Preah Bat Samdech Norodom Sihanouk,
The King of the
The Law on Audit of the Kingdom of Cambodia was passed by the National Assembly on the 12th of January 2000 at its third plenary session of the second legislature and approved by the Senate on all of its forms and legal concepts on the 21st of January 2000 at its second plenary session of the first legislature and was declared to be conformed with the Constitution by the Constitutional Council, except the article 40, and is entirely stated as follows:
The purpose of this Law shall be to establish a National Audit Authority, which is independent in its operations. The National Audit Authority shall be responsible for executing the external audit function of the Royal Government. The Auditor-General shall be empowered to conduct audits on accounting records, accounts, management systems, operation controls and programs of government institutions in accordance with generally accepted auditing standards and Royal Government auditing standards.
This Law also established the internal audit function in government ministries, institutions and public enterprises.
The government institutions in the provisions of this Law shall include ministries, institutions, agencies, authorities, national bank, state financial institutions, state and private sector joint venture financial institutions, public enterprises, public establishments, municipal, provincial and local government offices, contractors, suppliers of goods and services to the Royal Government under contracts, and other organizations receiving financial assistance from the Royal Government in addition to their own equity and credits such as tax and duty exemptions and other concessions to non-profit organizations and private investment enterprises.
(a) Audit on Financial statements
(b) Audit on the management of credit project financed by external sources
(c) Audit on management systems and operations of all institutions
(d) Audit on evaluation, efficiency and effectiveness of operations
(e) Audit on non-profit organizations, associations, political parties and private investment enterprises as stated in article 2 of this Law
(f) Audit upon the special request
External audit is an examination or review of the accounting records, operation management systems and the control of government institutions in compliance with generally accepted auditing standards and Royal Government standards of auditing to provide assurance that:
(a) Financial and economic activities are fairly presented in statements and reports
(b) These activities are in accordance with generally accepted accounting principles
(c) Control of procedures and practices are in compliance with laws, regulations, agreements, management systems, contracts, programs and other criteria related to revenues, expenditures and usages of the Royal Government resources.
Audit on the financial statements and reports of ministries and institutions which constitutes the basis in preparing the consolidated financial statements of the Royal Government for the year ended which are prepared by the Ministry of Economy and Finance prior to submission to the legislative body.
Audit on the accuracy, completeness, authorization, validation and consistency of financial data appearing on the statements of ministries, institutions and the consolidated financial statements of the Royal Government.
Audit on the financial statements of public enterprises and authorities is comprised of balance sheet, profit and loss statement and notes to the accounts forming apart of the financial statements. This audit also includes the financial statements of the business enterprises of the ministries, institutions, provinces, municipalities, and local government offices.
Audit on the financial statements and other reports requested by international aid agencies and lenders under the external funded projects. This audit shall certify the accuracy and the appropriateness of the required documents to withdraw and make the payment on each project together with minutes showing the compliance with the terms and conditions of the credit and project agreements. The audit shall further evaluate the performances of the operation after their completion.
Audit on the control systems to form an opinion on the adequacy of controls in the management systems and processes established by management over activities and operations.
Audit on functions or ongoing operations within government institutions to ensure that their operations are complied with applicable laws, regulations and principles. This audit includes public procurement, personnel payroll, contracts, public property management and mission.
Audit to evaluate the economy, efficiency, effectiveness of operations and outcomes of the Royal Government program. This audit includes the review of operations of public institutions either financial or non-financial institutions.
Audit on compliance with the defined provisions related to operations of non-profit organizations, associations and political parties which have received financial assistance from the Royal Government in form of exemptions from customs duties, salary tax, other taxes as well as privileges and immunities not provided by the law. The objective of this audit is to ensure that the Royal Government would not lose of revenue associated with the tax exemptions and ensure that the relevant institution operates within the pre-defined framework of its purpose.
