the Association of Chartered CertifiedAccountants (ACCA) are given direct admission.

Those who have obtained their qualificationsoverseas would need to show evidence that theyare proficient in Singapore laws (including thoserelating to companies and taxation). If they cannotshow such evidence, they will need to sit for therelevant examinations as prescribed by ICPAS.

(ii) Membership as Non-Practicing MembersNon-practicing members are members employed inthe profession, commerce and industry,government and statutory agencies, and academicinstitutions. To be admitted as a non-practicingmember the applicant must have fulfilled all therequirements to become a provisional member. Inaddition they are required to:

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• have acquired practical experience as specifiedby ICPAS

• attended a Pre-Admission Course conducted byICPAS

The Pre-Admission Course is a five-day refreshercourse on professional standards, Code of Conductand Ethics, and related matters. A member who hascompleted this course will not be required to undergoanother similar course of instruction when applyingfor a reclassification of his or her membership status.

(iii) Membership as Practicing MembersTo be admitted as a practicing member, theapplicant must have fulfilled all the requirements asrequired by a non-practicing member in addition tobeing registered as a public accountant under theAccountants Act. The requirements for registeringas a public accountant are given in Section 3.7.2.

(C) Other general condition applicable for allcategories of membershipAll members are required to comply strictly with theICPAS Code of Professional Conduct and Ethics,failing which members may face disciplinary action.


(A) Practicing CertificateThe criteria to be registered as a public accountantunder the Accountants Act and to obtain acertificate of registration issued by ACRA(hereinafter referred to as a “practicing certificate”)are contained within the Second Schedule ofAccountants (Public Accountants) Rules of theAccountants Act (hereinafter referred to as “theSecond Schedule”) and ACRA’s Practice DirectionNo. 1 of 2005. Any person who desires to beregistered as a public accountant under theAccountants Act must make an application to thePublic Accountants Oversight Committee (PAOC) ofACRA. The PAOC was established under theAccountants Act and assists ACRA in administeringthe Act.

An applicant must meet the following requirements: • has attained the age of 21 years• holds a qualification listed under the Second

Schedule• has acquired the practical experience required

under the Second Schedule• be a member of ICPAS.

An applicant must have, at the time of hisapplication for registration, acquired at least 3years of practical experience, of which at least 2years must be acquired after passing the relevantfinal examination prescribed under the SecondSchedule. This experience must be acquired within7 years before the date of application; of which atleast 1 year must be acquired within 3 years beforethe date of application.

The PAOC may require an applicant for registrationto undergo such interviews as it may determine. Itmay refuse to register any applicant who has hadhis registration, license or approval to practice as apublic accountant in any other country withdrawn,suspended, cancelled or revoked or in the opinionof the PAOC:

• is not of good reputation or character; • is engaged in any business or occupation that is

inconsistent with the integrity of a publicaccountant; or

• is otherwise unfit to practice as a publicaccountant.

The Second Schedule requires that an applicantwho does not have at least 2 years of relevant localexperience and who is a foreign graduate to satisfythe PAOC of his or her proficiency in local laws bypassing an examination in the following subjects:

• Singapore Company Law; and• Singapore Taxation and Tax Management.

The PAOC recognizes ICPAS as the learningprovider for the above two subjects.

Every applicant must also complete a course ofinstruction on ethics and professional practicesubjects as may be prescribed by the PAOC fromtime to time. Currently the prescribed course is theICPAS Pre-admission Course.

(B) Conditions for Holding a Practicing CertificateA certificate of registration is valid from the date itwas issued or renewed to 31st December of thesame year. An application for renewal must besubmitted in the renewal form and signedpersonally by the public accountant concerned. Itmust also be accompanied by the prescribed fees.A public accountant shall not be entitled to have hiscertificate of registration renewed if he has failed:

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• to pass any practice review conducted underACRA’s Practice Monitoring Programme,pursuant to Part V of the Accountants Act

• to meet the required standard of professionalconduct or practice under the Code ofProfessional Conduct and Ethics as prescribedunder the Accountants Act

• to comply with the prescribed requirementsrelating to continuing professional education(CPE) under the Accountants Act.

(C) Cessation Public accountants can apply to the PAOC to canceltheir certificate of registration by providing theirpublic accountant registration number andproposed date of cancellation. After the PAOCapproves the cancellation, the accountant isrequired to apply for a revocation of the relevantpublic accounting vehicle under which he or sheoperated by writing in to the PAOC or using theonline facility available at ACRA’s website.

(D) Conditions to Practice as Approved CompanyAuditorTo practice as an Approved Company Auditor, theperson would need to obtain a practicing certificateissued by ACRA. See Section 3.7.2 (A) above, onthe conditions relating to obtaining a practicingcertificate.

(E) Conditions to Practice as Tax AgentThere are no specific requirements in legislation fora person to practice as a tax agent.

(F) Conditions to Practice as LiquidatorThe conditions to practice as an Approved CompanyLiquidator are contained in Sections 9 and 11 of theCompanies Act and ACRA’s Practice Direction No. 5of 2005. ACRA’s Registrar of Public Accountantsmust be satisfied as to the experience and capacityof the applicant before approving such an application.The requirements depend on whether the applicant isa public accountant or not.

Public accountants must have suitable and relevantexperience – "suitable and relevant experience"means audit or liquidation experience; and evidenceof "capacity". To establish capacity, publicaccountants must obtain a report from two referees,one of whom must be an approved liquidator who hassupervised the applicant’s work. Approval to be aliquidator will remain so long as the applicant remainsa public accountant under the Accountants Act. If theliquidator ceases to be a public accountant, the

following conditions will apply with regards to thevalidity of the approval to act as a liquidator:

• a person who resigns voluntarily as a publicaccountant may continue to be a liquidatorupon an application made in writing and uponapproval granted by the Registrar. Theapplication should be made before hisproposed date of resignation as a publicaccountant. Otherwise, the liquidator licensewill lapse together with his/her de-registrationas a public accountant.

• a person who has been disciplined and has hadhis registration revoked, suspended, or notrenewed as a result may have his approval tobe a liquidator revoked. The approval will lapsetogether with the cancellation, suspension ornon-renewal of the public accountantregistration.

