Luxembourg

As a Member State of the European Union (EU), Luxembourg is subject to the accounting, auditing, and financial reporting requirements established through EU Regulations and Directives, as transposed into national law.

Accounting Framework

The accounting framework in Luxembourg is primarily derived from EU legislation and national laws.

In accordance with Regulation (EC) No 1606/2002 on the application of international accounting standards, companies whose securities are traded on a regulated market are required to prepare consolidated financial statements in accordance with International Financial Reporting Standards as adopted by the European Union (IFRS Accounting Standards). Listed entities may also elect to prepare their separate financial statements under IFRS Accounting Standards.

For entities that are not publicly accountable, Luxembourg permits the use of IFRS Accounting Standards, subject to authorization where applicable, or national accounting requirements commonly referred to as Lux GAAP. The national framework is principally set out in the Law of 10 August 1915 on commercial companies and the Law of 19 December 2002 on the trade and companies register and the accounting and annual accounts of undertakings.

Sector-specific requirements also apply. Credit institutions are subject to the Law of 17 June 1992 on the annual and consolidated accounts of credit institutions, while insurance and reinsurance undertakings are subject to the Law of 8 December 1994 on the annual and consolidated accounts of insurance and reinsurance undertakings.

Auditing Framework

Statutory audit requirements are established under the Law of 23 July 2016 concerning the audit profession, as amended (Audit Law), which transposes Directive 2006/43/EC as amended by Directive 2014/56/EU and implements Regulation (EU) No 537/2014 on statutory audits of public-interest entities.

The Audit Law requires statutory audits for public-interest entities, including listed companies, credit institutions, and insurance and reinsurance undertakings.

The Commission de Surveillance du Secteur Financier (CSSF) is the competent authority responsible for oversight of the statutory audit profession. Only approved statutory auditors, réviseurs d’entreprises agréés, may perform statutory audits.

The Audit Law requires statutory audits to be conducted in accordance with International Standards on Auditing (ISA) as adopted by the CSSF. The CSSF is also authorized to adopt standards on ethics and quality management applicable to statutory auditors and audit firms.

For assurance and related services engagements outside the statutory audit scope, the Institut des Réviseurs d’Entreprises (IRE) is responsible for issuing standards applicable to its members.

Auditors

In Luxembourg, statutory auditors are regulated under the Law of 23 July 2016 concerning the audit profession, as amended (Audit Law), together with related grand-ducal regulations and regulations issued by the Commission de Surveillance du Secteur Financier (CSSF). The Audit Law, including applicable European Union requirements, establishes the regulatory framework and organization of the audit profession, including the role of the Institut des Réviseurs d’Entreprises (IRE).

The CSSF is the competent authority responsible for the public oversight and regulation of the audit profession in Luxembourg. Its responsibilities include the approval and registration of approved statutory auditors and approved audit firms, the adoption of professional standards on ethics, quality management, and auditing, oversight of continuing professional development requirements, quality assurance review systems, and investigative and disciplinary arrangements.

Individuals seeking qualification as statutory auditors must hold at least a master’s degree or an equivalent qualification, complete a minimum of three years of practical training with an approved statutory auditor or approved audit firm, and successfully complete complementary education and examinations, including Luxembourg-specific legal and professional requirements. Following completion of the professional aptitude examination and registration with the CSSF, the individual may be approved as an réviseur d’entreprises agréé.

Membership in the IRE is mandatory for statutory auditors, approved statutory auditors, audit firms, and approved audit firms.

Chartered Accountants

Chartered accountants in Luxembourg are regulated under the Law of 10 June 1999 on the organization of the profession of accountant. Authorization to practice is granted by the Ministry of Economy.

Qualified chartered accountants, whether individuals or legal entities, are required to be members of the Ordre des Experts-Comptables (OEC), the professional accountancy organization for experts-comptables in Luxembourg. Membership is mandatory for those providing accountancy, tax, and related professional services.

The qualification requirements are established by law and include a minimum bachelor’s degree, three years of practical experience, and completion of complementary professional education and examinations. The education program and professional examinations are organized by the University of Luxembourg in accordance with the legal requirements, with the OEC participating in the relevant university committee responsible for the professional education program and aptitude examination.

The OEC’s responsibilities include ensuring members’ compliance with applicable laws and regulations, establishing ethical requirements, protecting and promoting the profession, setting and monitoring continuing professional development requirements, and implementing disciplinary measures for its members.

