Lebanon

Accounting Requirements

Accounting and financial reporting requirements in Lebanon are established by the Ministry of Finance (MoF) through ministerial decisions and decrees. Most companies are required to prepare annual financial statements in accordance with International Financial Reporting Standards (IFRS). Ministerial Decision No. 6258 dated August 21, 1996 and Ministerial Decision No. 673/1 dated June 14, 2001 require the application of International Accounting Standards (IAS)/IFRS for holding, offshore, limited liability, and joint stock companies; branches of foreign companies; and sole proprietorships and partnerships exceeding specified employee or turnover thresholds. Companies listed on the Beirut Stock Exchange are required to apply full IFRS. Other entities may apply IFRS on a voluntary basis. Financial statements may be prepared in Arabic, English, or French. The applicable IFRS are published annually in the Official Gazette, with the English version prevailing in cases of interpretational differences.

Banks and other financial institutions, except insurance companies, are additionally subject to accounting requirements established by the Banking Control Commission (BCC) under the Code of Money and Credit, the Banking Law of 1963, Resolution No. 10/1 of 1984, and related decrees. According to the World Bank Report on the Observance of Standards and Codes published in 2003, the BCC requirements were largely aligned with International Accounting Standards at that time, although some significant deviations were identified. It remains unclear whether the current framework is fully aligned with IFRS as issued by the International Accounting Standards Board.

Audit Requirements

Statutory audit requirements in Lebanon are established under Ministerial Decree No. 8089 of 1996. Mandatory audits apply to holding, offshore, limited liability, and joint stock companies; branches of foreign companies; and sole proprietorships and partnerships exceeding specified employee or turnover thresholds.

The Ministry of Finance is responsible for establishing auditing requirements in the jurisdiction. According to Ministerial Circular No. 742 of 2002, audits of financial statements are required to be conducted in accordance with International Standards on Auditing (ISA) as issued by the International Auditing and Assurance Standards Board (IAASB). The Beirut Stock Exchange and the Banking Control Commission also require listed companies and banks under their supervision to apply ISA in the conduct of statutory audits.

While no specific legal or regulatory clarification regarding the International Standard on Auditing for Audits of Financial Statements of Less Complex Entities (ISA for LCE) has been identified, the requirement to apply ISA as issued by the IAASB may reasonably encompass subsequently issued IAASB standards, subject to any future clarification by the Ministry of Finance. The Lebanese Association of Certified Public Accountants (LACPA) has also initiated awareness and training activities related to ISA for LCE as part of its implementation support activities.

The accountancy profession in Lebanon is regulated under Law No. 364 of 1994, which established the Lebanese Association of Certified Public Accountants (LACPA) as the legally recognized professional accountancy organization for Certified Public Accountants (CPAs). Only CPAs registered with and licensed by LACPA are permitted to practice public accountancy, conduct audits, and issue audit reports in Lebanon.

Law No. 364 defines the initial professional development requirements for aspiring CPAs and requires CPAs to be registered and licensed members of LACPA. Entry requirements include a university degree, practical experience under the supervision of a LACPA member, and successful completion of LACPA’s professional examinations. LACPA also establishes continuing professional development (CPD) requirements for its members and monitors compliance with these requirements.

LACPA shares regulatory responsibilities with the Ministry of Finance. Under the law, LACPA proposes auditing standards to the MoF for approval. LACPA is also authorized to establish ethical requirements for CPAs and to investigate and impose sanctions for non-compliance with its statutes or professional ethics, subject to applicable legal and regulatory requirements.

LACPA’s internal bylaws further outline membership requirements, CPD obligations, disciplinary procedures, and the process for admission to membership. In 2013, LACPA amended its bylaws to establish the mechanisms for a mandatory quality assurance (QA) review system for members.

Lebanon does not currently have an independent public audit oversight authority. Oversight and regulation of statutory auditors are primarily carried out by the Lebanese Association of Certified Public Accountants (LACPA) under Law No. 364 of 1994.

Under the law, only Certified Public Accountants (CPAs) registered with and licensed by LACPA are permitted to conduct statutory audits and issue audit reports in the jurisdiction. LACPA is responsible for administering membership and licensing requirements; establishing continuing professional development obligations; supporting implementation of auditing, ethical, and quality management standards; operating the quality assurance review system; and administering investigative and disciplinary procedures for members.

