Ordem dos Revisores Oficiais de Contas

In Portugal, the Comissão do Mercado de Valores Mobiliários (CMVM) is responsible for quality assurance (QA) reviews for public interest entities (PIEs) and the OROC conducts QA reviews for non-PIEs, under the supervision of the CMVM. Based on available information on the CMVM’s QA review system, and as indicated by OROC, it is aligned with SMO 1 best practices. Additionally, OROC reports that its QA system fulfills all the requirements of SMO 1.

Prior to the transposition of the European Union’s Audit Directive No. 2014/56/EU, the OROC carried out the QA reviews of all statutory auditors in the jurisdiction. To fulfill its responsibility, the OROC established the Quality Control Committee (CCQ), responsible for the implementation of the QA system. The OROC system now reviews non-PIE audit professionals at both the individual and firm level and explores the individual/firm’s internal quality policies and procedures as well as the quality of specific audit engagements. Auditors and audit firms are selected at random and are reviewed at least once every six years. Reviewers prepare a written report after the QA review which is discussed and approved by the CCQ.

The OROC CCQ had regular meetings with the CMVM to ensure alignment of the procesess and promote SMO 1 best practices. Subsequently, CMVM started to publish the results of its inspections in 2019.

To support the implementation of the requirements, the OROC reports that it prepared an inspection manual to guide the review process, developed implementation guidelines and has a mandatory annual training program for reviewers. In addition, the OROC supports members by offering courses on effective quality control systems and provides mandatory training on ISQC 1.

The OROC is encouraged to provide updates on its implementation support for members on the suite of IAASB Quality Management standards that will become effective in December 2022 and will require significant change management for regulators and firms.

Current Status: Sustain

Universities, the OROC, and the Ordem dos Contabilistas Certificados (OCC)—under the oversight of the Ministry of Finance (MoF), have a role in implementing initial professional development (IPD) and continuous professional development (CPD) requirements for professional accountants, which are established in the Law No. 148/2015, Decree Law No. 140/2015, and the Decree Law No. 139/2015.

To be eligible to practice as statutory auditors and become a member of OROC, individuals must: have a university degree, complete entrance examinations (4 written exams and 1 oral exam), have work experience of at least three years (under a supervision of a mentor with minimum five years’ experience) and pass a final assessment. In addition, OROC members are required to complete 60 credits of CPD over a three-year period. The OROC reports that the requirements for statutory auditors comply with the 2019 IES.

The OROC focuses on strengthening its CPD program by providing relevant courses for its members and monitoring compliance with the CPD requirements.

The OROC has demonstrated an ongoing process to maintain its level of fulfillment with the SMO 2 obligations and is committed to continuous improvement.

Current Status: Sustain

Auditing requirements are set in Law No. 148/2015. The law directly adopts ISA as issued by the IAASB, and requires statutory audits to be performed according to the standards. In addition, the law provides the Comissão do Mercado de Valores Mobiliários (CMVM) with the overall responsibility of implementing and translating ISA. In turn, the OROC supports the CMVM with translations. It has translated the 2018 IAASB Handbook and is in the process of translating the 2020 IAASB Handbook.

To support the ongoing adoption of the standards, the OROC reports that it monitors new and amended standards issued by the IAASB and it has recently translated and published the fourth edition of the ISA Guide for SMEs.

To facilitate the implementation of the standards, the OROC indicates it: (i) offers training activities on the standards, including an e-learning ISA course; (ii) develops implementation guidelines; (iii) disseminates information on updates to the standards and international developments in the area through printed materials and its website; and (iv) promotes discussion with universities to further include the latest ISA in their curricula.

Additionally, the OROC is a member of Accountancy Europe and provides comments to IAASB exposure drafts through this regional grouping.

The OROC has undertaken commendable actions to support the adoption and proper implementation of ISA with its ongoing translation process. As feasible, OROC is encouraged to progress with the timely translation of the 2020 IAASB Handbook, which includes revised standards effective in 2021 and significant changes to quality control standards effective in 2022.