Audit on compliance of private investment enterprises that have received exemptions and concessions from the Royal Government of Cambodia to exploit the natural resources in the Kingdom of Cambodia. This audit focuses on compliance with the agreements, the terms and conditions of the Royal Government approvals.
Audit at the request of the Finance and Banking Commission of the National Assembly, National Assembly, Senate, ministries, institutions or authorities for a special review on part or the entire audit operation raised by request party. The performance of the audit mentioned in this article shall be at the discretion of the Auditor-General.
The audits covered in the article 5 to 12 shall be undertaken by the National Audit Authority.
The National Audit Authority is an independent public entity and shall report directly to the National Assembly, Senate and the Royal Government for information purpose. The National Audit Authority shall be led by one Auditor-General and have two Deputy Auditor-Generals.
The officials of the National Audit Authority shall have its own separate statute.
The National Audit Authority shall have its own separate budget provided by the national budget. The revenues and expenditures of the National Audit Authority shall be governed by the financial system law.
The Auditor-General and the Deputy Auditor-Generals shall be appointed by royal decree on the recommendation of the Royal Government and approved by a two-third (2/3) majority of all members of the National Assembly.
In case of the Auditor-General or the Deputy Auditor-General(s) die(s), resign(s), disable(s) or commit(s) serious mistake, a new Auditor-General or Deputy Auditor-General(s) shall be appointed under the terms and conditions stated in this Law.
The candidates for the Auditor-General and Deputy Auditor-General positions shall be dignitaries having:
- Cambodian nationality at birth
- Degree in higher education or equivalent degree in accounting or economics or finance or law or commerce with proper certification
- Professional or working experiences for at least 10 (ten) years
- No position in the governing body of any political party.
The Auditor-General shall have the responsibilities to lead the National Audit Authority, be in charge of the implementation of policies, goals and objectives of the National Audit Authority and have authority to act in all matters stipulated in this Law.
The Royal Government shall submit the yearly statements of the budget settlements to the National Assembly and Senate for debate and vote. At the same time, the Royal Government must also submit these statements to the National Audit Authority for auditing. The National Audit Authority must certify these statements and issue the audit reports to the National Assembly and the Senate.
If the Royal Government fails to submit these budget settlement documents to the National Audit Authority within a period of 9 (nine) months after the end of the financial year. Auditor-General shall report this delay to the National Assembly and the Senate.
The Auditor-General shall issue report to the National Assembly, the Senate, the Council of Ministers, Ministry of Economy and Finance and relevant ministries with regard to the irregularities in the accounting records, monetary and asset management within any entity.
The Auditor-General shall issued reports and remarks on matters related to accounting records, moneys, assets and long-term liabilities in accordance with the provisions of this Law.
Notwithstanding any other provision that related to audit matters, the Auditor-General shall audit the accounting records of any authority or institution, certify the accounting records, and issue necessary reports to the head of those authorities or institutions and to the National Assembly, Senate and relevant ministries.
The Auditor-General shall regularly report to the National Assembly and the Senate any problem arising from the conduct of his/her duties or the usage of his/her powers as stipulated in this Law.
After preparing a performance audit report of any institution, the Auditor-General shall send a copy of this proposed report to the head of this institution. If the head of the institution gives the written comments to the Auditor-General within twenty-eight (28) days after receiving the proposed report, the Auditor-General must consider those comments before preparing a final report. Otherwise, if the head of the institution has not replied within the time period specified above, the proposed report shall be considered valid.
The reports issued by the Auditor-General shall be deemed to be public documents.
The Auditor-General may require by written notice to the head or representative of the relevant institution to:
(a) Provide the Auditor-General or authorized official with necessary information. An authorized official is an official who is authorized in writing by the Auditor-General to perform the functions in Chapter 6 of this Law
(b) Cooperate and provide any evidence to the Auditor-General or an authorized official
(c) Provide any related documents under control of the head or representative of the relevant ministries to the Auditor-General or an authorized official.
