Belgium

As a member of the European Union (EU), Belgium is subject to the accounting, auditing and financial reporting requirements established in EU Regulations and Directives as transposed into national laws and regulations. Belgium has fully aligned its legal framework with the EU acquis communautaire as it relates to accounting and auditing.

Accounting Framework

The Accounting Act of 1953 as amended in 2015 was published in the Belgian Official Gazette on December 30, 2015. It stipulates the requirements for preparation of financial statements, including applicable accounting standards and financial reporting thresholds. In accordance with the law, the Belgian Accounting Standards Board (BASB) is responsible for enacting financial reporting standards in Belgium.

EU-endorsed IFRS are required for the preparation of separate and consolidated financial statements of all listed companies. Belgium also used the option to require EU-endorsed IFRS in the consolidated financial statements of credit institutions, insurance companies, and investment firms whose securities do not trade in a public market. It also permits EU-endorsed IFRS in the consolidated financial statements of companies other than those mentioned above whose securities do not trade in a public market. Entities that are not required to use EU-endorsed IFRS must use Belgian Generally Accepted Accounting Principles (GAAP) issued by the BASB.

Auditing Framework

The law, the Act Regarding the Organization and Supervision of Statutory Auditors of 2016 (hereinafter “Audit Act of 2016”), transposes the Directive 2014/56/EU on statutory audits of annual accounts and consolidated accounts and Regulation (EU) No 537/2014 on specific requirements regarding statutory audit of public interest entities (PIEs). It defines the scope of entities subject to mandatory audit requirements and establishes the Belgian Audit Oversight Board (BAOB). Under the Act, PIEs in Belgium are defined as listed companies, credit institutions, insurance and reinsurance undertakings, and settlement organizations.

According to the Audit Act of 2016, all large and medium-sized entities, that meet two of the basic criteria in two subsequent accounting periods are subject to mandatory audits: (i) an annual turnover more than EUR 9,000,000 (exclusive of VAT, instead of EUR 7,300,000); (ii) total assets over EUR 4,500,000 (instead of EUR 3,650,000); and (iii) more than fifty employees on average during the year. Small companies that meet only one of the audit criteria listed above are exempt from appointing a statutory auditor and are only required to draw up simplified annual accounts.

All statutory audits must be conducted in accordance with the auditing standards drafted by the Belgian Institute of Registered Auditors (IBR-IRE) and approved by the BAOB and Minister of Economy, as required by the Audit Act of 2016. IBR-IRE reports on its website that ISA have been applicable in Belgium since 2009.

The main laws, accompanied by various Royal Decrees, that regulate the Belgian accountancy profession are the: (i) Accounting Act of 1953, as amended in 2015; (ii) Law of 2019 Concerning the Accountancy and Tax Professions (hereinafter “Law of 2019 (replacing the Law of 1999)”); and (iii) Act Regarding the Organization and Supervision of Statutory Auditors of 2016 (hereinafter “Audit Act of 2016”).

Accountants

The Accounting Act of 1953, as amended in 2015, and the Law of 1999 set the main activities and responsibilities of the organizations involved in the regulation of accountants which are the Institute of Accountants and Tax Consultants (IEC-IAB) and the Professional Institute of Accountants and Tax Accountants (IPCF). The Law of 1999 organized the accounting profession into various categories of professionals, including accountants (preparers); tax consultants; bookkeepers; and tax accountants under the auspices of IEC-IAB and IPCF.

In 2019 a new regulation replaced the Law of 1999 and merged the IEC-IAB and IPCF into the Institute for Tax Advisors and Accountants (ITAA) as part of unifying access to the profession. The updated regulation amended designations such as bookkeeper, tax bookkeeper, accountant, accountant-tax advisor, and tax advisor to become accountant, tax accountant, certified accountant, certified (tax) accountant, and certified tax advisor, respectively. The regulation is also phasing out designations of accountant, tax accountant, certified accountant and going forward, candidates may only pursue the certified (tax) accountant or certified tax advisor designations.

