Costa Rica

The financial reporting framework in Costa Rica is established under Commercial Code Law No. 3284 of 1964. The Code requires all companies to keep accounting records and provides the basic legal framework for accounting and auditing.

Responsibility for setting accounting and auditing standards in Costa Rica is shared between the Colegio de Contadores Públicos de Costa Rica (CCPACR), for non-regulated companies and the National Supervisory Council for the Financial System (CONASSIF), for regulated companies. Separate bodies regulate banks, insurance companies, listed companies, and pension funds under an overall harmonized financial reporting framework coordinated by CONASSIF in accordance with the Law No. 7732 of 1997.

In accordance with Law No. 1038 of 1947, the CCPACR is responsible for setting accounting standards for non-regulated companies in Costa Rica. The CCPACR has adopted IFRS since 2001, ratified the application in 2005, and IFRS for SMEs since 2009 and confirmed in 2018. The standards are adopted by reference and without modification. Further supporting IFRS adoption and implementation in Costa Rica, the General Tax Administration adopted IFRS through Resolution No. DGT-R-029-2018 and Decree No. 43198-H require that accounting systems used to generate tax information apply the accounting standards issued by the CCPACR. In addition, CONASSIF has adopted IFRS through its Regulation No. 34-2002, which states that regulated companies must use the accounting standards as approved by the CCPACR.

Regarding auditing standards, the CCPACR has adopted ISA translated into Spanish since 2002 by reference and without modification. In 2005 and subsequent years, the Handbook of Internacional Quality Control, Auditing, Review, Other Assurance, and Related Services Pronouncements was ratified. For regulated companies, through Regulation 32–10, CONASSIF requires external auditors to use ISA as approved by the CCPACR. Private companies in Costa Rica are not required to be audited under the law, but in the event of a voluntary audit, the auditor selected must be a member of the CCPACR and use ISA.

In Costa Rica, the accountancy profession is regulated at the state and professional levels. The law recognizes the financial sector regulators—the Stock Market Supervisory Authority (SUGEVAL), the General Superintendence of Financial Entities (SUGEF), the Superintendence of Pensions (SUPEN), and the General Superintendence of Insurance (SUGESE)— under the coordination of the National Supervisory Council for the Financial System (CONASSIF), as the entities responsible for regulating auditors providing services to regulated companies. In addition, the Law No. 1038 of 1947 and Law No. 1269 of 1951 distinguish two different segments of the accountancy profession—authorized public accountants and private accountants— which are both regulated at the professional level by the Colegio de Contadores Públicos de Costa Rica (CCPACR) and the Colegio de Contadores Privados de Costa Rica (CCPRCR), respectively.

The CCPACR regulates professional accountants in the public accounting and auditing profession, which have the exclusive legal responsibility to deliver statutory audit services. These individuals are referred to as authorized public accountants. The CCPRCR regulates accountants and accounting technicians, which have the exclusive responsibility for the preparation of accounting records and financial statements, commonly called private accountants.

In Costa Rica, universities, the CCPACR and the CCPRCR have a role in implementing entry requirements for professional accountants, which are established in the Law No. 1038 of 1947 and Law No. 1269 of 1951. Universities are responsible for setting the requirements for obtaining a bachelor’s degree and the professional accountancy organizations then define the qualification requirements.

To be eligible to practice as authorized public accountants, individuals must: have a university degree in accounting, have work experience of at least two years, take the CCPACR deontology seminar, and pass an ethics exam. Individuals may then become CCPACR members. As for private accountants, the CCPRCR has not established a minimum level of experience; however, individuals are required to attain an accounting or business administration degree from a university or technical institute. Continuing professional development and a competency exam for professional accountants are not mandatory requirements according to a court decision in Costa Rica that ruled against the Law No.1038 of 1947, which was aimed at creating these additional requirements.