• any person who ceases to be a publicaccountant and whose application for approvalto act as a liquidator is not renewed mayappeal to the Minister to retain or reinstate hisapproval to be a liquidator. This appeal inwriting must provide supporting reasons.

Non-public accountants must possess a minimumof 3 continuous years of full time insolvencyadministration experience, of which any 2 yearsmust be at a managerial or supervisory level.Applicants must obtain a report from two referees,one of whom must be an approved liquidator whohas supervised the applicant’s work. The Registrarmay refuse to register any applicant whom in heropinion is not of good reputation or character.

(G) Conditions to Practice as OthersSpecific requirements in legislation may apply whenperforming in other related roles in conjunction withthe role of a public accountant. These requirementsare elaborated in Section H, below. In addition, thepublic accountant will be required to abide by theACRA’s Code of Professional Conduct and Ethicsand the ICPAS’s Code of Professional Conduct andEthics when performing in other related roles.

(H) Compliance with LegislationPublic accountants are required to comply with avariety of legislation and regulations arising from thislegislation. This includes primarily the AccountantsAct and the Companies Act. In addition, publicaccountants are also required to comply with auditingstandards that will require them to review directors’and companies’ compliance with all relevant

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legislation, including the Income Tax Act; Securitiesand Futures Act; Financial Advisers Act; Corruption,Drug Trafficking and other Serious Crimes(Confiscation of Benefits) Act and the Terrorism(Suppression of Financing) Act which deal with taxcompliance, insider trading and securities dealing,money laundering and related matters, respectively.


Singapore’s Financial Reporting Standards (FRS) are issuedby the Council on Corporate Disclosure and Governance(CCDG) which was set up in 2002. The CCDG was replacedby the Accounting Standards Council (ASC) in 2007 whichwill issue accounting standards applicable to both thecorporate and non-corporate sectors. ACRA and ICPAS’sFinancial Statement Review Committee (FSRC) performfinancial reporting surveillance to ensure compliance withthe FRS.

Every company is required to maintain accounting recordswhich will sufficiently explain the transactions and financialposition of the company and enable true and fair financialstatements to be prepared from time to time. Theserecords are required to be kept in such manner as toenable them to be conveniently and properly audited andmust be retained for a period of not less than 5 years fromthe end of the financial year in which the transactions oroperations to which the records relate are completed.

A local company is required to hold its first AGM within18 months of its incorporation. At the AGM, the directorsare required to present the company’s financialstatements that are prepared in compliance with therequirements of approved accounting standards andwhich give a true and fair view of the state of affairs ofthe company to its shareholders.

Subsequent AGMs must be held every calendar year andthe interval between these meetings should not be morethan 15 months after the date of the last AGM. Acompany is required to file its Annual Return with theRegistrar within one month after the holding of the AGM.The financial statements which are presented at the AGMmust not be made up to a date older than 6 months fromthe date of the AGM for a private company or unlistedpublic company, or 4 months for a public listed company. All Singapore companies and branches of foreigncompanies are required to be audited by approvedauditors under the Companies Act, except for exemptprivate companies (EPC) with a turnover of less than $5million and dormant companies which are exempted fromstatutory audits. An exempt private company is a private

company in the shares of which no beneficial interest isheld directly or indirectly by any corporation and whichhas not more than 20 members. Auditors have to beappointed within three months of incorporation.

Companies will need to file their financial statements withACRA, except for EPCs. These financial statements willneed to be filed in XBRL (Extensible Business ReportingLanguage) format from 1 November 2007, except forexcluded categories which include banks, insurance andfinancial companies, which will continue to file in AdobePDF (Portable Document Format).


(A) Basis of TaxationBoth resident and non-resident companies aresubject to tax on income derived in Singapore andon foreign income received in Singapore. Acompany is resident in Singapore if the control andmanagement of the company is exercised inSingapore. In general, the control and managementof the company is taken to be the place where theBoard of Directors' meetings are held. Thecorporate tax rate is 18%, but the effective tax ratemay be even lower due to partial tax exemptionsgiven on the chargeable income.

Goods and services tax (GST) is applicable at arate of 7%.

Resident individuals are subject to tax both onincome derived in Singapore and income receivedin Singapore from sources outside Singapore. Theyare taxable at progressive rates from 3.5% to 20%and are entitled to claim certain personal taxreliefs. The first $20,000 of chargeable income isnot taxed. In addition, rebates of tax are announcedon an annual basis.

Non-resident individuals are subject to tax only inrespect of income derived from sources in Singapore.The tax rate on directors’ remuneration is 20%.Employee remuneration and other professionalincome are taxed at 15%. There is no tax on short-term (i.e. not more than 60 days) employees’remuneration.

Resident companies are not taxed on profitsderived elsewhere and not remitted to Singapore.Similarly, non-resident companies are only taxed onprofits derived from, or accruing in Singapore.

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(B) Tax AdministrationTax is only payable after an assessment has beenissued. Every company has to provide an estimateof its taxable income within three months of theend of its accounting period. An estimatedassessment will then be raised and the taxassessed must be paid within one month, unlessarrangement is made to pay the tax in installments.

A newly incorporated company should note that acompany that has income accrued in or derivedfrom Singapore or received in Singapore fromoutside Singapore is required to declare its incomeby completing an Income Tax Form for companies,known as Form C, each year.

The company has to submit its completed Form Cwith the accounts, tax computation and supportingdocuments by 31st July each year.


Public accountants can practice within a variety of legalentities, as follows:

• Sole Proprietorships• Partnerships• Limited Liability Partnerships (LLP)• Public Accounting Corporations (PAC)

A public accountant who wishes to have a firm orproposed firm approved as an accounting firm, LLP orPAC may apply to the PAOC for approval of the firm as anaccounting firm and its proposed name.

At least two-thirds of the partners of an accounting firm mustbe public accountants, or if the partnership has only 2partners, one of those partners should be a publicaccountant.

The capital of an LLP that is paid up or to be paid up shouldnot be less than $50,000 or such other sum as may beprescribed. At least two-thirds of the partners must bepublic accountants, or if the partnership has only 2partners, one of those partners should be a publicaccountant

A PAC must be registered under the Companies Actbefore approval is requested from the PAOC. Not lessthan two-thirds of the directors (including the chairman) ofa PAC should be public accountants.

