Cyprus Accounting Framework

The Cyprus Company Law requires all companies to use International Financial Reporting Standards (IFRS) in the preparation of their financial statements.

Cyprus as a member of the European Union has adopted the EU IAS Regulation which requires the members to apply the IFRS Standards as adopted by EU for the consolidated financial statements of EU companies whose securities are traded in regulated securities market, with effect from 2005.

The application of IFRS and International Accounting Standards (IAS) was required in Cyprus before joining the EU. It was required by the Institute of Certified Public Accountants of Cyprus (ICPAC) since 1981 and later by the regulations of the Cyprus Stock Exchange (CSE) and the subsequent legislation of CSE in 2003.

The application of the EU Directives and Regulations has been transported into national law. The Cyprus Companies Law requires entities to prepare financial statements in accordance with the EU-endorsed IFRS as per the Regulation.

The new 2016 amendments to The Company Law (Cap 113) require mandatory statutory audits for all companies irrespective of the size of the company.

All Cyprus companies are required to maintain accounting books and records which give a true and fair view of the company’s financial position and of its profit or loss and prepare annually financial statements in accordance with IFRS as adopted by the European Union and the requirements of the Cyprus Companies Law.

Cyprus companies are also required to have their financial statements, prepared in accordance with IFRS, audited by a qualified auditor.

The Institute of Certified Public Accountants of Cyprus (ICPAC) is the regulatory body of professional accountants in Cyprus. ICPAC’s main objectives include the provision of an organisational framework for all professional accountants, the support and the promotion of the activities and interests of the accountancy profession, the safeguarding of the reputation of the profession and adherence to the Code of Ethics by all its members, as well as the continuous professional development and updating of the members on issues relevant to accounting, auditing and other business matters.

ICPAC is a competent authority for the licensing and monitoring of its members under the Law Regulating Companies Providing Administrative Services and Related Matters of 2012. In addition, ICPAC is the competent authority responsible to monitor its members pursuant to the Prevention and Suppression of Money Laundering Activities Law. Furthermore, ICPAC is a competent authority under the Insolvency Practitioner Law responsible for the licensing, regulation and monitoring of its members providing Insolvency Services.