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Auditing and Accounting Requirments

Auditing and Accounting Requirments:


Accounting and auditing requirements are incorporated in the Code of Commerce and in the Charts of Accountants. The company’s financial year is normally 12 months but may be extended or shortened as is often the case during the first financial year. The closing date is set in the company's Articles of Association. Businesses can keep their records in Arabic, French or English. However, reporting must be done in Arabic, English and French and financial statements must be in Lebanese pounds. Although the holding and offshore companies can keep the records in a foreign currency but they should submit their report in the Lebanese pounds.

Most accounting matters were codified by the General Accounting Plan published through decree No. 4665 dated 26 December 1981.


The following accounting records should be kept:

  1. "General Journal" where daily entries are to be recorded. The recording could be done on a monthly aggregate basis provided that permission is obtained from the Finance Department concerned and that all supporting documents and vouchers relating to the monthly transactions are kept for audit purposes.
  2. "General Ledger".
  3. "Commitments Book" in which the obligations received, given or exchanged, are to be recorded.
  4. "Inventory Book" where inventory items, balance sheet and profit and loss captions are to be recorded.
  5. Shares listing book (for SAL companies) The books mentioned in (a), (c) and (d) above are statutory books. All pages of these books should bear the seal of the Commercial Court or a Notary Public as the case may be.


Except where excluded by law, the principle of prudence should be observed.

In accordance with Decree No. 1/6258, dated 21 August 1996, International Accounting Standards were applying to companies quoted on the stock exchange, then to banks and insurance companies and finally by large companies followed by all others.


Accounting records should be kept on the historical cost convention basis, except in the case of revaluation in accordance with the local requirements.

The accounting records should be kept on the accrual basis. Revenue and expenditure relating to a specific financial year should be recognized in that year.

Consistency in accounting principles, presentations and classifications should be observed. Any changes thereto should be for a better presentation of the financial position and should be noted in the financial statements along with the related effect on the financial and tax positions. back to top


Financial statements should be disclosed on an on-going concern basis. If another basis has been used, the methods and the effect thereof on the financial position should be clarified in the notes to the financial statements.

The financial statements should reflect the comparative figures of the preceding year.

Accounting records should be kept on the double entry book keeping system. They should be supported by documentary evidence, be recorded in chronological order and be drawn up in a manner to allow quick extraction of financial information required by General Accounting Principles. back to top


Audited financial statements together with the auditor's report, the directors or managers' report, and the directors' special reports commenting on existing or planned agreements between the company and its directors, must be submitted annually to the annual general assembly of the shareholders or partners.

The audited balance sheet, names of the members of the board of directors, managers, statutory auditors and court auditor are required by law to be published in the Official Gazette, a business publication and a daily local newspaper, within two months after the date of the annual general assembly.

Tax return declaration must be submitted annually to the Income Tax Department within five months after the end of the fiscal year. (Three months in the case of sole proprietors or partnerships).

Audited financial statements must also be submitted within eight months after the end of the fiscal year (six months in case of partnerships).

Banks are closely monitored by the Central Bank of Lebanon and the Banking Control Commission; as such, both institutions must receive a copy of all audited financial statements, including the short form report (opinion), a special report concerning advances to directors and major shareholders and a special report commenting on existing or planned agreements between the bank and its directors. All of the aforementioned reports are submitted annually by the auditors of the bank to the shareholders.

The Central Bank of Lebanon also receives annually from the auditors a copy of the detailed audit report (long form report), a letter regarding the various observations and recommendations in respect of the audit (management letter).

The financial statements should comprise the following:

  1. Balance Sheet
  2. Profit and Loss account (statements of income and retained earnings)
  3. Statement of changes in financial position d. Notes to the financial statements.  back to top


Law No. 364 of 1 August 1994 governs the accounting profession in Lebanon. The Syndicate of Licensed Accountants (Lebanese Association of Certified Public Accountants (LACPA) is responsible for registering accountants and issuing practicing certificates.

To qualify as a Certified Public Accountant, a person must hold a practicing Certificate awarded by the above mentioned Syndicate, In order to audit & issue the auditors report for the companies that are registered in Lebanon.

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Last Update: 03 April 2012

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