There are no mandatory professional indemnity insurance(PII) requirements imposed by ICPAS or ACRA onpracticing members or public accountants, respectively.However, under the Accountants Act, every PAC and LLPregistered under the Act is required to be covered by PII.

(A) Foreign ApplicationsAn applicant who is a foreigner and has only aforeign residential address should satisfy the PAOCthat he is or is about to carry on the public practiceof accountancy in Singapore. The applicant will thenbe allowed to file his or her business address inSingapore in lieu of the residential address.

Under the Singapore Immigration Regulations, anyforeigner who is not a Singapore permanent residentand wishes to engage in any business, profession,occupation or any form of paid employment inSingapore is required to apply for an EmploymentPass. Applications for an Employment Pass should bemade to the Ministry of Manpower. A successfulapplicant will be issued with an Approval-In-Principleletter to enable him or her to register a business withACRA.

Upon receipt of the Certificate of Registration (ofthe Business) from ACRA, the applicant needs tosend a copy of the certificate and the Approval-In-Principle letter to the Employment Pass Departmentfor the processing of his or her Employment Pass.For a successful applicant who is already anexisting shareholder or partner of a registeredcompany or business, an In-Principle Approval letterwill be issued for the collection of his or herEmployment Pass.

The above procedures apply only to foreignersintending to be actively involved in the day-to-dayoperations of the business and to businesseswhere no local manager has been appointed yet. Aforeigner, however, who is not "ordinarily resident"in Singapore must appoint a local manager who is.Individuals who are ordinarily resident include aSingapore Citizen, a Singapore Permanent Residentor a person who has been issued an EmploymentPass/Approval-In-Principle letter or a DependantPass.

(B) Professional ServicesEvery company is required to have one or moresecretaries who is a natural person and who hashis principal or only place of residence inSingapore. A company secretary of a publiccorporation must be a member of ICPAS, the

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Association of International Accountants (SingaporeBranch); the Institute of Company Accountants,Singapore or the Singapore Association of theInstitute of Chartered Secretaries or an advocateand solicitor.

Other professional services may be provided solong as they comply with the Codes of ProfessionalConduct and Practice of ACRA and ICPAS.

(C) Others

(i) Consequences of Non-renewalThe Act requires the Registrar of PublicAccountants to remove from the Register of PublicAccountants the name and particulars of a publicaccountant who has, without reasonable excuse,failed to renew his certificate of registration afterone month from the date of expiry, i.e. by 31January of the following year. A public accountantwhose name has been removed from the registerwill have to reapply for registration and pay theprescribed fees for registration.

(ii) Publication of list of public accountantsThe Registrar may, from time to time, prepare andpublish in such form or manner as the PAOC maydetermine a list of the names and particulars of allpublic accountants.

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3.8.1 Regulation of the Accounting Profession

(A) IntroductionThe Institute of Certified Accountants and Auditors ofThailand (ICAAT) was established in 1948. There aretwo professional accounting and auditing bodies inThailand. They are the ICAAT and the Board ofSupervision of Auditing Practice.

The “Accounting Profession Act B.E. 2547” wasintroduced to enhance the quality of financial reports.This Act has repealed the Auditor Act B.E. 2505 thatregulated only auditors, to regulate the conduct of allaccounting professionals thereby accommodatingrapid change in current accounting professions aswell as providing greater transparency and protectionto investors and the public.

This new Act introduced a new regulatory frameworkunder which all accounting professionals aresupervised. Consequently, a self-regulatory organisationcalled the Federation of Accounting Professions (FAP)was established in 2004 with authority to supervise theprofessionals in the following areas:

• Licensing, suspending and revoking theaccounting professional license for individuals;

• Registering all accounting service firms;• Setting up the auditing, accounting and any

other standards that are in conjunction withaccounting professions; and

• Establishing a code of conduct for allaccounting professionals.

In addition, under this Act, another new bodynamed “Accounting Profession Oversight Board”was set up to regulate the activities of the FAP,endorse Thai accounting standards and rulesissued by the FAP, and consider appeals regardingthe FAP’s orders. In order to maintain Thaiaccounting standards in line with IAS, the SEC willcooperate with the FAP on further developments.Prior to the establishment of the FAP, accountingstandards were issued by ICAAT.

(B) Membership Admission and Types ofMembershipsAccording to Section 37, if there is a provision of lawrequiring auditing or requiring a document to be affixedwith an auditor’s signature or opinion, a person shall beprohibited to certify auditing or a document, or toprovide an opinion as an auditor unless such person isa Certified Public Accountant (CPA) or he has beenauthorised by a competent authority to do so.

A member of FAP must have a related degree inaccountancy (normally 4 years of study).

• Ordinary member: Having at least a Bachelor’sDegree in Accountancy or holding a certificatein Accountancy or other degrees equivalent toa Bachelor’s Degree in Accountancy accreditedby the FAP or other degrees as prescribed bythe FAP;

• Extraordinary member: Having at least aBachelor’s Degree in Business Administration,Commerce, Economics, or other degrees asprescribed by the FAP;

• Associate member: Having education lowerthan a Bachelor’s Degree but higher than acertificate in high-level vocational schooling (inaccountancy) or diploma in accountancy orstudying in undergraduate level in accountancyor related fields.



(A) Practicing RequirementThere are several positions that foreigners cannotlegally occupy when seeking employment inThailand whether to work or be employed asAccountants. Foreigners are not permitted topractice accounting in the Thai Kingdom but canmanage or act as heads of the firms.

Foreigners need to obtain a work permit in order towork at any company in Thailand and obtaining thatwork permit is subject to approval by the LaborDepartment of Thailand.

(B) Criteria for Applying for the PracticingCertificateA person who wishes to be a CPA shall obtain alicense from FAP. Application, approval, and issuanceof a license of a CPA shall be in accordance withforms and criteria as prescribed in the regulations ofthe FAP.

If the license is not suspended or revoked, a CPAshall be exempt from receiving permission from theDirector of the Revenue Department to audit andcertify an account under the law on revenuecollection.

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Subject to Section 39 (1), an applicant for a licenseof a CPA shall have the following qualifications andshall not have the prohibited characteristics below:

• Being an ordinary member or an extraordinarymember under Section 14 paragraph two. In thecase that an extraordinary member is aforeigner, he shall be proficient in Thai to be ableto audit and to prepare a report in Thai and shallhave domicile in Thailand. After obtaining alicense, he shall obtain a work permit inaccordance with the law on aliens’ work.

