Instituto Salvadoreño de Contadores Públicos

In El Salvador, the Oversight Board of the Profession of Public Accounting and Auditing (CVPCPA) and the Superintendent of the Financial System (SSF) are authorized to conduct QA reviews. The ISCP indicates actively supporting the operational QA review systems in the jurisdiction and educating its members.

The ISCP supports the implementation of the two QA review systems—which the institute reports are both in line with SMO 1 best practices—by having a member sit on the CVPCPA’s Board and maintain permanent communication with the SSF. These mechanisms also enable the ISCP to monitor the QA review systems in the jurisdiction to ensure continued alignment with the SMO 1 requirements and promote any improvements or adjustments that may need to be made.

Furthermore, the ISCP reports that it has motivated and engaged its more experienced members to act as reviewers for the QA systems; analyzed the results of annual inspections; and provided training based on the findings of the inspection results.

In addition, the ISCP disseminates information on the QA review systems and works with universities by promoting relevant topics in the curricula. Lastly, the ISCP developed a virtual platform that provides professional accountants with tools to maintain high-quality services and raises awareness of the QA review systems in the jurisdiction.

The ISCP is encouraged to demonstrate how it is supporting the effective implementation of the new IAASB Quality Management standards and engaging with the CVPCPA and the SSF in case their QA review procedures need to be updated, such as providing more training to QA reviewers on how to assess firms’ context & approach to risk management.

Current Status: Sustain

In El Salvador, universities and the Oversight Board of the Profession of Public Accounting and Auditing (CVPCPA) have a role in implementing initial professional development (IPD) and continuing professional development (CPD) requirements for professional accountants, which are established in the Public Accountant Law, Decree No. 828 of 2000, as amended in 2017. Individuals wishing to obtain a public accountant or auditor license from the CVPCPA need a bachelor’s degree in accounting, one year of practical experience for a public accountant, or two years for an auditor. To maintain the license, individuals must fulfill annual CPD requirements that are aligned with the revised IES.

As an entity established by general consensus and with voluntary membership, the ISCP lacks the authority to adopt IES requirements for its members further. Therefore, its activities primarily include promoting an update of the universities’ curricula and proposing legal changes to the government that would require the accountancy profession in El Salvador to adopt and implement IES requirements as the education requirements to be met by all professionals.

For example, the ISCP states it has established a University Exchange Commission responsible for promoting the IES in the jurisdiction and collaborated with the CVPCPA to reform the IPD and CPD requirements. The ISCP has established an Education Standards Committee responsible for monitoring and executing SMO 2-related activities. The ISCP plans to develop a new comparison of the revised (2019) IES against the local requirements; create a document highlighting the main differences and potential solutions; and promote and disseminate the IES among universities and the CVPCPA. In addition, the ISCP has signed an agreement with the CVPCPA to serve as an authorized CPD provider.

The ISCP also previously reported additional activities to promote the adoption and implementation of IES in El Salvador. The institute worked with the Board of Professional Associations of El Salvador (CAPES) to update the legislation requiring a competency exam to practice. In 2019, the ISCP communicated with IFAC members in Brazil and Mexico to learn about their certification systems.

The ISCP's efforts to promote the IES are commendable. The ISCP is encouraged to continue collaborating with the CVPCPA and universities to promote and support the adoption and implementation of the IES requirements. As the regulators' plans to adopt the latest IES requirements remain unclear, the ISCP is encouraged to adopt the 2019 IES requirements for its members where feasible. A voluntary certification aligned with the IES could be one option, or a university accreditation scheme. The ISCP should continue referring to examples in the region for best practices.

The latest IES standards are available in Spanish and reflect the need for competency-based approaches and the increasing demand for accountants skilled in information and communications technologies and place further emphasis on professional skepticism skills and behaviors. These apply to both aspiring and professional accountants. The Accountancy Education E-Tool and the IES Checklist developed by IFAC & available in Spanish may also be useful for the gap analysis & advocacy the ISCP intends to undertake.

Current Status: Sustain

The ISCP is not legally responsible for adopting auditing standards in El Salvador. Still, it does play an important role in the standard-setting process by participating in the standard-setting proceedings of the Oversight Board of the Profession of Public Accounting and Auditing (CVPCPA) and Superintendent of the Financial System (SSF). The institute has a representative serve on the CVPCPA’s Board and maintains a permanent communication channel with the SSF. The ISCP successfully promoted and recommended the adoption of ISA to both entities and has processes in place to share translations and encourage the regulators to continue adopting updated versions of ISA in the jurisdiction.

To support the implementation of the standards, the ISCP has established a Committee of Professional Standards responsible for monitoring and ensuring the fulfillment of SMO 3 requirements. As part of its activities, the ISCP has developed training and includes ISA in its continuing professional development activities and seminars, such as the annual National Convention of Public Accountants and the National Congress of Teachers in Public Accounting and Economic Sciences. Additionally, the ISCP reports monitoring changes and modifications to the standards to ensure proper dissemination of information and international developments.