Candidates must (i) acquire a degree that is recognized by the Flemish, French or German-speaking Community and listed by the 2019 law; (ii) pass an initial admission test; (iii) complete a three (3) year internship at the ITAA or have at least seven years of practical experience (exemptions to the internship program are available); and (iv) pass a final examinations. To offer services, individuals must then register and obtain a license from ITAA.

The Law of 2019 grants ITAA with responsibility for: (i) implementing initial and continuing professional development requirements specified in the law for its members; (ii) providing training and licensing examinations; (iii) maintaining a registry for accountants and tax consultants; (iv) conducting an investigation and disciplinary system for its members to ensure compliance with educational and ethical requirements; and (v) keeping members informed of any revised or new accounting and ethical standards.

Accounting standard-setting is undertaken by the Belgian Accounting Standards Board (BASB) in accordance with the Accounting Act of 1953, as amended in 2015.

Auditors

Auditors are regulated at the state level under the Audit Act of 2016. The law outlines the roles of the Belgian Institute of Registered Auditors (IBR-IRE), the Belgian Audit Oversight Board (BAOB), and the Ministry of Economy.

Under the Act, IBR-IRE, under the supervision of BAOB, is delegated with the authority to: (i) approve and register statutory auditors and audit firms; (ii) provide continuing professional development (CPD) for auditors; and (iii) draft auditing and ethical standards for the BAOB and Minister of Economy’s approval and endorsement. Meanwhile, the BAOB is responsible for: (i) approving and endorsing audit standards with the Minister of Economy; (ii) conducting quality assurance reviews for all registered auditors carrying out statutory audits of PIEs and non-PIEs; and (iii) conducting investigations of all auditors and directing cases to the Financial Services and Markets Authority (FSMA) Commission of Sanctions as needed.

In order to practice as an auditor, the Audit Act of 2016 stipulates that an individual must: (i) be a citizen of a Member State of the European Union; (ii) be less than 65 years old; (iii) be free of any criminal convictions; (iv) possess a master’s degree from a Belgian university or equivalent foreign diploma; (v) complete three (3) years of practical training in auditing; (vi) pass "theoretical training exams" which can be taken before the start of the practical training or during the practical training; (vii) pass final examinations (which are administered by IBR-IRE); and (viii) take the auditor’s oath at the Court of Appeal. Individuals with equivalent foreign qualifications must pass an examination on company law, accounting law, and professional ethics as described in IBR-IRE’s Procedure for Foreign Professionals (2007).

The Act Regarding the Organization and Supervision of Statutory Auditors of 2016 (hereinafter “Audit Act of 2016”) established the Belgian Audit Oversight Board (BAOB) as the independent public audit oversight authority.

The BAOB is responsible for: (i) supervising all of the Belgian Institute of Registered Auditors’ (IBR-IRE) operations including the audit registry; (ii) supervising IBR-IRE’s continuing professional development for auditors; (iii) approving and endorsing audit and ethical standards with the Minister of Economy; (iv) conducting quality assurance reviews for all registered auditors carrying out statutory audits of public interest entities (PIEs) and non-PIEs; and (v) conducting investigations of all auditors and directing cases to the Financial Services and Markets Authority Commission of Sanctions as needed.

BAOB is a member of the International Forum of Independent Audit Regulators.

Belgian Institute of Registered Auditors (IBR-IRE)

IBR-IRE is a mandatory membership organization for auditors and audit firms established in accordance with the Accounting Law of 1953, as amended in 2015. The Act Regarding the Organization and Supervision of Statutory Auditors of 2016 grants IBR-IRE, under the supervision of the Belgian Audit Oversight Board (BAOB), with the authority to (i) approve and register statutory auditors and audit firms; (ii) provide continuing professional development for auditors; and (iii) draft auditing and ethical standards for the BAOB and Minister of Economy’s approval and endorsement.

IBR-IRE is a member of IFAC, Accountancy Europe, and the Fédération Internationale des Experts-Comptables Francophones (FIDEF).

