Colegio de Contadores Públicos y Auditores de Guatemala

There is no legal requirement to establish a quality assurance (QA) review system for all audits of financial statements in Guatemala. The Tax Legislation requires medium and large-sized companies to present annual audited financial statements. The Superintendencia de Administración Tributaria (SAT) has established a quality assurance (QA) review system for auditors providing services to these entities. The Superintendence of Banks (SIB) will also conduct reviews only when a suspicion or risk is identified. More information is required to assess the extent of alignment with the SMO 1 best practices.

In addition, Decree No. 72 of 2001 does empower the CCPAG as the regulator of the profession, and, as such, it is taking steps to establish a QA review system. The timeline for the establishment and implementation of such a system remains unclear.

In 2013, the CCPAG internally adopted quality control standards, including a provision stating the ongoing adoption of all subsequent revisions and updates as issued by the IAASB without modifications and including the IAASB-stated effective date and also created a National Quality Control Board to implement and operate a mandatory QA review system in line with SMO 1 requirements. However, CCPAG must now amend legislation and regulations to progress with the formal adoption at a jurisdictional level. This initiative is expected to be completed by 2025; however, CCPAG has reported these plans since 2018 without significant progress. In the meantime, the National Quality Control Board will be re-established in 2023.

In 2017, the CCPAG signed a cooperative agreement with the French International and Development Partnerships Directorate (DDPI) to receive technical support in designing a roadmap to establish a QA review system and training in the implementation of the ISQC 1. However, as reported by the CCPAG, the collaboration with DDPI has stopped.

The CCPAG states that it will support members' implementation of the quality management standards by providing training activities, designing questionnaires for audit firms to assess implementation, and preparing procedures and implementation guidelines.

CCPAG is encouraged to establish plans to advocate for and collaborate with the SAT and SIB to promote alignment with the SMO 1 best practices for QA reviews of firms the regulators undertake. CCPAG may also do the same with the Securities and Commodities Market (BVNSA) if it has not already established a QA review system for audit firms of listed companies.

CCPAG is encouraged to consider its role in SMO 1 and whether there is significant scope for other firms providing audits of financial statements that should undergo QA reviews. If there are, CCPAG should formulate more concrete plans & a timeline to (a) promote and support the development of a unified, mandatory QA review system at the jurisdiction level for all audits that would meet SMO 1 best practices or (b) to establish and implement its own mandatory QA review system for other audit firms and support the adoption & implementation of such processes.

Current Status: Plan

In Guatemala, universities, the CCPAG, and other regulatory entities set and implement initial professional development requirements for professional accountants. These include earning a bachelor's degree in accounting and at least two years of practical experience before graduating. The CCPAG indicates that it has limited authority to incorporate the requirements of IES into national requirements, which it tried to do in 2015, and is only legally capable and responsible for regulations related to its membership requirements. Universities only view IES as guidelines.

To further promote the adoption of the IES requirements, in 2017, the Instituto Guatemalteco de Contadores Públicos y Auditores (IGCPA) and CCPAG developed a gap analysis on the training of public accountants and auditors, which has been shared with the universities. In 2022, the CCPAG adopted mandatory continuous professional development (CPD) requirements for all members. The CCPAG offers CPD via seminars, workshops, short courses, and conferences.

In 2021, CCPAG outlined plans to relaunch the Education Commission responsible for promoting the IES to universities and other relevant stakeholders. Within the scope of activities of the commission, the CCPAG plans to draft an accountancy curriculum for universities aligned with the IES; and develop a certification process, including an entry exam, for individuals seeking CCPAG membership. It has also stated plans to assess the feasibility of leveraging international certifications such as ACCA or ICAEW. Lastly, the commission will be tasked with working with regulators to promote the IES and mandatory CPD for individuals providing services to companies under the control of each financial regulator. As of 2023, no specific timeframe for progression has been reported though.

In addition, the CCPAG reports plan to provide certifications to professionals providing specialty services, such as IFRS, IPSAS, and ISA.

The CCPAG is commended for adopting mandatory CPD requirements as recommended by IFAC in previous assessments. Robust accountancy education is essential for a strong profession and there are additional steps the CCPAG is encouraged to consider to adopt the 2019 IES requirements for its members where feasible. A voluntary certification aligned with the IES could be one option, as well as a university accreditation scheme, and CCPAG can refer to examples in the region for best practices and learnings.

The Accountancy Education E-Tool and the latest IES standards & IES Checklist, all available in Spanish, may be useful to identify implementation support materials and the CCPAG should review these available tools as part of its work plan.

Current Status: Plan

The CCPAG is empowered to set auditing standards for its membership which is mandatory for all auditors. It has adopted ISA as issued without modifications and with the IAASB-stated effective date. The Superintendencia de Administración Tributaria and the Securities and Commodities Market require companies under their supervision to have their statements audited in accordance with standards issued by the CCPAG. Meanwhile, the Superintendence of Banks (SIB) requires auditors providing services to entities under its supervision to prepare annual audited financial statements in accordance with ISA. A modification has been made to ISA 700 to account for the differences in the accounting manual issued by the SIB.

To support the ongoing adoption of the standards, the CCPAG monitors new and amended standards issued by the IAASB and disseminates information on updates to the standards and international developments in the area through printed materials and its website. The CCPAG raises awareness of the standards.

To facilitate its members' implementation of the standards, the CCPAG has developed implementation guidelines for its members; included ISA in its continuing professional development activities; and provided additional trainings to Guatemalan business chambers and regulators through conferences in order to enhance stakeholders' understanding of the standards.

