Instituto Guatemalteco de Contadores Públicos y Auditores

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) also will conduct reviews but 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.

Although the IGCPA has no legal authority to establish a mandatory QA review system, since 2014, IGCPA has supported the CCPAG to amend Decree No. 72 of 2001 and accompanying regulations to allow for the creation of a QA review system. The IGCPA played a key role in promoting the adoption of a QA review system in line with the SMO 1 requirements by supporting the development of the CCPAG's National Quality Control Board, which is expected to carry out QA reviews in the jurisdiction eventually.

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

As the CCPAG's National Quality Control Board is not executing its mandate, the IGCPA reactivated its initiative to develop a voluntary QA review system for its members who perform audits of financial statements. To achieve this, the IGCPA created a voluntary National Registry of auditors and audit firms that would participate in undergoing voluntary reviews. Since 2021, the IGCPA has outlined details within its Action Plan to implement an SMO 1 compliant QA review system, with reviews starting in 2025.

As part of preparing for the establishment and implementation of the voluntary QA system, the IGCPA is working on raising awareness amongst auditors, disseminating information, providing training activities, and coordinating with regulatory entities—i.e., the CCPAG, Tax Administration, the Superintendence of Banks, and the Securities and Commodities Market—to promote the benefits of a QA system. Ultimately, it is seeking all regulatory entities' support in establishing a unified, mandatory QA system at the jurisdiction level that meets the SMO 1 requirements.

As the SAT is operating a QA review system and the SIB carries out reviews under certain circumstances, the IGCPA should continue using its best efforts to collaborate with these regulators and relevant stakeholders to promote alignment with the SMO 1 requirements. The IGCPA should also continue using its best efforts to collaborate with other regulators and the CCPAG to promote and support the establishment of a unified, mandatory QA system at the jurisdiction level that meets the SMO 1 requirements.

IGCPA's plans to operate a voluntary QA review system serve the public interest and are aligned with best practices. During the next submission of its Action Plan, the IGCPA is encouraged to provide an update on its progress to develop and operate a voluntary QA review system.

Current Status: Execute

In Guatemala, universities, the Colegio de Contadores Públicos y Auditores de Guatemala (CCPAG), and some regulatory entities lead in setting and implementing initial professional development requirements for professional accountants. These include earning a bachelor's degree in accounting and at least two years of practical experience. As an entity established by general consensus and with voluntary membership, IGCPA’s activities primarily include promoting the full adoption and implementation of IES requirements to the regulators. For example, the IGCPA has established a University Exchange Commission responsible for promoting the IES to universities and the CCPAG.

In 2015, the IGCPA supported the CCPAG in adopting the IES requirements for all professional accountants; however, because the CCPAG lacks legal authority in this area, the IES are viewed only as guidelines for universities. Nonetheless, to further promote the adoption of the IES requirements 2017, IGCPA and CCPAG developed a gap analysis on the training of public accountants and auditors, which has been shared with the universities. As collaboration with CCPAG has not progressed since then, the IGCPA plans to review the analysis and update it against the requirements of the latest IES.

The University Exchange Commission is leading an initiative with the universities to incorporate the revised IES requirements into their curricula and voluntarily participate in an IES certification process. In addition, the IGCPA has reported since 2020 that it is considering modifying its by-laws to implement a professional exam for candidates before enrollment in the IGCPA. Once the IGCPA implements this, the institute intends to promote the exam to the CCPAG as a best practice and encourage the CCPAG, as the PAO with mandatory membership in the jurisdiction, to adopt it for any new members.

To support members' awareness and understanding of the standards, the IGCPA disseminates the IES on its institutional platforms. The institute offers CPD voluntarily through seminars, workshops, short courses, and conferences. In addition, the IGCPA offers certifications to professionals providing specialty services, such as IPSAS and ISA.

Finally, the IGCPA plans to coordinate with regulatory entities—i.e., the CCPAG, the Tax Administration, the Superintendence of Banks, and the Securities and Commodities Market—in addition to Chamber of Commerce to promote the IES requirements as part of each regulators' registration requirements.

The IGCPA efforts to promote the IES are commendable. As the CCPAG's plans to adopt the latest IES requirements are unclear, the IGCPA is encouraged to adopt the 2019 IES requirements for its members where feasible, such as an entry exam for individuals seeking IGCPA membership. As noted, these requirements could subsequently be used as a model or baseline for the CCPAG and other regulatory entities. 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 IGCPA should review these available tools as part of its work plan.

The IGCPA is encouraged to continue collaborating with other key stakeholders, such as CCPAG, universities, and regulators, to create a plan to bring national educational requirements for all professional accountants in line with the latest IES. Stakeholder support and engagement will be essential in ensuring alignment at the jurisdictional level.

