Iraq

Accounting Framework

The financial reporting framework in Iraq is established primarily under the Iraqi Company Law No. 21 of 1997, as amended in 2004, which sets out general requirements for the preparation of financial statements for companies operating in the jurisdiction. The law refers broadly to the application of “international accounting standards” for certain entities, including joint-stock and private companies; however, it does not explicitly mandate the use of International Financial Reporting Standards (IFRS).

The Iraqi Banking Law of 2004 introduces additional requirements for financial reporting within the banking sector. Article 42 requires banks to apply international accounting standards in accordance with directives issued by the Central Bank of Iraq (CBI). In practice, the CBI mandated the application of IFRS for banks in 2016, with subsequent instructions reinforcing implementation, including the mandatory application of IFRS 9 and related guidance issued in 2019 and 2020.

Despite these developments, the absence of an explicit statutory requirement mandating IFRS for all entities has resulted in a mixed application of financial reporting frameworks. Many entities continue to apply national accounting standards issued by the Iraqi Board of Accounting and Auditing Standards (IBAAS), which remains the primary standard-setting body at the jurisdiction level.

The IFRS for Small and Medium-sized Entities is not adopted in Iraq. Small and medium-sized entities that are not subject to sector-specific requirements generally apply national accounting standards issued by IBAAS.

Auditing Framework

Auditing standards in Iraq are established at the jurisdiction level by the Iraqi Board of Accounting and Auditing Standards (IBAAS), which is responsible for developing and issuing national auditing standards. These standards are designed to reflect international practices while incorporating jurisdiction-specific requirements.

Statutory audit requirements are supplemented by sector-specific regulations, particularly within the banking sector, where the Central Bank of Iraq (CBI) establishes additional audit and reporting requirements for regulated entities.

International Standards on Auditing (ISA), issued by the International Auditing and Assurance Standards Board (IAASB), influence auditing practices in the jurisdiction. The Iraqi Union of Accountants and Auditors (IUAA), which operates as the mandatory professional accountancy organization, requires its members to apply ISA based on available Arabic translations as part of their professional obligations.

However, ISA are not formally adopted at the legislative level and national standards issued by IBAAS continue to be applied in practice. As a result, the application of auditing standards may vary across entities and sectors, reflecting a combination of national requirements and professional obligations.

Accountants and auditors in Iraq are regulated primarily under the Law of the Iraqi Union of Accountants and Auditors No. 185 of 1969, as amended in 1973. The law establishes the Iraqi Union of Accountants and Auditors (IUAA) as the principal professional accountancy organization in the jurisdiction and requires accountants and auditors to be registered through the profession’s regulatory framework.

The Iraqi regulatory framework reflects a profession-led model. Under the law, the IUAA is responsible for maintaining registers of accountants and auditors; organizing and implementing a quality assurance review system; establishing and delivering continuing professional development requirements; establishing and implementing investigation and disciplinary mechanisms; and establishing and monitoring compliance with ethical requirements. In practice, the IUAA also plays a broader role in supporting the implementation of international standards and the development of the profession.

The profession includes both accountants and certified public accountants. To qualify as an accountant, individuals are generally required to complete a bachelor’s degree in accounting and become members of the IUAA. Individuals seeking to practice audit may pursue the Certified Public Accountant qualification through the Arab Institute of Certified Public Accountants (ARICPA), which operates within the professional framework linked to the IUAA. According to the information reported by the profession, the ARICPA program includes theoretical study, practical research, structured professional training, and final examinations. Certified public accountants must also be members of the IUAA and be included in the auditors’ register in order to practice audit.

Additional institutional arrangements also support regulation of the profession. The Iraqi Association of Certified Accountants (IACA), established by the IUAA in 2005, contributes to implementation support, training, and professional development activities. In addition, the Iraqi Board of Accounting and Auditing Standards (IBAAS), established in 1988, issues national accounting and auditing standards and therefore plays an important role in the broader regulatory environment for the profession.

