Background
The Accounting and Auditing Regulator (ACAR) provides quantitative thresholds to determine which private enterprises must submit financial statements for independent audit beyond those already subject to automatic audit requirements. These thresholds are part of Cambodia’s framework for distinguishing between enterprises that require external assurance and those eligible for simplified reporting.
Enterprises that meet at least two of the following three quantitative criteria are required to submit financial statements for independent audit: annual revenue of at least 4,000,000,000 riel; total assets of at least 3,000,000,000 riel measured at the accounting-period closing date; and an average workforce of at least 100 employees during the year. The asset criterion is specifically measured at the accounting-period closing date, and the employee criterion is based on the average number of employees during the year.
Scope of Application
The requirement applies to private enterprises that do not fall under separate automatic-audit mandates but which meet the numeric thresholds described above in at least two categories. The thresholds are used to classify enterprises for purposes of audit obligation under Cambodia’s accounting and auditing governance.
Key Provisions or Decisions
ACAR’s guidance sets three binary criteria. An enterprise is subject to mandatory independent audit if it satisfies any two of these conditions: (1) annual operating revenue equal to or exceeding KHR 4,000,000,000; (2) total assets of KHR 3,000,000,000 or more as measured at the balance-sheet date for the accounting period; and (3) an average annual headcount of 100 employees or more. Meeting two criteria triggers the audit submission obligation; meeting fewer than two leaves the enterprise outside this particular threshold-based requirement.
Implications for Investors, Businesses, or Compliance
Businesses near these numeric thresholds should monitor accounting-period revenue, year-end asset balances, and average workforce levels to determine audit obligations for the following reporting period. Investors and lenders can use the presence or absence of audited financial statements as a transparent indicator of regulatory classification under Cambodia’s accounting framework. Accounting teams should plan audit procurement and financial close processes in advance where the combined criteria indicate an upcoming audit requirement.
Official Source
Source: Accounting and Auditing Regulator (ACAR) post, published on Facebook: https://www.facebook.com/acarcambodia/posts/pfbid036vVCCe8Bwcd9Qi2vsViWVoAQeFQUVzBZ1AQSNtpufkJhFdi3rXeTNk5pH4GysuFGl
