Audit Report and Financial Statement Submission Requirements for the Year 2021

Over the last few months, the Accounting and Auditing Regulator (“ACAR”) has issued several notifications with regard to accounting report compliance requirements. We summarize the main points below.

ACAR issued Notification No. 022 AAR.SCN on 22 November 2021 as a reminder that the following types of companies must submit to ACAR an audit report for 2021 via the e-filing system no later than six months and 15 days after the balance sheet date:

1. Public enterprises
2. Public liability companies
3. Qualified Investment Projects
4. Companies that meet 2 of the following 3 criteria: (i) having annual turnover of at least KHR4 billion, (ii) having total assets of at least KHR3 billion, and (iii) having at least 100 employees (based on the average number of employees during the year).

Companies that do not fall into any of the four categories above do not need to submit an audit report to ACAR, but they are required to submit financial statements following Notification No. 002 AAR.SCN dated 27 January 2022. Notification No. 002 provides that starting from the year 2021, companies that are not required to have an audit report must prepare financial statements in compliance with the Cambodian Accounting Standards in force and submit them to ACAR via the e-filing system no later than three months and 15 days after the balance sheet date. You may be aware that this requirement was in place for the year 2020, but was postponed until 2021 at the request of a large number of companies.

In addition to the above, under Notification No. 001 AAR.SCN dated 27 January 2022, ACAR is now requiring companies that wish to continue using English language in their accounting systems to notify ACAR via the e-filing system by 31 March 2022 at the latest. Newly registered companies must notify ACAR of the use of the English language in their accounting systems within 60 days from the date that they are successfully registered with the General Department of Taxation.

Failure to comply with any of the abovementioned requirements is subject to the fines indicated in Sub-Decree No. 79 ANK dated 1 June 2020 on Provisional Fines for Violations of the Law on Accounting and Auditing. The fines range from KHR800,000 up to KHR20 million, depending on the company’s status (i.e. large taxpayer, medium taxpayer, or non-profit organization) and the type of violation committed.

We recommend that companies review the requirements above to ensure their accounting compliance to avoid any potential fines.