Institute for Tax Advisors and Accountants (ITAA)

ITAA is a mandatory membership organization for accountants and tax consultants established in accordance with the Law Concerning the Accountancy and Tax Professions (Law of 2019). ITAA is responsible for: (i) implementing initial and continuing professional development requirements specified in the law for its members; (ii) providing training and licensing examinations; (iii) maintaining a registry for accountants and tax consultants; (iv) investigating and disciplining its members to ensure compliance with educational and ethical requirements; and (v) keeping members informed of any revised or new accounting and ethical standards.

ITAA is a Member of IFAC, Accountancy Europe, Fédération Internationale des Experts-Comptables Francophones, and the Confédération Fiscale Européenne.

The Council of Ministers approved the preliminary draft law on the merger between Professional Institute of Accountants and Tax Accountants (IPCF) and the Institute of Accountants and Tax Consultants (IEC-IAB) to form “Institute of Tax Consultants and Accountants (ICE).” As of the date of the assessment, IPCF reports that the draft is with the Council of State for feedback before being introduced in Parliament. Once the merger occurs, ‘current’ IPCF certified tax specialists will receive the professional title of “tax accountant;” IEC accountants will be given the title “certified public accountant;” and tax advisors will be given the professional title of “certified tax adviser.” All trainees of the merged institute will be required to enter an internship program to obtain the professional titles.

The Act Regarding the Organization and Supervision of Statutory Auditors of 2016 (hereinafter “Audit Act of 2016”) stipulates that a quality assurance (QA) review system for all audits be stablished and operated by the Belgian Audit Oversight Board (BAOB).

The BAOB conducts quality assurance reviews at least once every three years on auditors of public interest entities (PIEs) and every six years on non-PIE auditors. BAOB conducts risk-based quality control and reviewers are either members of the Financial Services and Markets Authority (FSMA) or ‘are bound by a collaboration with the FSMA’. For PIEs, quality control is conducted by reviewers that are external to the profession.

It appears that the QA review system is in line with the requirements of SMO 1 and the European Union’s 8th Company Law Directive on Statutory Audit. Regarding adoption of relevant standards for the QA review system, the Board of Governors approved a draft standard relating to the application of ISQM 1 and 2 in February 2023.

Current Status: Adopted

The main laws, accompanied by various Royal Decrees, that regulate the Belgian accountancy profession are the: (i) Accounting Act of 1953, as amended in 2015; (ii) Law of 2019 Concerning the Accountancy and Tax Professions; and (iii) Act Regarding the Organization and Supervision of Statutory Auditors of 2016.

The Law Concerning the Accountancy and Tax Professions 2019 grants the Belgian Institute of Tax Advisors and Accountants (ITAA) with responsibility for implementing initial and continuing professional development (IPD and CPD, respectively) requirements specified in the law for its members and providing training and licensing examinations.

Candidates for these designations are required to be members of ITAA as per the Law of 2019 to practice. Candidates must: (i) acquire a degree that is recognized by the Flemish, French or German-speaking Community and listed by the 2019 law; (ii) pass an initial admission test; (iii) complete a three (3) year internship at the ITAA or have at least seven years of practical experience (exemptions to the internship program are available); and (iv) pass a final examinations. ITAA requires its members to complete 120 hours of CPD over three (3) years and monitors members’ fulfillment.

For auditors, the Audit Act of 2016 and Royal Decree on the Access to the Profession of 2018 stipulate IPD and CPD requirements.

In order to offer auditing services, individuals must: (i) be a citizen of a Member State of the European Union; (ii) be less than 65 years old; (iii) be free of any criminal convictions; (iv) possess a master’s degree from a Belgian university or equivalent foreign diploma; (v) complete three (3) years of practical training in auditing; (vi) pass 23 "theoretical training exams" which can be taken before the start of the practical training or during the practical training and 11 practical exams; (vii) complete a final assessment (written and verbal, administered by IBR-IRE); and (viii) take the auditor’s oath at the Court of Appeal. Auditors must remain members of IBR-IRE and adhere to its rules and regulations to practice. IBR-IRE requires its members to fulfill 120 hours of CPD over a three-year period, which is monitored through the quality assurance review program by the BAOB.

