This article is jointly written by AFA and LCPAA, in collaboration with MIA.
Strengthening the accounting profession is essential for economic growth in Laos. The Malaysian Institute of Accountants (MIA) and the Lao Chamber of Professional Accountants and Auditors (LCPAA) have embarked on a transformative mentoring initiative. Facilitated by the ASEAN Federation of Accountants (AFA) and supported by the International Federation of Accountants (IFAC), this collaboration marks a pivotal development in the journey of LCPAA towards achieving membership status in IFAC.
LCPAA, an Associate of IFAC since 2019, has been working diligently to align its practices with international standards. The partnership with MIA aims to address gaps in institutional capacity, improve governance and build the necessary capacities for LCPAA to comply with the IFAC Statements of Membership Obligations (SMOs).
Objectives, Challenges and Purpose of the Mentorship
Launched in 2023, the AFA Mentoring Project supports LCPAA in aligning its practices with international standards and global best practices for the accounting profession. The primary goal of this initiative is to assist LCPAA in meeting the requirements of the IFAC SMOs, a critical step toward moving from Associate to Members with its membership with IFAC. The SMOs cover areas critical to the profession, including quality assurance, education standards, auditing standards, ethical guidelines, public sector standards, investigation and disciplinary mechanisms, and financial reporting standards.
However, the initiative has also revealed several challenges. LCPAA faces a lack of experienced Quality Assurance (QA) staff, limited resources for curriculum development, and difficulties in implementing advanced standards like ISA and IFRS. These challenges underscore the importance of ongoing capacity-building activities, collaboration with international stakeholders, and the establishment of strong governance frameworks.
Through workshops, consultations, and capacity-building activities, the mentoring project identifies and addresses gaps in LCPAA’s adherence to these international standards. MIA, as the mentor, brings its extensive experience and resources to guide LCPAA in closing these gaps, particularly focusing on improving the latter’s infrastructure, governance, and technical capabilities.
Key Areas of Focus
The mentoring program covers several key areas, each aligned with one of the IFAC SMOs:
- SMO 1¹: LCPAA is in the process of developing a comprehensive quality assurance (QA) system. MIA had provided guidance on developing policies and procedures for QA, including recommendations on selecting firm review approaches (e.g., cycle or risk-based) and extending QA to non-audit firms. LCPAA is incorporating these recommendations and is integrating Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) reviews into its quality review processes to strengthen compliance with international auditing standards.
- SMO 2²: LCPAA is working on aligning its CPA qualification with the International Education Standards (IES) by adopting elements of the ACCA syllabus. With strategic guidance previously provided by MIA, LCPAA is now adapting the syllabus to include local content ensuring that aspiring accountants in Laos are well-versed in national regulations, while also meeting international benchmarks.
- SMO 3³: Regular training and workshops on International Standards on Auditing (ISAs) are planned to ensure that LCPAA members are equipped with the necessary skills and knowledge to conduct audits in line with global best practices. MIA has emphasized the importance of outreach to small and medium-sized practitioners (SMPs), who may have fewer resources than larger firms.
- SMO 4⁴: LCPAA, in collaboration with the Ministry of Finance, is reviewing the 2023 IESBA Code of Ethics for potential adoption. MIA is advising on communication strategies to ensure all stakeholders are well-informed of the changes, and that adequate training is provided to ensure smooth adoption and implementation.
- SMO 5⁵: The mentoring program supports the adoption of International Public Sector Accounting Standards (IPSAS) in Laos, beginning with cash basis accounting. MIA has shared its experiences with IPSAS adoption in Malaysia, helping LCPAA navigate the challenges of public sector financial management.
- SMO 6⁶: LCPAA is developing a framework for investigation and disciplinary processes to ensure accountability and uphold the integrity of the profession. MIA provides input based on its own disciplinary rules and practices, ensuring that LCPAA’s system is both effective and aligned with international norms.
- SMO 7⁷: LCPAA is in the process of developing an IFRS certificate program for its members. This will help ensure that financial reporting in Laos meets international standards, improving transparency and comparability for both local and foreign investors. MIA shared Malaysia’s journey on IFRS convergence and local implementation.
A Path Toward Global Integration
For LCPAA, the mentoring project with MIA represents more than just an opportunity to achieve IFAC membership. It is a chance to elevate the Lao accountancy profession to international standards, ensuring that local professionals are equipped with the knowledge, skills, and ethical frameworks needed to contribute meaningfully to both national and global economies.
The partnership reflects ASEAN’s commitment to regional collaboration, where member states leverage the expertise of established PAOs like MIA to accelerate progress for developing PAOs such as LCPAA. By fostering knowledge-sharing and capacity-building initiatives, ASEAN is creating a resilient and interconnected regional accounting ecosystem.
Conclusion
The AFA Mentoring Project between MIA and LCPAA is a testament to the power of strategic collaboration in professional development. As LCPAA works towards meeting IFAC’s membership obligations it is gaining valuable insights and support from its mentor, MIA. This partnership not only strengthens the accountancy profession in Laos but also contributes to the broader goal of enhancing the credibility and trustworthiness of the profession across the ASEAN region. Through sustained effort and commitment, LCPAA is well on its way to becoming a member of IFAC, a milestone that will bring lasting benefits to both the organisation and the accounting profession in Laos.
For its part, MIA is honored to contribute its expertise as the regulator and developer of the accountancy profession in Malaysia to support capacity building across ASEAN. “Our AFA mentoring efforts align seamlessly with MIA’s mission of fostering sustainable nation-building, complementing the Madani Government’s vision of fortifying the ASEAN economic bloc as Malaysia assumes the ASEAN Chairmanship in 2025,” said MIA President, Dato’ Seri Dr Mohamad Zabidi Ahmad.
¹ SMO 1: Quality Assurance
² SMO 2: International Education Standards by IFAC
³ SMO 3: International Standards and Other Pronouncements Issued by the IAASB
⁴ SMO 4: International Code of Ethics for Professional Accountants
⁵ SMO 5: International Public Sector Accounting Standards and Other Pronouncements Issued by the IPSASB
⁶ SMO 6: Investigation and Discipline
⁷ SMO 7: International Financial Reporting Standards and Other Pronouncements Issued by the IASB
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