Current Status: Sustain

The OROC sets ethical standards for the auditing profession in accordance with its prescribed mandate in Decree Law No. 140/2015. The OROC approved a revised Code of Ethics effective January 2012, which is aligned with the 2009 version of the IESBA Code of Ethics. The OROC has reported plans since 2019 to translate the 2018 and 2021 versions of the International Code of Ethics issued by IESBA to incorporate the latest requirements.

The OROC reports that it monitors changes to the IESBA Code of Ethics in order to review, approve, and publish new sections of its Code of Ethics or amend existing parts when necessary.

The OROC supports the implementation of its Code amongst its members by providing trainings and seminars on ethics-related courses, integrating ethical requirements into professional exams, and disseminating updates of its Code.

The OROC indicates it is also supporting the Comissão do Mercado de Valores Mobiliários (CMVM), which has overall oversight of the auditing profession, with the adoption and implementation of requirements aligned with the IESBA Code of Ethics. The CMVM issued an FAQ stating that IESBA Code of Ethics is being considered as a source for further interpreting and developing independence principles.

It is in the public interest that professional accountants adhere to the latest ethical requirements issued by the IESBA. The OROC is encouraged to continue pursuing its convergence process to eliminate differences between its Code and the International Code of Ethics, which has been revised several times since 2009. A timeframe for completion should be outlined in the Action Plan. The 2021 Handbook is currently effective, with changes in the terms and concepts used in the IAASB's International Standard on Assurance Engagements (ISAE) 3000 (Revised), and revisions to promote the role and mindset expected of all professional accountants. In addition, the objectivity of an engagement quality reviewer and other appropriate reviewers, revisions to the non-assurance services, and revisions to the fee-related provisions will be effective in December 2022.

Current Status: Plan

The OROC is not responsible for the adoption of public sector accounting standards, which are adopted by the Comissão de Normalização Contabilística (CNC), under the purview of the Ministry of Finance. The CNC has adopted a public sector accounting framework based on 2014 IPSAS.

The OROC has promoted the use of IPSAS or IPSAS-based accounting framework through its participation and representation on the CNC. As part of its contribution to the adoption process, the OROC translated the 2012 IPSAS Handbook and intends to translate the 2021 version.

To support the implementation of the standards, the OROC: (i) organizes conferences and workshops to assist with the application of the local accounting standards; (ii) participates in the Ministry of Finance’s implementation process of the IPSAS; and (iii) disseminates information on updates to the standards and international developments in the area. In addition, the OROC indicates that it participates in the international standard-setting process exposure drafts and other IPSASB pronouncements.

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

Current Status: Sustain

In Portugal, the Comissão do Mercado de Valores Mobiliários (CMVM) and the OROC share responsibility for establishing investigative and disciplinary (I&D) systems for statutory auditors. Accordingly, the OROC has implemented an I&D system that it reports is fully aligned with the requirements of SMO 6.

OROC maintains a Disciplinary Committee with powers to investigate and sanction auditors for legal and professional breaches. The OROC states it has established ongoing processes to conduct assessments of its I&D policies and procedures against the requirements of SMO 6. In addition, the OROC has mechanisms in place to raise awareness of the I&D processes and disciplinary sanctions are disclosed in annual reports.

The OROC has demonstrated an ongoing process to maintain its level of fulfillment with the SMO 6 obligations and is committed to continuous improvement.

Current Status: Sustain

In accordance with the EU Accounting Directive, EU-endorsed IFRS are mandatory for the preparation of consolidated financial statements of companies considered to be public interest entities and permitted for other corporate sector entities. In addition, the Comissão de Normalização Contabilística (CNC), under the purview of the Ministry of Finance, is authorized to set accounting standards for corporate sector entities. The CNC standards differ from the IFRS.

The OROC states it is proactive in this area by participating in the CNC’s working groups, promoting convergence with IFRS, and raising awareness of the requirements of the adopted EU-endorsed IFRS

Among its members, the OROC supports IFRS implementation by providing training activities; integrating IFRS in both OROC’s annual CPD plan and initial professional development offerings; and distributing information on the standards through various means, such as its website.

Additionally, the OROC is a member of Accountancy Europe and provides comments to IASB exposure drafts through this regional grouping.

The OROC has demonstrated an ongoing process to maintain its level of fulfillment with the SMO 7 obligations and is committed to continuous improvement.

Current Status: Sustain