Federación Argentina de Consejos Profesionales de Ciencias Económicas

In Argentina, only companies using IFRS are required to prepare annual audited financial statements. This includes listed companies, financial institutions, and other companies (excluding insurance companies). Audits of companies regulated by the Central Bank (BCRA) and the National Securities Commission (CNV) are subject to QA review systems established by each regulator. The financial sector regulators' regulation addresses mainly the requirements for audit firms to adopt quality control standards. While it appears that the BCRA and CNV are carrying out QA reviews, it is unclear if the procedures are aligned with SMO 1 best practices. Lastly, it is unclear if the Superintendence of Insurance (SSN) has established a QA system for auditors providing services to insurance companies – which do not apply IFRS and undergo audits using national audit standards.

For all other companies, the provincial councils defer to the auditing standards issued by FACPCE for other companies. FACPCE has adopted quality management standards (ISQM 1 and 2 and ISA 220 (Revised)) by Circular 7. However, as the federal umbrella organization of a federated system, FACPCE and the provincial councils have yet to establish a QA review system or framework.

Since 2008, through its Accounting and Auditing Standard-Setting Board (CENCyA)—a technical and standard-setting body—the FACPCE has engaged in the following activities: discussing the feasibility of establishing a QA review system, developing an impact analysis of the potential adoption and implementation of such a system and subsequently engaging with stakeholders, benchmarking national and international experiences of QA reviews systems, creating debate forums to discuss a potential proposal, and then providing training activities on quality control and the QA review system proposal.

Since 2018 FACPCE has indicated it has established a QA Special Commission within CENCyA to consider formally adopting and implementing a QA system, but there is no firm timeline. FACPCE would plan to support its implementation and socialize such a system among its members.

FACPCE is encouraged to establish plans to advocate for and collaborate with the BCRA and CNV to promote alignment with the SMO 1 best practices for QA reviews of firms the regulators undertake. FACPCE may also do the same with the SSN if it has not already established a QA review system for audit firms of insurance companies.

FACPCE is encouraged to consider its role in SMO 1 and whether there is a significant scope of other firms providing audits to financial statements prepared under IFRS that should undergo QA reviews. If there are, FACPCE 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 in the provincial councils.

Current Status: Execute

In Argentina, the Ministry of Education (MoE), universities, each provincial council, and the financial sector regulators—the Central Bank (BCRA), the National Securities Commission (CNV), and the Superintendence of Insurance—have a role in implementing initial professional development (IPD) requirements for professional accountants, which are established in Law No. 20.488 of 1973. A university accounting degree, which includes practical experience, is the only requirement to register as a public accountant. To offer accountancy services, including auditing, individuals with accounting degrees must register and obtain licenses from the professional council of their jurisdiction. In addition, auditors providing services to the financial sector are subject to additional practical experience requirements established by the regulators.

Given the FACPCE's lack of authority to adopt educational requirements for the profession and, therefore, adopt the IES, its activities primarily include actions to promote the incorporation and implementation of IES requirements to the other accountancy regulators. FACPCE has been advocating for the incorporation of IES requirements since 2009 and consistently incorporated the IES as part of the technical agendas of national and international conferences.

FACPCE has effectively influenced the Board of Deans of Schools of Economic Sciences (CODECE) to incorporate supervised professional practices (internships) for accounting students into the university accountancy curricula. FACPCE confirmed that CODECE included the practical experience requirements in the National Law No. 26/427 on Educational Internships and that the requirements align with IES 5.

To further consider how IES requirements might be incorporated into national accountancy education, FACPCE developed a comparison in 2014 of the IES (at the time) against the local requirements; benchmarked Argentine educational requirements against other jurisdictions; created a document highlighting the main differences and potential solutions; and promoted and disseminated the IES among universities and the MoE.

Lastly, FACPCE trains its members through its Professional Development Federal System (SFAP).

FACPCE is encouraged to consider its role in SMO 2 as the regulators' plans to adopt the latest IES requirements are unclear. Robust accountancy education is essential for a strong profession with mobility opportunities. FACPCE may update its gap analysis against the 2019 IES and develop a roadmap for bringing educational requirements in line with the revised IES by using the Accountancy Education E-Tool and the latest IES standards & IES Checklist, all available in Spanish. For example, FACPCE may consider collaborating with the financial sector regulators to adopt additional registration requirements for external auditors to promote and support adopting and implementing the IES requirements. FACPCE may also consider a voluntary certification aligned with the IES, adopting mandatory CPD requirements for members, and/or a university accreditation scheme. FACPCE can refer to examples in the region for best practices and learnings. FACPCE could then support adopting and implementing these processes in the provincial councils.

Current Status: Execute

Only companies using IFRS are required to prepare annual audited financial statements. This includes listed companies, financial institutions, and other companies (excluding insurance companies).

