Article 2.

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This Prakas aims at:
- Assuring accuracy and integrity of information provided by institutions to the
National Bank of Cambodia (NBC) and other stakeholders;
- Enhancing the effectiveness of banking supervision and harmonization of
supervisory practices with national and international standards and best practices; and
- Enhancing the quality of work performed by the audit firm.
Article 3.-
This Prakas is applicable to audit firms accredited by the NBC and for the audited
institutions under the supervisory authority of the NBC.
Article 4.-
- Competence: refers to external auditor’s ability to exercise professional judgment
and carry out key aspects of the audit, such as identifying and assessing the risks
of material misstatement and designing and implementing appropriate responses
to those risks.
- Objectivity: refers to external auditor’s judgment is not affected by conflicts of
interests. The external auditor should be independent in both fact and appearance.
- Independence: refers to the freedom from situations and relationships which
could impair external auditor’s objectivity. Independence should be observed not
only in the context of the institution that is being audited but also with respect to
the institution’s related entities.
- Code of Ethics: refers to the Code of Professional Ethics as promulgated by
competent organizations in the Kingdom of Cambodia.
- Engagement partner: refers to person in the audit firm who is responsible for the
audit engagement and its performance, and for the auditor’s report that is issued
on behalf of the firm.
- Immediate family member: refers to spouse, child, parents, sibling, or dependent.
Chapter 2
Accreditation Requirement
Article 5.-
Any audit firm that intends to audit banking and financial institutions shall apply for
accreditation from the NBC.
Any firm that applies for accreditation from the NBC shall satisfy the following
requirements:
1. Having registered at Ministry of Commerce;
2. Having registered as member of the Kampuchea Institute of Certified Public
Accountants and Auditors (KICPAA);

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 3. Holding an audit license from the National Accounting Council (NAC) of the
Ministry of Economy and Finance (MEF);
4. Having a minimum of 2 (two) partners and auditors registered as active members
at the KICPAA who shall be subject to the qualification as stated in Article 7;
5. Having been engaged in auditing business and have a good reputation for at least
3 (three) years up to date of filling the application for accreditation;
6. Shall be subject to a regular engagement quality control review; and
7. Any other conditions required by the NBC.
Article 6.-
Any audit firm applying for an accreditation shall submit the following documents:
1. Company profile;
2. Company registration certificate;
3. Certificate of membership with the KICPAA;
4. Audit license from the NAC of the MEF;
5. List of partners and auditors who are active members with the KICPAA, attached
with certificate of active membership, their criminal record, and CVs specifying
qualifications and experiences;
6. Audit manuals;
7. Information of the audit services conducted for the last 3 (three) years;
8. Audited financial statements of the audit firm for the last 3 (three) years; and
9. Any other documents required by the NBC.
Article 7.-
The firm’s partners and auditors who are active members with the KICPAA shall
satisfy the additional criteria as below:
1. Are fit and proper persons;
2. Satisfy the auditor’s objectivity and independence requirements as defined in the
Code of Ethics promulgated by competent organizations in the Kingdom of
Cambodia;
3. Have a minimum of 3 (three) years’ experience in banking audit; and
4. Have sufficient knowledge and competence corresponding to the regulatory and
risk management frameworks for banking sector.
Article 8.-
After receiving the complete documents, the NBC shall notify the applicant about its
decision within 3 (three) months.

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 Chapter 3
Obligations of the Firm and the Institution
Article 9.-
The firm shall have the following obligations:
1. Conduct audit for the institutions’ financial statements;
2. Provide assessment on other reports as required by the NBC;
3. Report to the NBC immediately on any incidents concerning insolvency or
significant risk leading to insolvency of the institution, failure to comply with
applicable laws and regulations, and any existing or proposed state of affairs that
may materially prejudice the institution’s capacity to safeguard the interests of
depositors and stakeholders;
4. Refrain from providing the institution with the information and documents related
to situations referred to in point (3) above
5. Report to the NBC of any unexpected change of the institution’s staffs involved in
the audit work during the audit assignment;
6. Provide the outcome of the Engagement Quality Control Review as required by
the NBC;
7. Provide the NBC with updated information related to any material changes
including change in its engagement partners, active members and senior
management;
8. Provide the NBC with other documents or information as required by the NBC.
The audit firm shall complete the application for accreditation as specified in
Appendix.
Article 10.-
If there is a special purpose engagement conducted, the firm shall submit the report of
the special purpose engagement to the NBC and to the Board of the institution.
If not otherwise specified by the NBC, the audit firm shall provide reasonable
assurance on the report of the special purpose engagement and notify to the institution in
writing.
Article 11.-
In order to enhance the audit quality and to monitor the soundness of the institution’s
operations as well as its regulatory compliance, the NBC may require a tripartite meeting
with the audit firm and the institution to discuss the audit report, any irregularities, and other
matters deemed necessary. On the other hand, bilateral meeting between the NBC and the
audit firm may be held as warranted.