A CPA applicant must pass 6 subjects within 3 years(plus completing 3,000 hours of practical experiencewithin 3 years) in order to become a CPA. Eachsubject passed remains valid for only 3 years if a CPAapplicant has not yet passed the whole examinations.A CPA applicant must complete 3,000 hours ofpractical experience within 3 years as pre-qualificationbefore becoming a CPA.

In the CPA case, students can register to accumulatetheir practical experience hours and are required tocomplete at least 15 credits in accounting subjectsbefore registering. Obtaining practical experience canbe done in parallel with taking the CPA examinations.However, applicants eligible to take the exams have tocomplete their bachelor's degrees first.

(C) Conditions to Holding a Practicing CertificateCPD (Continuing Professional Development) isrequired for both bookkeepers and auditors (bothpracticing and non-practicing).

• For bookkeepers, 27 hours of CPD is requiredwithin 3 years.

• For auditors, 12 hours of CPD is requiredwithin a year.

(D) RenewalPractitioner can renew a CPA license yearly inwhich the procedure will take less than 90 days.

(E) CessationPenalties for the person found guilty of misconductare in the following order of severity:

• Written warning• Put on probation• Suspension of a license and registration or

prohibition against practice in the relevantaccounting professions for a term notexceeding three years

• Revocation of a license and registration orwithdrawal of membership in the Federation ofAccounting Professions

(F) Conditions to Practice as Certified AuditorTo be registered as a licensed auditor, a candidatemust have a degree in accounting or an equivalentaccounting diploma and must be found fit to belicensed as an auditor. The candidate must havecompleted practical auditing work required by theAuditor Professional Control Commission (APC) andmust be twenty years of age. Basically the candidatemust be a Thai national, but under a reciprocalarrangement a national of a country that allows Thainationals to become auditors is also eligible.

To enforce an ethical standard in the profession,the candidate must not be of bad conduct ormorally defective, must not have been convicted ina case related to the profession, must not be aninsane person or mentally defective person andmust not practice another profession. An auditor’slicense has a valid period of five years.

(G) Conditions to Practice as Tax AgentNot mentioned

(H) Conditions to Practice as Approved Liquidator Not mentioned

(I) Conditions to Practice as Others Not mentioned

(J) Compliance with LegislationBookkeepers are regulated by the Department ofBusiness Development (DBD), Ministry ofCommerce (The Accounting Act B.E. 2543 (2000))while auditors are supervised by the FAP (TheAccounting Professions Act B.E. 2547 (2004)).

Auditors can be involved in tasks related to theSecurities and Exchange Commission, Departmentof Insurance, Department of BusinessDevelopment, Department of Cooperative Auditing,Ministry of Agriculture and Cooperatives,Department of Revenue and Bank of Thailand.

The Auditor Professional Control Commission (APC)has the powers and duties to register and issuelicenses to auditors, to suspend or revoke auditors’licenses, to prescribe rules and procedures relatingto the administration of auditor license, and toconsult with the universities or other institutionsrelating to the curriculum for auditing profession.

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It is empowered to form sub-committees to do anybusiness or any investigation within its powers.


(A) Accounting StandardFAP issues the Accounting Standardpronouncements which correlate very closely to theInternational Accounting Standards (IAS) and the USGenerally Accepted Accounting Principles (GAAP).Most of the accounting pronouncements’publications are in Thai; except for the accountingstandards of which some have been translated intoEnglish.

Currently, there are a total of 57 accountingstandards. Of those issued, 31 standards arecurrently effective, four standards are not yetrequired by Thai law, and 22 standards have beensuperseded. In addition, there are nine accountingstandards’ interpretations, four of which arerequired by law.

Under the Accountancy Act B.E. 2543, ThaiAccounting Standards (TAS) must be approved bythe Ministry of Commerce in Thailand (MOC) andplaced into law before companies are required toadopt such standards.

(B) Books of Accounts and Statutory RecordsThe Accounts Act of 1972 authorised the Ministryof Commerce and the Director-General of theCommercial Registration Department, Ministry ofCommerce, to issue regulations regarding thebooks of accounts and supporting documents thatmust be maintained by business enterprises.

Books of accounts and supporting documents mustbe kept in such a manner as to allow a balance sheetand income statement to be drawn up each year.These accounts must be audited by a registered Thaiauditor.

Copies of these accounts must be filed with theRevenue Department and the Registrar ofPartnerships and Companies within five monthsafter the financial year end. These accounts needto be certified by an auditor.

Accounting entries may be recorded in a foreignlanguage, but there should be an appended Thaitranslation. All accounting entries should be writtenin ink, typewritten, or printed.

(C) Accounting PeriodA newly established company or partnership shouldclose its accounts within 12 months from the dateof its registration. Thereafter, the accounts shouldbe closed every 12 months. If a company wishesto change its accounting period, it must obtain thewritten approval of the Director-General of theRevenue Department.

(D) Accounting RequirementsIn accordance with the Revenue Code and NationalExecutive Council (NEC) Decree No. 285, all juristiccompanies, partnerships, and branches of foreigncompanies, are required to prepare a balance sheetand income statement for each accounting period.These financial statements must be properlycertified by an authorised auditor in Thailand, andproperly submitted to the Commercial Registrar.Copies of the audited financial statements mustalso accompany the income tax return that must befiled with the Revenue Department within 150 daysfrom the closing date of each accounting period.


(A) Basis of TaxationThere is the general provision that residents areassessed on all income whether it has a Thai orforeign source while non-residents are taxed onincome derived from Thailand.

Companies organised under Thai law are subject toincome tax on income earned from sources withinand outside Thailand. These companies includeprivate and public limited companies, registeredordinary and limited partnerships, and jointventures. For foundations and associations, incometax is based on gross revenues. A branch of aforeign corporation is taxed only on income derivedfrom sources within Thailand.

(B) Tax RegistrationsAn individual person who is subject to personal incometax must obtain a tax identification card from theRevenue Department within 60 days from the date ofhaving income.

A business, which is subject to corporate incometax, must obtain a tax identification card from theRevenue Department within 60 days after itsincorporation or registration.

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All persons whose annual turnover exceeds Baht600,000 must register for value added tax within30 days after the annual turnover has exceededthat amount, unless specifically exempted.

