The Accountancy Profession Act of the Lebanese Association of Certified Public Accountants Law No 364
Article 1: The present Act regulates the profession of Certified Public Accountants in Lebanon.
PART I – The Lebanese Association of Certified Public Accountants
Chapter I – General Provisions:
Article 2 – Definition:
A Certified Public Accountant (CPA) is any/all natural person performing in his name or on behalf of another legal entity: auditing and appraisal of all types of accounts and rendering an opinion as to the authenticity and accuracy of financial data.
Article 3 – No person shall act as CPA unless registered in the tables of the Association established in accordance with the present Act.
Article 4 – An association known as the “Association of Certified Public Accountants” having legal personality, shall be created with the aims of:
1- Protecting the profession, promoting it and preserving its image.
2- Promoting cooperation and solidarity among members, protecting their interests and defending their legitimate rights.
3- Undertaking scientific research projects and improving accounting principles and techniques.
4- Formulating and proposing accounting and auditing principles as well as professional conduct rules in accordance with international standards, including those set by the Arab and international unions that the Association belongs to.
5- Imposing sanctions on members who do not comply with its statutes or the ethics of the profession.
6- Working on resolving conflicts and disputes that arise among members.
Article 5 - The head office of the Association will be located in Beirut. The Association may set up offices in the various Lebanese Muhafazats.
Chapter II – The organizational structure of the Association
Article 6 – The Association is composed of a general assembly and a Council exercising their powers in accordance with the provisions of the present Act.
Clause 1 – The General Assembly
Article 7 – The general assembly is composed of all Certified Public Accountants registered in the General Table of the Association.
1- Membership Conditions:
Article 8 – No one is entitled to be registered in the General Table of the Association or practice the profession in Lebanon or purport to be a CPA unless he meets the following requirements:
1- Being a Lebanese citizen for more than ten years.
2- Being over 21 years of age.
3- Enjoying all his civil rights and having never been convicted of adisgraceful crime or offence, as defined in law-decree No.59/112, article 4, paragraph (E).
4- Holding a degree in Business Administration or its equivalent or a “TS” degree in accounting, recognized by the ministry of professional and technical education. These degrees must be accompanied by a minimum of five years of experience.
5- Passing the examination set by the examination committee and approved by the Council. As for holders of CPA (Certified Public Accountant) or CA (Chartered Accountant) diplomas or their French equivalent, i.e., “Diplome d’Expertise Comptable”, and above, from international institutes and associations, they shall only sit for exams related to Lebanese laws as set by the Association Council.
The board of examiners consists of five members:
- A judge chosen by the minister of Justice as chairman.
- An expert appointed by the Finance minister
- A university professor teaching accounting and auditing appointed by the president of the Lebanese University.
- Two members designated by the Association Council.
6- Having settled his membership fees and the yearly subscription set fort in the Association’s Rules of Procedure.
7- Meeting experience requirements as stipulated in the present Act and attaching to the membership application a certificate granted by the office where he trained, proving that he is entitled to be registered in the CPAs’ Table.
8- Having never been dismissed from civil service as a result of disgraceful or shameful offences.
9- Devoting himself entirely to the profession and practicing it in his own office or that of an associate or as employee in the firm of another CPA.
Article 9 – Candidates applying for membership are first listed in the Trainee Register set by the Council in this respect. Candidates are to submit, for that purpose, in addition to all required documents proving they meet the conditions stipulated in aforementioned article 8, a written request including the name of the CPA at the office of which they trained as well as a certificate attesting to his consent. The Council shall pronounce on the filed application within two months from the date of submission, failing which, the application will be accepted without consultation.
If the filed application is turned down, the candidate can appeal against the decision before the court of appeals within the thirty days following rejection. As soon as the case is submitted before the competent court, the Association Council shall, upon request, pass on the claimant’s file to the said court within two weeks at the most, along with any observations he deems fit to make. The Council is entitled to express an opinion on the matter before the court of appeal at Beirut, through a representative appointed by the President of the Association.
Article 10 – A trainee may request to be registered in the Table of Certified Public Accountants once having completed a three-year training period as auditor at the office of a registered CPA.