The CCPAG has demonstrated an ongoing process to maintain its fulfillment of the SMO 3 obligations and is committed to continuous improvement.

Current Status: Sustain

Decree No. 72 of 2001 grants authority to the Colegio de Contadores Públicos y Auditores de Guatemala (CCPAG) to adopt ethical requirements for all professional accountants. In March 2013, the CCPAG adopted the IESBA Code of Ethics through a Resolution published in the Guatemalan Official Gazette. The Resolution states that any changes to the Code will automatically be adopted as issued by the IESBA. All individuals seeking CCPAG membership must attend training on the IESBA Code of Ethics before admission to the CCPAG.

The CCPAG, through its Court of Honor, has ongoing processes to adopt and update its ethical requirements. In addition, in 2021, the CCPAG created the Ethics Commission responsible for monitoring new and amended standards, raising awareness of the standards, and promoting educational activities. The Ethics Commission is expected to support members' understanding and implementation of the Code through seminars and courses, publishing articles on the Code in its magazine and website, disseminating the Code to universities, and encouraging universities to incorporate the Code of Ethics into their accounting curricula.

The CCPAG has demonstrated an ongoing process to maintain its fulfillment of the SMO 4 obligations and is committed to continuous improvement.

Current Status: Sustain

The National Constitution of the Republic of Guatemala establishes the Accounting Administration Authority of the Ministry of Public Finance (MoF) as the accounting standard-setter for the public sector. Accordingly, the MoF has adopted national standards on an accrual basis with reference to the IPSAS, through Decree No. 109 of 2019. The CCPAG reports that, while it has no direct responsibility in this standard-setting area, it significantly contributed to the consultation activities and meetings that led to the MoF adopting IPSAS.

Since 2015, the CCPAG has held courses and conferences on IPSAS and provides training activities for its members and relevant stakeholders. The CCPAG reports in 2023 that it plans to relaunch the Public Sector International Accounting Standards Commission, which is responsible for monitoring new and amended standards, raising awareness of the standards, providing technical support to the MoF with the implementation of IPSAS and when appropriate, develop an implementation review plan, implementation guidance, and offer educational activities. In addition, the CCPAG plans to offer certifications to professionals providing specialty services, including one on IPSAS.

As CCPAG progresses with its stated plans, it may find IFAC's Train the Trainers: Introduction to IPSAS resource helpful.

Current Status: Sustain

Decree No. 72 of 2001 authorizes the Colegio de Contadores Públicos y Auditores de Guatemala (CCPAG) to establish an investigative and disciplinary (I&D) system for all professional accountants. Accordingly, the CCPAG has established I&D procedures, which its Honor Tribunal leads.

Since 2014, the CCPAG and the Instituto Guatemalteco de Contadores Públicos y Auditores (IGCPA) have reported that they are collaborating to prepare amendments to Decree No. 72 of 2001 which would be necessary to address gaps in the current procedures that would fulfill SMO 6 requirements. Identified gaps include: the system only being "complaints-based" (and not information-based as well); no linkage with the results of QA reviews; only having professional accountants serve on the Tribunal; a limited range of penalties; and the results of the I&D procedures are not made publicly available, among others. The initiative was expected to be completed by 2021. However, as of the date of the assessment, no actions have been reported.

In 2021, the CCPAG created the Ethics Commission in part to be responsible for addressing the identified gaps and supporting the necessary amendments to Decree No. 72 of 2001.

I&D procedures that meet the SMO 6 benchmark are foundational to maintaining public trust and confidence in the profession. CCPAG's system continues to have gaps since 2017. The CCPAG should continue using its best efforts to update Decree No. 72 of 2001 to incorporate missing elements that would help to fulfill SMO 6 requirements.

CCPAG is encouraged to connect with other PAOs in the region who have overcome similar obstacles to learn from them and formulate a plan for progressing.

Current Status: Plan

The CCPAG, Superintendencia de Administración Tributaria (SAT (the tax authority)), the Securities and Commodities Market (BVNSA), and the Superintendence of Banks (SIB) are the entities legally responsible for the adoption of accounting standards. The SAT and the BVNSA permit but do not require the application of IFRS. The SIB has its own accounting manual for banks, financial institutions, and insurance companies which differs from the IFRS Standards – if any issues are not addressed by the SIB manual, IFRS should be used. Finally, the CCPAG has adopted IFRS and IFRS for Small- and Medium-sized Entities (SMEs) for application among its membership, but its resolutions are not legally binding in this area.

The CCPAG monitors new and amended standards issued by the IASB, provides training activities, and disseminates information on updates to the standards and international developments through its website. The CCPAG reports plans to relaunch the Private Sector International Accounting Standards Commission, responsible for monitoring new and amended standards, raising awareness of the standards, and supporting the Education Commission activities and initiatives.

The CCPAG also collaborates with regional organizations such as the Group of Latin American Accounting Standard Setters (GLENIF) to provide additional training activities. In addition, the CCPAG has a representative in GLENIF and participates in the international standard-setting process by commenting on exposure drafts at the regional level.

If deemed feasible, the CCPAG is encouraged to consider how it might continue advocating to the Tax Administration and SIB for the full adoption of IFRS and IFRS for SMEs, which would help bring financial reporting in line with international best practices and should benefit the SME financial reporting environment in Guatemala.

Current Status: Sustain