Individuals with equivalent foreign qualifications must pass an examination on company law, accounting law, and professional ethics as described in IBR-IRE’s Procedure for Foreign Professionals (2019).

Based on the information provided by IBR-IRE and ITAA, educational requirements in Belgium appear to be mostly aligned with 2019 revised IES. It remains unclear how competencies are assessed and demonstrated in the IPD process. Furthermore, more information is needed pertaining to alignment with IES 7 (CPD) and demonstrating competencies.

Current Status: Partially Adopted

According to the Audit Act of 2016, audits must be conducted in accordance with the standards set by the Belgian Institute of Registered Auditors (IBR-IRE) and approved by the High Council for the Economic Professions and Minister of Economy.

IBR-IRE reports on its website that ISA have been applicable in Belgium since 2009 and adoption of new and revised standards is ongoing. As of April 2023, has adopted the 2016-2017 IAASB Handbook of International Quality Control, Auditing, Review, Other Assurance, and Related Services Pronouncements in addition to approving ISA 250 (revised); ISA 540 (revised); and ISA 315 (revised) for financial years beginning on or after 15 December 2023.

Current Status: Partially Adopted

The Audit Act of 2016 contains the general ethical rules applicable to the registered auditor (with respect to any engagement) as well as the conceptual framework approach.

The Belgian Institute of Registered Auditors enforces ethical requirements for auditors in line with the Audit Act of 2016. As of the date of the assessment, ethical requirements for auditors are reportedly in line with the 2009 IESBA Code of Ethics following the implementation of the EU audit reform. Additional ethical provisions applicable to the statutory auditor are included in the Belgian Code for Companies and Associations.

The Law Concerning the Accountancy and Tax Professions 2019 sets the basis of the ethical requirements to be implemented by the Institute of Accountants and Tax Consultants (ITAA) for its members—accountants, tax consultants, and bookkeepers.

ITAA reports that its members are required to adhere to a Code that incorporates the requirements of the 2009 IESBA Code of Ethics. The full ethical requirements are issued by a royal decree of the Minister of the Economy. ITAA reports that revisions to the Code based on the 2018 International Code of Ethics for Professional Accountants are in the process of being approved by the relevant Ministers.

Current Status: Partially Adopted

The Belgian central government follows the federal accounting and budgeting laws including the law of 22 May 2003 concerning the organization of the budget and governmental accounting and the Royal Decree on the execution of the law of 22 May 2003 concerning the chart of accounts.

The accounting system is on an accrual basis using national standards at the central government level and for the Walloon and Brussels local government, for each component of the financial statements (except for cash flow statement). This is the same at the Flemish local government level, except for changes in net asset that are recorded on a modified accrual basis.

Current Status: Not Adopted

Under the Audit Act of 2016, investigation and discipline (I&D) of auditors is performed by the Belgian Audit Oversight Board (BAOB) who may conduct investigations and then refer cases for sanctioning to the Financial Services and Markets Authority (FSMA) as needed.

Prior to the enactment of the Audit Act of 2016, the Belgian Institute of Registered Auditors—the professional accountancy organization for auditors—conducted I&D procedures in the jurisdiction for auditors. Currently, it is unclear if the system is still operational but when functioning, it was mostly in line with SMO 6 requirements. Its I&D mechanism was not able to incorporate the range of sanctions in SMO 6 due to limitations of the law.

The Law of 2019 Concerning the Accountancy and Tax Professions requires the establishment of a mechanism for investigating and disciplining accounting professionals. In accordance with the detailed requirements of the Law of 2019, the Institute of Accountants and Tax Consultants (ITAA) established mechanisms for investigating and disciplining its members.