The Council may, if deemed necessary, extend the mentioned training period by two additional years. It is also entitled to exempt the holders of the higher technical degrees determined by the Council, from the aforementioned training period, provided their degrees are at least equivalent to those of “CPA” or “CA” or the French degree, known as “Diplome d’Expertise Comptable”.
If the Council doesn’t render a decision regarding the aforementioned registration request within two months from the date of submission, the request will be deemed accepted.
2- Loss of membership:
Article 11 – A CPA shall be deprived of his membership and prohibited from practicing the profession in the following cases:
1- When failing to comply with any of the requirements set forth in aforementioned Article 8 of the present Act.
2- When the disciplinary board renders an irrevocable decision prohibiting him from practicing the profession.
3- Rights and Obligations:
Article 12 – A Certified Public Accountant shall have as a permanent elected domicile his own office or the firm of another associate CPA. He has the right of electing more than one domicile provided he informs the Association about them. As for trainees, their elected domicile shall be that of the office or firm where they are trained. Throughout their training period, trainees shall be under the supervision of a CPA and will perform assignments on his behalf.
Article 13 – A trainee should perform training in auditing, during which he shall work on a full-time basis as provided for in the Rules of Procedure.
Article 14 – A CPA shall:
1- Be sworn to professional confidentiality and banking secrecy.
2- Practice the profession in person without mandating a third party through proxy. He may, however, hire assistants at his responsibility.
3- Sign at his responsibility the works performed by individuals and trainees from within his office.
Article 15 – A Certified Public Accountant shall not:
A- Be in breach of the rules of professional conduct set by the Association.
B- Combine the accountancy profession with the following positions and professions:
1- All kinds of civil service posts, including municipalities and public institutions. He can, however, get into parliament, become a town council member, carry out non-remunerated electoral functions or teach at the various public and private institutes and universities provided not to perform auditing services.
2- Being an employee at private-owned firms and companies.
3- Other professions or careers in sales and marketing.
4- Being a board member or a shareholder in a client firm.
5- Being a member of another association, with the exception of scientific associations and syndicates that are not in contradiction with his profession as CPA.
6- Having, personally or via the firm he represents, shared interests with third parties who speculate on the stock exchange to influence the quotation of a company’s securities.
7- Carry out economic feasibility studies relating to the projects undertaken by the client firms.
C- He shall not practice the audit profession with any firm or company whatsoever, in the following cases:
- If he has family ties - up to the 3rd degree - with one of its Board members or its general manager or any of its major shareholders owning more than 25% of the firm’s capital.
- If he has any loan to or from the aforementioned client firm or any of its sister companies or if he deals with it based on conditions that differ from those prevailing ordinarily, except in cases where he is at the same time a debtor and a creditor or where work conditions are normal and of the usual type.
- If he is a former employee of the said firm or any of its subsidiairies, unless more than four years have passed since he last worked there.
Article 16 – In addition to his main occupation, a CPA is entitled to perform the following:
1- Analyze the conditions and functioning of projects and firms from the economic, administrative as well as financial points of view and carry out relevant feasibility studies.
2- Undertake scientific, administrative and financial studies, provide consultancy services and give his opinion at the request of any public or private body.
3- Draw up statistics and collect economic data, on behalf of private and professional institutions.
4- Arbitrate in matters falling within the framework and the limits of the profession.
In this respect, CPAs may jointly found professional non-trading partnerships or establish companies in collaboration with financial, management and economic experts. Contracts are to be put down in writing and mentioned in the special register (stipulated in Article 20 of the present Act) set for companies that practice the profession.
Article 17 – Any person illegally purporting to be a Certified Public Accountant or illegally practicing the accountancy profession shall be liable to the sanctions stipulated in Article 393 of the penal code and to prosecution whereby the Association could claim damages.
4- Membership Conditions for Arab and Foreign CPAs:
Article 18 – Non-Lebanese can be registered in the General Table of the Association to practice as « Certified Public Accountants » in Lebanon provided they meet, in addition to the conditions required from Lebanese CPAs, the following prerequisites:
1- To be from countries where laws and regulations entitle the Lebanese citizens who meet the local requirements to practice the accountancy profession, in accordance with the reciprocity principle.