The application for Value Added Tax (VAT)registration before the date of commencingbusiness is also allowed under the conditionsspecified by the Director-General of tile RevenueDepartment.

(C) Tax AdministrationThe Revenue Code is the principal tax law in Thailand.The Code governs personal income tax, corporateincome tax, VAT, specific business tax, and stampduty. The Petroleum Income Tax Act governs taxationof oil and gas concessionaires, and the Customs Actgoverns tariff on imports and exports. Other lawsgovern excise tax and property tax.

A corporate taxpayer must file an annual tax returnand pay the tax due within 150 days from the closeof each accounting period which is defined as theduration of 12 months. Returns must beaccompanied by an audited balance sheet, incomestatement, and Certification of auditors for certain taxissues.

(D) Value Added TaxVAT is levied at the rate of 7% on the value of goodssold and services rendered at every level, includingon importation. Certain categories of goods andservices (e.g. exports) are zero-rated (i.e. subject to0% VAT). In addition, other categories of goods andservices (e.g. sale of agricultural products) areexempt from VAT.

Under the VAT system, the VAT registrant seller ofgoods or services must levy the VAT on thepurchaser. The seller is generally entitled to claimcredit for any VAT paid on the acquisition of its rawmaterials, stock, or other goods, or for servicesused in the business. This VAT credit is generally notavailable with respect to entertainment expenses andcertain specific expenditures.

A business, which sells zero-rated goods or services,is also entitled to a credit for VAT paid on purchaseof goods or services. However, a business, whichsells exempt goods or services, is not entitled tosuch a credit and must bear the VAT as its cost.

The VAT system places stringent registration anddocumentation obligations on the business. VATcredits are only available if tax invoices in theprescribed form are received from suppliers. Thereare monthly VAT return filing requirements andrecords that must be maintained to provide an audittrail for revenue tax examiners.


For auditors of non-listed companies, in order to qualifyas a professional, the assessment questions will be setby a sub-committee. For subscription, applicants fill outforms to show their work experiences and otherqualifications required in detail. FAP staff will go over theinformation and propose to the sub-committee to reviewevery application. FAP’s board will approve theapplications as the last decision.

The FAP shall issue a license to an applicant forthwith notlater than ninety days from the date of submission, if ithas found that the applicant is qualified and has noprohibited characteristics.

For auditors of listed companies, the FAP sub-committeewill consider and scrutinize the candidates’ application,work papers, and other relevant experiences. After thereview, the decision is made and sent to the SEC.

All the practitioners need to have their principal or placeof residence in order to practice in Thailand. Anaccounting or auditing firm has to register with FAPaccording to Section 11 of the Accounting ProfessionsAct, and to obtain a licence, the firm has to pay 2,000Baht for a 3-year period.

(A) Professional ServicesThe following is a list of professional services thatshall be offered by Practitioners to the public:

• bookkeeping;• auditing;• managerial accounting;• accounting system;• tax accounting;• accounting education; and • technology or other accounting services

prescribed by the ministerial regulations.

(B) OthersNot mentioned

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(A) IntroductionThe Vietnam Accounting Association (VAA) wasformed in 1994 representing the accounting andauditing profession in Vietnam.

The Vietnam Association of Certified PublicAccountants (VACPA) was established on 15 April2005 to represent the practicing auditors in Vietnam.

VACPA is a member organisation of VAA and issubject to State management in respect of theaccounting and auditing profession exerted by theMinistry of Finance (MOF).

VAA was admitted as a member of IFAC in May1998, and also as a member of the ASEANFederation of Accountants (AFA) at the same time.

The objectives of VACPA are to:

• maintain and develop the accountancyprofession; and

• improve the quality of accounting, auditing andfinancial advisory services of Vietnam throughtraining, technical update courses, professionalethics and service quality control, andinformation exchange for its members.

(B) Membership Admission and Types ofMembershipThe membership of professional bodies for VAA isas follows:

• on voluntary basis• working as an accountant; or• teaching accounting• no exam required• CPD: not compulsory

The membership of professional bodies for VACPAis as follows:

• Vietnamese CPA holders• 40 compulsory CPD hours/ year• exceptional cases: lecturers and individuals

who contribute to the development of theprofession

Members can be categorised into:(ii) Official Members (iii) Associate Members(iv) Honorary Members

(i) Membership as Official Members• Vietnamese citizens who have been granted

Auditors’ Certificates (AC) by the Minister ofFinance (MOF) and currently work for theindependent audit organisations in Vietnam.

• Vietnamese citizens who have been granted ACby the MOF but do not work for theindependent audit organisations in Vietnam,and wish to join the Association as OfficialMembers.

• Lecturers, researchers, and managementofficers in the accounting and auditing areawho have positive influence on theAssociation’s activities and wish to join theAssociation as Official Members.

(ii) Membership as Associate Members• Vietnamese citizens who have been granted AC

by the MOF but do not work for theindependent audit organisations in Vietnam.

• Vietnamese citizens who have been grantedwith foreign AC and wish to join the Associationas Associate Members.

(iii) Membership as Honorary Members• Persons who have prestige and accounting and

auditing competence, and have contributedsignificantly to building the Association and arerespected by the members.

• Associate Members and Honorary Membersare not allowed to run for, or be nominated tothe Association’s Council, and are not allowedto vote on any of the Association’s matters.

(C) Other general condition applicable for allcategories of membershipAny person who wishes to become an OfficialMember or Associate Member must meet all thecriteria set out in membership criteria andclassification, and have proper conduct for theprofession, subscribe to the Association’s Charterand volunteer to submit the application to joinVACPA.


(A) Practicing CertificateA member shall not hold himself out as a memberin public practice unless he holds a valid practicingcertificate issued by the MOF. Therefore, memberswho should apply for a practicing certificate arethose intend to set up an audit or non-audit firm.

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(B) Criteria for Applying for the Practicing CertificateThere are two types of practicing certificates whichare Practicing Certificate for professional auditor(Certificate of Auditor - CA) and for professionalaccountants (Accounting Practice Certificate - APC).Both of them are issued by MOF.

According to the Statute of Organising CPAExamination and Issuing Auditor Certificate andPracticing Certificate of Accountant, the foreignersshould have been lawful residents of Vietnam for atleast one year in order to be allowed to enroll in theCPA exam.