The Law of 23 July 2016 concerning the audit profession, as amended, grants the Commission de Surveillance du Secteur Financier (CSSF) authority for the public oversight of the audit profession in Luxembourg. The CSSF is the competent authority responsible for the approval and registration of approved statutory auditors and approved audit firms, the adoption of standards on professional ethics, quality management, and auditing, oversight of continuing professional development, quality assurance review systems, and investigative and administrative disciplinary arrangements.

The CSSF is a member of the International Forum of Independent Audit Regulators (IFIAR). IFIAR’s member directory lists the CSSF as Luxembourg’s independent audit oversight authority.

The Institut des Réviseurs d’Entreprises (IRE)

The Institut des Réviseurs d’Entreprises (IRE) was established by law in 1984 and is the mandatory professional accountancy organization for statutory auditors, approved statutory auditors, audit firms, and approved audit firms in Luxembourg.

Its responsibilities include protecting the rights and interests of the profession; issuing professional standards for activities outside the scope of statutory audit; ensuring compliance by its members with professional obligations, including anti-money laundering and counter-terrorist financing requirements; conciliating disputes involving members; carrying out duties delegated by the Commission de Surveillance du Secteur Financier (CSSF); making proposals to the CSSF in the interest of the profession; exercising disciplinary authority through its Disciplinary Board; and maintaining and publishing the register of statutory auditors and audit firms.

The IRE is a member of IFAC and Accountancy Europe and actively participates in the work of national regulatory and standard-setting bodies, including the Commission des Normes Comptables, the CSSF, and the Commissariat aux Assurances.

The Ordre des Experts-Comptables (“OEC”)

The Ordre des Experts-Comptables (OEC) was established under the Law of 10 June 1999 on the organization of the profession of accountant. It is the mandatory professional accountancy organization for all experts-comptables, including both individuals and firms providing accountancy, tax, and related advisory services in Luxembourg.

The OEC’s responsibilities include ensuring that its members comply with applicable laws and regulations; establishing ethical requirements; protecting and promoting the interests of the profession; representing the profession on legal and technical matters; establishing and monitoring continuing professional development requirements; and implementing investigative, disciplinary, and enforcement procedures for its members.

The OEC is a member of IFAC and Accountancy Europe.

The Law of 23 July 2016 concerning the audit profession, as amended (Audit Law), establishes a mandatory quality assurance (QA) review system for all statutory audits of financial statements in Luxembourg. The quality assurance system is administered by the Commission de Surveillance du Secteur Financier (CSSF), which acts as the public oversight authority for the audit profession.

In accordance with the Audit Law, quality assurance reviews are required at least every three years for statutory auditors and approved audit firms that audit public-interest entities and at least every six years for those auditing non-public-interest entities. The CSSF’s inspection methodology includes an assessment of the firm’s system of quality management and the review of selected engagements.

The quality management standards applicable to approved audit firms include International Standard on Quality Management (ISQM) 1 and ISQM 2, as adopted by CSSF Regulation No. 24-02 of 26 January 2024, together with Luxembourg-specific supplements. Accordingly, the jurisdiction continues to meet the requirements of the EU Audit Directive, Regulation (EU) No. 537/2014, and the requirements of SMO 1.

In addition to the CSSF’s statutory audit quality assurance system, the Institut des Réviseurs d’Entreprises (IRE) maintains a peer review system covering members’ professional obligations outside the statutory audit scope, including compliance with anti-money laundering and counter-terrorist financing requirements.

For certified chartered accountants, the Ordre des Experts-Comptables (OEC) also maintains peer and professional review mechanisms to ensure that its members comply with applicable legal and professional requirements, including obligations related to anti-money laundering and counter-terrorist financing.

Current Status: Adopted

The initial professional development and continuing professional development requirements for statutory auditors in Luxembourg are established by the Law of 23 July 2016 concerning the audit profession, as amended, the grand-ducal regulation of 14 December 2018 determining the requirements for the professional qualification of réviseurs d’entreprises and réviseurs d’entreprises agréés, and CSSF Regulation No. 16-10 on continuing education.