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Article 12.-
The firms shall, at all times, comply with the following standards:
1. Cambodian International Financial Reporting Standards (CIFRSs); as applicable
in the Kingdom of Cambodia;
2. Standards on auditing applicable in the Kingdom of Cambodia;
3. Code of Ethics; and
4. Others related laws and regulations.
Article 13.-
The accredited audit firm is not allowed to audit the institution in the following
situations:
1. Having material direct and indirect financial and/or economic relations with the
institution;
2. Any member of the management of the audit firm being an immediate or close
family member of the Board, management, head of internal audit, head of
compliance, head of finance or other senior officers of the institution;
3. Receiving any direct or indirect interests from the institution and/or having any
other relationship, as determined by the NBC that may reasonably pose conflict of
interest with the institution.
Article 14.-
The audit firms shall not provide the following services to the institution:
1. Bookkeeping or other services related to the accounting records or financial
statements;
2. Financial information systems design and implementation;
3. Internal audit outsourcing services;
4. Tax consultation services; and
5. Any other services, as determined by the NBC that reasonably may pose conflict
of interest.
In case the audit firm has already provided any of the above mentioned services to
audited institutions, the audit firm is not allowed to sign a contract intending to provide audit
services to that institution except where the services were completed at least 3 (three) years
for point (1) and 1 (one) year for other points above.
Article 15.-
An audit firm shall not serve as an engagement partner for a continuous period of
more than 3 (three) years with the same institution. However, branches or subsidiaries of
foreign bank may select the same audit firm as their head office provided that engagement
partner of the audit firm be changed every 3 (three) years. The audit firm that has been
rotated off the audit of an institution may resume it audit engagement with the same audited
institution only after a lapse of 2 (two) years from the last audit engagement.

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Article 16.-
1. The audited institution has the following obligations:
a. Be subject to an annual audit;
b. Select the audit firms that have been accredited by the NBC and make a
request to the NBC before December 31st of each calendar year, by attaching
the list of engagement partner;
c. Provide the NBC with the terms of the engagement at least 30 (thirty) days
prior to the commencement of the engagement;
d. Provide the audit firms with the data and information in accordance with the
audit scope, and the regulatory requirements and directives by the NBC.
Unless permitted by the NBC, the institution shall refrain from providing the
NBC’s on-site inspection report to the audit firm;
e. Allow the audit firm to access information from the board, committees,
internal auditor and other relevant staffs and to access to other information
for the audit firm to fulfill its obligations under this Prakas;
f. Ensure that the institution’s Audit Committee review the external auditor’s
engagement every year, including an evaluation of the auditor’s
independence;
g. Ensure that the institution’s head of internal audit be represented in the
tripartite meetings with the NBC, the institution and the audit firm unless
otherwise specify by the NBC; and
h. Provide its Board and Audit Committee the audit reports and other relevant
documents.
2. If necessary, the NBC may require an institution to appoint an audit firm, who
maybe the existing firm or another firm to perform special audit on a particular aspect of the
institution’s operations, regulatory reporting, risk management systems or financial position.
3. The audit costs and relevant expenses shall be borne by the institution.
Chapter 4
Fees and Charges
Article 17.-
Applying audit firm shall pay information fee and processing fee at the time of the
application as below:
1. Information fee: KHR 500,000 (five hundred thousand riels);
2. Processing fee: KHR 4,000,000 (four million riels).
Accredited audit firms shall pay the annual accreditation fee of KHR 20,000,000
(twenty million riels) no later than January 15 of each year.

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 Audit firm accredited during the year shall pay the accreditation fee as follows:
- When accredited in the first quarter: shall pay accreditation fee in full;
- When accredited in the second quarter: shall pay three quarters of accreditation fee;
- When accredited in the third quarter: shall pay two quarters of accreditation fee;
- When accredited in the fourth quarter: shall pay a quarter of accreditation fee.
Chapter 5
Transitional Provision
Article 18.-
Audit firms which have already been authorized by the NBC shall apply for
accreditation from the NBC under this Prakas in the period of 6 (six) months, starting from
the effective date of this Prakas.
Chapter 6
Penalty Provision
Article 19.-
An audit firm that contravenes any provision of this Prakas shall be subject to
administrative actions such as warning, reprimanding to correct the mistakes, and revocation
of accreditation.
Article 20.-
The NBC may revoke the accreditation of the audit firm based on any of the
following grounds:
1. The Company registration, Certificate of active member with KICPAA and/or
audit license from NAC, MEF have been revoked;
2. Audit firm has seriously contravened accounting and/or auditing rules and
principles prescribed in the Law on Accounting and Auditing or related laws and
regulations; and/or
3. Not fulfilling the obligations prescribed in this Prakas and other requirements by
the NBC.
An audit firm whose accreditation has been revoked shall terminate its auditing
services to an audited institution from the date of receiving a written notice of revocation
from the NBC.
The NBC, at its own discretion, may consider a new application of an audit firm
whose accreditation has been revoked, after 3 (three) years from the date of revocation.
Article 21.-
An audit firm that contravenes any provision of this Prakas shall be subject to
transactional penalty from KHR 10,000,000 (ten million riels) to KHR 20,000,000 (twenty
million riels).

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Article 22.-
Institution that contravenes any provision of this Prakas shall be subject to penalty
as specified in Article 52 of the Law on Banking and Financial Institutions.
Chapter 7
Final Provision
Article 23.-
Circular B7-010-002 CL dated December 29, 2010 on the Selection of Independent
Auditors for Annual Audit of Banks and Financial Institutions and any others provisions
contrary to this Prakas are hereby repealed.
Article 24.-
The General Secretary, the General Director of Banking Supervision, the General
Director of Central Banking, the General Cashier, the General Inspector, Directors of all
relevant Departments in the National Bank of Cambodia, Banking and Financial Institutions
under the National Bank of Cambodia’s supervisory authority and the accredited audit firm
shall strictly implement this Prakas.
Article 25.-
This Prakas shall take effect from the signing date.
Phnom Penh, November 14, 2017
The Governor
Signed and Sealed: Chea Chanto

To:

− As stated in article 24“for implementation”

− All members of the Board of Directors