NGOs and associations play an important role in Cambodia’s development by mobilising donor funding, grants and membership contributions for public-interest activities.
Although they operate on a not-for-profit basis, they remain responsible for maintaining proper accounting records, preparing financial statements, meeting regulatory requirements and, where applicable, obtaining an independent audit.
Sound accounting and auditing are therefore essential not only for compliance, but also for demonstrating transparency, accountability and responsible use of entrusted resources.
The Cambodian legal framework
The accounting and reporting responsibilities of NGOs and associations in Cambodia are principally governed by several interconnected laws, standards and regulations.
The Law on Associations and Non-Governmental Organisations, promulgated through Royal Kram No. NS/RKM/0815/010 dated 12 August 2015, establishes the legal framework for domestic associations, domestic NGOs, foreign associations and foreign NGOs.
Under the law, a domestic association is a membership-based organisation that does not distribute profits to its members, while a domestic NGO is a non-membership organisation or foundation established to serve public interests without distributing profits.
The Law on Accounting and Auditing, promulgated through Royal Kram No. NS/RKM/0416/006 dated 11 April 2016, expressly applies to not-for-profit organisations. Articles 11 and 12 require the application of accounting and auditing standards approved in Cambodia, while Articles 17 to 26 establish requirements relating to financial-statement preparation, accounting records, reporting language, record retention and audit reports.
These requirements were made operational for not-for-profit entities through ACAR Instruction No. 010 dated 15 March 2022 on the Implementation of Accounting and Auditing Obligations for Not-for-Profit Entities. The instruction states that the accounting and auditing obligations apply to not-for-profit entities from 2022 onward.
Consequently, NGOs and associations should consider their obligations under at least three separate regulatory channels:
- registration and annual reporting obligations under the Law on Associations and Non-Governmental Organisations;
- accounting, financial reporting and audit obligations regulated by the Accounting and Auditing Regulator, or ACAR; and
- tax registration, declaration and payment obligations administered by the General Department of Taxation.
Compliance with one reporting channel does not necessarily satisfy the requirements of another.
The applicable financial reporting standard
Under ACAR Instruction No. 010, not-for-profit entities must maintain their accounting records and prepare their financial statements in accordance with the Cambodian Financial Reporting Standards for Not-for-Profit Entities, commonly referred to as CFRS for NFPEs.
The CFRS for NFPEs is specifically designed for organisations whose principal objective is service delivery or the achievement of a social purpose rather than the generation and distribution of profits.
Its reporting model focuses on receipts, expenditure, fund balances, the nature of the organisation, its activities and information necessary to demonstrate accountability for resources received and used.
An NGO or association should therefore not assume that financial statements prepared solely according to a donor’s reporting template automatically comply with CFRS for NFPEs.
Donor reports are often prepared by project, grant, budget line or funding agreement, whereas statutory financial statements should normally cover the reporting entity as a whole.
ACAR Instruction No. 010 permits a not-for-profit entity to apply either the Cambodian International Financial Reporting Standards, or CIFRS, or the Cambodian International Financial Reporting Standard for Small and Medium-sized Entities, or CIFRS for SMEs.
However, an entity choosing either of these frameworks must notify ACAR in advance in writing.
The selection of a reporting framework should therefore be based on the organisation’s legal status, activities, funding arrangements, asset base and users of its financial statements. It should not be changed merely to achieve a preferred accounting result.
Fundamental accounting obligations
Article 20 of the Law on Accounting and Auditing requires not-for-profit organisations to maintain accounting records, and every accounting transaction must be supported by a valid accounting voucher.
This means that payments, receipts, payroll costs, procurement transactions, employee advances, grants and other transactions should be supported by appropriate documentation such as invoices, receipts, contracts, approval forms, bank records and payment evidence.
Under Articles 21 to 23 of the law:
- the normal accounting year runs from 1 January to 31 December;
- an alternative accounting year requires permission under the applicable procedures;
- accounting records and financial statements are generally required to be prepared in Khmer and expressed in Khmer riel;
- English and a foreign currency may accompany the Khmer and Khmer-riel records when the applicable conditions are satisfied; and
- accounting records must be retained for at least ten years.
Article 17 further requires financial statements to be prepared within three months after the financial year-end.
Where an organisation cannot meet this requirement, a properly supported request for an extension must be submitted to the relevant regulator in accordance with the applicable procedures.
In practice, an effective accounting system for an NGO or association should be able to report transactions by:
- donor and grant;
- project and programme;
- restricted and unrestricted fund;
- geographical location;
- activity or output;
- approved budget line; and
- nature of expenditure.
This allows the organisation to prepare entity-wide statutory financial statements while also producing the separate reports required by donors, members, governing boards and project partners.
Annual reporting under the NGO law
Article 25 of the Law on Associations and Non-Governmental Organisations contains reporting requirements that are separate from ACAR’s financial-statement filing requirements.
A domestic NGO must submit its activity report and annual financial report no later than the end of February of the following year.
Where a domestic NGO receives financial support from donors, it must also submit copies of reports sent to donors within 30 days after those reports are sent.
Copies of project documents and donor financial agreements must likewise be submitted within 30 days from the agreement date, and the relevant report must be maintained at the organisation’s office for at least five years.