2- To collaborate with a Lebanese Certified Public Accountant
3- To have the required qualifications and skills entitling him to practice the accountancy profession in his country provided these skills are at least equal to those required from Lebanese CPAs.
4- To meet all required legal and regulatory conditions related to the residency and work of foreigners in Lebanon.
Article 19 – Foreign experts shall be registered in the Table for foreign experts, after submitting a written membership request along with all documentary evidence proving that he meets the legal conditions required for the practice of the profession in Lebanon. Once registered, the foreign expert becomes an LACPA member having the right to vote at the General Assembly, on condition of reciprocity. He is not, however, entitled to stand for Council elections.
5 – LACPA Tables and Accounting Firm Registration:
Article 20 – The Council shall keep:
1- A table known as the « General Table of CPAs » including the names of all Certified Public Accountants that are members of LACPA.
2- A table with the names of foreign CPAs.
3- A register for trainees.
4- A register for the companies that practice the profession.
Registration shall take place and the register - referred to in aforementioned paragraph 4 - shall be kept in accordance with the rules and regulations set forth in the Rules of Procedure of the Association. The register shall be put at the disposal of anyone wishing to obtain information on any registered company practicing the profession or to get a certified copy of a the said registration on payment of the fees provided for in the aforementioned Rules of Procedure. The issued Registration Certificates shall be signed by the president and the secretary.
6 – General Assembly Meetings:
Article 21 – The general assembly holds its annual ordinary meeting during the second half of the month of May of each year. Extraordinary general meetings can be called when deemed necessary by the Council or at the request of one third of the Association’s members.
Article 22 – The meetings of the general assembly are chaired by the President of the Association. When absent or unable to carry out his duties, for any reason whatsoever, the Vice-president shall stand in for him. Should the latter be absent or unable to perform his duties, the Association’s Secretary will take over, followed successively by the oldest member.
Article 23 – The meetings of the general assembly are not deemed legally valid unless more than half of the members having paid their subscription fees attend, failing which, the general assembly will be called for a second meeting to be held less than 20 days after the first. The second meeting will be deemed legally valid irrespective of the number of attending members.
Article 24 – The decisions of the general assembly are taken by a majority vote. In case of a tie, the president or his substitute shall have the casting vote.
Article 25 – Among the competences of the General Assembly:
1- Discussing the Council’s annual report.
2- Debating the accounts of the previous year as well as audit reports and appointing the auditors in charge of the next financial year.
3- Approving the budget set for a financial year starting on January 1st and ending on December 31st.
4- Electing the Association’s President and Council as well as the two disciplinary board members.
5- Approving the Rules of Procedure proposed by the Council.
6- Setting the membership fees and the yearly subscription fees.
7- Examining the remaining agenda items.
Clause 2 – The Association Council
Article 26 – A Council consisting of a President and nine members elected by the general assembly during its regular session is responsible for all issues related to the Association. A secretary general assists the Council in running the Association. He is appointed on a full-time basis in accordance with the Association’s administrative structure and has such powers as the Association Council may prescribe
Article 27 – Standing for election as President or Council member can take place once a decision is issued to call the general assembly to an election meeting. The said convocation should be published in three local newspapers, an economic one as well as the official gazette and should be posted at the entrance of LACPA headquarters, at least twenty days before the meeting.
Candidacies are to be submitted to the Association Council. The final date for submission shall be three days prior to the elections.
Members that no longer meet all membership requirements or have been sentenced for a disciplinary sanction exceeding “reprimand” are not allowed to stand for election.
Article 28 – Candidates shall be elected by secret ballot and a committee made up of three non-candidate members chosen by the general assembly before the beginning of the elections shall supervise the election process.
The votes shall be counted and the results announced during the meeting. The candidate with the majority of votes shall win the elections. In case of a tie, the older person shall be elected.
The Beirut Civil Court of Appeal shall look into any dispute related to the election process and give its ruling.
Article 29 – The President and the Association members are elected for two years.
Article 30 – The President may be re-elected for a second two-year mandate only two years after the expiration of his previous mandate. As for members, they can, at the expiry of their mandate, be re-elected once; a third mandate being tolerated only two years after the expiration of their previous mandate.
Article 31 – A third of the members of the Association Council is eliminated by a draw at the end of the first year whereas the second third of members is eliminated at the end of the second year with the exception of the President. Other members shall be elected to replace them. This will be applied until the election process returns to normal.
