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Chan Bopta

La Trobe University

Australia 3086

P.W.Senarath Yapa *

La Trobe University


Australia 3086

Kerry Jacobs

Australian National University


Australia 0200

corresponding author *

P.W.Senarath Yapa

School of Business

La Trobe University

Australia 3086

Ph: 61 3 9479 1642

Fax: 61 3 9479 5971

Accounting and Finance Association of Australia and New Zealand (AFAANZ) Conference:

1-3 July 2007

The Gold Coast, Queensland, Australia


Purpose – The purpose of this paper is to examine the re-emergence of accounting profession in Cambodia in the aftermath of the Khmer Rouge (KR).  Cambodia’s economic infrastructure was devastated by the civil war of the mid 1970s, the rule of the KR between 1975 and 1979. During their rule of Cambodia, the KR massacred between two and three million inhabitants including most educated professionals such as accountants.

Design/methodology/approach – This paper provides a historical case study of the suppression and re-emergence of the accounting profession in Cambodia based on interviews with survivors and key figures.

Findings – The interview data shows social, political and war related economic dynamics that have influenced the re-emergence of accounting profession in impoverished Cambodia to the extent of gaining the membership to WTO.

Research limitations/implications – The re-emergence of the accounting profession in Cambodia has been examined using the interview data and some documentary analyses. However the analysis and empirical evidence of this study have important implications for the accounting policy makers in Cambodia.

Originality/value – No study has ever been done on Cambodian accounting profession. The paper highlights the importance of re-emergence of accounting in Cambodia in terms of economic development and the constitutional changes that evolved after KR regime in Cambodia.

Keywords : Accounting Profession, Cambodia, Khmer Rouge (KR), KICPAA.

Paper type :  Research paper



There has been a strong interest among researchers in the development of the accounting profession although most of these studies have focused on developed countries such as the USA and the UK with long histories of such professional formations.  Initially these studies have provided a basic documentation of the emergence of the accounting professions (Garrett, 1961; Institute of Chartered Accountants of England and Wales, 1965).  Over time this has evolved into a critical analysis of the forces and interests that impact the development of the accounting profession (e.g. Willmott, 1986; Walker, 1995; and Chua & Poullaos, 1998).  The research has also expanded to consider the emergence of the accounting profession in developing countries (Wallace, 1992; Yapa, 1999; Uche, 2002; Annisette, 2000; Sian, 2006 and Dyball, 2006).  Although these studies has reflected similar themes to the studies of the accounting profession in the more developed and established settings it has also been important to note the distinctive aspects of these countries.  In particular the development and place of the accounting profession has often been influenced by the presence, the practices and the departure of European colonial powers.  This theme has been notably evident in the recent studies of the histories of the accounting profession in many of the Association of South East Asian Nations[i] (Craig and Diga, 1996; Saudagaran and Diga, 2000; Yapa, 1999;2003)

This present study extends the existing research by focusing on the accounting profession in Cambodia.  Cambodia is an interesting case study because it combines many of the central colonial aspects with its own particularly disturbing history.  Cambodia is a nation with relatively clear and undisputed borders, with a relatively homogenous ethnic and linguistic population and a longstanding history.  Between 1887 and 1953, Cambodia was under French colonial rule as French Indochina.  Given the French colonial history it would be reasonable to expect that Cambodia would develop a Continental European model of accounting profession strongly influenced by the French approach.  Following Japanese occupation in World War II, Cambodia gained full independence from France in 1953. In April 1975, after a five-year struggle, Communist Khmer Rouge (KR) forces captured Phnom Penh and evacuated all cities and towns destroying most of the businesses, professions and the remnant of the French colonial interest.  The KR regime interrupted the ‘normal’ patterns of post-colonial social and professional development.   Therefore Cambodia provides a contemporary example of the emergence of accounting practices and profession in the absence of the social and institutions or direct colonial influence that virtually every country and study would take for granted.