All ITAA members are subject to a Disciplinary Commission comprising a judge in the court of commerce, and two ITAA members appointed by the Board that are responsible for maintaining professional discipline. The chairman is appointed by the King on the recommendation of the Minister of Justice. Sanctions can be imposed and determined by disciplinary bodies chaired by a magistrate. Appeals may be granted as stipulated in the law. Professional accountancy organizations may request investigations by the Federal Police for any perceived infringements to the law.

ITAA’s completed a self-assessment of its I&D processes and reports that it is mostly aligned with SMO 6 requirements, apart from (i) a process for the independent review of complaints on which there was no follow-up being established and (ii) the results of the investigative and disciplinary proceedings being publicly available. Not all results of proceedings are made available to the public (for privacy reasons), however expulsion cases that result in removal from the members’ list are published on the ITAA website.

Current Status: Partially Adopted

As a member of the European Union (EU), Belgium is subject to the accounting, auditing and financial reporting requirements established in EU Regulations and Directives as transposed into national laws and regulations.

EU-endorsed IFRS are required for the preparation of separate and consolidated financial statements of all companies whose securities trade in a regulated market. Belgium also used the option to require EU-endorsed IFRS in the consolidated financial statements of credit institutions, insurance companies, and investment firms whose securities do not trade in a public market. It also permits EU-endorsed IFRS in the consolidated financial statements of other companies whose securities do not trade in a public market. EU-endorsed IFRS have slight modifications from IFRS (e.g., temporary 'carve-out' from IAS 39 Financial Instrument: Recognition and Measurement and a temporary extension of the scope of applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts) but according to the IFRS Foundation, the modifications affect a limited number of companies and the majority of companies that do not apply the options can state full compliance with the IFRS.

The Belgian Accounting Standards Board (BASB) is responsible for enacting financial reporting standards in Belgium in accordance with the Accounting Act of 1953 as amended in 2015 for all other entities. Entities that are not required to use EU-endorsed IFRS must use Belgian Generally Accepted Accounting Principles issued by the BASB.

IFRS for Small and Medium Enterprises is not adopted in the jurisdiction and there are no known plans for adoption.

Current Status: Adopted

Relevant Organizations

• Belgian Institute of Registered Auditors (IBR-IRE)
• Belgian Audit Oversight Board (BAOB)
• Institute of Accountants and Tax Consultants (ITAA)
• Financial Services and Markets Authority (FSMA)
• Commission des Normes Comptables (CNC)

Relevant Legislation

• Law of 1999 Concerning the Accountancy and Tax Professions
• Accounting Act of 1953
• Act Regarding the Organization and Supervision of Statutory Auditors of 2016

Relevant Publications

• Accountancy Europe, Structure and Organisation of the Accountancy Profession. Key feature: Belgium, 2020.
• --, Member State Implementation of Directive 2014/95/EU, 2017.
• --, Organization of the Public Oversight of the Audit Profession in Europe, a Survey, March 2018.
• --, Definition of Public Interest Entities in Europe, March 2019.
• --, Defining a public interest entity: How to streamline the scope of EU audit rules across countries, 2022.
• --, Overview of the ISA adoption in the EU, 2015.
• Belgian Audit Oversight Board, Annual Reports.
• CMS Law Now, Belgian Audit Reform, February 2017.
• De Broeck Van Laere & Partners, New Accounting Rules, January 2016.
• European Commission, Audit Directive – Transposition Status, Nov 2021.
• EY, Overview and Comparison of Public Accounting and Auditing Practices in the 27 EU Member States, December 2012.
• IFIAR, Belgium: Member Profile, 2023.
• IFRS Foundation, IFRS Application Around the World, Jurisdictional Profile: Belgium, July 2016.
• IBR-IRE, SMO Action Plan, 2021.
• ITAA, SMO Action Plan, 2023.
• Mazars, The EU Audit Reform in Belgium, 2016.
• Simon Braun, The New Size Criteria Applicable to Companies, January 2016.
• The Accountant, Belgium Concludes Transposition of EU Audit Reform, November 2016.