Auditors working in the public sector are subject to additional requirements under the Federal Board of Supreme Audit framework. Public sector auditors must satisfy the applicable licensing and professional requirements established for that segment in addition to remaining within the professional framework of the IUAA. This results in a differentiated regulatory environment in which the IUAA remains the core professional body, while public sector audit is subject to additional state oversight arrangements.

Overall, the accountancy profession in Iraq is regulated through a profession-led system centered on the IUAA, with supporting roles played by the IACA, the ARICPA, the IBAAS, and public sector institutions relevant to government audit. Recent cooperation between the IUAA and the Institute of Chartered Accountants in England and Wales has also aimed to strengthen the profession’s strategic planning and professional education framework.

There is no independent public audit oversight authority in Iraq.

Auditors are regulated primarily through a profession-led framework established under the Law of the Iraqi Union of Accountants and Auditors No. 185 of 1969, as amended in 1973. Under this framework, the Iraqi Union of Accountants and Auditors (IUAA) is responsible for regulating auditors, including maintaining the register of auditors, implementing quality assurance review mechanisms, and overseeing compliance with professional and ethical requirements.

In the absence of an independent oversight body, the IUAA performs key functions related to audit quality and professional conduct within the jurisdiction. This includes organizing and implementing quality assurance reviews and administering investigation and disciplinary processes for its members, who comprise the population of practicing auditors.

Public sector audit is subject to separate institutional arrangements. The Federal Board of Supreme Audit of Iraq (FBSAI) operates as the supreme audit institution and is responsible for auditing public sector entities and overseeing the use of public funds. The FBSAI exercises authority over government audit activities, including the audit of federal revenues and expenditures.

Overall, the audit oversight framework in Iraq is characterized by a profession-led system for private sector audit oversight through the IUAA, complemented by state oversight of public sector audit through the FBSAI. However, there is no independent public oversight authority with responsibility for supervising statutory audits across the profession.

Iraqi Union of Accountants and Auditors (IUAA)

The Iraqi Union of Accountants and Auditors (IUAA) is the principal professional accountancy organization in Iraq and was established under the Law of the Iraqi Union of Accountants and Auditors No. 185 of 1969, as amended in 1973. The law provides the legal foundation for the organization and requires accountants and auditors to be members in order to practice in the jurisdiction.

In accordance with its statutory mandate, the IUAA is responsible for maintaining the register of accountants and auditors; licensing members to provide accounting and auditing services; organizing and implementing a quality assurance review system; establishing and delivering continuing professional development requirements; establishing and operating an investigation and disciplinary system; and establishing and monitoring compliance with ethical requirements.

The IUAA plays a central role in supporting the development and regulation of the profession, including promoting the implementation of international standards and facilitating training and professional development activities. The organization is a member of the International Federation of Accountants and engages with international and regional stakeholders to strengthen the profession in Iraq.

Iraqi Association of Certified Accountants (IACA)

The Iraqi Association of Certified Accountants (IACA) was established by the Iraqi Union of Accountants and Auditors (IUAA) in 2005 and operates under its umbrella as part of the professional framework in Iraq.

The IACA contributes to the development of the profession by supporting the implementation of international accounting and auditing standards in coordination with the IUAA, providing training programs and workshops for accountants and auditors, and contributing to the development and promotion of ethical requirements for professional accountants.

While the IUAA retains primary regulatory responsibility for the profession, the IACA plays a supporting role in professional development, capacity building, and the advancement of professional practices within the jurisdiction.

The quality assurance review system in Iraq is established under the Law of the Iraqi Union of Accountants and Auditors No. 185 of 1969, as amended in 1973, which assigns responsibility for quality assurance to the Iraqi Union of Accountants and Auditors (IUAA). The IUAA reports that it established an independent Quality Assurance and Inspection Committee in 2003 and operates a cycle-based peer review system covering audit firms, with approximately 200 firms reviewed annually. The IUAA has also reported, through its IFAC membership profile, that the system is aligned with the requirements of Statement of Membership Obligations 1.