The Khmer Rouge regime, lead by Pol Pot, killed most of the professionals in all disciplines in Cambodia including accountants and wiped out most of the elite, social and physical infrastructure in the country.  Once Pol Pot was removed from power, the accounting profession was rebuilt by a small number of remaining professionals.  This tragedy offers an unparalleled opportunity to study the birth of an accounting profession and explore many of the themes and issues associates with the structure and nature of the accounting profession.

Recently Cambodia has secured membership in the World Trade Organization and has become an important player in Asia and in trade given its geographic location in the lower Mekong region between Thailand in the west, Viet Nam in the east, and Lao PDR in the north.  Yet Cambodia remains one of the world’s least developed countries, with an estimated GDP in 2005 of between US$393 to US$448 per capita, a population about 11 million, a predominantly rural and agricultural economy, a life expectancy of 59 years and an infant mortality of 96 per thousand births.  Cambodia ranks as one of the poorest countries in the world.  Within the exception of Jacobs and Kemp (2002) there have been relatively few studies of the role and place of accounting among the poor.

This paper traces the re-emergence of the accounting profession in Cambodia.  It shows social, political and war related economic dynamics that have influenced the emergence of the accounting profession in Cambodia and how the development of the accounting profession in neighbouring countries, especially in the Viet Nam, has influenced the development of the profession in Cambodia.  To achieve its aim, the paper is divided into four parts. Part one explores the underpinning professionalisation concepts.  Part two traces the origins of the accountancy profession in Cambodia.  Part three explains the various development strategies adopted by the Ministry of Economy and Finance (MEF) including IKCPAA. Part four concludes the paper.

2. Underpinning Professinalisation concepts

Within this paper we conceptualised the process of professionalisation as a series of interactions between occupational associations and other social institutions, in relation to a particular set of conditions. The interactions involve negotiation, posturing, confrontation, conflict and conciliation; other social institutions include the state, corporations and higher education. The label ‘professionalisation’ is given to the outcomes of the process of professionalisation (Johnson, 1972; Larson, 1977; Abbott, 1988; Freidson, 1994; Macdonald, 1995).  Most of this literature is drawn from the sociology of professions which has focused on how professionalism can be defined (as a social structure) or how occupations professionalise (through what process) (for example, see Vollmer & Mills, 1996; Freidson, 1970;1988; Turner and Hodge,1970; Johnson, 1972; Freedman, 1976; Larson, 1977; Collins, 1979; Parkin, 1979; Abbott, 1978; Macdonald, 1995). It is argued that professionalisation can be used to explain how occupational associations of accountants push their claims to be recognized as a profession.  Attributes of professionalisation – control of work and power for market for services (Johnson, 1972; Abbott, 1988; Freidson, 1994) – are significant for any analysis of how an occupational association achieves professional status, as is an ideological framework that rationalises, justifies and legitimises the use of such control and power.

Freidson (1994, p. 174) argued that if an occupational association is to be able to gain freedom from governmental control in the exercise of its authority in producer (labour) and consumer (service) markets, then it needs to be able to persuade government of four areas:

  1. The occupation’s knowledge and skill are worthy of special protection;
  2. The occupational association is organised in such a way that it is able to control the monopoly its members have without abusing the privilege;
  3. Recruitment, training and evaluation of new members ensure competence and trustworthiness; and
  4. Peer review is used to ensure quality of service.

This position adopted by Freidson (1994) is typical or the earlier ‘charactoristic’ school of professional study.  However it does serve to highlight the important link between professional status, the power of the state and public or social acceptance.  Preston et al. (1995, p. 517) made similar points in their study of the formation of the accounting profession within the United States.  They argued that by subscribing to political and moral ideals of the day the accounting profession sought to legitimise its activities and have acquired the status and privilege of a profession.  Both O’Leary and Boland (1987) and Ramirez (2001) also make similar points in relation to the importance of the social standing and social perception of accountants in acquiring professional status.  In turn Hoskin and Macve (1986, 1994) highlight the importance of examinational system but as a tool of social perception management and institutional legitimating.

