Egypt's New Auditing Standards: What Changes and When They Apply

Executive summary

• The instrument: Prime Minister's Decree No. 3725 of 2025 (Official Gazette, Issue 41 bis (h), 15 October 2025; issued 13 October 2025), on the proposal of the Financial Regulatory Authority (FRA) chairman, after the Standing Committee for Egyptian Accounting and Auditing Standards approved it at its meeting of 19 May 2025.
• The decree adopts a complete new set of auditing, review, other assurance and related services standards, intended in its foreword's words "to align with the latest versions of the International Standards".
• The new set applies only to the audit or review of financial statements whose financial year begins on or after 1 January 2027, and the decree contains no provision permitting earlier application; the standards of Minister of Investment Decree No. 166 of 2008 remain in force for financial years beginning before it.
• The decree was amended by Prime Minister's Decree No. 1274 of 2026 (Official Gazette, Issue 19, 9 May 2026), which empowers the Minister of Investment and Foreign Trade, on the Standing Committee's proposal, to amend or replace the standards by ministerial decision, without touching the effective date.
• The headline changes: a separate standard on "key audit matters", required in audits of listed entities; the old modifications standard split into two; and a quality control standard that applies at firm level rather than to a single engagement.
• The direct addressees are statutory auditors and chartered accountancy firms; unlike the 2008 decree, Article 1 names no category of entity.

The instrument and who issued it

Prime Minister's Decree No. 3725 of 2025 was issued under the chairmanship of the Council of Ministers on 21 Rabi' al-Akhir 1447H, corresponding to 13 October 2025, signed by Prime Minister Dr Mostafa Madbouly, and published in the Official Gazette, Issue 41 bis (h), of 15 October 2025. Its preamble cites Companies Law 159 of 1981, Capital Market Law 95 of 1992, and Law 10 of 2009 on regulating oversight of non-banking financial markets and instruments.

It was amended by Prime Minister's Decree No. 1274 of 2026, issued on 22 April 2026 and published in the Official Gazette, Issue 19, of 9 May 2026, which adds a second paragraph to Article 1: "The Minister of Investment and Foreign Trade may, by a decree issued on the proposal of the Standing Committee formed by Prime Minister's Decree No. 2115 of 2023 referred to above, amend or replace the standards referred to in the preceding paragraph." The amendment leaves the effective date and the repeal untouched.

What the decree adopts

Article 1 provides that "the Egyptian Standards on Auditing, Review and Other Assurance Engagements accompanying this decree apply when auditing or reviewing financial statements... and the International Standards apply to any matter not addressed by a text in the Egyptian Standards." The accompanying set, per its own foreword — itself "an integral part" of the standards — covers audits and reviews of historical financial information, other assurance engagements, and related services (compilations and agreed-upon procedures).

Egyptian Quality Control Standard No. (1) applies at the level of the firm as a whole, not to a single engagement: by its own text it applies to "all offices of chartered accountants in respect of audit, review, and other assurance and related-service engagements," and the nature and extent of the policies and procedures each firm sets depend "on various factors such as the size of the firm and its operating characteristics." Quality control at the level of a single engagement is dealt with by Auditing Standard (220), as paragraph 2 of Standard (1) itself notes.

When it applies, and where Decree 166 of 2008 stands

Under Article 1, the new set applies only to the audit or review of financial statements whose financial year begins on or after 1 January 2027. Each standard has its own effective-date paragraph tied to that date, worded for the type of engagement: the auditing standards apply to financial statements for periods beginning on or after it, the assurance standard (3000) to engagements whose assurance report is dated on or after it, while Quality Control Standard (1) provides that "systems of quality control in compliance with this standard are required to be applied from 1 January 2027."

None of the decree's three articles, nor its amendment, permits early application of the new set. The new Auditing Standard (200) does, however, state in its application material (paragraph A56) that "unless otherwise stated in the auditing standard, the auditor is permitted to apply an auditing standard before the effective date specified in it" — a permission found in a standard not yet in force, not in the decree.

Article 2 provides that "Minister of Investment Decree No. 166 of 2008 referred to above is repealed, and the standards... accompanying it are repealed, with effect from the date the standards accompanying this decree become mandatory." The repeal is therefore not immediate: the 2008 standards — issued by Decree 166 of 2008, published in Al-Waqa'i' Al-Misriyya, Issue 173 supplement (a), 28 July 2008 — remain in force for every financial year beginning before 1 January 2027.

What changes most from the 2008 set

Under its paragraph 5, Standard (701) applies to audits of complete sets of general purpose financial statements of listed entities, and wherever the auditor decides to communicate key audit matters or is required to do so by law or regulation.

The new set also extends into a wider range of assurance work: controls at a service organisation (3402), greenhouse gas statements (3410), and the compilation of pro forma financial information included in a prospectus (3420), alongside two related-services standards: agreed-upon procedures (4400) and compilation of financial information (4410).

Who the decree addresses

The direct addressee is the statutory auditor auditing or reviewing financial statements, together with the chartered accountancy firms addressed by Quality Control Standard (1). Article 1 is general: the standards apply "when auditing or reviewing financial statements", without naming any category of entity, whereas Article 1 of Decree 166 of 2008 applied its standards "to the audit of annual financial statements or the review of quarterly financial statements of joint-stock companies" subject to Companies Law 159 of 1981 or Capital Market Law 95 of 1992. Which entities must be audited is set by the laws governing each entity, not by this decree.

What this requires

• Establish each entity's first financial year beginning on or after 1 January 2027: it is the first year audited or reviewed under the new set, whenever the auditor's report is signed.
• Do not rely on early application without an official position on it: the decree does not provide for it, and Article 2 keeps the 2008 standards in force for every financial year beginning before 2027.
• Audit firms should apply quality control systems under Standard (1) from 1 January 2027; it makes the firm's chief executive, or its managing board of partners, fully responsible for the system (paragraph 18).
• Listed entities and their auditors should prepare to discuss likely key audit matters before the first report under the new set, which adds this paragraph to their auditor's report.
• Follow any decision of the Minister of Investment and Foreign Trade amending or replacing the standards before the effective date.

The firm's Audit & Assurance Department tracks the new set's entry into force and updates the firm's audit methodology and internal quality control programme ahead of its application to financial years beginning on or after 1 January 2027.

Mahmoud Nassef — Chartered Accountant (Egyptian Register), Founder Partner

Member, Egyptian Society of Accountants & Auditors
Member, Egyptian Tax Society
Member, Egyptian Society for Public Finance and Taxation

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