Article 32 – The Association Council shall meet within the week following the announcement of the results to elect, from among its members, the Vice-president, the Secretary and the Treasurer of the Association.
Article 33 – Should a Council member no longer meet all membership requirements or be sentenced for a disciplinary sanction exceeding that of “Reprimand”, he shall be discharged without any consultation from the Association Council.
Should a member fail to attend three consecutive meetings without due justification, he shall be deemed resigning. He shall be notified in writing and his absence is mentioned in the minutes. If he fails to attend once more without a valid excuse, he will be considered as having resigned and his resignation will be written down in the minutes. The member will be notified in writing by registered mail.
Article 34 - Should the position of the President or any other member fall vacant before the end of the mandate, it shall be filled by the candidate who had had the second highest number of votes in the previous elections. If the president or the member who used to hold the now vacant post had been elected unanimously, new elections will be held to replace him.
If four or more member positions fall vacant before the first of December of the year, the general assembly will be convened to elect new members for the vacant positions.
Article 35 – Should six positions fall vacant, the Association Council shall be deemed dissolved. New elections will take place within two months from the date of dissolution. Such being the case, the Council shall remain in place until the new Association Council is elected.
Article 36 – The Association Council is responsible for all matters likely to achieve the Association’s objectives. He shall make sure that the laws and regulations related to the profession, protecting its dignity and preserving its interest are respected. It is also responsible for:
1- Formulating the Association’s Rules of Procedure and any relevant amendments.
2- Implementing the decisions of the general assembly.
3- Deciding on membership applications.
4- Managing the financial matters of the Association and collecting membership and yearly subscription fees.
5- Acting as a mediator to resolve disputes among members.
6- Contacting the public authorities and other bodies, individuals or institutions to follow up the demands of the Association as to any issue related to its interests.
7- Performing the Association’s administrative works and tasks that do not fall within the general assembly’s scope of competence.
8- Convening the general assembly.
9- Discharging the members who no longer meet all of the membership requirements.
10- Formulating and suggesting accounting and auditing principles in accordance with international standards, including those set by the Arab and international unions that the Association belongs to and formulating the rules of professional conduct which are to be approved by the Finance Minister.
11- Taking legal proceedings.
Article 37 – The Association Council shall formulate the rules of procedure during a period not exceeding three months after assuming its functions. He shall then submit them to the general assembly for approval.
Article 38 – The President shall convene the Association Council at least once a month by a written invitation sent along with the meeting’s agenda.
In order to have quorum, at least six members are to be present including the President or the Vice-president. Should both of them be absent, the oldest member shall preside the meeting.
If the President does not call the Council, the meeting may be held at the request of three members at least.
Article 39 – The Association Council takes its decisions by a majority of votes. In case of a tie, the President has the casting vote. Any interested party and the district attorney in the court of appeal at Beirut may appeal against the decisions of the Association Council during a one-month-period from the date of notification. The State Council will look into the lodged appeal.
Article 40 – The prerogatives of the President, the Vice-President, the Secretary and the Treasurer of the Association are the following:
The President: The President represents the Association before the judicial and administrative authorities. He heads the meetings of the Council, executes its decisions, signs the contracts and documents in implementation of the Council’s decisions as well as all official and administrative correspondences. He monitors the works of the various committees, sees to it that all General Assembly and Association Council decisions be implemented and signs the expenditures along with the Treasurer.
The Vice-President: He replaces the President in all works and competences during his absence.
The Secretary: The secretary takes the minutes of the meetings and signs them along with the President. He organizes and files the registers and documents of the Association and the members’ dossiers. He also notifies the parties concerned about the decisions of the Association Council and the general assembly.
The Treasurer: He is the trustee of the Association’s funds, collects its revenues and signs all expenditures with the President.
Article 41 – The duties and functions of the President, the Vice-President, the Secretary and the Treasurer shall be detailed in the Association’s Rules of Procedure.
Clause 3 – The Committees of the Association:
Article 42 – The Association’s Council is entitled to form, from among its own members and those of the Association, permanent and provisional committees that perform works and undertake studies related to the tasks of the Association. The number of these committees, the number of their members and their respective tasks shall be defined in the Association’s Rules of Procedure.
