Despite Lebanon's overallcommendable progress in implementing internationalstandards, there are still compliance gaps of varyingdegrees in both accounting and auditing practices. There isless gap in listed companies and banks; a greater gapappears in other companies with determinants based on sizeand who is performing the audit. These gaps stem primarilyfrom shortcomings in professional education and training inLebanon. When the Lebanese Association for Certified PublicAccountants was established in 1994, all applicants, whosought license to practice, were certified withoutexamination. More importantly, no enforcement mechanismexists to ensure International Accounting Standards (IAS)compliance, except in the banking sector. Although manyaudit firms make effort to perform audits in accordance withInternational Standards on Auditing (ISA), quality of auditsvaries significantly. The Order on Auditing, issued by theMinister of Finance, does not cover regulation orsupervision of the auditing profession and does not mentionenforcement regulations or the monitoring of ISA compliance.This report provides recommendations for an action plan,with particular focus on developing practical implementationguidelines; strengthening enforcement mechanisms; upgradingaccounting curricula and increasing training arrangementsand opportunities for practicing auditors; and establishinga system to perform quality control reviews of audit practices.
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