Lao PDR

Head of State :
President Bounnhang Vorachith

Head of Government :
Prime Minister Thongloun Sisoulith

Capital :
Vientiane

Language(s) :
Lao

Currency :
Kip

ASEAN CPA

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Profile of the Country

Information of The Country

Professional Associations

The Government established the Lao Institute of Certified Public Accountants (LICPA) on 24 June 1998 under MOF as the key regulatory body for accounting and auditing arrangements. This includes the development of strategies, policies and other issues concerning accounting and auditing activities. LICPA acts as a professional body representing the accounting and auditing profession in Lao PDR.

The objectives of LICPA aim mainly at mobilising, guiding and gathering professional accountants as well as protecting faithful interests of accountants and auditors in order to practice their profession to be in compliance with laws and regulations, assist the State in promoting, developing and upgrading accounting and audit professions.

The main duties of LICPA are as follows:

to work out the medium and long-term schemes of work;
to define management regulations Certified Public Accountants which contribute into the study on the code of ethics and other related regulations;
to organise professional training courses and continuing professional development to be in compliance with rules regarding syllabus, projects and programs defined by the Ministry of Finance on a regular basis;
to collaborate, consult, exchange ideas and lessons on accounting and audit with its member;
to cooperate with professional accountancy organisations and institutes of other countries within the region and globe with the accordance of the Ministry of Finance;
to monitor the professional activities of its members;
to summarise and report on the activities of the LICPA to the Ministry of Finance and other related authorities on a regular basis;
to perform other rights and duties in accordance with the legal provisions.

The LICPA is a member of the ASEAN Federation of Accountants but is not a member of the International Federation of Accountants (IFAC).

The membership of LICPA is categorised as below:

Honorary Members;
Primary Members (Practicing Members and Non-Practicing Members); and
Associate Members.

Honorary Members consist of qualified individual persons with knowledge and experience in accounting and auditing, who are invited to be Honorary Members by the Institute with no registration fee for membership.

Primary Members are divided into Practicing Members and Non-Practicing Members. Practicing Members include individuals and legal entities. Individual members are those providing services in accounting and auditing entities such as accounting and auditing enterprises and state audit organisation; those never been convicted leading to imprisonment; having at least 5 years’ experience in accounting; are over 25 years old; and have a Bachelor Degree of Accounting issued by Ministry of Education and Certificate of Professional Accountant issued by the MOF.

Juridical person Legal entities may become a member if they provide services in accounting and auditing; those never been convicted of any serious offence; are registered with commerce, tax authorities, and have authorisation issued by the MOF.

Non-practicing members consist of Accountant Teachers and Inspection Official Staff. These people could apply for membership to LICPA if they are qualified and as Lao national citizen; never been convicted leading to imprisonment; have at least 5 years’ experience in accounting; are over 25 years old; have a Bachelor Degree of Accounting and Certificate of Professional Accountant issued by the Ministry of Finance.

Associate Members for foreigners and legal entities with investment in by foreigners who conduct accounting and auditing activities in Lao PDR. They have to be registered with LICPA and must fulfil the following conditions: citizens of country members of the International Accounting Standard Committee; have an equivalent diploma in accounting recognised by the equivalent commission; Lao citizens represent at least 70% of qualified staff, of which one person is a member of LICPA; conduct out of the country training courses for Lao citizen staff for at least 30 hours per year and internal in-house training for 120 hours per year; and observe the Code of Ethics and other rules issued by LICPA.

These membership requirements would be revisited soon by LICPA to be complied with new adopted laws on accounting and audit. LICPA will officially change its name to Lao Chamber of Professional Accountants and Auditors (LCPAA) as defined in the new independent audit Law.

Qualifying as an Accountants

Setting Up an Accountancy Practice

Under the previous Accounting Law, accounting consultants and accounting experts are allowed to provide advice on accounting, to set up accounting system, to maintain book-keeping, to conduct follow-up, analysis, evaluation and problems solving in accounting of the accounting entity (the budget, technical and administrative entities, public funds, enterprises and not-for-profit organisations who are subjected to the obligation of book-keeping).

Under the Audit Law (No: 05/NA 2007), independent auditor is an accounting consultant or accounting expert who conducts audit engagement and has been registered as members of LICPA and on the registry of the company under the terms of the Enterprise and Tax Laws.

However, the new promulgated Independent Audit Law, replacing those provisions regarding accountancy and audit practices, covers the requirements for establishing accountancy or audit firm.

Individual

An individual CPA practitioner may practice either as an employer or employee in a accountancy or audit firm or in business. An individual local and foreign CPA is not allowed to practice as a liberal profession. He/she must work on behalf of a legal entity only.

In order to have permission to sign auditor’s report on behalf of an audit firm, the CPA shall be registered and has a statutory auditor license issued by the Ministry of Finance. To be a statutory auditor, the CPA of the audit firm shall be a partner of its audit firm.

Public Accounting firm

According to the Law on Enterprises No: 11/NA, dated November 9, 2005, Accounting Law 2013 and Independent Audit Law 2014, accountancy firms and audit firms, doing business in accounting and audit services must be approved and have obtained licences issued by the MOF and registered for accounting practice by and with LCPAA.

