Lao Chamber of Professional Accountants and Auditors

Associate | Established: 1998 | Associate since 2019

The LCPAA was established in 1998 with an objective to unite accountancy professionals in Laos. The organization’s recognition is established under the Law on Independent Audit of 2014. The organization offers Certified Public Accountant (CPA) licenses for its members and is responsible for: (i) arranging and delivering the continuing professional development program for all practitioners; (ii) managing and conducting professional examinations for CPA certifications; and (iii) conducting an investigations and disciplinary system with the Ministry of Finance. CPAs may practice as auditors in audit firms that are members of LCPAA.

LCPAA is a primary member of ASEAN Federation of Accountants.

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Statements of Membership Obligation (SMO)

The Statements of Membership Obligations form the basis of the IFAC Member Compliance Program. They serve as a framework for credible and high-quality professional accountancy organizations focused on serving the public interest by adopting, or otherwise incorporating, and supporting implementation of international standards and maintaining adequate enforcement mechanisms to ensure the professional behavior of their individual members.

Last updated: 11/2019
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SMO Action Plan

Status of Fulfillment by SMO

  • SMO 1: Quality Assurance

    Under the Law on Independent Audit of 2014, the Ministry of Finance (MoF) is responsible for establishing a mandatory quality assurance (QA) review system. Based on LCPAA’s self-assessment, as of November 2019, the QA system in Laos aligns with the requirements of SMO 1. As it is still new, LCPAA reports that are plans for the system to be continuously assessed for improvements to be implemented in the future.

    In April 2017, the MoF operationalized its first QA system in the jurisdiction—the Laos Audit Quality Assurance System (LAQAS). The scope of the LAQAS includes reviewing the performance of audit firms, as well as implementing a multi-year monitoring program that evaluates the quality of audit work being performed. LCPAA assists the MoF with conducting the reviews, and also provides technical and administrative support. The LCPAA reports that as the system is still new, it is being assessed for improvements to be implemented in the future.

    LCPAA supports its members by offering them training and seminars with support from technical consultants and international and regional experts on the QA review process in order to increase awareness and knowledge. LCPAA plans to further assist its members by developing an application guide in 2019, and by also collaborating with the MoF to administer “The Coaching Program.” The program is designed to educate auditors on the QA review process and sanctions that could be imposed, particularly if they are found to be non-compliant with applicable laws and regulations. In addition to reviewing the program in the future, LCPAA reports that there are also plans by the MoF to review the legal framework to ensure that the QA system has further legislative support.

    LCPAA is encouraged to continue ensuring that the processes in place continue to meet international requirements. Given that the systems are new, LCPAA is encouraged to share implementation progress with IFAC staff.

    Current Status: Execute

  • SMO 2: International Education Standards

    The Law on Independent Audit of 2014 stipulates initial professional development and continuing professional development (CPD) requirements in Laos and provides authority to the LCPAA, under the oversight of the Ministry of Finance (MoF), as the body responsible for setting these requirements.

    The LCPAA offers Certified Public Accountant (CPA) licenses for its members and is responsible for: (i) arranging and delivering the CPD program for all practitioners—120 hours over 3 years with a minimum of 20 hours in any year; and (ii) managing and conducting professional examinations for CPA certifications. In an effort to support members, LCPAA signed several memorandums of understanding (MoUs) with universities and professional accountancy organizations, such as the Malaysian Institute of Accountants (MIA) and CPA Australia, for support in the development and provision of its CPD program. Annually, LCPAA has conducted annual CPD training and courses for its members.

    The Chamber reports that it is undertaking several initiatives to move towards full alignment with the revised IES requirements. For example, in December 2016, the Chamber published regulations to align with IES 7. Other initiatives include seeking support from the Association of Certified Chartered Accountants (ACCA) for assistance with updating its own syllabus in line with the latest version of the ACCA syllabus (i.e. IES 2, 3 and 4); and updating LCPAA training materials. As of 2019, LCPAA reports that 260 trainees are currently undertaking the CPA certification program.

    Although some of the requirements of the revised IES have been incorporated into the national requirements, LCPAA reports the following gaps in practical experience (IES 5) and CPD for auditors (IES 8): (i) practical experience requirements lack specific performance objectives and qualification elements; (ii) there is no system for monitoring or evaluating achievement; (iii) the current law allows exemption from practical experience requirements for certain categories of persons (e.g., professors of accounting); and (iv) there is no specific CPD requirement or program for audit engagement partners. By the end of 2019, LCPAA reports that it expects to complete the adoption of the same practical experience requirements as the ACCA.

    LCPAA is encouraged to continue executing its plans to eliminate all gaps and align its educational requirements with those of the 2015 revised IES.

    Current Status: Execute

  • SMO 3: International Standards on Auditing

    Under the Law on Independent Audit, the Ministry of Finance (MoF) is responsible for setting auditing standards in Laos. The MoF adopts the International Standard on Auditing (ISA) as issued by the IAASB in English and are effective for all mandatory audits.

    As the LCPAA has no legal responsibility for adoption, it focuses on supporting its members with the implementation process. LCPAA incorporates ISA in continuing professional development course offerings and disseminates training materials to its members. Between February 2016 and June 2018, LCPAA conducted 30 courses and seminars on the ISA with an emphasis on the new auditor’s report and professional skepticism. LCPAA members that are partners and employees of Big 4 audit firms are required to report on ISA training on an annual basis.

    In addition, LCPAA reports that it plans to translate essential sections of the ISA and other IAASB Pronouncements by the end of 2019, as well as the Guide to “Using ISAs in the Audits of SMEs” published by the SMP Committee by December 2020. The decision to translate the essential sections is expected to reduce the workload to be handled as their translation into Lao is a complex, time consuming exercise requiring significant financial resources.