While the central justification and public argument for professional recognition of accountants tends to be couched in terms of public interest, it seems clear from this interest that it was more likely to be actually driven by personal and economic interest.  In summarizing the professionalization of accounting in the United Kingdom and the United States, Lee (1996b: 193) describes the process as “essentially as economic text with a cover entitled the public interest”.  Although grouped around an argument of public interest, a number of factors have been proposed as  the basis for an actual claim of professional status.  Moore and Cooper (1994) suggest that is a “mystique” concerning accounting knowledge and the mechanisms by which accountants informally established their credentials in the absence of state registration (Macdonald, 1985) which provide the basis for the claim of professional status.  In turn Hines (1989) makes the point that it is the claim to possess rather than the actually possession of a body of knowledge that lies at the basis of the social recognition of the profession.

Recent studies have examined the development of professional bodies in settler colonies where professional associations were established by self-selected elite to close off market opportunities from non-elite practitioners (Chua and Poullaos, 1998).  In non-settler colonies on the other hand, the setting up of professional bodies was part of wider, state-sponsored, human resource development programs.  The evidence on the accounting profession in Asia indicates that even for non-settler colonies within the same geographic region, there have been distinctly different historical evidence and outcomes.  For example, the dominant role of the State in the market has severely constrained the growth of the Brunei Institute of Certified Public Accountants (BICPA) (Annisette, 1999; Yapa, 1999).  The State was seen as a mode of accessing social and economic opportunities by ethnic and social groups who were previously left without access to the profession (Annisette, 1999; Susela, 1999). In the case of BICPA, ethnic factors prevented the professional association from acquiring State patronage for its members (Yapa, 1999, p.333).  Studies of other former colonies have identified a profound dependence on overseas qualifying associations for the training and certification of professional accountants, thus demonstrating the operation of contemporary imperialism and its continuities with nineteenth century British imperialism (Annisette, 2000; Chua and Poullaos, 2002). Annisette (2000, p.655), for example, showed that the emerging accounting professions in Tobago and Trinidad consistently marginalised the indigenous university, which appeared eager to participate in the education and certification of the country’s accountants. The Institute of Chartered Accountants of Tobago and Trinidad (ICATT) instead surrendered control of its knowledge functions to the UK based ACCA. This paper seeks to contribute to this literature by depicting a story of re-emergence of accounting profession in Cambodia.


Historically Cambodia experienced conflicts for a number of centuries from a number of different directions.  Thailand moved from the West and seized the Angkor region while Vietnam encroached from the East.  In 1863 when France colonized Vietnam, they imposed a protectorate on Cambodia.  The French re-took Angkor from Thailand, moved the capital from Oudong to Phnom Penh and restored the Cambodian archaeological sites.  However, the French neglected the local education and language and the literacy rate fell with ninety years of colonial rule producing only 144 Khmer Baccalaureates (Kiernan, 2004). Appendix 1 shows the brief summary of political, legal and economic systems in Cambodia from 1953 to present period.

After Cambodia’s independence from the French in 1954 Prince Sihanouk expanded education and restored public access to Khmer language historical sources.  During the 1960’s Sihanouk tried to keep Cambodia neutral as U.S forces intervened in the war in neighbouring Vietnam.  He was ousted by Lon Nol in 1970 and the Vietnamese and American armies crossed the border carrying the Vietnam War into Cambodia.  By 1973, half a million tons of U.S bombs had killed over 100 000 peasants and devastated the Cambodian country side (Kiernan, 1989).  This was used by the Khmer Insurgents (KI [Khmer Rouge]) to argue that the U.S. bombing was at the instigation of the Cambodian government under Lon Nol and that it was necessary to join with the Khmer Rouge forces to return Prince Sihanouk to power to defeat Lon Nol and to stop the bombing.