The Auditor-General may direct that:
(a) The information shall be provided verbally or in writing and be certified that is legally accurate.
(b) The Auditor-General has the right to verify the accuracy of the information and evidences provided.
The Auditor-General or the authorized official:
(a) May during working hours enter and remain on the auditee’s premises
(c) May examine, make copies or extract documents from any report.
An authorized official entitled to enter or remain on auditee’s premises must show the written authorization letter signed by the Auditor-General. After seeing the authorization letter, the auditee shall facilitate the authorized official in his/her audit work.
It is prohibited for the information provider to make false statements either verbally or in writing.
Any authorized official who obtains the information directly or indirectly during the fulfillment of his/her work stipulated in this Law, such official must not disclose, divulge or leak that information to the public except for the internal use in performing the function of the National Audit Authority.
The prohibition in article 35 of this Law has no impact on disclosing, divulging or providing information in the report, containing the conclusion, remarks or observations of the Auditor-General.
The Auditor-General shall not include detailed information in the public report to be released for the public if:
(a) The Auditor-General believes that the disclosure of the information would be contrary to the public interest for any of the reasons setting out in article 38 of this Law
(b) The Royal Government has issued a certificate to the Auditor-General stating that disclosure of the information would be contrary to the public interest for any of the reasons setting out in article 38 of this Law.
For the purpose of the article 37 of this Law, the following reasons shall be treated as information that would be contrary to the public interest:
(a) It would prejudice the security, defense, sovereignty, or international relations of the Kingdom of Cambodia
(b) It would prejudice the commercial interest of any legal entity or person.
In reference to the article 37 of this Law, the Auditor-General decides:
(a) Not to prepare the report to be released for the public
(b) To withhold the detailed information in the report to be released for the public.
However, the Auditor-General shall include the detailed information in the article 37 of this Law in the report to be submitted to the National Assembly, the Senate or other relevant ministries.
In case of necessity, on the proposition of the Finance and Banking Commission of the National Assembly, the Permanent Committee, on behalf of the National Assembly, has the right to select special auditors to review the activities and operations of the National Audit Authority.
An internal audit shall be established within each institution, ministry and public enterprise. The internal audit shall report to the head of each institution, ministry and public enterprise and shall submit its report and conclusion to the National Audit Authority. The procedures for the organizing and functioning of the internal audit shall be determined by sub-decree.
The function of internal audit is to independently examine and evaluate the effectiveness on the implementation of the internal control system within institutions, ministries and public enterprises.
An internal control system is the means of the Royal Government established by the management of the institutions, ministries and public enterprises in order to provide reasonable assurances which regard to the following:
(a) Effectiveness of operations
(b) Reliability of financial reports
(c) Compliance with the applicable laws, regulations, policies, procedures and implementation arrangements.
Regardless of other possible penalties, any person who violates the article 31 or 33 of this Law shall be liable to a fine from 1,000,000 (one million) Riels to 5,000,000 (five million) Riels or be imprisoned for a term from 1 (one) to 3 (three) months or be liable to both fine and imprisonment.
Regardless of other possible penalties, any person who violates an article 34 of this Law shall be liable to a fine up to 5,000,000 (five million) Riels or more or be imprisoned for a term from 1 (one) to 5 (five) years or be liable to both fine and imprisonment.
Any provision contrary to this Law shall be abrogated.
This Law is promulgated urgently.
Preah Bat Samdech Norodom Sihanouk,
The King of
The Law on Additional
Law to the Law on Audit of the Kingdom of Cambodia was enacted by the National
Additional Law to the Law on Audit of the
Added to the article 40 in Chapter 8 of the Law on Audit of the Kingdom of Cambodia, promulgated by Royal Kram No. CS/RKM/0300/10 dated March 03, 2000 as follows:
In case of necessity, on the proposition of the Permanent Committee of the National Assembly, the National Assembly may decide to establish a special commission to review the activities and operations of the National Audit Authority.
This Law is promulgated urgently.