The wording applicable to domestic associations is different. Article 25 provides that the Ministry of Interior may request an association’s activity report and annual financial report where necessary.
Associations should therefore not automatically assume that they have no reporting obligation; they should review their registration conditions, governing statutes and current instructions issued by the Ministry of Interior.
Foreign NGOs must submit copies of annual activity reports and financial status reports sent to donors to the Ministry of Foreign Affairs and International Cooperation and the Ministry of Economy and Finance within 30 days after those reports are sent to donors.
Copies of project documents and financial agreements must also be submitted within 30 days after the agreement date.
Article 25 further authorises the Ministry of Economy and Finance or the National Audit Authority to check or audit associations and NGOs when necessary.
These reports should not be confused with the financial statements filed with ACAR. An organisation may therefore have to prepare:
- annual entity-wide financial statements under CFRS for NFPEs, or another Cambodian financial reporting framework permitted by ACAR;
- annual activity and financial reports under the NGO law;
- donor-specific project or grant reports;
- tax declarations and supporting schedules; and
- an independent auditor’s report on the annual financial statements where the statutory audit criteria are met.
Submission of financial statements to ACAR
ACAR Instruction No. 010 establishes the following annual filing deadlines:
- A not-for-profit entity that is not subject to independent audit must submit its annual financial statements to ACAR within three months and 15 days after its accounting closing date.
- A not-for-profit entity that is subject to independent audit must submit its audited financial statements to ACAR within six months and 15 days after its accounting closing date.
For an entity with a 31 December year-end, these deadlines generally correspond to:
- 15 April for unaudited financial statements; and
- 15 July for audited financial statements.
The submission is made through ACAR’s electronic filing system for not-for-profit entities. ACAR’s current website continues to provide a dedicated NFPE financial-statement filing portal.
Management should not wait until the filing deadline to begin preparing the financial statements.
Accounts should be closed, reconciled and reviewed promptly after year-end so that management, the governing board and the external auditor have sufficient time to address errors, missing documents and unresolved matters.
When is an independent audit required for NGOs and Association?
The statutory independent-audit requirement is principally established by Prakas No. 563 MEF.PrK dated 10 July 2020 on the Obligations to Submit Financial Statements for Independent Audit.
The not-for-profit entity is required to undergo a statutory independent audit when both of the following conditions are met:
- total annual expenditure exceeds KHR 2 billion; and
- the average number of employees during the accounting period exceeds 20.
The audit must be conducted by an independent audit firm licensed by ACAR. Once an organisation meets the statutory audit conditions, published implementation guidance indicates that it must submit audited financial statements for three consecutive years, even where it falls below the criteria in a subsequent year.
An audit required by a donor should not automatically be assumed to satisfy the Cambodian statutory audit requirement. This depends on whether the auditor is appropriately licensed, whether the audit covers the complete legal entity, whether the correct financial reporting framework is applied, and whether the report complies with the required form and auditing standards.
For example, an audit limited to one donor-funded project may provide assurance over that project’s financial report, but it may not constitute an audit of the organisation’s complete annual financial statements.
Applicable auditing standards
A statutory financial-statement audit must be conducted in accordance with the Cambodian International Standards on Auditing, or CISAs.
The auditor seeks reasonable assurance, which is a high but not absolute level of assurance, that the financial statements are free from material misstatement caused by fraud or error.
Consequences of non-compliance
Failure to comply with accounting, auditing and filing obligations may expose an organisation and responsible persons to regulatory penalties.
Sub-Decree No. 102 ANKr.BK dated 25 May 2026 replaces Sub-Decree No. 79 and establishes fines for offences such as failure to submit financial statements, obtain a required audit, maintain proper accounting records, comply with applicable standards or cooperate with ACAR inspections. Serious or repeated professional violations may also lead to suspension or revocation of an accounting or auditing licence.
Most penalties under Sub-Decree No. 102 take effect from 25 November 2026, while certain provisions take effect from 25 May 2027. ACAR may also inspect the premises of a not-for-profit entity where necessary.
Under the Law on Associations and Non-Governmental Organisations, reporting non-compliance may result in written warnings, temporary suspension, removal from the register or, for foreign organisations, termination of the memorandum of understanding.
Beyond regulatory penalties, non-compliance may damage the organisation’s credibility with donors, beneficiaries, members, regulators and the public.
Principal legal and professional references:
- Law on Associations and Non-Governmental Organisations, promulgated by Royal Kram No. NS/RKM/0815/010 dated 12 August 2015.
- Law on Accounting and Auditing, promulgated by Royal Kram No. NS/RKM/0416/006 dated 11 April 2016.
- Cambodian Financial Reporting Standards for Not-for-Profit Entities.
- ACAR Instruction No. 010 dated 15 March 2022 on the Implementation of Accounting and Auditing Obligations for Not-for-Profit Entities.
- Prakas No. 563 MEF.PrK dated 10 July 2020 on the Obligations to Submit Financial Statements for Independent Audit.
- Sub-Decree No. 102 ANKr.BK dated 25 May 2026 on Provisional Fines for Violations of the Law on Accounting and Auditing.
- Cambodian International Standards on Auditing, including CISA 200, CISA 220 (Revised), CISA 230, CISA 240 and CISA 250 (Revised).
