Chile

The financial reporting framework in Chile is established under the Companies Law No. 18.046 of 1981. The Companies Law contains basic requirements for financial reporting for all companies in Chile, including requirements for the preparation of financial statements. The Companies Law defines two types of corporations: open and closed corporations. Open corporations have 500 or more shareholders and at least 10% of subscribed capital must belong to a minimum of 100 shareholders. Open corporations are statutorily regulated by the Financial Market Commission (CMF). Closed corporations may voluntarily register and be regulated by the CMF under the Registry of Informants.

The Law No. 13.011 of 1958 delegates the Colegio De Contadores De Chile (CCCH) the responsibility for setting accounting standards for non-regulated (closed) corporations. The CCCH has adopted IFRS and for IFRS for Small- and Medium-sized Entities (SMEs) since 2013.

The CMF is the financial sector regulator in Chile as of 2019, overseeing open corporations, listed and insurance companies, banks, and financial institutions. The Superintendent of Banks and Financial Institutions (SBIF) is now unified within the CMF; however, the SBIF still sets different requirements for financial institutions. The CMF has adopted IFRS since 2009. When adopting IFRS, the SBIF made significant modifications. According to the IFRS Foundation, the financial statements of banks and other financial institutions are described as complying with the standards issued by SBIF, not IFRS.

As far as auditing requirements are concerned, non-regulated companies are required to have their financial statements audited in accordance with the Chilean Generally Accepted Auditing Standards (NAGAs) issued by the CCCH, in accordance the Law 13.011 of 1958. The CCCH reports that the NAGA are the translation of the standards issued by the Audit Standards Board of the American Institute of Certified Public Accountants, which, in turn, are based on ISA. The CMF has the authority to set the auditing standards for entities under its regulation and require the application of standards issued by the CCCH.

Only audit firms are regulated at the state level through the supervision of the Financial Market Commission (CMF), in accordance with Law 18,045 of 1981. The law requires audit firms to be registered in the CMF’s Registry of External Auditors (RAE) and individual professionals registered in the auditors and account inspectors (RICAE) register. The CMF is empowered to: (i) maintain a registry of audit firms authorized to audit companies under its control; (ii) set ethical requirements; (iii) develop an investigative and disciplinary (I&D) system; and (iv) require audit firms to establish quality control mechanisms. Audit reviews are only carried out when a suspicion or risk is identified.

All other accountancy professionals may voluntarily join a professional accountancy organization (PAO) and be self-regulated through the membership requirements of the PAO.

Universities, the National Accreditation Commission, the Ministry of Education and the Superintendency of Higher Education have a role in implementing initial professional development (IPD) requirements for all professional fields, including professional accountants, established in Law No. 20.370 and Law No. 20.129. However, according to the Colegio de Contadores de Chile (CCCH), there are no minimum requirements to practice accountancy in Chile.

Prior to 1981, all practicing accountants were required to register with the Colegio de Contadores de Chile (CCCH) and adhere to its rules and regulations. However, in 1981, Law No. 13.011 of 1958, which created the CCCH, was modified by the Law No. 3.621 of 1981. The modifications eliminated the obligation to be registered with the CCCH. The CCCH now unites professional accountants, including auditors, in the jurisdiction through voluntary membership, and requires its candidates to hold a bachelor’s degree in accounting to be considered for membership. In accordance with the law, the CCCH’s responsibilities include the following: (i) setting accounting and auditing standards for non-regulated companies; (ii) issuing professional and ethical standards for its members; (iii) establishing membership requirements; (iv) investigating and disciplining its members; (v) providing training programs; and (vi) representing and promoting the accountancy profession.

There is no independent audit oversight authority in Chile. The supervision and regulation of auditors and firms are outlined in the Regulation section.

The Colegio de Contadores de Chile (CCCH)

The CCCH, created by the Law No. 13.011 of 1958, is a voluntary professional accountancy organization with responsibilities such as: (i) setting accounting and auditing standards for non-regulated companies; (ii) issuing professional and ethical standards for its members; (iii) establishing membership requirements; (iv) investigating and disciplining its members; (v) providing training programs; and (vi) representing and promoting the accounting profession.

In addition to being an IFAC Member, the CCCH is a member of the Inter-American Accounting Association and the Integration Committee Europe—Latin America, and a member of the Group of Latin-American Accounting Standard Setters.

The Colegio de Contadores de Chile (CCCH) is committed to supporting the adoption of the standards on sustainability reporting issued by the ISSB into the country's regulatory system and collaborating with the Financial Market Commission (CMF).

There is no legal requirement to establish a quality assurance (QA) review system for all audits of financial statements in Chile. While Law No. 18.045 sets the legal foundation for establishing QA for auditors providing services to listed companies, as of 2023, no mandatory QA review system has been implemented. The Financial Market Commission (CMF) requires audit firms in the Registry of External Auditors (RAE) to establish quality control mechanisms. However, audit reviews are only carried out when a suspicion or risk is identified. As the Colegio de Contadores de Chile (CCCH) reported, the processes are not aligned with the SMO 1 best practices.

The CMF recognizes the Audit Standards Committee of the CCCH as the auditing standard-setter. The CCCH translates and adopts auditing and relevant standards as issued by the Audit Standards Board of the American Institute of Certified Public Accountants, which, in turn, are based on ISA, ISQC1, and ISQC2.