If the foreigners meet the residence requirementand hold the member certificate of Association ofChartered Certified Accountants (ACCA) and ICPAS,foreign auditor will be accepted to enroll in thetransition exam in English. After getting the VietnamAuditor Certificate and completing theestablishment of an auditing firm in Vietnam, theycan only live in Hanoi and provide auditing services.

(C) ExceptionThe MOF issues practicing certificates for auditorsalthough this is part of the Association’s Charter,and the Certificate may be issued even if theapplicant is not a member of the Association. TheMOF will be issuing “Professional Accountants”certificates and this is also the responsibility of theAssociation under its Charter.

(D) RenewalNot mentioned

(E) CessationArticle 12 of the Regulations on Appointment ofApproved Auditing Firms to audit stock issuing,listing and trading organisations, auditing firms orauditors shall be suspended from approved auditorstatus in the following circumstances:

i. where the firm or the auditor violates theconditions specified in clauses 3 and 4, Article13 of this Regulation.

ii. where the audit work does not meet therequirements as assessed by the SSCaccording to the accounting, auditingstandards and other relevant regulations.

iii. where in six consecutive months, the numberof approved auditors has fallen below therequired seven.

iv. where the firm or the auditor has pendinglitigation related to the audit work.

(F) Conditions to Practice as Approved AuditorIn order for independent auditing firms to undertakethe audit of non-government enterprises and foreign-invested firms, the auditing firms must meet thefollowing requirements in order to obtain their license:

• Be legally established;• Have capital of at least VND2 billion, or in the

case of foreign firms, capital of at leastUSD300,000;

• At least 7 auditors in each firm must be CPAsin Vietnam or have a Financial Auditor Licenseof Vietnam;

• Have a minimum number of 30 clients perannum; and

• Meet requirements for period of audit serviceprovision in Vietnam.

(G) Conditions to Practice as Financial AuditorLicense A student who has the qualifications of a Bachelorin Accounting is required to have three years’experience working in an auditing firm or five years’experience as an accountant. After fulfilling thesecriteria, the student is then qualified to take anexamination in order to obtain a Financial AuditorLicense, which is issued by the MOF.

Auditors who are required to personally sign auditreports or audit certificates must possess aFinancial Auditor License of Vietnam. In order to begranted a Financial Auditor License, candidatesmust first pass examinations that are set by theState Examination Council of Auditors andcoordinated by the Accounting Policy Department.Examination in English is an option for non-Vietnamese.

(H) Conditions to Practice as Tax AgentNot mentioned

(I) Conditions to Practice as LiquidatorNot mentioned

(J) Compliance with LegislationThe Government established the National Councilfor Accountancy (the Council) under MOF as the keyregulatory body for accounting and auditingarrangements, including the development ofstrategies, policies and other issues concerningauditing and accounting activities.

The Accounting Policy Department of the MOFplays a major role in establishing national

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accounting and auditing standards, upgradingprofessional qualifications of accountants andauditors, research, and quality control ofindependent auditing firms.

The Law on Accounting of The Socialist Republic ofVietnam was approved by the National Assembly.This Law provides for contents concerningaccounting practice and organisation, accountantsand activities of the profession.

Currently, MOF is the key regulator for licensing butstarting from 2008, VACPA will take over theresponsibilities.

The MOF, on May 15th 2007, promulgated theRegulations on Quality Control of Accounting andAuditing Services. The Regulations stipulate thataccounting and auditing enterprises must beinspected in respect of quality periodically onceevery three years. In any case that breaches arefound, auditing must be immediately carried out inthe later year. MOF have collaborated with VAA andVACPA in promulgated the quality control amongstprofessional.A part from periodic inspection, sudden inspectioncan be made if there is any sign showing that theenterprise seriously violates Regulations of theState, of the Career Association or professionalstandards in providing accounting and auditingservices.


Vietnam has only accounting requirements for regulatoryreporting. Article 29 of the Vietnamese Accounting Lawissued on June 17, 2003 and Article 19 of Decree No.129/2004/ND/CP of Government prescribe that all typesof enterprise are required to submit annual financialstatements to the Business Registration Office, StatisticsOffice, Tax Office and some other related agencies(depending on different types of enterprise).

The Financial Reporting Framework in Vietnam wasupdated on August 2006. All domestic companies, listedand unlisted, are required to use Vietnamese AccountingStandards (VASs), which have been developed by theMOF. Generally, the VASs were based on IASs that wereissued up through 2003, though some modificationswere made to reflect the local accounting regulations andenvironment. None of the IASB’s amendments to IASs nornew IFRSs have been adopted.

The MOF has temporarily suspended the development ofVAS due to resource constraints.

The MOF is considering whether to grant rights to theVACPA to formulate and update VAS. If this is formalisedunder the law, VACPA would then serve as the accountingstandard setting body in Vietnam, rather than the MOF.

According to the Decree No 93/2003/ND/CP dated onAugust 13, 2003, the Government prescribesresponsibilities and functions of the State Audit Office andstates “government enterprises are objectives of StateAudit Office.” Annually, the Director of State Audit Officesubmits to the Prime Minister a list of Governmentalenterprises that need to be audited in the year.

Decree No. 105/2004ND/CP dated on March 30, 2004of Government on External Audit prescribes that annualfinancial statements of the following enterprises shouldbe audited by external auditors which are foreign investedcompanies, banks, financial institutes, insurers, listedcompanies, governmental companies.

Up to November 2007, MOF has announced 37Vietnamese Standards on Auditing (VSA) which aredeveloped based on International Standards on Auditing(ISAs) issued by IFAC and 26 Vietnamese AccountingStandards (VAS) which developed based on InternationalAccounting Standards (IAS).

According to Decree No 105/2004/ND/CP ofGovernment, an enterprise can only sign a contract withan auditing company to audit its financial statements for3 years. There is an exception that a big auditing firmowned by some owners can sign an audit engagementfor longer term with a rotation every 3 years of theauditor who signs the audit report.

With regard to representative offices of foreignenterprises, household businesses and cooperatives, theGovernment shall provide for the contents of accountingwork according to the underlying principles of the law onaccounting.

Where an international convention to which the SocialistRepublic of Vietnam is a signatory or participant containsprovisions other than those prescribed therein, theprovisions of this international convention shall prevail.