Candidates seeking qualification as statutory auditors must have the theoretical qualification specific to the profession at master’s level or equivalent, complete at least three years of supervised practical training, complete complementary training on Luxembourg legislation organized by the University of Luxembourg, and pass the professional competence examination organized by the Commission de Surveillance du Secteur Financier (CSSF). Continuing professional development is mandatory for both réviseurs d’entreprises and réviseurs d’entreprises agréés, who must complete at least 120 hours over a three-year reference period, including a minimum of 20 hours in each reference year.

Based on these requirements, the statutory auditor qualification framework continues to be consistent with the European Union Audit Directive and remains aligned with the 2019 revised International Education Standards (IES), including requirements related to higher education, practical experience, assessment, and continuing professional development. The CSSF monitors continuing professional development for approved statutory auditors, while the Institut des Réviseurs d’Entreprises monitors continuing professional development for statutory auditors.

For chartered accountants, the Law of 10 June 1999 regulates the profession of expert-comptable. The qualification pathway continues to include higher education, practical experience, complementary professional education, and examinations, with the University of Luxembourg delivering the complementary training program for candidates. Based on the available legal and institutional information, the framework for chartered accountants remains broadly aligned with the 2019 revised IES.

Current Status: Adopted

The Law of 23 July 2016 concerning the audit profession, as amended (Audit Law), stipulates that statutory audits in Luxembourg be carried out in compliance with International Standards on Auditing (ISA) as adopted by the Commission de Surveillance du Secteur Financier (CSSF). The Audit Law also authorizes the CSSF to issue standards in the field of statutory audit.

ISA and other applicable standards are adopted by way of CSSF regulation. While the regulation includes Luxembourg-specific add-ons and carve-outs, the CSSF maintains an ongoing process to incorporate new and revised ISA as issued by the International Auditing and Assurance Standards Board.

The Audit Law also empowers the Institut des Réviseurs d’Entreprises (IRE) to issue standards for engagements outside the statutory audit scope. The IRE has adopted applicable International Standards on Assurance Engagements, International Standards on Review Engagements, and International Standards on Related Services, as well as national standards for engagements entrusted exclusively to the audit profession by law.

The IRE also maintains an ongoing process to adopt new and revised International Auditing and Assurance Standards Board pronouncements.

Current Status: Adopted

In accordance with the Law of 23 July 2016 concerning the audit profession, as amended (Audit Law), the Commission de Surveillance du Secteur Financier (CSSF) is responsible for adopting ethical requirements applicable to statutory auditors in Luxembourg. These requirements are adopted through CSSF Regulation No. 24-02 of 26 January 2024, which covers standards on professional ethics and quality management.

The CSSF has adopted the International Code of Ethics for Professional Accountants (including International Independence Standards) issued by the International Ethics Standards Board for Accountants, together with a Luxembourg supplement. The published supplement expressly states that it applies the IESBA Code in the version published in the 2023 Edition of the Handbook, with Luxembourg-specific additions and modifications.

The Institut des Réviseurs d’Entreprises, as the professional accountancy organization for auditors and audit firms, requires its members to comply with the ethical requirements established by the CSSF for statutory audit engagements.

Under the Law of 10 June 1999, the Ordre des Experts-Comptables is responsible for establishing ethical requirements applicable to its members. The OEC’s Code de déontologie has been approved by its General Assembly. Based on the member’s publicly reported information, the OEC code is aligned with the 2024 International Code of Ethics. However, a public link to the full OEC code could not be independently verified from publicly available sources reviewed for this update.

Accordingly, as the publicly evidenced CSSF ethical requirements for statutory auditors are based on the 2023 Edition of the IESBA Code rather than the current 2025 Handbook, the jurisdiction would be assessed as Partially Adopted under the revised methodology.

Current Status: Partially Adopted

Public sector accounting standards in Luxembourg are set by the Ministry of Finance through laws, regulations, and administrative requirements. Based on publicly available international sources, the central government continues to use national standards on a modified cash basis rather than accrual-basis International Public Sector Accounting Standards (IPSAS).

The Organisation for Economic Co-operation and Development reported that Luxembourg was using a modified cash accounting system and was planning a transition to accrual accounting, although progress had been limited. The same source notes that Luxembourg had begun preparatory work to harmonize accounting systems and practices as part of a longer-term reform process.

More recent Organisation for Economic Co-operation and Development analysis on Luxembourg’s public finance system discusses reforms to budgeting, fiscal planning, and budget documentation, but does not indicate that accrual-based IPSAS or European Public Sector Accounting Standards have been adopted. Accordingly, the jurisdiction continues to be assessed as Not Adopted for IPSAS.