The first Western accounting system was imported in to Cambodia in 19th century by the French to support the colonial rule and the country’s legal and accounting system developed along the lines of those in France.  During the French colonial era, families that were able to provide their children with post secondary education chose to send them to university to read arts and science and later proceed to the fields of law, engineering and medicine” (Interviews, 2006 No.1).  During the colonial period the policy of the French colonists was not to develop an industrial economy in Cambodia but focused instead on the development and exploitation of Cambodian natural resources to provide materials for French industry.  There was little demand for accountants and what there was  undertaken by French accountants rather than locals.  There was also little effort to educate the locals in such skills and only a few Cambodians were ever trained to work as accountants in French offices and small trading companies (Interviews 2006, No.2).  However, any accounting system or practice was entirely an application of existing French laws and practices in Cambodia as no law defining the accounting and auditing system for private enterprises has ever been established under the French colonial rule.

3.1 1950s to 1970s accounting development

In the era of Sangkum Reastr Niyum (1953-1970), all enterprises were required to prepare their financial statements based on the French accounting model.  Despite the fact that there lacked of widespread common practice in accounting and auditing standards during this period it seems that a number of French-based and a few other international companies that operated in Cambodia who produced and returned their financial statements to their parent company.  Clearly each of these complied with the appropriate accounting standards for their home-jurisdiction.  However, as far as the era of the Republic of Cambodia is concerned (1970 to 1975), there was no any evidence indicating that Cambodia had any of their own accounting and auditing standards.

During the period of the Khmer Rouge between 1975 and 1979 (known as Democratic of Kampuchea, 1975-1979) there were hardly any economic activities other than a barter system with a few countries of the communist bloc.  In 1968, The Khmer Rouges launched a national insurgency to overthrow the government. They seized power in April 1975, executed intellectuals and enslaved the population in mass farming collectives.  All business activities across the country were abolished and condemned as anti-proletariat and anti-peasants.  During this period, the entire legal system was destroyed and a severe form of economic planning based on centralised system was introduced. Eventually, Cambodia was isolated from the rest of the world and its people were living on substance agriculture. Therefore, no evidence of an indigenous Khmer accounting practices during this period. However, Vietnamese occupation of Cambodia in 1979 saw the continuation of central planning, and heavy reliance on Soviet aid for consumption and reconstruction of the economy. With the subsequent collapse of the former USSR towards the latter part of the 1980s and the withdrawal of Vietnam troops from Cambodia in 1989, it embarked on market oriented reforms and resumption of relations with international bodies in 1993 (Leung et al., 2005). As revealed by some of the KR survivors, during KR and Vietnam occupation periods, some form of Soviet record keeping on financial transactions have been taken place (Interview 5, 2006). Therefore in this period there was no commercial accounting, accounting profession or accounting standards.  What little record keeping there was associated with the central control of the country and the regulation of the rural production.

3.2 1980 to 1990Rules and regulations for the development of accounting

After the liberation of the country from Khmer Rouge in 1979 the People’s Republic of Kampuchea, was established.  The government adopted a socialist planned economy approach and sought to rebuild the social and economic infrastructures that had been destroyed.  Under the planned economy approach most economic activities were carried out by the State and in accordance with the predetermined plans.  Therefore there was little need for private sector accounting and auditing standards although a limited chart of accounts were pronounced for use by the State economic entities and enterprises in the mid 1980s which reflected basic accounting principles.  During the late 1980s agrarian reform and property ownership were introduced in an attempt to transform the planned economy into a limited open market economy resulting in private sector investment and an expansion of business activities.

Following the 1993 election the development of a legal framework for accounting and auditing systems by successive Royal Government of Cambodia occurred with remarkable speed.  The following section highlights the development of accounting rules and regulations in Cambodia.

In 1980 at the beginning of the rebuilding the Cambodian economy the Ministry of Economy and Finance (MEF) was established with Mr. Chan Phin as minister.  The MEF had the responsibility for unifing the management of the areas of finance, accounting, taxation and the State budget for the country.  Therefore the MEF produced Rules and regulations for the areas of included finance, budget, taxation, and accounting system in order to more effectively control the public sector spending and to aid the effective collection of taxation revenue.

On 13 March 1980, the office of the Council of Ministers had issued their first accounting regulation.  This was regulation No. 41-80 KB SS on the disclosure of supporting evidence statements and common chart of accounts to be used by accounting/bookkeeping units in all government ministries.  By decision No 2359-81 KHV dated 14 December 1981, the requirement to use this common chart of accounts to monitor their own financial situation was extended to all state institutions at all levels.