LACPA has continued progressing implementation activities related to quality management and quality assurance through activation of the Quality Control Supervisory Commission and related technical committee; awareness initiatives on International Standard on Quality Management (ISQM) 1, ISQM 2, and ISA 220 (Revised); and development of quality assurance procedures and monitoring mechanisms.

The Ministry of Finance retains certain regulatory responsibilities, including approval of ethical and auditing requirements proposed by LACPA. In February 2025, the Ministry of Finance approved adoption of the International Code of Ethics for Professional Accountants (including International Independence Standards) as issued by the International Ethics Standards Board for Accountants.

No independent audit oversight body separate from the profession and government ministries was identified at the time of the assessment.

Lebanese Association of Certified Public Accountants (LACPA)

LACPA was established under Law No. 364 of 1994 as the sole legally recognized professional accountancy organization for Certified Public Accountants (CPAs) in Lebanon. Membership in LACPA is mandatory for individuals licensed to practice public accountancy and perform statutory audits in the jurisdiction.

LACPA is responsible for regulating and supporting the profession in accordance with the provisions of Law No. 364. Its responsibilities include administering membership and licensing requirements for CPAs; establishing continuing professional development (CPD) requirements; supporting implementation of auditing, ethical, and quality management standards; and administering investigative and disciplinary procedures for members.

Under the law, LACPA proposes auditing standards to the Ministry of Finance (MoF) and is authorized to establish ethical requirements for CPAs, subject to approval by the MoF. In February 2025, Ministerial Decree No. 152/1 approved adoption of the International Code of Ethics for Professional Accountants (including International Independence Standards) as issued by the International Ethics Standards Board for Accountants (IESBA). LACPA also supports implementation of the Code through CPD activities, awareness initiatives, technical guidance, and dissemination of Arabic-language materials.

LACPA’s internal bylaws establish additional membership obligations, CPD requirements, disciplinary procedures, and quality assurance review arrangements. In 2013, LACPA amended its bylaws to establish the framework for a mandatory quality assurance review system for members conducting audits. LACPA has continued progressing implementation activities related to the QA system through activation of the Quality Control Supervisory Commission and related technical committee; awareness initiatives on International Standard on Quality Management (ISQM) 1, ISQM 2, and ISA 220 (Revised); and development of QA procedures and monitoring mechanisms.

In addition to being a member of the International Federation of Accountants (IFAC), LACPA is a member of the Fédération Internationale des Experts-Comptables Francophones and the Arab Federation of Accountants and Auditors.

In 2013, the Lebanese Association of Certified Public Accountants (LACPA) amended its bylaws to establish a mandatory peer-review quality assurance (QA) system for Certified Public Accountants. LACPA’s published materials confirm establishment of the Quality Control Supervisory Commission and related quality control and peer review procedures, although earlier public materials indicate that implementation initially focused on selected or voluntary audit firms.

LACPA’s 2024 SMO Action Plan indicates that the QA system is being operationalized and that monitoring of member firms’ compliance with International Standard on Quality Management (ISQM) 1 and ISQM 2 is ongoing.

Based on available public information, the jurisdiction-level QA framework has been established and incorporates relevant SMO 1 requirements, but it does not yet appear to be fully operational for all mandatory audits. Accordingly, the QA system is assessed as Partially Adopted.

ISQM 1 and ISQM 2 are adopted, which supports the QA framework assessment; however, the system remains assessed as Partially Adopted because it is still being operationalized.

Current Status: Partially Adopted

Law No. 364 of 1994 establishes initial professional development requirements for Certified Public Accountants (CPAs), including a university degree, practical experience under the supervision of a Lebanese Association of Certified Public Accountants (LACPA) member, and successful completion of LACPA’s professional examinations. LACPA establishes continuing professional development (CPD) requirements for CPAs and requires members to complete a minimum of 40 hours annually.

Based on available information, the jurisdiction-level framework incorporates the requirements of the 2019 IES for entry, professional education, practical experience, assessment, and continuing professional development for CPAs. Accordingly, the IES are assessed as Adopted.

Current Status: Adopted

The Ministry of Finance (MoF) is responsible for adopting auditing standards in Lebanon. The Beirut Stock Exchange (BSE) and the Banking Control Commission (BCC) may also establish audit requirements for entities under their supervision.

According to Ministerial Circular No. 742 of 2002, auditors are required to apply International Standards on Auditing (ISA) as issued by the International Auditing and Assurance Standards Board (IAASB) for audits of financial statements. The BSE and BCC also require listed companies and banks to have their financial statements audited in accordance with ISA.