The financial sector regulators—the Central Bank (BCRA), the National Securities Commission (CNV), and the Superintendence of Insurance (SSN) — are empowered to set sector-specific audit rules for the companies they regulate. The CNV requires the application of ISA as adopted by Federación Argentina de Consejos Profesionales de Ciencias Económicas (FACPCE). However, auditors providing services to companies regulated by the BCRA and SSN must apply national auditing standards and specific auditing regulations issued by the regulators.

The FACPCE, through its Accounting and Auditing Standard-Setting Board (CENCyA), issued TR No. 32 in 2012, adopting ISA by reference for other companies using IFRS. In accordance with the Law No. 20.488 of 1973, each provincial council has the legal authority to issue rules regulating the accountancy profession in its jurisdiction, including setting audit standards for all other companies not covered by financial sector regulators. In practice, all provincial councils defer to the standards issued by the FACPCE.

As part of its efforts to support ISA adoption, FACPCE has created commissions within each financial sector regulator. As the BCRA and SSN have issued their own auditing standards, which are not the ISA, FACPCE has created a committee to analyze the possibility of adopting ISA for audits of these companies.

To support the ongoing adoption of the standards, CENCyA and FACPCE: (i) monitor new and amended standards issued by the IAASB, (ii) provide implementation guidelines and materials to support the implementation of the standards; (iii) and participate in the international standard-setting process by providing comments on exposure drafts and other IAASB pronouncements.

To facilitate members' implementation of the standards, FACPCE offers continuing professional development programming, incorporates training sessions on the standards within its National Congress, and disseminates information on updates and revisions to ISA.

If deemed feasible, FACPCE is encouraged to consider how it might continue promoting the need & benefit of adopting ISA for the audits of banks and insurance companies in the jurisdiction to the BCRA and SSN.

Current Status: Sustain

FACPCE—the national voluntary PAO of a federated system—and the provincial councils, under Law No. 20.488 of 1973, use a national Code of Ethics developed prior to 2004 and not based on the IESBA Code of Ethics. As reported by FACPCE, not all provincial councils use the unified national Code. FACPCE adopted the independence aspects of the IESBA Code of Ethics through Technical Resolution (TR) No 34 of 2012. The TR is mandatory only for auditors providing services to listed companies and has been officially endorsed by the National Securities Commission (CNV) through its General Resolution No 663 of 2016.

FACPCE reports that the fragmented regulation of the accountancy profession in Argentina, given the country's federated system, increases the difficulties of unifying a National Code of Ethics. Different stakeholders approve such changes depending on each provincial council's rulings and decisions. For example, in some cases, a change would require a Provincial Decree; in others, approval from an Assembly of professionals; and still in others, the decision relies on a Resolution of the Board of Directors of the respective provincial council.

On March 31, 2023, FACPCE approved Project No. 50, which would update the TR No 34 of 2012. FACPCE is opening a consultation to adopt the IESBA Code of Ethics for all auditors providing services to listed companies. According to the national standard-setting process, the exposure draft will be open to comments for 180 days, and it is expected that FACPCE to decide on the adoption before the end of 2023. Project No. 50 does not contemplate the adoption of the IESBA Code of Ethics for all professional accountants and does not anticipate changes to the national Code of Ethics developed prior to 2004 and not based on the IESBA Code of Ethics.

FACPCE indicates it has analyzed and compared the ethical requirements adopted by each of the 24 provincial councils, the unified national Code, and the IESBA Code of Ethics to prepare a project aimed at reducing and/or eliminating gaps. However, the actions to harmonize the Code continue to be delayed due to the fragmented regulation.

IFAC commends FACPCE for the recent decision to update the ethical requirements and align those to the IESBA Code of Ethics for all auditors providing services to listed companies. FACPCE is encouraged to provide an update on the decision from Project No. 50.

Nonetheless, it is in the public interest that all professional accountants adhere to the latest ethical requirements issued by the IESBA. FACPCE is encouraged to provide information about a plan to eliminate differences between the unified national Code and the IESBA Code of Ethics and/or consider the adoption of the IESBA Code of Ethics for all professional accountants.

The 2022 Handbook is currently effective, incorporating the conforming amendments to IAASB's quality management standards, revisions to the non-assurance services (NAS) and fee-related provisions, and revisions to address the objectivity of an engagement quality reviewer (EQR) and other appropriate reviewers, that are effective since December 2022.

Current Status: Consider

FACPCE is not responsible for setting public sector accounting standards, which are adopted by the National Accounting Office (CGN). State-owned enterprises are required to apply Argentine GAAP (accrual -basis) in the preparation of their financial statements. The CGN has reportedly started a process to develop public sector accounting standards harmonized with accrual-basis IPSAS but a timeframe for adoption is unclear.