The basis to the chart of accountants approach was the conventional double-entry approach and this was labelled at the time as the system of “matching targeted revenues against targeted expenditures”(Interview No.3).

The objective of establishing full accounting within the public sector was further reinforced by the Council of Ministers decision No 169 SRC dated 7 October 1982 which sought to establish a full public sector accounting system in all state departments and units.  The foundation for this announcement has been established by two earlier decisions by MEF.  They issued decision No 014 KHV-SRC dated 26 February 1982 that a format in the form of vouchers [1]for state enterprises and decision No 1412-82 dated 20 September 1982 on the use of cash accounting for industrial enterprises[2].  The state owned manufacturing and commercial units also shifted to a more fully-developed accounting system which was called “a regime of setting off revenue against expenditures”.   While this did involve accounting it also involved a clear policy shift in that the commercial units had to cover their own costs from their revenues and that they would not longer be subisidised by the central budget managed by the MEF.

In 1983, under the leadership of minister Chhay Than, the Department of Accounting was established in the MEF.  This Department of Accounting with the cooperation of other institutions in the public sector had issued rules relating to practice of accounting.  However these rules were not limited to government entities and started to have a broader applicability.   These new accounting rules were:

(a) Uniform code of accounts for commercial enterprises,

(b) Uniform code of accounts for industrial enterprises and

(c) Uniform code of accounts for construction enterprises.

Progressively manufacturing and service industries were no longer understood as an expense centre within the national budget but were expected to clearly recover their own costs under “a system of self financial independence”. Over a period of time this system apparently caused some inconsistencies within government entities.

In 1987, having noticed the inconsistency amongst the accounting standards and having understood the complexity of organizing all accounts under a unified code system, Council of Ministers had issued the decision No 49 SSR dated 11 April 1987 on the Prakas to use the unified chart of accounts at the public sector institutions to ensure efficiency and effectiveness in public sector accounting system. Thereafter, the MEF had issued a directive No 004 KHV-PK dated 13 July 1987 on the essences and use guideline of the chart of accounts for the public sector institutions. This unified chart of accounts comprised of about 66 accounts and 64 sub-accounts. The whole system was divided into 11 groups and another group of non-balanced accounts consisted of 9 accounts as components (Interviews No .4).

In October 1987, the MEF issued two decisions for implementation by local bodies. These were:(a) The decision No 102 SSR-KHV dated 23 October 1987 on the notice of implementation of the uniform code of accounts for stocks and warehouse. (b) The decision No 105 SSR-KHV dated 28 July 1987 on the notice of the implementation of the uniform code of accounts for fixed assets.

The progressive liberalisation of Cambodia throughout the late 1980s and the early 1990s represented no only a response to the needs of Cambodia but also a reflection of a broader of Perestroika within the Soviet communist bloc and the shift towards a more open and market type economy.  Therefore the growth in accounting regulation while initially within the management of the state and state finances progressively evolved into tools for management of the increasingly commercialised state owned enterprises and then into tools for the management of the newly emergent private commercial enterprises.  The explicit change of the Cambodian economy from a planned economy to a market economy took place in 1989 and the 1991 Paris agreement signalled the end of chronic war and internal strife that disturbed the development of Cambodian economy. From this point in time the role of the MEF changed from that of regulating the state to also producing the legal and financial framework for the private sector.  To facilitate this change in its mission, the MEF had invited Mr. Chheang Vun as a vice minister to take charge in drafting and preparing a ‘new system of accounting’.  The objective of this new accounting system was to serve both the need of public and private enterprises in a free-market economy and it was begun in 1993 with the support of the French government through the French National Accounting Council.

