Cyprus

As a member of the European Union (EU), Cyprus is subject to accounting, auditing, and financial reporting requirements established through EU Regulations and Directives as transposed into national laws and regulations. The jurisdiction has aligned its corporate reporting and statutory audit framework with the EU acquis communautaire.

The Companies Law, Cap. 113 establishes the financial reporting requirements for companies in Cyprus and incorporates the provisions of the EU Accounting Directive (2013/34/EU). Entities whose securities are admitted to trading on a regulated market are required to prepare consolidated financial statements in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU. In practice, Cyprus requires the application of EU-endorsed IFRS for both consolidated and separate financial statements of companies. Cyprus has not adopted the IFRS for Small and Medium-sized Entities (IFRS for SMEs).

Statutory audit requirements are established under the Companies Law, Cap. 113 and the Auditors Law of 2017 (L.53(I)/2017), which constitutes the principal legal framework governing the audit profession and public oversight arrangements in Cyprus. The Auditors Law of 2017 superseded the previous Auditors and Statutory Audits of Annual and Consolidated Accounts Law of 2009 and transposed the requirements of EU Directive 2014/56/EU and Regulation (EU) No. 537/2014 into national legislation.

The Companies Law requires all registered companies to undergo a statutory audit regardless of size. The Auditors Law specifies that statutory audits are to be conducted in accordance with International Standards on Auditing (ISA) as adopted by the European Commission. As the European Commission has not formally adopted ISA at the EU level, Cyprus requires application of ISA as issued by the International Auditing and Assurance Standards Board (IAASB).

The Cyprus Public Audit Oversight Board (CyPAOB) is designated as the competent authority responsible for public oversight of the audit profession. CyPAOB is authorized to oversee the application of auditing standards in the jurisdiction, issue additional audit-related requirements where necessary, and advise the Council of Ministers on matters relating to the applicability of ISA in Cyprus.

Only statutory auditors are regulated at the state level in Cyprus. The audit profession is governed by the Auditors Law of 2017 (L.53(I)/2017), which establishes the legal framework for the approval, registration, supervision, and discipline of statutory auditors and audit firms, as well as the public oversight arrangements for the profession.

The Cyprus Public Audit Oversight Board (CyPAOB) is the competent authority responsible for public oversight of the audit profession. Under the Auditors Law of 2017, CyPAOB is responsible for establishing and overseeing requirements related to auditing standards, professional ethics, quality management, investigation and discipline, auditor registration, and continuing professional development for statutory auditors. CyPAOB is also responsible for monitoring audits of public interest entities and conducting oversight of the regulatory activities delegated to Recognised Bodies of Auditors.

The Institute of Certified Public Accountants of Cyprus (ICPAC) is recognized under the Auditors Law of 2017 as a Recognised Body of Auditors. All statutory auditors and audit firms must be registered with a Recognised Body of Auditors and, as of the date of the assessment, ICPAC remains the only Recognised Body of Auditors in Cyprus. Certain regulatory responsibilities have been delegated to ICPAC through formal delegation agreements initially signed in September 2017 and subsequently revised in July 2020.

Under the delegated arrangements, ICPAC is responsible for maintaining the public register of auditors and audit firms; registering individuals and firms that meet the requirements of the Auditors Law of 2017; implementing continuing professional development requirements for registered auditors; monitoring audit firms performing audits of non-public interest entities; and supporting compliance with applicable auditing, ethical, and quality management standards.

To qualify as a statutory auditor, individuals are generally required to hold a recognized professional accountancy qualification, complete advanced audit-related education and training, obtain a minimum of three years of relevant practical experience with an audit firm, and satisfy continuing professional development requirements established under the legal and regulatory framework.

Individuals practicing as accountants outside the statutory audit profession are not subject to state regulation. However, ICPAC regulates its members through its by-laws, regulations, ethical requirements, and continuing professional development obligations. Membership is comprised of practicing and non-practicing professional accountants.

ICPAC members engaged in public practice are required to obtain the relevant practicing certificates depending on the services provided. These include practicing certificates related to general accountancy services, statutory audit, administrative services, and insolvency practice. Members in public practice are also subject to additional continuing professional development requirements and competency assessments in relevant areas of local legislation and regulation.

In addition to its professional responsibilities, ICPAC serves as the competent authority for its members in public practice under legislation related to anti-money laundering and counter-terrorist financing, sanctions implementation, administrative service providers, and insolvency practitioners.

Independent public oversight of the audit profession in Cyprus is established under the Auditors Law of 2017 (L.53(I)/2017), which designates the Cyprus Public Audit Oversight Board (CyPAOB) as the competent authority responsible for the oversight and regulation of statutory auditors and audit firms.

CyPAOB is responsible for ensuring that statutory auditors and audit firms comply with the Auditors Law of 2017 and Regulation (EU) No. 537/2014 on specific requirements regarding statutory audits of public interest entities. Its responsibilities include approving and registering statutory auditors and audit firms; establishing and overseeing requirements related to auditing standards, professional ethics, internal quality management, and continuing professional development; monitoring audits of public interest entities; conducting investigations and disciplinary proceedings; and cooperating with competent authorities in other EU Member States and third countries.