FACPCE reports it is proactive in this area despite its lack of legal authority, and its Accounting and Auditing Standard-Setting Board (CENCyA) prepares technical recommendations for the government, which as of the date of this report, includes four technical recommendations in line with IPSAS requirements: Public Administration Accounting Conceptual Framework; Presentation of Budget Execution Accounting Statement; Financial Statement Presentation and Asset Recognition and Measurement.

To further promote the adoption of IPSAS, FACPCE has engaged in regular meetings with the CGN; submitted comments to IPSASB exposure drafts; disseminated information on the updates to the standards; signed cooperation agreements aimed at research management and control of public funds; and offered training courses and included the IPSAS as topics within its National Congress.

FACPCE has demonstrated an ongoing process to maintain its fulfillment of the SMO 5 obligations and is committed to continuous improvement.

Current Status: Sustain

In Argentina, the provincial councils are responsible for establishing investigative and disciplinary (I&D) systems for their members, and as reported by FACPCE, the provincial councils have implemented I&D systems; however, it is not clear to what extent the provincial I&D systems comply with the best practices of SMO 6.

FACPCE is the federal umbrella organization for the councils, and therefore, it reports that it has been collaborating with the provincial councils to promote the establishment of I&D systems that are in line with the requirements of SMO 6. FACPCE indicates that in 2012 worked on comparing the professional councils' I&D systems against the SMO 6 requirements. In 2023, FACPCE decided to update the comparison exercise to suggest changes and amendments to enhance the I&D system.

FACPCE reports that the fragmented regulation of the accountancy profession in Argentina due to the country's federal system presents challenges in meeting the benchmark of SMO 6. Depending on each provincial council's rulings and decisions, different stakeholders are involved in the approval of such changes. For example, in some cases, a change would require a Provincial Decree; in others, approval from an Assembly of professionals; and still in others, the decision relies on a Resolution of the Board of Directors of the respective provincial council.

I&D procedures that meet the SMO 6 benchmark are foundational to supporting public trust and confidence in the profession. It appears that FACPCE has identified gaps in the provincial councils' systems since 2012. FACPCE is strongly encouraged to consider its role in regards to SMO 6 and provide more details and information about its plans either to (a) establish a national I&D system (which would serve as the unified system that can investigate and discipline all professional accountants across all provinces); (b) to serve as an appeal mechanism for provincial council cases; and/or (c) to develop I&D processes in line with the SMO 6 requirements and recommend and support the implementation of these processes into the provincial councils' I&D systems. Once its role is established, FACPCE is encouraged to create a strategic plan with the actions it will undertake to fulfill its mandate.

Current Status: Consider

The provincial councils and the financial sector regulators—the Central Bank (BCRA), the National Securities Commission (CNV), and the Superintendence of Insurance (SSN)— are responsible for setting accounting standards in Argentina. The provincial councils defer to the standards issued by FACPCE for companies other than financial sector companies. FACPCE administers the Accounting and Auditing Standard-Setting Board (CENCyA), the technical and standard-setting body, which drafts standards for FACPCE approval. In turn, FACPCE-issued standards must be adopted by its provincial councils' councils to become applicable in their jurisdictions. FACPCE issued Technical Resolution (TR) No 26 in 2009, which adopts IFRS and IFRS for Small- and Medium-sized Enterprises (SMEs) by reference. Listed companies are required to use IFRS per CNV Resolution No. 576 of 2010. Financial institutions are required to use IFRS, except for IFRS 9, by the BCRA Communication A6114, as amended. Insurance companies apply accounting regulations issued by the SSN which plans to adopt IFRS, but no specific date has been announced.

As part of supporting the adoption of IFRS among other regulators, FACPCE signed a cooperation agreement with the BCRA, which consequently resulted in the adoption of IFRS in 2018 for financial institutions. FACPCE replicated this agreement with the SSN to facilitate the adoption of IFRS for the financial statements of insurance companies, but no specific date was announced.

The FACPCE reports it is active in both regional and international standard-setting processes. The CENCyA monitors changes to the standards and pronouncements issued by the IASB and prepares TRs to adopt new requirements. Additionally, FACPCE is a Latin American Accounting Standard Setters Group member and provides comments to IASB exposure drafts through this regional grouping. Furthermore, FACPCE participates in IASB's worldwide standard setters, Emerging Economies Group, and SME IFRS Implementation Group (SMEIG).

Amongst its members, FACPCE supports the implementation of the standards by disseminating information on the standards through various mechanisms, printing handbooks of the standards, providing training, encouraging universities to incorporate the standards in their curricula, and preparing implementation guidelines.

FACPCE has demonstrated an ongoing process to maintain its fulfillment of the SMO 7 obligations and is committed to continuous improvement. If deemed feasible, FACPCE is encouraged to consider how it might further promote the need & benefit of adopting IFRS for the financial statements of insurance companies to the SSN.

Current Status: Sustain