Current Status: Partially Adopted

Universities, the National Accreditation Commission, the Ministry of Education, and the Superintendency of Higher Education have a role in implementing initial professional development (IPD) requirements for all professional fields, including professional accountants, that are established in Law No. 20.370 and Law No. 20.129. The Colegio de Contadores de Chile (CCCH) reports that the universities providing accountancy education programs have incorporated the (2019) IES requirements. However, according to the CCCH, there are no minimum requirements to practice accountancy in Chile and no mandatory continuing professional development requirements.

The CCCH reports that its candidates must hold a bachelor’s degree in accounting to be considered for membership.

Finally, professional accountants regulated by the Financial Market Commission (CMF) are subject to its regulation. The CMF requires these individuals to have relevant practical experience.

Current Status: Partially Adopted

In accordance with Law No. 13.011 of 1958, the Colegio de Contadores de Chile (CCCH) is responsible for setting auditing standards for non-regulated companies. The Auditing Standards Committee of the CCCH adopts the Chilean Generally Accepted Auditing Standards (NAGAs). As reported by the CCCH, the NAGA are the translation of the standards issued by the Audit Standards Board of the American Institute of Certified Public Accountants (AICPA). The standards issued by AICPA are based on ISA.

The Financial Market Commission (CMF) has the authority to set the auditing standards for entities under its regulation and requires the application of standards issued by the CCCH.

In September 2023, the Auditing Standards Committee of the CCCH formally announced its recommendation to modify NAGAs. Effective 2025, the NAGAs will be based directly on the IAASB issued standards rather than the AICPA issued standards.

Current Status: Partially Adopted

Only audit firms are regulated at the state level through the supervision of the Financial Market Commission (CMF), in accordance with Law 18,045 of 1981. The CMF has the authority to determine ethical requirements for auditors of entities under its supervision. The CMF requires the International Code of Ethics for Professional Accountants for auditors providing services to audit firms in the Registry of External Auditors (RAE) and individual professionals registered in the Register of Auditors and Account Inspectors (RICAE)

The Law No. 13.011 of 1958 authorizes the Colegio de Contadores de Chile (CCCH) to set ethical requirements for its members. Accordingly, the CCCH has developed its own Code of Ethics, updated in 2022, while utilizing the latest version of the International Code of Ethics for Professional Accountants as a supplement to its own Code.

Other individuals practicing the profession in Chile are not subject to any ethical requirements and are not subject to professional regulation.

Current Status: Partially Adopted

The Constitution of Chile and Law No. 10.336 establish the Controller General of the Republic of Chile (CGRCH) as the accounting standard-setter for the public sector. The CGRCH has adopted IPSAS – modified for local context – on an accrual-basis (IFAC/CIPFA International Public Sector Financial Accountability Index 2020) through the Resolution No. 16 of 2015, effective since January 1, 2016.

Current Status: Adopted

Law No. 13.011 of 1958 authorizes the Colegio de Contadores de Chile (CCCH) to establish an investigative and disciplinary (I&D) system for its members, and it has established and implemented I&D procedures accordingly. The CCCH conducted an assessment of its I&D policies and processes against the requirements of SMO 6 and has identified gaps, for example, the composition of members of the I&D committee and results of the investigative and disciplinary proceedings are not made available to the public. The Chilean Constitution prohibits the CCCH from imposing penalties like loss of professional designation or exclusion from membership, among others.

The Financial Market Commission (CMF) also has responsibility for the I&D of audit firms registered in the Registry of External Auditors (RAE) and individual professionals registered in the Register of Auditors and Account Inspectors (RICAE). The extent to which the I&D system established by the CMF meets the best practices of SMO 6 is not established.

According to the CCCH, any other accountancy professionals (i.e., not registered in the REAE, RICAE, or a CCCH member) are subject to the state’s legal system.

Current Status: Partially Adopted

Law No. 13.011 of 1958 authorizes the Colegio de Contadores de Chile (CCCH) to set accounting standards for non-regulated companies. The CCCH has adopted IFRS, through the Technical Bulletin (TB) No. 85, and IFRS for Small- and Medium-sized Entities (SMEs) by the TB No. 2, since 2013.

The CMF is the financial sector regulator in Chile as of 2019, overseeing open corporations, listed and insurance companies, banks, and financial institutions. The Superintendent of Banks and Financial Institutions (SBIF) is now unified within the CMF; however, the SBIF still sets different requirements for financial institutions. The CMF has adopted IFRS since 2009. When adopting IFRS, the SBIF made significant modifications. According to the IFRS Foundation, the financial statements of banks and other financial institutions are described as complying with the standards issued by SBIF, not IFRS.

Current Status: Partially Adopted

Relevant Organizations

• Colegio De Contadores De Chile (CCCH)
• Controller General of the Republic of Chile (CGRCH)
• Commission for the Financial Market (CMF)
• Superintendent of Banks and Financial Institutions (SBIF)

Relevant Legislation

• CCCH, Law No. 13.011 of 1958
• CGRCH, Normas del sistema de contabilidad general de la nación, February 2015
• CMF, Registro de Auditores Externos, January 1989
• CMF, Normas de inscripción y funcionamiento del registro de empresas de auditoria externa, April 2013

Relevant Publications

• CCCH, SMO Action Plan, 2023.
• IFRS Foundation, “IFRS Application around the World Jurisdictional Profile: Chile,” June 2016
• United Nations Conference on Trade and Development, “International Accounting and Reporting Issues,” 2014.