3.3 New Constitution in 1993 and accounting development

Following the general election in 1993, the new government proposed a new constitution which declared a liberal democracy and a multi-party system as the basis of the political regime of Cambodia.  In their first term the government presented the alleviation of the poverty in Cambodia as their primary mission.  The strategy involved a shift away from the previous isolation and military control and a shift towards integration with the region and the world at large and towards the promotion of economic development and reform.  In order to bring about effective economic reform it was necessary to develop the institutions and regulations for a free market economy, administrative reform, legal and judiciary reform and armed forces reform

As part of the economic reform, the Cambodian Government considerable legislation relating to the law on investment (1994), the Chamber of Commerce law (1995), the commercial Register Law (1995), the Cambodia Investment Board (1995).  The accounting aspects to these changes were converted by the Law on Taxation (1997), public finance, banking system together with accounting and auditing system reform- Audit Law[3] (2000).  In 2002 the National State Assembly of Cambodia approved the Law on Corporate Accounts. This Law is called “Law on corporate accounts, their audit and the accounting profession”. Under the guidance of this law a National Accounting Council (NAC) was established within the MEF.  Under Article 7 of the 2002 Act the NAC is established as a consultative body to review and give its opinion on all accounting regulations and laws and to develop the conceptual framework and accounting standards.

To achieve the objectives of economic reform highlighted in the new constitution, the MEF, under the guidance of the Royal Government of Cambodia led by Prime Minister Hun Sen, had considered and selected a chart of accounts, as prescribed by Prakas No. 012 PK-RKSHV dated 07 November 1993 on the application of “the General Accounting Plan or Plan Comptable General”.   This plan governed the accounting system in Cambodia and contained a recommended chart of accounts, list of accounts to be applied, accounting treatment, accounting principles and guidelines for financial statement presentation (Narayan and Godden, 2000).  This latest chart of accounts reflects a clear French influence in its structure and classifications of accounting codes.  Another development in the field of accounting is the Law on Audit that was passed by the National State Assembly on the 12th of January 2000 and approved by the Senate and was declared to be conformed to the Constitution by the Constitutional Council (The National Audit Authority in Cambodia).

4. The accounting profession in Cambodia

This section analyses (with reference to relevant professional concepts outlined in the previous section) the situation of professional accounting in Cambodia in light of various occasions on which issues arose between the State and the profession during the past decades. The ‘state’ refers to the “authority of hierarchical control, as operationalized by career civil servants for example, is vested in agreed rules and procedures backed up by the state’s monopoly of legitimate coercion” as explained by Puxty et al., in 1987(p.275). Description of the Cambodian context will be included as part of the analysis.

Before 1953, Cambodian legal system was based on French civil code and a judiciary. Political system was considered as a French protectorate and the political power was held by the French. During this period the policy of the French colonists was to exploit the Cambodian natural resources to supply materials for French trading activities. Apparently there was no need for an indigenous accounting profession and commercial accounting in Cambodia. The accounting record keeping was performed for basic commercial activities by French accountants rather than locally trained professionals. Throughout the historical period, (i.e., during KR and Vietnam occupation in Cambodia from 1975 to 1989), it reflect that under central planning communist regime there was no need for a commercial accounting profession. Therefore a development of indigenous accounting profession was not evolved in each period of the country as there was not private business sector.    Nevertheless, ever since the time when France imposed its colonial rules over Cambodia, no law defining the accounting and auditing system for private enterprises has ever been established.  Therefore professional accounting profession was absent during this period.            .