Chapter III – Discipline:
Article 43 – Any LACPA member failing in his professional duties or guilty of an act discreditable to the profession tarnishing thereby its name and image shall be subject to one of the following disciplinary sanctions:
3- Suspension of practice for a period up to one year.
Article 44 – The disciplinary board is composed of the Association’s President or his substitute and four members, two of whom are elected by the General Assembly and the remaining two by the Council from among its members for a one-year mandate.
In addition to constituent members, two substitute members are elected by the General Assembly to stand in, when need be, for any constituent member unable to attend a meeting.
The members of the disciplinary board can be relieved of their duties for the reasons set forth in the code of civil procedure.
Article 45 – The Association Council shall bring the offender before the disciplinary board after an investigation into the offences he is accused of. The investigation is conducted by the Association’s President in collaboration with one of the members of the disciplinary board..
The Association Council shall bring the offender before the disciplinary board at the request of:
1- The public prosecution.
2- A plaintiff who can be a member or a non-member of the Association
3- The concerned person himself, in case of self-indictment.
Article 46 – When brought before the disciplinary board, the member is entitled to have recourse to a lawyer or a CPA or both to defend him.
Article 47 – The hearing is confidential. When examining the case, the disciplinary board is entitled, when deemed appropriate, to take into consideration the good faith of the member and resort to all available legal means to prove it.
Article 48 – The offender shall receive, at least two weeks in advance, a notice of the necessity to appear before the disciplinary board along with a summary of the grievances set out against him. He is entitled to look into his file and make photocopies of the documents it includes to prepare his defence.
Article 49 – The meetings of the disciplinary board are not deemed legal unless at least two-thirds of its members attend.
Article 50 – The disciplinary board shall render a decision within the 15 days following the receipt of the file. This period can be extended by 15 additional days pursuant to a justified decision taken to this effect by the Board or by one month if the disciplinary board’s delay in pronouncing on the matter is due to the investigated party itself, provided that deferment reasons be well-founded and justified.
Article 51 – The rulings given by the disciplinary board are the result of majority-based decisions. The offender is to state the reasons behind his offence.
Article 52 – Disciplinary rulings can be given in absentia. Any CPA against whom a disciplinary action has been taken by decision of the disciplinary board may, within fifteen days from the date of notification, appeal to the said board for reconsideration. The CPA may also appeal against the decision before the Council of State within a period of thirty days as of the date of notification.
The disciplinary board shall examine the appeal and pronounce on it within the following thirty days.
The decisions of the disciplinary board are to be notified by registered mail with acknowledgment of receipt.
The board’s decisions can be contested by lodging an appeal to the Council of State, which will give its ruling after a closed hearing during which, the appellant may be represented by a lawyer.
Any member who had his name crossed off the Association’s Table as a result of a disciplinary action taken against him may ask for reinstatement 5 years after the verdict. If the Association Council deems that the time which has elapsed makes up for the caused damages, it shall accept the member’s reinstatement request. Should it be otherwise, the request will be refused, in which case, it may me renewed one year later, a maximum of three reinstatement requests being tolerated.
Article 53 – The disciplinary board’s decisions shall remain secret. The members who have been convicted of disciplinary offences shall have their names listed, in alphabetical order, in a special register kept by the Association, along with the types of these offences. Only the district attorney in the court of appeal at Beirut, the President, the Vice-president and the Secretary of the Association as well as the members of the disciplinary board are entitled to have access to the mentioned register.
Should the member be convicted of tarnishing the name and dignity of the profession, or be liable twice for sanctions more severe than « reprimand », the Association Council is entitled, on condition of the approval of the majority of members to post the decision at the Association’s headquarters for one month.
Article 54 – Disciplinary proceedings do not prevent penal charges
PART II - Miscellaneous
Article 55 – A pension fund for CPAs may be established by virtue of a decree issued by the Council of Ministers at the instigation of both the finance minister and the minister of economy and trade. The rules and regulations governing the management of the fund as well as all relevant membership conditions, benefits and financing means shall be defined in the mentioned decree. The treasury shall not be responsible, in any way, for the charges and expenses resulting from the creation of the fund.