Based on the Law on Foreign Investment, financialstatements of all FIEs to be audited by recognisedauditing firm and MOF have required the financialstatements of all private Vietnamese companies to beaudited by qualified professional.

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The Vietnamese taxation system has the following formsof taxes:

• Enterprise Income Tax (EIT);• Value Added Tax (VAT);• Foreign Contractor Withholding Tax (FCWT);• Special Sales Tax (SST);• Import and Export Tax;• Personal Income Tax (PIT); and• Natural Resources Tax (applicable to those engaged

in exploiting natural resources).

(A) Tax AdministrationForeign-Invested Enterprise (FIE) generally use thecalendar year as their tax year unless MOFapproves a different tax year. Enterprises must filea provisional income tax return by the 25th day ofthe tax year.

Annual tax finalisation must be submitted within 90days from the end of the tax year and payment ofoutstanding tax (if any) must be made within 10days from submission.

(B) Taxes on Goods and ServicesValue Added Tax (VAT) payers include all individualsand organisations carrying out business in Vietnam.VAT payers are required to register for payment ofVAT with the local taxation authorities where theyare located.

VAT is to be declared provisionally on a monthlybasis, and paid to the State Treasury in accordancewith the notice issued by the tax office, and in anyevent no later than the 25th day of the followingmonth.

(C) Taxes on IndividualsVietnam residents are subject to personal incometax (PIT) on worldwide regular income and onVietnam-sourced irregular income. Non-residentsare subject to tax only on Vietnam-sourced regularand irregular income.

Liability for PIT is determined on the basis ofresidency. Vietnamese citizens are always treatedas tax residents, while the residency of anexpatriate is determined based on duration ofphysical presence in Vietnam.


On June 27th 2006, the MOF promulgated a Circularproviding guidelines for the registration and managementof accounting practice. According to this Circular, theaccounting service enterprise must annually register foraccounting practitioners; any individuals doing business inaccounting service must register for accounting practicewith VAA.

Accounting service enterprise, individuals doing businessin accounting service shall be only entitled to provideaccounting services after having registered foraccounting practice and being approved by VAA.

According to the stated Law, foreign organisations andindividuals are able to establish auditing firms in Vietnamif they meet the current requirements:

• 3 types of auditing firms are set up and operated:limited liability companies with two or more members,partnerships and private companies. Auditing firmsshould publicise the registered form of firm during itsoperation time.

• An auditing firm is required to have at least 3 CPAswith auditor certificates of Vietnam to set up, in whichthe Director of Audit Firm should be the auditorcertificate holder. There is no difference in regulationbetween Foreigners and Vietnamese; 3 foreignauditors who hold Vietnam auditor certificates wouldbe accepted.

• Within 30 days since the receiving date of businessregistration certificate, the auditing firm should notifyto the Ministry of Finance the establishment of theauditing firm and the list of registered auditorspracticing in the firm.

• Within operation time, the auditing firm should containat least 3 registered auditors. If the requirement isnot met in 6 consecutive months, the auditing firmshould cease the provision of audit service.

It is reasonable that every practicing auditor should be amember of VAA including foreigners.

A foreign auditing organisation that has not set up abranch in Vietnam will be allowed to provide auditingservices in Vietnam in the following cases, unless therelated international treaties state otherwise:

• After admitting a local auditing firm to be its member,the foreign auditing firm will be able to provideauditing services under its name and its member’sname. In addition, when the foreign auditing firm

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admits a local auditing firm to be its member, it willbe able to provide audit services to regular clientsinvesting in Vietnam through that member company.

• To cooperate with a local auditing firm in individualaudit, the auditing report should have the signature ofthe local auditing firm.

• If the foreign auditing firm has the need to provideauditing services and issue auditing reportsseparately in Vietnam, it must be accepted by theMOF for individual audit.

(A) Professional ServicesMost independent auditing companies have rapidlydeveloped many kinds of financial and accountingservices to give clients more choices, whichenhance the profession as a whole. Theseadditional services include:

• financial accounting supervision• asset assessment• advice on enterprise equity proposals• financial and accounting consultancy • taxation advice• professional training on financial management,

etc.

(B) Others

(i) Responsibilities of the membersThe members of the Association are responsible:

• To strictly abide by the systems, policies andlegislation of the State, and the internalregulations and resolutions of the Association.

• To attend the routine activities and paymembership fees in full (Honorary Members donot have to pay membership fees).

• To keep striving to upgrade knowledge andcompetency in all respects, maintain anduphold the professional ethics.

• To enhance the profession’s prestige; topublicise and promote the Association’s imageand reputation, to protect the Association’shonor and interests.

• To participate actively in developing themembership base and keep constant contactwith the Association’s office.

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ACCA National Offices

CAMBODIA

ACCA Cambodia#26 Street 370Boeng Keng Kang IKhan Chamcar MornPhnom Penh.

Mailing AddressPO Box 922Phnom Penh.

Tel: +855 (0)23 991 676Fax: +855 (0)23 991 677E-mail: [email protected]

MALAYSIA

ACCA Malaysia Sdn Bhd (473007P)27th Floor Wisma Denmark86 Jalan Ampang50450 Kuala Lumpur


Malaysia - Kuching BranchUnit #8.01 8th Floor Gateway KuchingNo 9 Jalan Bukit Mata93100 Kuching Sarawak

Tel: +60 (0)82 425051 Fax: +60 (0)82 426061E-mail: [email protected]

SINGAPORE

ACCA Singapore435 Orchard Road#15-04/05 Wisma AtriaSingapore 238877

Tel: +65 6734 8110Fax: +65 6734 2248E-mail: [email protected]

VIETNAM

ACCA VietnamUnit 605 - 605A6th Floor of Saigon Trade Center37 Ton Duc Thang StreetDistrict 1Ho Chi Minh City


ACCA Hanoi OfficeUnit 1304Level 13Pacific Place83B Ly Thuong Kiet StreetHoan Kiem DistrictHanoi


48

National Accountancy Bodies

BRUNEI

The Brunei Darussalam Institute of Certified PublicAccountantsP.O. Box 30, Gadong Post OfficeBandar Seri Begawan, BE3978, Brunei Darussalam.Tel : +673-2454945, 2454947Fax : +673-2454946E-mal : [email protected] : http://www.bicpabrunei.com