4.1 Kampuchea (Cambodian) Institute of Certified Public Accountants and Auditors (KICPAA)

As evidenced in the previous discussion, the accounting profession in Cambodia is very young and inexperienced when compared to most Western countries.  However, in mid 1999 with the economic reforms and the ongoing globalisation pressure from the other Asian countries, the MEF formally requested the French Government for assistance in upgrading the Cambodian Accounting standards. The French government agreed to this request and it was decided to conduct a full study on both public and private sector accounting practices. The study was conducted in late 1999 by the French consultant “Conseil National de la Compagnie National” and a set of documents was submitted the MEF in March 2000.  In 2003, the Kampuchea Institute of Certified Public Accountants and Auditors (KICPAA) was set up under the sponsorship of the MEF.  Although the KICPAA was technically a private organisation, it was governed and regulated by the Ministry of Finance (MEF) and KICPAA’s day to day functions were still directly influenced by the state. This is the national accounting body having responsibility in representing its members, promoting and defending the status and the interests of the profession and to participate in the work of the NAC (Narayan and Godden, 2000).  Although Cambodia lacks a culture of accounting, there are now seven accounting firms in the country including three of the Big Four largest international accounting firms in the world have offices in Phnom Penh: Ernst & Young International, KPMG and PriceWaterhouseCoopers (The Cambodia Daily, 5-6 Sep, 2002).  The establishment of new local accounting firms must be approved by the MEF to be able to provide statutory services. Cambodian accountants may form an accounting firm on a partnership basis and this has generally taken a limited liability form.  While overseas firms have been permitted a presence the government adopted a policy of maximizing the existing accounting resources among Cambodians before allowing access to experts from overseas or depending on them.  Therefore the big international firms are not allowed to do any statutory audit or accounting work under the Cambodian accounting law.  However they were permitted to establish a presence and offer consulting services to foreign firms and a few Cambodian clients, set up joint ventures within local firms to perform audits on multinational corporations and Cambodian firms listed overseas, accepting Cambodian accounting firms as their member firms, and apply for a provisional operation licenses to set up operations in Cambodia.

Unlike accounting professional bodies in the Western world the KICPAA remains a government agency and therefore the question remains concerning the independence of the Cambodian accounting profession from the state.  As revealed by the interviewees, these government bodies are the real ‘power behind the throne’ and all staff members of the KICPAA are government officers and officials.  Another major event in the development of accounting in Cambodia during this period is the enactment of the first Accounting Law by the National State Assembly, which is the highest legislative body in Cambodia.  The new law expanded the role of the KICPA and stipulated that accounting professional qualification was obtainable only by examination.  It is important to note that the new accounting law contains some adjustments which will have some influence on the state-profession relationship.  For example, according to new law an accounting firm may be organized as a partnership or a corporate body with limited liability. This provision allows the separation of accounting firms from the state.

The KICPAA was not financially independent from Government funding. This was mainly because of the small size of the Institute.  At May 2003 the Register of the Institute recorded only 38 members as active and two as retired.  Three resident and four distant members were recorded as being inactive.  Finally, only 10 of the 15 locally registered firms were active.  The number of active KICPAA members is rather unimpressive given the fact that the there are over 100 qualified members of the KICPAA. Given the above review it is clear that the re-emergence of the accounting profession in Cambodia was largely the direct involvement and the direction by the Cambodian government.

With increasing globalization and the liberalization of state-run economy, Cambodia is in the process of privatising many of the State enterprises and listing many of them in the overseas stock exchanges.  In addition, there seems to be some discussion on setting up of a securities investors’ protection fund in order to protect investors.  The fund initiated by the MEF, is mainly intended to give investors some compensation when they suffer from losses brought by misbehaviour or bankruptcy of companies.  The continuing economic reforms necessitate a corresponding development in skills and reputation of international accounting firms. However, according to available information, despite the Cambodia’s openness to the outside world, it appears that ‘Big Four’ and other international accounting firms cannot be expected to play a prominent role in the development of Cambodian accountancy profession in the immediate future.

From the above it is clear that political instability has been a contributory factor to the rather slow pace of the development of the accountancy profession in Cambodia. This has been partly responsible for the unimpressive number of accountants being trained by the KICPAA. The unstable political climate has also made it necessary for some of these accountants to flee the country. It is also unlikely that the current arrangement will lead to any meaningful development in the emergence of an accounting syllabus and local case studies that can be adapted to the social and economic specificities of Cambodia.. This is because foreign accountancy bodies have very limited understanding of indigenous accounting terrain. In this respect, coordination between Cambodian universities and the KICPAA is necessary.

