Cambodia’s revised financial reporting framework establishes specific independent audit requirements for not-for-profit organisations (“NPOs”) and their projects.
Under Prakas No. 063 dated 18 August 2026 on the Obligations to File Annual Financial Statements and Submit Financial Statements for Independent Audit, the audit requirements for not-for-profit organisations are assessed separately from those applicable to commercial enterprises.
The new independent audit requirements apply from the 2026 accounting period onwards.
1. Project-Level Independent Audit Requirement
Article 10 provides that the financial statements of a project must be submitted for independent audit where the project has:
Total project cost exceeding KHR 2 billion
Equivalent to USD 500,000
The wording of the Prakas is “exceeding” KHR 2 billion. Accordingly, the statutory trigger is a project cost above that amount.
This requirement applies at the project level and should therefore be distinguished from the separate audit test applicable to the annual financial statements of the not-for-profit organisation itself.
2. When Must the NPO’s Annual Financial Statements Be Audited?
The annual financial statements of a not-for-profit organisation are required to undergo independent audit where both of the following conditions are satisfied:
Condition 1 – Annual expenditure
Total annual expenditure exceeds:
KHR 3 billion (USD 750,000)
The calculation excludes the cost of projects that are themselves subject to independent audit.
Condition 2 – Employees
The average number of employees during the year is:
20 employees or more.
Both conditions must be met before the annual financial statements of the NPO fall within this mandatory audit requirement.
Example
An NPO has:
- annual expenditure of KHR 4 billion, excluding projects separately subject to audit; and
- an average of 25 employees during the year.
Both conditions are met and the NPO’s annual financial statements would therefore be subject to independent audit.
If the same NPO had only 15 employees on average during the year, the annual financial statements would not become subject to mandatory audit solely under this test, although individual projects may still separately require audit.
3. Audit Frequency for NPO Projects
Article 11 also determines how frequently qualifying projects must be audited.
Projects not exceeding 18 months
A project with a duration not exceeding 18 months may be subject to one independent audit only.
Projects exceeding 18 months
A project with a duration exceeding 18 months must be subject to independent audit, with:
One independent audit for each twelve-month period.
This distinction is particularly important for multi-year projects and donor-funded programmes that extend beyond a single accounting period.
4. Voluntary Independent Audit
Where an NPO or an NPO project does not meet the mandatory conditions under Article 10, it may nevertheless voluntarily submit its financial statements for independent audit.
Such a voluntary audit should be distinguished from the statutory audit requirement imposed by Prakas No. 063.
5. Who Can Perform the Independent Audit?
For purposes of Prakas No. 063, an “independent audit” means an audit of financial statements performed by an auditor licensed by the Accounting and Auditing Regulator (“ACAR”).
Accordingly, an NPO or qualifying project subject to mandatory audit should ensure that the audit is performed by an appropriately licensed auditor.
6. Audit Completion and Filing Deadlines
The independent audit work and issuance of the independent auditor’s opinion must be completed:
No later than six months after the closing date of the accounting period.
The audited annual financial statements and independent auditor’s report must then be filed with ACAR no later than:
Six months and twenty days after the closing date of the accounting period.
For an NPO with an accounting year ending 31 December 2026, this would ordinarily mean:
- audit completion by 30 June 2027; and
- filing with ACAR by 20 July 2027.
Where completion within the prescribed period is not possible, the Prakas permits an application to ACAR for an extension in accordance with the applicable requirements.
7. What Happens If the NPO No Longer Meets the Audit Conditions?
Article 16 provides a specific mechanism for a not-for-profit organisation that no longer meets the conditions in Article 10.
In that situation, the NPO ceases to be subject to the requirement to submit its annual financial statements for independent audit.
However, it must:
Notify ACAR in writing no later than 30 days after the closing date of the accounting period.
This is different from the exemption mechanism applicable to certain enterprises under Article 15.
For NPOs, the Prakas specifically requires a written notification to ACAR when the Article 10 conditions are no longer met.
8. Filing Requirement for NPOs Not Subject to Audit
An NPO that is not subject to independent audit is still required to file its annual financial statements with ACAR.
The filing deadline is:
Three months and twenty days after the closing date of the accounting period.
For an accounting period ending 31 December, this would ordinarily correspond to 20 April of the following year.
9. Late Filing Penalties for NPOs Not Subject to Independent Audit
For a not-for-profit organisation that is not subject to independent audit, late filing of annual financial statements with ACAR is subject to an administrative fine of:
KHR 1.2 million (USD 300) per month of delay.
The total late-filing penalty for each accounting period is capped at:
KHR 7.2 million (USD 1,800).
The penalty is calculated from the month in which the filing deadline falls until the month in which ACAR receives the complete filing together with the annual financial statements.
The specific penalties under Articles 21 to 23 apply to entities not subject to independent audit and should therefore not be automatically extended to audited NPOs without considering other applicable legal provisions.
10. Effective from the 2026 Accounting Period
Article 26 provides that the independent audit requirements under Articles 8 to 11 apply:
From the 2026 accounting period onwards.
Prakas No. 563 MEF.PrK dated 10 July 2020 has been repealed, while existing implementing guidelines issued under that Prakas remain in force until they are replaced by new implementing guidelines.
Key Takeaway for Not-for-Profit Organisations
For the 2026 accounting period onwards, NPOs should assess their audit obligations at two separate levels:
- Individual projects — where total project cost exceeds KHR 2 billion; and
- The NPO’s annual financial statements — where annual expenditure exceeds KHR 3 billion, excluding separately audited projects, and average employees are 20 or more.
Management should not assume that an audit of the organisation automatically satisfies the separate statutory requirements applicable to individual qualifying projects, or vice versa.
NPOs should therefore identify qualifying projects early, calculate their annual expenditure and average employee numbers carefully, and plan audit engagements in sufficient time to meet the statutory completion and filing deadlines.
Legal Reference: Prakas No. 063 dated 18 August 2026 on the Obligations to File Annual Financial Statements and Submit Financial Statements for Independent Audit.
Download the Prakas here:
Disclaimer: This article provides general information based on Prakas No. 063 and does not constitute legal, accounting or other professional advice. The application of the requirements should be considered based on the particular facts and circumstances of the organisation or project together with applicable Cambodian laws, regulations and ACAR implementing guidance.
