Colegio de Contadores de Chile

There is no legal requirement to establish a quality assurance (QA) review system for all audits of financial statements in Chile. While Law No. 18.045 sets the legal foundation for establishing QA for auditors providing services to listed companies, no mandatory QA review system has been implemented. The Financial Market Commission (CMF) requires audit firms in the Registry of External Auditors (RAE) to establish quality control mechanisms. However, an inspection is only carried out when a suspicion or risk is identified.

The CCCH states that it regularly promotes the need to adopt a mandatory QA system at the jurisdiction level to the CMF through the Chairman of its Auditing Standards Committee. Furthermore, the CCCH plans to support members’ understanding of QA reviews when the regulators adopt a QA system. The CCCH has communicated with the CMF regarding its plans to modify NAGAs by changing their basis from AICPA to IAASB standards effective 2025 and plans to support the implementation of the IAASB quality management standards.

The CCCH has adopted and translated audit and quality control standards as issued by the Audit Standards Board of the American Institute of Certified Public Accountants (AICPA) for application by its members, which, in turn, are based on ISA and ISQC 1. The CCCH has reported plans to translate the proposed AICPA quality management standards, which are aligned with the IAASB, as reported by AICPA, once the standards are approved. To support the implementation of the requirements, the CCCH reports that it offers training and courses on effective quality control and supports audit firms with the implementation of the standards.

As the CMF is the authority responsible for developing and operating a QA review system, and the CMF carries out reviews when a suspicion or risk is identified, the CCCH should continue using its best efforts to collaborate with CMF and relevant stakeholders to achieve alignment with the SMO 1 benchmark.

Current Status: Review & Improve

Universities, the National Accreditation Commission, the Ministry of Education, and the Superintendency of Higher Education have a role in implementing initial professional development (IPD) requirements for all professional fields, including professional accountants. CCCH reports that the universities providing accounting education programs have incorporated the 2019 IES requirements. However, according to the CCCH, there are no minimum requirements to practice accountancy in Chile.

To implement some educational requirements, the CCCH requires individuals to hold a bachelor’s degree in accounting to be considered for its membership.

The CCCH indicates that its primary activities in this area are centered on promoting the need to implement IES requirements to regulators. In line with this, the CCCH has established a Higher Education Committee (CES), which consists of members from several academics from Chilean universities. The CES has circulated the IES to and held meetings with directors of the main universities. Through these meetings, the CES has received notice that several universities have incorporated the IES into their study programs.

The IES are also part of a "Guide for the creation or modification of study programs in accounting,” prepared by the CES, to be used by educational institutions — both technical institutes and universities. In addition, the CES has also developed a mandatory professional certification program for CCH members, which includes a continuing professional development (CPD) requirement. However, this program has not yet been implemented.

Lastly, the CCCH established mechanisms, such as its magazine, to distribute information to members regarding recent developments in educational matters.

The CCCH is encouraged to continue collaborating with regulators and universities, specifically the Financial Market Commission (CMF), which has additional registration requirements for external auditors, to promote and support adopting and implementing the IES requirements. CCCH can refer to examples in the region for best practices and learnings, which include: a voluntary certification aligned with the IES, adopting mandatory CPD requirements for its members, and a university accreditation scheme.

The Accountancy Education E-Tool and the IES Checklist developed by IFAC may be helpful in identifying implementation support materials and the CCCH’s Higher Education Committee should review these available tools as part of its work plan.

Current Status: Execute

The Auditing Standards Committee (CAN) of the CCCH adopts the Chilean Generally Accepted Auditing Standards (NAGAs). As reported by the CCCH, the NAGA are the translation of the standards issued by the Audit Standards Board of the American Institute of Certified Public Accountants (AICPA). The standards issued by AICPA are based on ISA. The Financial Market Commission (CMF) requires the application of standards issued by the CCCH. CCCH reports that the CNA maintains communications with the CMF about firms' auditing standards compliance.

In September 2023, the Auditing Standards Committee of the CCCH formally announced its recommendation to modify NAGAs. Effective 2025, the NAGAs will be based directly on the IAASB issued standards rather than the AICPA issued standards. The CCCH has been translating the AICPA’s audit standards since 1972 and, therefore, has an established mechanism in place to monitor, translate, and issue new and revised standards in a timely manner. The institute reports that it will continue translating and issuing the AICPA’s audit standards due to the large number of U.S. companies operating in Chile and the large number of Chilean companies participating in the U.S. stock market.

To facilitate members’ implementation of the NAGA, the CCCH offers continuing professional development programming and disseminates information on updates and revisions of NAGA. The CNA also reports plans to disseminate information on ISA and include ISA as part of CCCH’s training.

The CCCH's decision to adopt ISA and other IAASB pronouncements is significant and demonstrates its commitment to global best practice in standard-setting to fulfill its SMO 3 obligations. The CCCH is encouraged to raise awareness of ISA by communicating with the regulators on IAASB initiatives and advocating for the inclusion of ISA in all accountancy curricula.

Current Status: Review & Improve

The CCCH is responsible for setting ethical requirements for its members. It has developed its own Code of Ethics, and indicates it utilizes the International Code of Ethics for Professional Accountants as a supplement to its own Code.