However, the jurisdiction-level framework does not fully incorporate current quality management requirements. As of IFAC’s November 2024 update, the Iraqi Board of Accounting and Auditing Standards had not officially adopted International Standard on Quality Management 1, International Standard on Quality Management 2, or International Standard on Auditing 220 (Revised). Accordingly, no version of ISQM 1 or ISQM 2 is currently adopted at the jurisdiction level in Iraq.

While a quality assurance review system is in place and reported by the IUAA as operational, the absence of adopted ISQM 1 and ISQM 2 means the jurisdiction-level framework is not fully aligned with SMO 1 requirements. Quality assurance in Iraq is therefore assessed as Partially Adopted.

Current Status: Partially Adopted

Initial professional development requirements in Iraq are established through a combination of the Law of the Iraqi Union of Accountants and Auditors No. 185 of 1969, as amended in 1973, university accounting education overseen by the Ministry of Higher Education and Scientific Research, and the professional qualification pathway delivered through the Iraqi Union of Accountants and Auditors (IUAA) and the Arab Institute of Certified Public Accountants (ARICPA). To qualify as an accountant, candidates complete a bachelor’s degree in accounting and join the IUAA. Candidates seeking to practice audit may pursue the certified public accountant qualification through ARICPA, which includes a five-year program, practical training, and final examinations.

The jurisdiction does not appear to have formally adopted a specific version of the International Education Standards (IES) in law or regulation. Instead, the existing framework is assessed against the IES requirements. IFAC’s current member profile for Iraq notes that it remains unclear whether initial professional development requirements are aligned with the revised 2019 IES, including the revisions to IES 2, IES 3, and IES 4 effective from 2021.

Continuing professional development requirements also remain only partially aligned. The IUAA reports mandatory continuing professional development of 20 to 40 hours every three years for auditors, while non-auditors are not subject to mandatory continuing professional development requirements. This means the jurisdiction-level framework does not fully meet the requirements of IES 7 and IES 8 for all professional accountants.

Accordingly, no exact version of the IES can be confirmed as formally adopted for all aspiring and professional accountants in Iraq, and the jurisdiction-level framework is not fully aligned with SMO 2 requirements.

Current Status: Partially Adopted

Auditing standards in Iraq are established at the jurisdiction level by the Iraqi Board of Accounting and Auditing Standards (IBAAS). While IBAAS issues national auditing standards, these are developed with reference to International Standards on Auditing (ISA) issued by the International Auditing and Assurance Standards Board (IAASB).

The Iraqi Union of Accountants and Auditors (IUAA) requires its members to apply ISA based on available Arabic translations as part of their professional obligations. The most recent Arabic translation available is the 2025 Handbook of International Quality Management, Auditing, Review, Other Assurance, and Related Services Pronouncements, published in April 2026.

In practice, ISA in their entirety are applied by auditors across the jurisdiction through the IUAA framework, which governs the population of licensed auditors. National standards issued by IBAAS are aligned with ISA and do not appear to override the application of ISA in practice.

Accordingly, ISA in effect at the time of the assessment are applied for mandatory audits in Iraq and the jurisdiction-level framework is assessed as aligned with Statement of Membership Obligations 3 requirements. ISA are therefore assessed as Adopted.

The International Standard on Auditing for Less Complex Entities has not been formally adopted in Iraq.

Current Status: Adopted

Ethical requirements for professional accountants in Iraq are established under the Law of the Iraqi Union of Accountants and Auditors No. 185 of 1969, as amended in 1973, which grants the Iraqi Union of Accountants and Auditors (IUAA) authority to set ethical requirements for the profession.

The IUAA requires its members to apply the International Code of Ethics for Professional Accountants (including International Independence Standards) issued by the International Ethics Standards Board for Accountants (IESBA). The most recent Arabic translation available is the 2024 Handbook, which is used to support implementation of the Code in the jurisdiction.