5. Conclusion

The analysis in this paper has attempted to highlight some of the salient factors that have influenced the re-emergence of the accounting profession in Cambodia. It shows how the type of state in place (military or democratic), societal expectations and government actions have implicated on the development of the accountancy profession. The story of re-emergence of accounting profession in Cambodia is different to other settler colonies in Asia and Africa. Particularly during the KR period and Vietnam occupation in Cambodia, there was no commercial accounting and it basically record keeping type of a function under the central planning ideology of the state. However, with the imminent collapse of the former USSR in the later part of 1980s and the departure of Vietnam troops from Cambodia in 1989, it entered on market –oriented reforms.

In setting up the KICPAA in 2002, the intention of the state was that it would be the premier national institute in Cambodia committed to serving society by providing professionals capable of resource management with the highest level of integrity and competence. The state supported this mission by providing various facilities including the parallel development of university-based accounting education. However, these objectives have not been fully achieved by the KICPAA, shown by the fact that the KICPAA has not provided the number of qualified local accountants required by local institutions over the past years. This paper has illustrated this development through a historical analysis (aftermath of KR) of the profession and the role of the state in its development. Evidence in this paper, however, shows that it is not only public needs and expectations as well as professional competence that impact on the dynamics of the accounting profession. The type of government in existence, (i.e military or democratic), and personal relationships are also important variables in the professionalisation process. The interview data showed social, political and war related economic dynamics that have influenced the re-emergence of accounting profession in impoverished Cambodia. No study has ever been done on Cambodian accounting profession. This paper highlights the importance of re-emergence of accounting in Cambodia in terms of economic development and the constitutional changes that evolved after KR regime in Cambodia to the extent of gaining the membership to WTO.


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Interviews (1),(2),(3),(4) and (5) – with officials of KICPAA, accounting practitioners and academics in Cambodia – 2006. (Most of these interviews were conducted with KR survivors).

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Appendix 1 : Cambodia – Brief summary of Political, Legal, and Economic Systems.

Years Legal system Political system Political Power Economic system
Before 1953 French-based civil code and judiciary Under French protectorate Held by the French Colonial
1953-1970 (The Kingdom of Cambodia) French-based civil code and judiciary Constitutional Monarchy Held by Prince Norodom Sihanouk as prime minister Market and then nationalized
1970-1975 (The Khmer Republic) French-based civil code and judiciary Republic Held by Lon Nol Market, war economy
1975-1979 (Democratic Kampuchea) Legal system destroyed All previous systems abolished, extreme Maoist agro-communism Khmer Rouge Agrarian, centrally planned
1979-1989 (The people’s Republic of Kampuchea) Vietnamese communist model Communist party, central committee, and local committees Cambodian People’s Party (Vietnamese backed) Central planning
1989-1993 (The State of Cambodia) Greater economic rights Communist party, central committee, and local committees Cambodian People’s Party (Vietnamese backed) Central planning
1993-present (The Kingdom of Cambodia) French-based civil code combined with common law in certain sectors Constitutional Monarchy Shared between FUNCINPEC* and the Cambodian People’s Party Transition to market economy

* National United Front for an Independent, Neutral, Peaceful, and Cooperative Cambodia.

Source: ADB, 2001. Key Governance Issues in Cambodia, Lao PDR, Thailand, and Viet Nam, [Online], Available at: <URL:>, Accessed date: August 19, 2003.

[1] Voucher is a document prepared by the finance department to justify the payment and to keep a record of evidence.

[2] These are government owned firms or agencies. Their major function was to carry out government activities.

[3] This Law was passed in March , 2000 and established the Auditor-General and an Audit Department.

[i] The Association of South East Asian Nations (ASEAN) was formed in 1967; it is a regional political and economic grouping made up of Brunei Darussalam, Indonesia, Malaysia, the Philippines, Singapore and Thailand, which are the older members of ASEAN. Vietnam, Laos, Cambodia and Burma joined in the late 1990s. As a regional grouping, ASEAN has attracted much interest because of the remarkable economic growth of its member countries. Exports of the six older members of ASEAN alone have been surging by 7.7% or US$ 316.6 billion in 1998 to US$ 341.1 billion in 1999. Imports grew at the same rate, from US$ 259.5 billion in 1998 to US$ 279.5 billion in 1999; see ASEAN TODAY – Address by Rodolfo C. Severino.