CyPAOB also oversees the regulatory activities delegated to Recognised Bodies of Auditors. The Institute of Certified Public Accountants of Cyprus is the only Recognised Body of Auditors in Cyprus and performs delegated functions under CyPAOB’s oversight, including registration, maintenance of the public register, continuing professional development procedures, and monitoring of auditors and audit firms that do not audit public interest entities.

CyPAOB is a member of the International Forum of Independent Audit Regulators, which supports international cooperation and the sharing of best practices among independent audit oversight authorities.

The Institute of Certified Public Accountants (ICPAC)

The ICPAC was established in 1961 in accordance with the Companies Law, Cap. 113. ICPAC is the principal professional accountancy organization in Cyprus and its membership comprises practicing and non-practicing accountancy professionals.

ICPAC is recognized under the Auditors Law of 2017 as the sole Recognised Body of Auditors in Cyprus. Under the delegation arrangements with the Cyprus Public Audit Oversight Board, ICPAC performs delegated regulatory functions, including the registration of statutory auditors and audit firms, maintenance of the public register, monitoring of auditors and audit firms that do not audit public interest entities, implementation of continuing professional development procedures, and support for compliance with applicable auditing, ethical, and quality management requirements.

ICPAC also regulates its members, accounting firms, and students through its by-laws, regulations, continuing professional development requirements, and investigation and disciplinary procedures. The Cyprus Public Audit Oversight Board retains public oversight responsibilities for the audit profession, including oversight of ICPAC’s delegated activities.

In addition to being a member of the International Federation of Accountants, ICPAC is a member of Accountancy Europe, the Edinburgh Group, and the Mediterranean Federation of Accountants.

The quality assurance (QA) review system in Cyprus is established under the Auditors Law of 2017, which requires all statutory auditors and audit firms to be subject to a QA system under the public oversight of the Cyprus Public Audit Oversight Board (CyPAOB). The framework applies to all statutory audits and is operational at the jurisdiction level.

CyPAOB retains responsibility for supervising the QA system for statutory auditors and audit firms that audit public interest entities. The Institute of Certified Public Accountants of Cyprus (ICPAC), as the sole Recognised Body of Auditors, conducts supervisory inspections of statutory auditors and audit firms that perform statutory audits of non-public interest entities under delegated arrangements, subject to CyPAOB oversight.

The QA framework is supported by audit monitoring procedures that assess compliance with International Standards on Auditing, the International Code of Ethics for Professional Accountants, and applicable quality management requirements. The framework incorporates the requirements of SMO 1 and applies to all mandatory audits.

International Standard on Quality Management 1, International Standard on Quality Management 2, and International Standard on Auditing 220 (Revised) have been adopted by ICPAC as issued, based on an ongoing ICPAC Council decision.

Current Status: Adopted

Initial and continuing professional development requirements for statutory auditors in Cyprus are established under the Auditors Law of 2017. The Cyprus Public Audit Oversight Board (CyPAOB) is responsible for oversight of these requirements, while the Institute of Certified Public Accountants of Cyprus (ICPAC), as the Recognised Body of Auditors, implements and monitors compliance with education and continuing professional development requirements for its members and registered auditors.

ICPAC operates the Cyprus Joint Examination Scheme with the Association of Chartered Certified Accountants, under which local students register with both bodies and may satisfy the examination criteria for membership of both organizations. The scheme incorporates Cyprus-specific requirements, including Cyprus corporate and business law, taxation, and advanced taxation.

ICPAC requires all members to complete continuing professional development annually. The current requirement is 40 units per year, including at least 21 verifiable units, with additional relevant continuing professional development requirements for members holding practicing certificates. ICPAC states that its continuing professional development program complies with International Education Standard 7, and CyPAOB’s 2025 circular refers to compliance expectations under International Education Standards 7 and 8 for statutory auditors.

ICPAC has assessed its education requirements against the 2019 International Education Standards and reports alignment.

Current Status: Adopted

The Auditors Law of 2017 specifies that audits must be carried out in accordance with the international auditing standards as adopted by the European Commission (EC). In Cyprus, the legal adoption of the International Standards on Auditing (ISA) issued by the IAASB is pending upon the endorsement of EC on a European level. Until the EC adopts ISA, the national legislation requires application of ISA as issued by IAASB in Cyprus.

The Cyprus Public Audit Oversight Board has the legal authority to impose audit procedures or requirements and advise the Council of Ministers on the applicability of ISA in Cyprus.

ISA for Audits of Financial Statements of Less Complex Entities (ISA for LCE) has also been adopted for use in Cyprus.