Authorized public accountants (auditors) providing services to regulated entities mentioned above must be registered with the SUGEVAL, which manages the registry on behalf of the other regulators. To be included in the registry, auditors must be members of the CCPACR. In addition, each financial regulator is empowered by law to: (i) investigate and discipline auditors providing services to companies under its purview; and (ii) establish and operate a quality assurance (QA) review system. Auditors that conduct audits with serious deficiencies can be permanently removed from the SUGEVAL auditor registry. Lastly, CONASSIF’s Regulation 32–10 requires external auditors of regulated entities to adhere to the International Code of Ethics issued by the IESBA.

In accordance with the Law No. 1038 of 1947, the CCPACR is empowered to carry out the following regulatory activities: (i) maintaining a registry of authorized public accountants; (ii) setting accounting and auditing standards for non-regulated companies; (iii) establishing ethical standards for its members; (iv) implementing an investigation and discipline system for its members; (v) establishing and operating a QA review system for its members; (vi) providing input into the accountancy curricula for authorized public accountants; and (vii) representing and developing the profession of authorized public accountants.

Also, according to law, the CCPRCR responsibilities include the following: (i) maintaining a registry of private accountants; (ii) establishing ethical standards for its members; and (iii) implementing an investigation and discipline system for its members.

Professional accountants in Costa Rica may be members of both organizations. If CCPACR members wish to provide services in the private sector, they must be also members of the CCPRCR.

There are no independent audit oversight arrangements in Costa Rica and auditors in the country are regulated at the state level by the financial sector regulators—the Stock Market Supervisory Authority (SUGEVAL), the General Superintendence of Financial Entities (SUGEF), the Superintendence of Pensions (SUPEN), and the General Superintendence of Insurance (SUGESE)— under the coordination of the National Supervisory Council for the Financial System (CONASSIF), and at the professional level by the Colegio de Contadores Públicos de Costa Rica (CCPACR).

Auditors are subject to regulation by SUGEVAL and CCPACR which is further described in the Regulation section.

The Colegio de Contadores Públicos de Costa Rica (CCPACR)

The CCPACR, created by the Law No. 1038 of 1947, is a mandatory professional accountancy organization regulating practitioners in the public accounting and auditing profession, which have the exclusive legal responsibility to deliver statutory audit services. These individuals are referred to as authorized public accountants. In accordance with the law, the CCPACR is empowered to carry out the following regulatory activities: (i) maintaining a registry of authorized public accountants; (ii) setting accounting and auditing standards for non-regulated companies; (iii) establishing ethical standards for authorized public accountants; (iv) implementing an investigation and discipline system for its members; (v) establishing and operating a quality assurance review system for its members; (vi) providing input into the accountancy curricula for authorized public accountants; and (vii) representing and developing the profession of authorized public accountants.

In addition to being an IFAC Member, the CCPACR is a member of the Inter-American Accounting Association and the Group of Latin American Accounting Standard Setters.

The Colegio de Contadores Privados de Costa Rica (CCPRCR)

The CCPRCR, established by the Law No. 1269 of 1951, is another professional accountancy organization in the country that represents accountants and accounting technicians. These individuals have the exclusive responsibility for the preparation of accounting records and financial statements and are recognized as private accountants. In accordance with the law, the CCPRCR responsibilities include the following: (i) maintaining a registry of private accountants; (ii) establishing ethical standards for its members; and (iii) implementing an investigation and discipline system for its members.

In accordance with the Law No. 1038 of 1947, the Colegio de Contadores Públicos de Costa Rica (CCPACR)—as the regulator of professional accountants in the public accounting and auditing profession, which have the exclusive legal responsibility to deliver statutory audit services— is empowered to establish a quality assurance (QA) review system for all audits of financial statements. The CCPACR reports that it has established a mandatory QA review system in line with the requirements of the SMO 1.