The CCCH reports that it has ongoing processes to monitor changes to the IESBA Code of Ethics and subsequently issue new sections of its Code of Ethics or amend existing parts when necessary.

To support the implementation of the Code, the CCCH: (i) raises awareness of the Code among the financial sector regulators, universities, judiciary and legislative powers, and government; (ii) disseminates information to relevant stakeholders about the changes to its Code and new, proposed, and revised provisions of the IESBA Code of Ethics; and (iii) includes ethical requirements in its training programs.

The CCCH is encouraged to continue promoting the adoption and implementation of its Code or the International Code of Ethics for Professional Accountants for individuals who may just be practicing not as a member of CCCH or registered with the CMF.

Current Status: Sustain

The CCCH is not responsible for the adoption of public sector accounting standards in Chile, which are adopted by the Controller General of the Republic of Chile (CGRCH). The CGRCH has adopted IPSAS – modified for local context – on an accrual-basis as the applicable public sector accounting standard since 2016. The CCCH notes that it was active in the convergence process with IPSAS by participating in meetings and advising the Controller General. The CCCH has since held meetings periodically to coordinate and support the application of the standards.

The CCCH indicates that it has established mechanisms to distribute information regarding recent developments and revisions issued by the IPSASB. The CCCH’s Higher Education Committee has also incorporated IPSAS into educational programming.

The CCCH is encouraged to share the 2022 IPSAS Handbook with the Controller General of the Republic of Chile. The IFAC’s Train the Trainers: Introduction to IPSAS resource might be helpful to CCCH to continue providing support to public sector accountants in the jurisdiction.

Current Status: Sustain

The CCCH is responsible for establishing and operating an investigative and disciplinary (I&D) system for its members and has established and implemented I&D procedures accordingly. In addition, the Financial Market Commission (CMF) has responsibility for the I&D of audit firms registered in the Registry of External Auditors (RAE) and individual professionals registered in the Register of Auditors and Account Inspectors (RICAE).

The CCCH and its regional councils carry out I&D processes continuously. The CCCH reports it has issued procedures and guidance for I&D systems at regional councils that are incorporated under the umbrella of the CCCH. As part of its efforts to align its system with international best practices, in 2019 and 2021, it assessed its I&D policies and processes against the requirements of SMO 6 and identified gaps. These include the composition of members of the I&D committee (i.e., no non-accountants); public interest considerations (results of the proceedings are not publicly available) and the CCCH is prohibited by the Chilean Constitution to impose penalties such as loss of professional designation or exclusion from membership, among others.

I&D procedures that meet the SMO 6 benchmark are foundational to maintaining public trust and confidence in the profession. CCCH's system has continued to have areas for improvement since its last Action Plan update in 2019. It is strongly recommended to invest time and resources in strengthening its procedures. CCCH is encouraged to connect with other PAOs in the region who have overcome similar obstacles to learn from them. At a minimum, the CCCH should communicate if and how it plans to address the needed improvements in this area where it is legally capable.

Secondly, IFAC has previously urged CCCH to consider its role regarding SMO 6 at the jurisdictional level and provide more details and information about its plans either to recommend and support the implementation of I&D processes in line with the SMO 6 requirements to CMF; or to promote a unified national system that can investigate and discipline all professional accountants while being in line with SMO 6.

Current Status: Consider

The CCCH is mandated by law to adopt corporate accounting standards for non–regulated companies and has accordingly adopted IFRS and IFRS for Small- and Medium-sized Entities (SMEs) by reference. The CMF is the financial sector regulator in Chile as of 2019, overseeing open corporations, listed and insurance companies, banks, and financial institutions. The Superintendent of Banks and Financial Institutions (SBIF) is now unified within the CMF; however, the SBIF still sets different requirements for financial institutions. The CMF has adopted IFRS since 2009. When adopting IFRS, the SBIF made significant modifications. According to the IFRS Foundation, the financial statements of banks and other financial institutions are described as complying with the standards issued by SBIF, not IFRS.

To support the adoption of the standards, the CCCH reports that it has a permanent Accounting Principles and Standards Committee that reviews and approves accounting standards on an ongoing basis. The committee also develops presentations for the financial sector regulators on IFRS, reviews the translations of the standards to detect errors that may cause confusion in the application of the standards, sends the analysis to the IASB, and participates remotely in the IASB meetings.

The CCCH states that it holds regular meetings with regulators to participate in technical discussions regarding analysis of issues or rules that affect the application of the regulations. It does the same with educational institutions to communicate changes to the IFRS and to ensure that universities have included this subject into their accounting curriculum. Additionally, the institute indicates that it supports members’ implementation and compliance with IFRS by disseminating information on new and modified IASB pronouncements, making the translated standards available on its website, and providing training courses.

The Accounting Principles and Standards Committee developed a training program on IFRS for Small- and Medium-sized Entities (SMEs) to support the implementation of the standards in different Chilean regions.

Furthermore, the CCCH is a member of the Latin American Accounting Standard Setters Group and participates in the international standard-setting process by providing comments to exposure drafts on a regional level.

If deemed feasible, the CCCH is encouraged to consider how it might continue to promote the need for the full adoption of IFRS for banks and other financial institutions in the jurisdiction to the CMF.

Current Status: Sustain