Individual or legal entity willing to apply for accountancy firm practicing license that could practice non-assurance engagements shall comply with the following principal requirements:

Be a Lao Certified Public Accountant or a legally established foreign accountancy firm;
Be member of the LCPAA;
Is not a government officer, owner, partner or employee of any enterprise;
Never been disciplinarily sanctioned or been judged by court for fraud or economic or accounting violations; and
Have at least three accounting, finance staffs with high education level and above.

For establishing audit firm that could practice in both assurance and non-assurance engagements, the following criteria should be met:

Be a Certified Public Accountant or a legally established foreign audit firm;
Be member of the LCPAA;
Is not a government officer, owner, partner or employee of any enterprise;
Never been disciplinarily sanctioned or been judged by court for fraud or economic or accounting violations;
Have at least two CPAs and several staff in case of individual entity;
CPAs shall be managers and be shareholders of at least three fifth of all shareholders and if having more than two shareholders several staff shall be employed.

Nevertheless, on a temporary basis when aptitude test could not be organised yet, the Ministry of Finance can authorise foreign CPA to practice as Lao CPAs with the following conditions:-

The foreign CPA is required to provide necessary and continuing professional training to employees of Lao nationality;
The foreign CPA must comply with the ethics required by the Professional Accountancy Body and comply with the rules and obligations similarly to members of the Professional Accountant’s Body.

The visa and requirement of professionals are subject to the labor law and regulations of the Ministry of Labor and Social Welfare. Endorsement of the respective departmental authorities is also required.

Law and Regulations on Accountancy Practice

As of April 2013, there were approximately 192 Certified Public Accountants (CPA) registered with the Lao Institute of Certified Public Accountants (LICPA), out of which 165 were registered as members in public practice and 27 registered as non-practicing members. There are approximately 60 approved accounting and audit firms operating in the Lao PDR.

The first two laws governing the accounting profession in the Lao PDR were (1) the Accounting Law No. 01NA dated July 2nd 2007, which came into force in 2009 and replaces the Law on Enterprise Accounting No 12/90/APS dated 29 November 1990; and (2) the Audit Law No. 07/NA dated 3 July 2007.

However, this Accounting Law 2007 was recently replaced by a new amended Accounting Law dated 26th December 2013 and promulgated in January 2014, but does not cover accounting profession. The objective of this law is to determine the accounting principles, rules and measures of the implementing accounting entities for the purpose of strengthening accounting activities to be transparent as tools for financial management of budget entities and enterprises, monitoring in order to raise efficiency of State budget and enterprise management as well as contributing to the sustainable socio-economic development of the Nation.

This law applies to all implementing accounting entities in the public and private sectors, individuals and other organisations related to accounting operations.

The first law governing audit practice is the Audit Law No: 05/NA 2007, which came into force in 2007. The objectives of the Audit Law are to determine the principles, rules and measures related to the conduct of audit aiming at making the management, the use of Government funds, the activities of business entities and not-for-profit entities in compliance with laws and regulations, efficient, economical, and to prevent from negative appearances in public finance and the State Budget, contributing to the reinforcement and the soundness of the State and economic management, encouraging local and foreign investment, and to promote the progressive and sustainable socio-economic development. This law covers the scope under the State audit jurisdiction and independent audit for private owned entities.

Recently, a new law on State Audit No 16/NA was promulgated on July 6th 2012 to be applied by all State Audit-related organisations and individuals, except audit firms. This Law replaces State Audit part of the Law on Audit No: 05/NA. In September 2014, the new law on independent audit for the private sector which covers accounting profession was also. promulgated.

Accounting for financial institutions is governed by the Decree on the Accounting of the Bank of Lao PDR and the Financial Institutions under the Authorization of the Bank of Lao PDR No. 03/PM introduced on January 8th 1996. The purpose of the decree is to focus to ensure that the whole system of the Bank of Lao PDR works properly and efficiently. The Bank of Lao PDR is currently drafting a Decision replacing this Decree to be in line with new Accounting Law.

The MOF is the main licensing body for the accountancy profession in Lao PDR.

The Accounting Department of the MOF (according to the Ministerial Decision on the Organization and Activities of the Accounting Department, No: 1135/MoF dated April 29th 2013) is responsible for:

to study, and define the strategic plans and policies, as well as the regulations on the accounting and audit activities under proposal to the Government for its consideration to be complied with the country’s socio-economic development and in line with regional and international trends;
to study the government and enterprise accounting standards, and audit standards to gradually complied with IPSAS, IFRS and ISA, respectively, and to develop and to improve the accounting and audit system and other accounting and audit regulations for consideration and approval by the MOF;
to propagate and disseminate the laws and other legislations concerning accounting and audit;
to study other regulations, manuals, and conduct nation-wide training for public and private sector;
to issue license, control, monitor and check accounting software to be used in Lao PDR, and track related fee payments to the State Budget;
to control, manage and, monitor and supervise the application of the laws and other legislation concerning government and enterprise accounting, and audit;
to give advices on accounting and audit to accounting entities and other related parties;
to analyse and make comments on financial statements of the National Treasury in each period, to give guidance and to supervise the Accounting Council and the Association of Accountants and Independent Auditors;
to guide provincial accounting sections at provincial finance departments on professional works;
to supervise and regulate the Lao Institute of Certified Public Accountants trained personnel on accounting work;
to coordinate with related parties to develop accounting and audit syllabus to be complied with IFAC International Education Standards the State organisations and other organisations that are concerned with the accounting activities;
to cooperate with both international and regional accounting organisations in the field of accounting;
to summarise, evaluate and report to the Government on the organisation and implementation of the accounting activities; and
to exert other rights and duties in accordance with the legal provisions.