Current Status: Not Adopted

The Law of 23 July 2016 concerning the audit profession, as amended (Audit Law), establishes an investigative and disciplinary system for statutory auditors in Luxembourg. Responsibility is shared between the Commission de Surveillance du Secteur Financier (CSSF), as the public oversight authority, and the Institut des Réviseurs d’Entreprises (IRE). The CSSF has powers to investigate breaches and impose administrative sanctions and measures on approved statutory auditors and approved audit firms, while the IRE operates disciplinary arrangements for matters falling within its remit, including referral to its Disciplinary Board and appeal to the Cour d’Appel.

The Audit Law also gives the IRE authority to monitor compliance with professional obligations falling within its competence and to take disciplinary action where appropriate. The law provides for investigative procedures, sanctions, and an appeals process, and requires the IRE to inform the CSSF of breaches involving approved statutory auditors and approved audit firms.

For chartered accountants, the Law of 10 June 1999 on the organization of the accounting profession grants the Ordre des Experts-Comptables (OEC) authority to oversee the profession and operate disciplinary procedures through its disciplinary bodies. Publicly available legal sources indicate that the OEC framework includes investigative, disciplinary, and appeals elements. Based on the member’s self-assessment, the OEC reports that its system is aligned with SMO 6 requirements.

Current Status: Adopted

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

In accordance with Regulation (EC) No 1606/2002, companies whose securities trade on a regulated market are required to prepare consolidated financial statements in accordance with International Financial Reporting Standards (IFRS Accounting Standards) as adopted by the EU. Listed entities are also permitted to apply IFRS Accounting Standards as adopted by the EU in their separate financial statements. In addition, entities whose securities do not trade on a regulated market may use these standards on a voluntary basis for both consolidated and separate financial statements.

The IFRS Foundation notes that IFRS Accounting Standards as adopted by the EU are IFRS Accounting Standards as issued by the International Accounting Standards Board, with limited modifications at the EU level, such as the temporary carve-out from IAS 39. The IFRS Foundation further indicates that the financial statements of the majority of companies can still assert full compliance with IFRS Accounting Standards as issued by the International Accounting Standards Board.

Upon authorization from the Commission des Normes Comptables (CNC), other non-listed entities may choose between IFRS Accounting Standards as adopted by the EU and Luxembourg generally accepted accounting principles for consolidated and/or separate financial statements. Entities applying national requirements remain subject to the relevant provisions of the Law of 10 August 1915 on commercial companies and the Law of 19 December 2002 on the trade and companies register and the accounting and annual accounts of undertakings, as well as sector-specific legislation where applicable.

Current Status: Adopted

Relevant Organizations

Commissariat aux Assurances (CAA)

Commission de Surveillance du Secteur Financier (CSSF)

Commission des Normes Comptables (CNC)

Institut des Réviseurs d’Entreprises (IRE)

Ministry of Finance

Ordre des Experts-Comptables (OEC)

Relevant Legislation

Law of 23 July 2016 concerning the audit profession, as amended

Grand-ducal Regulation of 14 December 2018 determining the requirements for the professional qualification of réviseurs d’entreprises and réviseurs d’entreprises agréés

CSSF Regulation No. 24-02 of 26 January 2024

CSSF Regulation No. 16-10

Directive 2006/43/EC

Directive 2014/56/EU

Regulation (EU) No 537/2014

Directive 2013/34/EU

Regulation (EC) No 1606/2002

Law of 19 December 2002

Law of 10 August 1915 on Commercial Companies

Law of 17 June 1992

Law of 8 December 1994

Relevant Publications

Accountancy Europe, Public Oversight Survey, 2015

Accountancy Europe, Structure and Organisation of the Profession – Key Features: Luxembourg, 2020

Accountancy Europe, Defining a Public Interest Entity, 2022

IRE, SMO Action Plan, 2023

IFIAR, Luxembourg – Member Profile

IFRS Foundation, IFRS Application Around the World – Jurisdictional Profile: Luxembourg

IFRS Foundation, IFRS Application Around the World – Jurisdictional Profile: European Union

OEC, SMO Action Plan, 2023

OECD and International Federation of Accountants (IFAC), Accrual Practices and Reform Experiences in OECD Countries