In addition, the financial sector regulators—the Stock Market Supervisory Authority (SUGEVAL), the General Superintendence of Financial Entities (SUGEF), the Superintendence of Pensions (SUPEN), and the General Superintendence of Insurance (SUGESE)—under the coordination of the National Supervisory Council for the Financial System (CONASSIF), are authorized by law to establish a QA review system for all audits of financial statements of regulated companies. Regulators have not established a QA system, as the CCPACR performs this activity for all audits. However, regulators primarily check compliance with legal requirements and review the auditors’ findings. Audit working papers can be subject to review by each regulator.

Current Status: Adopted

In Costa Rica, universities, the Colegio de Contadores Públicos de Costa Rica (CCPACR) and the Colegio de Contadores Privados de Costa Rica (CCPRCR) have a role in implementing initial professional development requirements for professional accountants, which are established in the Law No. 1038 of 1947 and the Law No. 1269 of 1951. Universities are responsible for setting the requirements for obtaining a bachelor’s degree and the professional accountancy organizations then define the qualification requirements.

To be eligible to practice as an authorized public accountant (auditor), individuals must: have a university degree in accounting, have work experience of at least two years, take the CCPACR deontology seminar, and pass an ethics exam. Subsequently, candidates must become members of the CCPACR. As for private accountants, there is no minimum level of experience; however, they are required to attain an accounting or business administration degree from a university or technical institutes and be a member of the CCPRCR.

Continuing professional development (CPD) and a final competency exam/assessment for any professional accountant in Costa Rica is not a mandatory requirement according to a national court decision that ruled against Law No.1038 of 1947, which was aimed at creating these additional requirements.

Although a few of the requirements of the IES have been incorporated into national requirements (e.g., an entry program, an assessment on ethics (IES 4), some practical experience (IES 5)), there are no CPD requirements (IES 7) or a final competency exam/assessment (IES 6).

Current Status: Partially Adopted

The Colegio de Contadores Públicos de Costa Rica (CCPACR) has the mandate to set auditing standards for non-regulated companies in Costa Rica according to the Law No. 1038 of 1947. The CCPACR has adopted the Spanish translations of ISA since 2005 by reference and without modification. In 2022, the CCPACR issued a new publication, Circular 03-2022-R; this pronouncement was issued to ratify the adoption of the ISA.

In addition, Law No. 7732 of 1997 grants the National Supervisory Council for the Financial System (CONASSIF) the authority to set auditing standards for regulated entities, which include banks, insurance companies, listed companies, and pension funds. CONASSIF’s Regulation 32–10 requires application of ISA as approved by the CCPACR.

Current Status: Adopted

The Law No. 1038 of 1947 grants the Colegio de Contadores Públicos de Costa Rica (CCPACR) the authority to set ethical standards for its members, which are authorized public accountants (auditors). Accordingly, the CCPACR has developed its own Code of Ethics based on the 2012 IESBA Code of Ethics.

The Colegio de Contadores Privados de Costa Rica (CCPRCR) is empowered by the Law No. 1269 of 1951 to set ethical requirements for its members, which are private accountants (accountants and technicians). The CCPRCR has adopted a Code of Ethics that is not based on the IESBA Code of Ethics.

Finally, the Law No. 7732 of 1997 empowers the National Supervisory Council for the Financial System (CONASSIF) to set ethical standards for auditors providing services to regulated companies. CONASSIF Regulation 32–10 requires external auditors to use the International Code of Ethics as issued by the IESBA.

Current Status: Partially Adopted

In accordance with the Law No. 8131 of 2001, the National Accounting Office, under the authority of the Ministry of Finance (MoF), is responsible for establishing public sector accounting and reporting standards in Costa Rica. The MoF adopted accrual-basis IPSAS (2014) through the Decree No. 34918 -H of 2016. The Decree was updated by the Resolution DCN-0003-2021, requiring accrual-basis IPSAS (2018).

