The Royal Government has issued a Sub-Decree that sets out offences and penalties for non-compliance with the Law on Accounting and Auditing and related regulations. The Sub-Decree applies to enterprises registered with the Ministry of Commerce and/or the General Department of Taxation, not-for-profit entities registered with competent ministries or institutions, and licensed accounting and auditing professionals, and is generally effective 6 months after its date of issuance (with certain provisions effective after 12 months).
The Sub-Decree sets specific penalties for different types of non-compliance with the Law on Accounting and Auditing. The offences include, but are not limited to, failure to undertake an independent financial audit where an audit is required, failure to submit annual financial statements to ACAR, failure to maintain proper accounting records, use of non-compliant accounting standards, failure to use financial statements to fulfil tax obligations, failure to maintain accounting documentation, not using Khmer language and Khmer Riel, intentional misreporting of financial information, use of a financial year-end that is not in accordance with the regulations, obstruction of ACAR inspections or refusal to provide requested information, and professional misconduct or regulatory non-compliance by accountants and auditors, including licensing and reporting obligations. For professionals, in addition to fines, suspension, restriction or revocation of licenses may be applied in serious or repeated cases.
The penalty amounts under this Sub-Decree are significantly higher than the charges under the previous Sub-Decree which it replaces, making non-compliance substantially more costly; for example, failure to file annual financial statements can result in a penalty of up to KHR 60 million (approximately USD 15,000) for an audit enterprise and KHR 50 million (approximately USD 12,000) for a non-audit enterprise.