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

Current Status: Sustain

In El Salvador, professional accountants are subject to ethical requirements set by the Oversight Board of the Profession of Public Accounting and Auditing (CVPCPA), which has adopted the IESBA Code of Ethics without modifications and as the translation is issued. Although the ISCP cannot legally adopt ethical requirements for its members, the ISCP does play an important role in the standard-setting process by having a representative serve on the CVPCPA’s Board and monitors revisions & updates to promote the adoption of the latest version.

ISCP’s vital role as an advocator is highlighted by the CVPCPA decision to return to the adoption of the IESBA Code. In 2018, the CVPCPA reversed previous decisions to adopt the IESBA Code of Ethics and adopted its own Code of Ethics that was not based on the IESBA Code of Ethics. During deliberations, the ISCP expressed disagreement with the decision of the CVPCPA to adopt differing ethical requirements and offered to financially support the regulator with the use and distribution of the IESBA Code of Ethics for the jurisdiction. Subsequently, the ISCP, in collaboration with other PAOs in the jurisdiction, persuaded the CVPCPA to withdraw the decision to adopt its own Code.

The ISCP indicates that it monitors the cases of non-compliance with ethical requirements identified by the CVPCPA and has developed training on topics related to ethical standards.

The ISCP also reports that it has signed agreements with the universities in El Salvador to disseminate the IESBA Code of Ethics and encourages universities to incorporate the IESBA Code of Ethics into the accounting curricula. In addition, the ISCP supports the implementation of the IESBA Code by disseminating information; creating a question-and-answer section on its website to address ethical concerns; and developing an annual survey of members’ compliance with the Code of Ethics.

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

Current Status: Sustain

The ISCP is not responsible for setting public sector accounting standards adopted by the Director General of Government Accounting (GOES) within the Ministry of Finance in El Salvador. Nevertheless, the ISCP reports that it promotes the adoption of IPSAS by meeting with the GOES and maintaining a dialogue on how the institute can best collaborate with the government. As a result of these meetings, the ISCP shared the Spanish translation of the IPSAS with the GOES for its analysis, and the GOES decided to adopt certain IPSAS.

In addition, the GOES is receiving technical and financial support from the United States Agency for International Development to support the adoption of IPSAS. The ISCP is monitoring the project’s activities and, in 2016, participated in a training course on IPSAS for public sector accountants.

The ISCP has established a Committee for the Public Sector responsible for monitoring changes to the standards and pronouncements issued by the IPSASB, providing training on accounting standards for the public sector, and disseminating the information amongst its members. In addition, the ISCP reports that it has signed agreements with the universities in El Salvador to disseminate IPSAS and encourage universities to incorporate IPSAS into the accounting curricula

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

Current Status: Sustain

In El Salvador, the Oversight Board of the Profession of Public Accounting and Auditing (CVPCPA) and the Superintendent of the Financial System (SSF) are responsible for investigating and disciplining (I&D) professional accountants, with the SSF carrying out I&D procedures for auditors of certain regulated companies and the CVPCPA conducting investigations and issuing sanctions for all other professionals. The ISCP assessed the CVPCPA’s I&D policies and processes against the requirements of SMO 6 and has identified gaps, such as no linkage with the results of QA reviews, and committee members do not include non-accountants, among others.

The ISCP reports that it promotes the SMO 6 best practices to the CVPCPA by having a representative serve on the CVPCPA’s Board, which allows the institute to propose improvements and monitor the implementation of the CVPCPA’s I&D system. In addition, the ISCP indicates that it monitors the I&D cases led by the SSF.

ISCP has established its own Investigation and Discipline Committee responsible for monitoring the CVPCPA’s disciplinary decisions. When ISCP members are issued disciplinary reports, the Committee will also request a corrective action plan to educate the member. Monitoring also allows the ISCP to gather statistical information on I&D cases for its own tracking and reporting purposes.

I&D procedures that meet the SMO 6 benchmark are key to maintaining public trust and confidence in the profession. The ISCP should continue using its best efforts to collaborate with CVPCPA and SSF to promote the best practices of SMO 6.

Current Status: Sustain

It is the responsibility of the Oversight Board of the Profession of Public Accounting and Auditing (CVPCPA) and the Superintendent of the Financial System (SSF) to set accounting standards for the financial statements of the respective companies under each agency’s supervision. The ISCP indicates that it actively participates and contributes to the CVPCPA’s standard-setting process and advocates for the adoption of the full IFRS and IFRS for SMEs. It has a representative who serves on the CVPCPA’s Board and works closely with the CVPCPA to maintain the adopted version of the IFRS and IFRS for SMEs based on the latest Spanish translation. The ISCP also engages with the SSF, which has adopted the IFRS for listed companies, but for banks, insurance companies, and pension funds, SSF has established “regulatory GAAP” accounting standards, which are not aligned with IFRS.

The ISCP created a Professional Standards Committee responsible for monitoring changes to the standards and pronouncements issued by the IASB, promoting updates to the regulators, and ensuring dissemination and training for its members.

ISCP has provided specialized courses on IFRS and IFRS for SMEs and developed an IFRS for SMEs diploma,

If deemed feasible, the ISCP is encouraged to consider how it can further promote the need & benefit of adopting IFRS for the financial statements of for banks, insurance companies, and pension funds in the jurisdiction of the SSF.

Current Status: Sustain