Current Status: Execute

The IGCPA is not authorized to adopt auditing standards in Guatemala. The standards adopted by respective regulators are outlined in the Jurisdiction section.

The IGCPA played an essential role in the standard-setting process by supporting the CCPAG in adopting ISA, which the CCPAG has adopted since 2007 for its membership and which the Superintendencia de Administración Tributaria and the Securities and Commodities Market subsequently adopted. The IGCPA has established a Standards Commission and reports that it monitors new and amended standards issued by the IAASB and disseminates information on updates to the standards through printed materials and its website. The IGCPA created a National Registry of auditors and audit firms that supports the ongoing implementation of the standards through voluntary quality review inspections.

In addition, the IGCPA includes the newest/revised ISA in its continuing professional development activities and provides additional trainings, such as conferences, to different Guatemalan business chambers to enhance stakeholders' understanding of the standards. The IGCPA also states that it has developed practical implementation guidelines for its members.

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

Current Status: Sustain

In Guatemala, the IESBA Code of Ethics has been adopted by the Colegio de Contadores Públicos y Auditores de Guatemala (CCPAG), whose mandatory membership includes all professional accountants. The CCPAG has established ongoing processes to continuously adopt and update its Code, so it remains aligned with the IESBA Code of Ethics. Additionally, the IGCPA has incorporated within its bylaws the IESBA Code of Ethics for mandatory application by its members since 2012.

To support the implementation of the Code, the IGCPA has carried out various support activities such as seminars and courses, including some with the Inter-American Accounting Association (AIC) and the Committee of Integration for Latin Europe and America (CILEA), and publishing articles on the Code in its magazine and website. Additionally, the IGCPA reports that it has an ongoing mechanism to disseminate the Code of Ethics.

In 2022, the IGCPA created a new Ethical Commission responsible for carrying out all dissemination activities regarding the ethical requirements.

The IGCPA 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 IGCPA reports that it promoted and supported the adoption of IPSAS by contributing to consultation activities around the standard-setting process and participating in several meetings with the MoF. Subsequently, the IGCPA has supported the MoF in implementing IPSAS through several initiatives. These include: encouraging the MoF to sign an agreement with IFAC to reproduce and use the IPSAS; providing technical training to MoF staff; testing the application of IPSAS in the MoF's information system; preparing a manual on policies and procedures for IPSAS, and preparing pro forma financial statements in accordance with IPSAS.

Additionally, since 2015, the IGCPA has offered courses and conferences on IPSAS and provided training activities for its membership. The IGCPA offers certifications to professionals providing specialty services, including one on IPSAS. The IGCPA also reports that it monitors new and amended standards issued by the IPSASB and disseminates information on updates to the standards through printed materials and its website.

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

Current Status: Sustain

Investigative and discipline (I&D) requirements in Guatemala for all professional accountants are established by the Colegio de Contadores Públicos y Auditores de Guatemala (CCPAG). In addition, the IGCPA has established an Honor Tribunal to investigate and discipline its members who have voluntarily joined the institute and become subject to its rules and regulations.

Since 2014, the IGCPA and the CCPAG 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 2020, the IGCPA compared its I&D system and the requirements of the SMO 6 and concluded that it misses the same elements as the CCPAG I&D system. It has outlined steps within its action plan to address the identified gaps.

I&D procedures that meet the SMO 6 benchmark are an important component to maintaining public trust and confidence in the profession. The IGCPA should continue using its best efforts to collaborate with CCPAG to update Decree No. 72 of 2001 to incorporate missing elements that would help to fulfill SMO 6 requirements.

Current Status: Execute

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 standards adopted by respective regulators are outlined in the Jurisdiction section.

The IGCPA has established an IFRS Standards Committee responsible for monitoring changes to the standards and pronouncements issued by the IASB, and sharing updates to the regulators.

In 2020, the IGCPA prepared a proposal to the SAT to update the Tax Legislation Decree to formally adopt the IFRS and IFRS for SMEs and avoid special purpose financial statements. The IGCPA plans to develop a reconciliation model between the Tax Legislation Decree and IFRS and IFRS for SMEs.

To support its members with the implementation of the IFRS and other national accounting standards, the IGCPA provides CPD opportunities, disseminates IASB pronouncements, and collaborates with regional organizations such as the Group of Latin American Accounting Standard Setters (GLENIF) and the Inter-American Accounting Association to provide additional training activities.

The IGCPA also provides technical support to the CCPAG's representation in GLENIF and participates in the international standard-setting process by commenting on exposure drafts at the regional level.

If deemed feasible, the IGCPA 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