CAMBODIA

Kampuchea Institute of Certified PublicAccountants & Auditors (KICPAA)# 26 Street 370 Sangkat Boeung Keng Kang 1Khan Chamkarmon, Phnom Penh, Cambodia.Tel : [855] 23 990 664Fax : [855] 23 991 037E-mail : [email protected] : http://kicpaa.org

INDONESIA

Ikatan Akuntan Indonesia (IAI)Graha AkuntanSindanglaya Street No. 1, MentengJakarta 10310, Indonesia.Tel : 62-21-31904232Fax : 62-21-7245078Email : [email protected] : http://www.iaiglobal.or.id

MALAYSIA

Malaysian Institute of Accountants (MIA)Dewan AkauntanNo. 2, Jalan Tan Sambanthan 3Brickfields, 50470 Kuala Lumpur, Malaysia.Tel : +603 2279 9200Fax : +603 2274 1783E-mail : [email protected] : http:// www.mia org.my

MYANMAR

Myanmar Accountancy Council (MAC) Union of MyanmarOffice of the Auditor General (OAG-Secretariat of MAC)35/87 Lower Kyimyindine Road, Ahlone, YangonMyanmar.Tel : 95-1-221332Fax : 95-1-221331E-mail : [email protected]

PHILIPPINES

Philippine Institute of Certified Public Accountants(PICPA)PICPA Building, 700 Shaw Boulevard, Mandaluyong CityP.O.Box 1440, Metro Manila, Philippines. Tel : 723-0691/92/93Fax : 723-6305 and 726-9452E-mail : [email protected];

[email protected] : http://www.picpa.com.ph

SINGAPORE

Institute of Certified Public Accountants of Singapore(ICPAS)20 Aljunied Road, #06-02 CPA HouseSingapore 389805.Tel : (65) 6749 8060Fax : (65) 6749 8061E-mail : [email protected] : http://www.icpas.org.sg

THAILAND

Federation of Accounting Professions(Under the Royal Patronage of His Majesty the King - FAP) 444/1 Samsen Road DusitBangkok 10300, Thailand.Tel : 662-668 8071-4, 662-668 8535-8Fax : 662-2437683, 662-6697207E-mail : [email protected] Website : http://www.icaat.or.th

VIETNAM

Vietnam Association of Accountants and Auditors(VAA) 192 Giai Phong Road Thanh XuanDistrict Hanoi, Vietnam.Tel : 84 4 8686714 - 8686721Fax : 84 4 8686722E-mail : [email protected]

49

References

BRUNEI

(i) Brunei Darussalam Institute of Certified Public Accountantshttp://www.bicpabrunei.com

CAMBODIA

(i) Kampuchea Institute of Certified Public Accountants and Auditorshttp://www.kicpaa.org

INDONESIA

(i) Report on the Observance of Standards and Codes (ROSC), Republic of Indonesia(ii) Indonesia Institute of Accountants

http://www.iaiglobal.or.id(iii) Indonesia Accounting Society

http://www.akuntan.org

MALAYSIA

(i) Malaysia Institute of Accountantshttp://www.mia.gov.my

(ii) Securities Commissionhttp://www.sc.com.my

(iii) Attorneys General’s Chambers of Malaysiahttp://www.agc.gov.my

MYANMAR

(i) Burma Lawyer’s Councilhttp://www.blc-burma.org

PHILIPPINES

(i) Diagnostic study of Accounting and Auditing practices in the Philippines (ii) Philippine Institute of Certified Public Accountants

http://www.picpa.com.ph(iii) www.prc.gov.ph

SINGAPORE

(i) Institute of Certified Public Accountants of Singaporehttp://www.icpas.org.sg

(ii) Accounting and Corporate Regulatory Authority Singaporehttp://www.acra.gov.sg

(iii) Singapore Attorney General’s Chambershttp://statutes.agc.gov.sg

(iv) Inland Revenue Authority of Singaporehttp://www.iras.gov.sg

(v) CCDGhttp://www.ccdg.gov.sg

(vi) Ministry of Manpowerhttp://www.mom.gov.sg

vii) Singapore Statuteshttp://statutes.agc.gov.sg/

THAILAND

(i) Securities and Exchange Commission, Thailandhttp://www.sec.or.th/secen1/index.php

(ii) Institute of Certified Accountants and Auditors of Thailandhttp://www.icaat.or.th/homeen.htm

(iii) Accounting in Thailandhttp://msm.byu.edu/c&i/cim/account/thailand/project.htm

(iv) A comparative study of Thailand and Myanmar Professional AccountantAdmission Requirements

(v) http://businessmissionasia.wordpress.com/tag/setting-up-a-thai-company/

VIETNAM

(i) Vietnam Association of Certified Public Accountantshttp://www.vacpa.org.vn

(ii) Financial Management & Governance issue in Vietnam: Vol 1http://www.adb.org/Documants/Books/Financial-Mgt/Vietnam

Acknowledgement

Appreciation to all the following contributors in themaking of this publication.

ACCA

Sopheap Hin (Cambodia)Ainul Ibrahim (Malaysia)Jennifer Lopez (Malaysia)Joseph Alfred (Singapore)Nguyen Phuong Mai (Vietnam)

ACCA Malaysia Public Practice Committee

Allan YipAndrian YeoChen Voon HannLock Peng KuanSi Chay BengWong Yok Chin

ASEAN representatives

Pengiran Haji Moksin Haji Yusof (Brunei)Hajah Ning Lela Mohamad (Brunei)Lee Kin Chee (Brunei)Lim Hoon Hui (Brunei)Dr Djoko Susanto (Indonesia)Elly Zarni Husin (Indonesia)U Than Tin (Myanmar)Manuel M. Pascual (Philippines)Montri Chenvidyakarn (Thailand)

CAS & Associates

Chen Voon HannChow Yuet HarChristy Goh Seak HuangChu Kok LeongChu Vun HennHuwaida HasbullahLoo Thin TuckNg Mei QiNurfadhilah Sulaiman @ YusofSee Hong HengToh Geok TengWan Nor Azmina Wan DaudWei Mei FungWei Mei Ting

MIA

Johnny YongKhairina Mohamed KhalitKhairul Azmi RezoSuhairah OthmanZaireen Muda

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