Based on the legal requirement to apply ISA as issued by the IAASB for audits of financial statements, the jurisdiction-level framework is aligned with the relevant SMO 3 adoption requirements. Accordingly, ISA are assessed as Adopted.

As of the date of the assessment, no specific legal or regulatory clarification regarding the International Standard on Auditing for Audits of Financial Statements of Less Complex Entities (ISA for LCE) had been identified.

Current Status: Adopted

Law No. 364 of 1994 authorizes the Lebanese Association of Certified Public Accountants (LACPA) to establish ethical requirements for Certified Public Accountants, subject to approval by the Ministry of Finance (MoF).

In February 2025, Ministerial Decree No. 152/1 approved adoption of the International Code of Ethics for Professional Accountants (including International Independence Standards) as issued by the International Ethics Standards Board for Accountants (IESBA).

Current Status: Adopted

The Ministry of Finance (MoF) is responsible for adopting public sector accounting standards in Lebanon. The IFAC and Chartered Institute of Public Finance and Accountancy International Public Sector Financial Accountability Index indicates that Lebanon’s central government financial reporting framework uses national standards on a cash basis. Accordingly, the jurisdiction-level framework is assessed as Not Adopted.

Current Status: Not Adopted

The investigative and disciplinary (I&D) system for Certified Public Accountants (CPAs) is established under Law No. 364 of 1994 and the internal bylaws of the Lebanese Association of Certified Public Accountants (LACPA). Since all CPAs must be licensed and registered members of LACPA, the system applies to all professional accountants authorized to practice public accountancy in the jurisdiction. Law No. 364 is the legal basis for regulating the profession and establishing LACPA’s authority over CPAs.

LACPA’s I&D process provides for complaints to be reviewed by the President and Board, referral to an Investigations Committee, and, where warranted, consideration by a Disciplinary Committee. Available sanctions include reprimands, monetary fines, and expulsion. Earlier World Bank analysis confirmed that Law No. 364 established a disciplinary process and related penalties for ethical breaches by members, while also noting historical gaps in monitoring and enforcement mechanisms.

LACPA amended its bylaws between 2014 and 2023 to further align its I&D system with SMO 6 requirements where it has authority to do so. However, some gaps remain, particularly related to administrative processes and legal constraints affecting full alignment. Accordingly, the jurisdiction-level I&D framework is established and operational but does not fully incorporate all SMO 6 requirements.

Current Status: Partially Adopted

The Ministry of Finance (MoF) is responsible for adopting financial reporting standards in Lebanon. Ministerial Decision No. 6258 dated August 21, 1996 and Ministerial Decision No. 673/1 dated June 14, 2001 require most companies, including holding, offshore, limited liability, and joint stock companies; branches of foreign companies; and larger sole proprietorships and partnerships, to prepare annual financial statements in accordance with International Financial Reporting Standards (IFRS).

Listed companies are required to prepare and publish annual audited financial statements in accordance with prevailing IFRS, and banks are also required to prepare financial statements in line with IFRS. Publicly available evidence indicates that listed companies and banks are required to apply IFRS, while the applicable IFRS are published annually in the Official Gazette and the English version prevails in cases of interpretation.

Based on the requirement for domestic publicly accountable entities to apply IFRS as issued by the International Accounting Standards Board, the jurisdiction-level framework is aligned with the relevant SMO 7 adoption requirements. Accordingly, IFRS are assessed as Adopted.

IFRS for Small and Medium-sized Entities are not adopted in Lebanon.

Current Status: Adopted

Sources

Relevant Organizations

Arab Federation for Accountants and AuditorsBanking Control Commission of LebanonBeirut Stock ExchangeChartered Institute of Public Finance and AccountancyLebanese Association of Certified Public AccountantsMinistry of Finance of Lebanon

Relevant Legislation

Banking Law of 1963Law No. 364 of 1994 Regulating the Accountancy ProfessionMinisterial Decision No. 6258 of 1996 and Decision No. 673/1 of 2001 on IFRS AdoptionMinisterial Circular No. 742 of 2002 on ISA AdoptionMinisterial Decree No. 152/1 of 2025 on Adoption of the IESBA CodeResolution No. 10/1 of 1984 and Related Banking Decrees

Relevant Publications

Lebanon Report on the Observance of Standards and Codes: Accounting and Auditing