Current Status: Adopted

The Auditors Law of 2017 mandates all statutory auditors and audit firms to be subject to principles of professional ethics. Furthermore, according to the law, the Cyprus Public Audit Oversight Board may adopt ethical standards for the audit profession in line with the IESBA Code of Ethics for Professional Accountants and relevant decisions of the European Commission. The law also stipulates that, until the EC issues a decision, auditors in Cyprus must be subject to the requirements of the IESBA Code of Ethics as issued by IESBA.

The Institute of Certified Public Accountants of Cyprus (ICPAC), through its regulations, also requires all its members, both auditors and non-auditors, to comply with the International Code of Ethics as issued by the IESBA (in English). This is directly incorporated into ICPAC’s Members’ Handbook – revised on an ongoing basis to include the latest requirements (ICPAC Ethics Code Resources).

Current Status: Adopted

The Fiscal Responsibility and Budgetary Framework Law of 2014 establishes the public financial management framework in Cyprus and provides that the Accountant General determines the accounting standards to be applied by the public sector. The Treasury of the Republic of Cyprus is leading the transition from cash-basis accounting to accrual-basis International Public Sector Accounting Standards (IPSAS).

The Treasury has developed IPSAS-based accounting policy papers as part of the reform, including policies based on IPSAS 1, IPSAS 2, IPSAS 24, IPSAS 34, IPSAS 43, and IPSAS 49. The Treasury’s published policy papers indicate that these standards have been adopted by the Treasury for the Republic of Cyprus as part of the ongoing accrual accounting implementation.

The reform remains in transition, with the Treasury’s action plan focused on moving the public sector to accrual-basis accounting.

Current Status: Partially Adopted

The investigation and discipline (I&D) system for statutory auditors and audit firms in Cyprus is established under the Auditors Law of 2017. Statutory auditors and audit firms are subject to public oversight and disciplinary control by the Cyprus Public Audit Oversight Board (CyPAOB), which operates through its Board and Disciplinary Committee.

CyPAOB is responsible for disciplinary investigations and enforcement matters relating to statutory auditors and audit firms. Under the delegation arrangements, the Institute of Certified Public Accountants of Cyprus (ICPAC) refers complaints and disciplinary matters involving statutory auditors and audit firms to CyPAOB, while ICPAC retains responsibility for I&D procedures for its members, accounting firms, students, and graduate accountants outside the statutory audit framework.

ICPAC’s disciplinary framework sets out the composition, independence, procedures, and sanctions applicable to its disciplinary process, and publicly identifies the conduct that may constitute a disciplinary offence.

The jurisdiction-level I&D framework is operational for statutory auditors and audit firms and is supported by ICPAC’s disciplinary arrangements for other professional accountants under its authority. Accordingly, the I&D system is assessed as aligned with SMO 6 requirements.

Current Status: Adopted

The Companies Law, Cap. 113 requires companies in Cyprus to prepare financial statements in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union. Cyprus requires EU-endorsed IFRS for both consolidated and separate financial statements of companies whose securities trade in a regulated market and for companies whose securities do not trade in a regulated market.

The applicable version is IFRS as endorsed by the EU and effective in the jurisdiction at the time of reporting. The IFAC translations database does not indicate a Cyprus-specific Greek translation of the IFRS Accounting Standards. Accordingly, IFRS are adopted for all domestic publicly accountable entities and the jurisdiction-level framework is assessed as adopted.

Cyprus has not adopted the IFRS for Small and Medium-sized Entities. A new Financial Reporting Standard for Small-sized Entities, based on the IFRS for SMEs Accounting Standard, has been developed but is subject to approval and implementation procedures.

Current Status: Adopted

Relevant Organizations

Cyprus Public Audit Oversight Board (CyPAOB)

European Financial Reporting Advisory Group (EFRAG)

International Forum of Independent Audit Regulators (IFIAR)

Institute of Certified Public Accountants of Cyprus (ICPAC)

Ministry of Finance of the Republic of Cyprus

Treasury of the Republic of Cyprus

Relevant Legislation

Auditors Law of 2017 (L.53(I)/2017)

Companies Law, Cap. 113

Directive 2013/34/EU of the European Parliament and of the Council on annual financial statements, consolidated financial statements and related reports of certain types of undertakings

Directive 2014/56/EU amending Directive 2006/43/EC on statutory audits of annual accounts and consolidated accounts

Fiscal Responsibility and Budgetary Framework Law of 2014

Regulation (EU) No 537/2014 on specific requirements regarding statutory audit of public-interest entities

Relevant Publications

CyPAOB Annual Report 2024

ICPAC Accountancy Cyprus Magazine, Issue 148 (November 2025)

ICPAC Audit Monitoring – Overview of Common Findings

ICPAC Continuing Professional Development Requirements

ICPAC Cyprus Joint Examination Scheme

ICPAC Disciplinary Regulation 2024

ICPAC Ethics Code Resources

ICPAC IFRS Updates Seminar Agenda (2025)

ICPAC SMO Action Plan 2025

IFRS Foundation Jurisdictional Profile – Cyprus

Treasury of the Republic of Cyprus – IPSAS Accounting Policies and Accrual Reform Materials