Article 56 – Only the CPAs registered in the General Table of the Association shall be entitled to be listed in the CPA table stipulated in law-decree No. 54 dated March 17, 1953. Any entry that does not meet this condition is deemed null.
Article 57 – The auditors that are appointed in accordance with applicable laws, must be chosen among the audit firms listed in the relevant registry of the Association or from among the CPAs registered in the Association’s General Table. As for cases where a taxpayer must resort to an auditing firm or appoint an auditor to attest their yearly accounts and balance sheets, they shall be determined in a decree issued by the Council of Ministers at the instigation of both the finance minister and the minister of economy and trade.
Article 58 – Any natural or legal person wishing to appoint an auditor, must choose him from among the audit firms listed in the relevant registry of the Association or from among the CPAs registered in the Association’s General Table
Article 59 – The various accounts, balance sheets and financial reports are not deemed legally attested unless they are attested by a Certified Public Accountant. The latter shall attest them in his name or that of the firm he works at.
PART III – Transitional Provisions
Article 60 – During a transition period of one year from the creation of the constituent committee stipulated in article 64 of the present Act, any Lebanese person meeting the requirements set forth in paragraphs 1, 2 and 3 of Article 8 of the present Act and practicing the accountancy profession when this Act comes into force, is entitled to become a member of the Association and hold the title of « Certified Public Accountant » provided he fulfills one of the following conditions:
1- Having been appointed as Certified Public Accountant to the Lebanese courts for a minimum period of three years and having practiced the accountancy profession prior to the enforcement of the present Act.
2- Having practiced the accountancy profession, at his own office or at a firm where he is one of the partners, for a minimum period of four consecutive years before the enforcement of the present Act.
3- Having practiced the accountancy profession at the auditing firm of another CPA for a minimum period of five years, two of which at least as « senior auditor » and above, knowing that the decision as to the seriousness of the submitted membership request lies with the constituent committee.
4- If the applicant does not meet one of the above-mentioned conditions, he shall not be entitled to become a member of the Association unless he passes the examination set forth in paragraph 5 of Article 8 of the present Act. Should practice years be less than those required in above-mentioned paragraphs 1, 2 and 3, they shall be considered as a training period and be deducted from the total number of training years required by law.
Article 61 – Any person wishing to benefit from the provisions set forth in afore-mentioned article 60, must submit to the Association, within the year following the formation of the constituent committee stipulated in article 64 of the present Act, a membership application, along with all documentary evidence proving that he meets the required skills.
Once registered in the General Table of the Association, the members shall, within the six months following their registration date, practice the profession at their own offices and firms or those they share with other colleagues in their capacity as partners or at other accounting and audit firms, failing which, they shall be crossed off the General Table or registered in the Table of non-practicing CPAs.
Article 62 – Any non-Lebanese person practicing the profession in Lebanon shall not benefit from the provisions set forth in afore-mentioned Article 60, unless he/she meets the requirements stipulated in Article 18 of the present Act.
Article 63 – The Lebanese and foreign accounting firms practicing the profession in Lebanon before the enforcement of the present Act are to regularize their situation within the year following the enforcement of this Act. To this effect, they shall:
- Make sure that Lebanese and foreign partners meet the conditions hereby required for the practice of the accountancy profession.
- Make sure to be registered in the Association’s special register set for accountancy firms and provided for in Article 20 of the present Act.
Article 64 – As of the enforcement of this Act, the minister of Finance and the minister of Economy and Trade shall form a constituent committee composed of ten members chosen from among accountants and auditors practicing the profession or from among the holders of auditing and accounting degrees and diplomas. The constituent committee shall have the powers of the Association Council, as defined in the present Act, for a period of one year, during which, the committee shall take all necessary measures to elect the first Association Council.
As soon as the constituent committee is formed, the Lebanese Association of Certified Public Accountants founded by virtue of decision No.1/518, issued by the minister of Employment and Social Affairs, on November 17, 1964 as well as all previously established accounting and auditing professional associations shall be dissolved, without the need for a new law to be enacted in this regard.
Article 65 – Any law incompatible with or contrary to the provisions of the present Act shall be abrogated.
Article 66 – The present Act shall come into force as of its publication in the official gazette.