Through the Decree No. 41641 -H, the MoF has extended the period for the mandatory implementation of these standards in all public institutions until January of 2023. Accrual-basis IPSAS are adopted for application but are not required until 2023

Current Status: Partially Adopted

In Costa Rica, the Colegio de Contadores Públicos de Costa Rica (CCPACR) and the Colegio de Contadores Privados de Costa Rica (CCPRCR), under the Law No. 1038 of 1947 and the Law No. 1269 of 1951 have the authority for investigating and disciplining (I&D) professional accountants. Accordingly, the CCPACR has established an I&D system for its members, which are authorized public accountants (auditors). It has concluded that the I&D mechanism fulfills the requirements of revised SMO 6.

The CCPRCR has also established and implemented an I&D system for its members; however, it is not aligned with SMO 6 requirements based on limited available information.

In addition, the financial sector regulators—the Stock Market Supervisory Authority (SUGEVAL), the General Superintendence of Financial Entities (SUGEF), the Superintendence of Pensions (SUPEN), and the General Superintendence of Insurance (SUGESE)—under the coordination of the National Supervisory Council for the Financial System (CONASSIF), are authorized by law to investigate and discipline auditors providing services to companies under its purview. Additional information is needed regarding the extent the financial sector regulators' involvement in enforcement matters and whether their enforcement systems align with the best practices of SMO 6.

Current Status: Partially Adopted

In accordance with Law No. 1038 of 1947, the Colegio de Contadores Públicos de Costa Rica (CCPACR) is responsible for setting accounting standards for non-regulated companies in Costa Rica. The CCPACR has adopted IFRS since 2001, ratified the application in 2005, and IFRS for SMEs since 2009 and confirmed in 2018. The standards are adopted by reference and without modification. In 2022, the CCPACR issued, Circular 06-2022-R, to ratify the adoption of the IFRS.

Further supporting IFRS adoption and implementation in Costa Rica, the General Tax Administration adopted IFRS through Resolution No. DGT-R-029-2018 and Decree No. 43198-H require that accounting systems used to generate tax information apply the accounting standards issued by the CCPACR.

In addition, accounting standards for regulated companies are established by the National Supervisory Council for the Financial System (CONASSIF). CONASSIF adopted IFRS through its Regulation No. 34-2002, which reinforces the accounting standards as approved by the CCPACR.

Current Status: Adopted

Relevant Organizations

• Colegio de Contadores Públicos de Costa Rica (CCPACR)
• Colegio de Contadores Privados de Costa Rica (CCPRCR)
• Consejo Nacional de Supervision del Sistema Financiero (CONASSIF)
• General Superintendence of Financial Entities (SUGEF)
• General Superintendence of Insurance (SUGESE)
• National Accounting Office
• Stock Market Supervisory Authority (SUGEVAL)
• Superintendence of Pensions (SUPEN)

Relevant Legislation

• CCPACR, Law No. 1038 of 1947, Law for the Creation of the Professional Organization of Public Accountants
• CCPRCR, Law No. 1269 of 1951, Law for the Creation of the Professional Association of Private Accountants in Costa Rica
• CONASSIF, Regulation 32-10, General Regulation of External Auditors
• CONASSIF, Regulation 34-02, Accounting Standards Applicable to the Supervised Entities by SUGEF, SUGEVAL, SUPEN, SUGESE and Non-financial Issuers
• CONASSIF, Law No. 7732 of 1997, the National Financial System Supervision Council (CONASSIF) gives the authority to establish accounting and auditing standards for regulated companies
• General Tax Administration, Resolution No. DGT-R-029-2018. Establishes interpretative criteria for the tax effect on earnings in the application of International Accounting Standards by Professional Organizations of Public Accountants of Costa Rica
• Ministry of Finance (MoF), Decree No. 43198- H of December 2021

Relevant Publications

• CCPACR, SMO Action Plan, September 2022.
• IPSASB, A Closer Look At: Costa Rica, 2014.
• IFRS Foundation, IFRS Application Around the World, Jurisdictional Profile: Costa Rica, February 2018.
• World Bank, Report on the Observance of Standards and Codes: Accounting and Auditing, Costa Rica, 2012.