While the IUAA indicates that its ethical requirements are regularly updated to align with the IESBA Code, there is no clear evidence that the version of the Code in effect at the time of the assessment (2025 Handbook) has been formally adopted and is enforceable for all professional accountants at the jurisdiction level.

The IESBA Code of Ethics in Iraq is therefore assessed as Partially Adopted.

Current Status: Partially Adopted

Public sector accounting standards in Iraq are set by the Ministry of Finance. According to IFAC member reporting, self-financing public entities apply the Iraqi Unified Accounting System on an accrual basis, while government-funded entities apply the Governmental Accounting System on a cash basis. There are no reported plans to adopt International Public Sector Accounting Standards (IPSAS).

Accordingly, no version of IPSAS has been adopted at the jurisdiction level in Iraq. Although the Iraqi Union of Accountants and Auditors reports that it distributes the Arabic translation of the 2022 IPSASB Handbook and promotes IPSAS awareness through workshops and advocacy, this supports implementation only and does not constitute jurisdiction-level adoption.

Current Status: Not Adopted

The investigation and disciplinary system in Iraq is established under the Law of the Iraqi Union of Accountants and Auditors No. 185 of 1969, as amended in 1973, which assigns responsibility for investigation and discipline to the Iraqi Union of Accountants and Auditors (IUAA). Under this framework, the IUAA is responsible for investigating misconduct, enforcing compliance with professional standards, and administering disciplinary actions for its members, who comprise the population of professional accountants in the jurisdiction.

The IUAA reports that it has established a disciplinary framework, including a Discipline Committee responsible for reviewing cases of non-compliance with applicable rules, regulations, and professional standards. Sanctions may be imposed in accordance with the law, with enforcement supported by the judicial system where required. The IUAA has conducted a self-assessment indicating that its system incorporates the key elements of Statement of Membership Obligations 6, including investigative procedures, disciplinary processes, and mechanisms for enforcement.

Based on available information, the investigation and disciplinary system is established and operational for all professional accountants and incorporates the requirements of SMO. The investigation and disciplinary system in Iraq is therefore assessed as Adopted.

Current Status: Adopted

The financial reporting framework in Iraq is established under the Iraqi Company Law No. 21 of 1997, as amended in 2004, which refers generally to the application of “international accounting standards” but does not explicitly mandate the use of International Financial Reporting Standards (IFRS).

The Central Bank of Iraq requires banks to apply IFRS, based on directives issued in 2016 and subsequent guidance, including requirements relating to IFRS 9. However, for other entities, IFRS are not mandated, and many companies continue to apply national accounting standards issued by the Iraqi Board of Accounting and Auditing Standards. The IFRS Foundation indicates that IFRS are permitted, but not required, for other domestic companies, including publicly accountable entities.

Accordingly, IFRS in effect at the time of the assessment are not required for all domestic publicly accountable entities in Iraq, and the jurisdiction-level framework is not fully aligned with Statement of Membership Obligations 7 requirements. IFRS in Iraq are therefore assessed as Partially Adopted.

The IFRS for Small and Medium-sized Entities Accounting Standard has not been adopted in Iraq, and entities not applying IFRS continue to use national accounting standards. This does not affect the overall adoption assessment.

Current Status: Partially Adopted

Relevant Organizations

Central Bank of Iraq (CBI)Iraqi Board of Accounting and Auditing Standards (IBAAS)Iraqi Union of Accountants and Auditors (IUAA)Ministry of Finance of Iraq

Relevant Legislation

Iraqi Banking Law No. 94 of 2004Law of the Iraqi Union of Accountants and Auditors No. 185 of 1969 (as amended in 1973) Company Law No. 21 of 1997 (as amended in 2004)

Relevant Publications

IFRS Foundation Jurisdictional Profile – IraqIFAC Translations Database IFAC and CIPFA International Public Sector Financial Accountability Index