    Lastly, LCPAA ensures that its members are kept up-to-date on any announcements published by the MoF such as Announcement No. 697 on the mandatory enforcement of ISQC 1, ISA, ISAE and ISREs on March 2017.

    Current Status: Sustain

  • SMO 4: Code of Ethics for Professional Accountants

    Under the Law on Independent Audit of 2014, the Ministry of Finance (MoF) is responsible for establishing ethical requirements for all professional accountants in Laos. The LCPAA reports that in October 2016, the MoF adopted and published the Lao Code of Ethics, which is aligned with the principles of the 2015 IESBA Code of Ethics. The LCPAA has clear plans in its SMO Action Plan to review the 2018 International Code of Ethics and NOCLAR standard for adoption by 2021/2022.

    Since LCPAA has no legal responsibility for adoption, it focuses on supporting the MoF with adoption, as well as its members with implementation. The LCPAA indicates that it has established plans, starting in January 2020 to collaborate with the MoF to incorporate provisions of the NOCLAR standard in the Law on Independent Audit by December 2021. In addition, starting January 2019, the LCPAA will further collaborate with the MoF to develop and conduct training sessions on the revised and restructured IESBA Code and on NOCLAR with a view of completing the support process by December 2021.

    Presently, LCPAA has established processes to disseminate related information through lectures, seminars, its website, and has also included the restructured code in other training programs. The LCPAA has also developed guidance and training materials on applying the adopted Code.

    The LCPAA is encouraged to continue its efforts and to regularly report to IFAC on its progress. While the 2018 International Code of Ethics is expected to be incorporated by 2021 or 2022, LCPAA is encouraged to consider completing the update earlier, if deemed feasible.

    Current Status: Execute

  • SMO 5: International Public Sector Accounting Standards

    Under the Law on Accounting of 2013, the Ministry of Finance (MoF) is responsible for setting public sector accounting standards in Laos. Under the law, government entities are required to apply cash-basis IPSAS. While accrual-basis IPSAS is stated in the Law on Accounting, implementation will take much longer as cash-basis IPSAS is still being learned.

    To support IPSAS implementation efforts, the LCPAA reports that it is working with the International Monetary Fund (IMF) and MoF to finalize the development of technical guidance that will support LCPAA members and those working in the public-sector with the implementation of cash-basis IPSAS. The timeframe for these guides to be published is mid to end of 2019. Following the publication of guidance, the LCPAA reports that starting 2020, it will collaborate with the MoF to incorporate material from the guidance and the principles of cash-basis IPSAS into the CPD training program to help ensure the understanding of the requirements amongst government employees.

    The LCPAA is encouraged to continue its efforts to collaborate with the MoF to develop guidance on IPSAS and support the implementation of the standards in the jurisdiction.

    Current Status: Review & Improve

  • SMO 6: Investigation and Discipline

    The Law on Independent Audit of 2014 designates the LCPAA and the Ministry of Finance (MoF) with the responsibility to establish and conduct an investigation and disciplinary (I&D) system in the jurisdiction. To avoid any overlaps, both the MoF and LCPAA agreed that primary responsibility for management of the system would be undertaken by LCPAA. The MoF would retain its responsibility to impose sanctions for any breaches to the law. As of November 2019, LCPAA reports that regulations around I&D and a proposed system have been drafted, with a view of the system being operationalized in September 2019.

    LCPAA reports that the system will be comprised of a Disciplinary Committee, an Investigations Committee, and an independent Appeals Board. LCPAA conducted a self-assessment of the proposed I&D system against the requirements of SMO 6 and concluded that it would be in line with the requirements once operational.

    Even though the I&D system is not yet operational, LCPAA indicates it conducted an awareness-raising campaign between September 2017 and June 2018 to educate members of the system and also disseminate best practices guidance.

    Once the I&D system is operational, the LCPAA and MoF are encouraged to collaborate in assessing the system on an ongoing basis and ensuring continued alignment with SMO 6 requirements. As a part of the reporting process, the LCPAA is encouraged to ensure it shares the progress of the implementation of the new system with IFAC.

    Current Status: Plan

  • SMO 7: International Financial Reporting Standards

    Under the Law on Accounting of 2013, the Ministry of Finance (MoF) is responsible for setting accounting standards to be applied in Laos. The MoF has adopted the International Financial Reporting Standards (IFRS) and the Lao Financial Reporting Standards for Non-Public Interest Enterprises (LFRS for Non-PIEs), which are based on the 2009 version of the IFRS for Small- and Medium-sized Entities.

    As it does not have legal responsibility for the adoption of national accounting standards, the LCPAA concentrates and participates in the national standard-setting process as a member of an accounting advisory board that provides input and feedback when standards are being adopted. LCPAA also concentrates on supporting the standards’ implementation in the jurisdiction, which the chamber indicates is the current challenge nationwide. The PAO has collaborated with the Federation of Accounting Professions (FAP) from Thailand to design a train the trainers’ program on IFRS for Lao CPA to facilitate the introduction of the standards to the local profession.

    To further support its members with understanding IFRS requirements, LCPAA has established processes to disseminate information through lectures, seminars, and has also included IFRS in its continuing professional development program. Beginning December 2018, LCPAA has initiated training on LFRS for non-PIEs.

    Current Status: Sustain


IFAC bears no responsibility for the information provided in the SMO Action Plans prepared by IFAC member organizations. Please see our full Disclaimer for additional information.



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