The Accountancy Advisory Board is a non-permanent organisation under the supervision of the Ministry of Finance. The Board has a role of technical advisor on accounting, financial reporting standards and other accounting related regulations.

Specific Regulation

Monitoring Committee

Regulated Accounting Services

Professional Accountants in Public Practice

(as a partner or director in an accounting or audit firm)

NAB Membership and/or PRA Registration

NAB Requirement :

Yes, must be practicing member of LCPAA

PRA Requirement :

MOF – Yes, their entity must have accounting or audit firm practicing license

NAB Membership and/or PRA Registration Requirement
(such as examination, test, recognised qualifications, etc)

NAB Requirement:

To be practicing member of LCPAA, that individual must be Lao Certified Public Accountant (Lao CPA). To be a Lao CPA he/she, must complete:

CPA training program
CPA practical training

In addition, practicing member must comply with continuing professional development (CPD) obligation.

Foreign CPA could apply for Lao CPA, if their CPA training program is accredited by LCPAA, they could be exempted from Lao CPA course and practical training, but shall pass an aptitude test on Lao business-related legislations.

PRA Requirement :

To have accounting firm practicing license, the applicant shall be Lao CPA and member of LCPAA; not be an officer, owner, shareholder or staff of any enterprise; be free of embezzlement or other intentional infringements on finance or accounting; and have more than three technical staff that have acquired a high level education degree in accounting and finance.

To have audit firm practicing license , the applicant shall be Lao CPA and member of LCPAA; not be an officer, owner, shareholder or staff of any enterprise; be free of embezzlement or other intentional infringements on finance or accounting; have at least two certified public accountants and, in case of sole proprietorship enterprise, have technical staffs that have acquired at least a high level education degree; and Have a certified public accountant as shareholder of least three fifths of total shares and act as manager. In case there are more than two shareholders, have technical staffs that have acquired at least a high level education degree.

Citizenship Requirement

No.

Remarks

However foreign workers shall be subject to other Lao related legislations such as Law of Labour.

Individual accountants (neither Lao national nor foreigner) are not authorized to practice independently in public practice).

Eligibility requirement, where applicable (ACPA/RFPA)

Open to ASEAN CPA / RFPA.

Auditor in Public Practice

(as a partner or director in an accounting or audit firm)

NAB Membership and/or PRA Registration

NAB Requirement :

Yes, must be practicing member of LCPAA

PRA Requirement :

MOF – Yes, their entity must have accounting or audit firm practicing license, and the auditor must have a statutory auditor license.

NAB Membership and/or PRA Registration Requirement
(such as examination, test, recognised qualifications, etc)

NAB Requirement:

To be practicing member of LCPAA, that individual must be Lao Certified Public Accountant (Lao CPA). To be a Lao CPA he/she, must complete:

CPA training program
CPA practical training

In addition, practicing member must comply with continuing professional development (CPD) obligation.

PRA Requirement :

In addition to the above requirements for audit firm practicing license, to be a statutory auditor he/she must be a Lao certified public accountant and have a position as director or engagement partner of an audit firm.

Citizenship Requirement

No.

Remarks

However foreign workers shall be subject to other Lao related legislations such as Law of Labour.

Individual accountants (neither Lao national nor foreigner) are not authorized to practice independently in public practice).

Eligibility requirement, where applicable (ACPA/RFPA)

Open to ASEAN CPA / RFPA.

Non-Regulated Accounting Services

Chief Accountant

Chief Accountant in large-sized enterprises and public interest enterprises

NAB Membership

Yes, must be practicing member of LCPAA

PRA Requirement

Ministry of Finance - No

NAB Membership Requirement
(such as examination, test, recognised qualifications, etc)

To be practicing member of LCPAA, that individual must be Lao Certified Public Accountant (Lao CPA). To be a Lao CPA he/she, must complete:

CPA training program
CPA practical training

In addition, practicing member must comply with continuing professional development (CPD) obligation.

PRA Requirement

Ministry of Finance - No

Citizenship Requirement

No

Remarks

However foreign workers shall be subject to other Lao related legislations such as Law of Labour.

Eligibility requirement, where applicable (ACPA/RFPA)

Open to ASEAN CPA / RFPA.

All About Registered Foreign Professional Accountant (RFPA)

Application Process

Fee

Download Documents

1. Assessment Statements
2. Assessment Statements Revisions
3. Accountancy Services