Uruguay

The financial reporting framework in Uruguay is established under the Commercial Companies Law No. 16.060 of 1989. The law establishes the obligation for companies to keep books of accounts and provides the basic legal framework for accounting.

The law requires companies to report annually under generally accepted accounting principles set through Presidential Decrees issued by the Permanent Commission of Adequate Accounting Standards (CPNCA). The CPNCA was established by Resolution No. 90 of 1991 within the Ministry of Economy and Finance. In 2011, the CPNCA adopted International Financial Reporting Standards (IFRS) for listed companies as translated into Spanish and issued by the IASB without modifications. Subsequently, in 2014, the Central Bank of Uruguay (BCU) adopted IFRS as translated into Spanish as issued by the IASB for banks, financial institutions, insurance companies, and pension funds. Finally, as of 2014, the CPNCA adopted IFRS for Small and Medium-sized Entities as translated into Spanish and as issued by the IASB without modifications for companies that meet the following criteria: (i) do not have public accountability; (ii) annual net operating income does not exceed $UR 200,000; (iii) total indebtedness to entities controlled by the BCU, in any time of year, do not exceed 5% of the Net Asset Value for Financial Accountability; (iv) do not have the participation of the state; and (v) do not control or controlled by entities excluded by the preceding items.

In Uruguay, companies (except for regulated entities described below) are not legally required to have audited financial statements. However, entities seeking funding through the financial sector may, in certain circumstances, be required to produce audited financial statements.

In accordance with Law No. 18.401 of 2008, the respective regulators of financial institutions, listed companies, insurance companies, and pension funds were integrated into the unified financial sector regulator, the Superintendence of Financial Services within the BCU. The regulated entities must have their financial statements audited by registered auditors, and as mandated by BCU, these auditors must be performed in accordance with ISA. Furthermore, listed companies are required by law to appoint a síndico. The síndico is given wide-ranging oversight functions that overlap with the work of external auditors, including the issuance of an opinion on the financial statements.

In addition, the Tax Administration (DGI) sets standards for the preparation of financial statements for tax-reporting and fiscal audits. For tax purposes, financial statements for large and medium-sized companies (as per classification by the DGI) must be audited by a public accountant in accordance with the BCU-adopted standards.

In accordance with Decree No. 103 of 1991 professional accountants are required to have a university accounting degree to practice the profession. No professional examination or professional experience is required. University graduates must register with the Ministry of Education to practice as a public accountant (qualified to work providing bookkeeping or tax preparation services) or auditor. As far as ethical requirements and investigative and disciplinary procedures are concerned, no law or regulation exists defining these professional requirements.

There is one professional accountancy organization in Uruguay: the Colegio de Contadores, Economistas y Administradores del Uruguay (CCEAU). The only requirement to apply for membership with the CCEAU is to have completed the relevant academic education. Individuals who voluntarily join the CCEAU are self-regulated through its membership requirements. The CCEAU regulates its members by setting professional standards, representing and promoting the accounting profession, providing training activities, and investigating and disciplining its members.

In the absence of a professional certification mechanism for auditors, the Central Bank of the Republic (BCU) has established its own auditor's registry through Regulation Nº 2136 of 2013. Once auditors register with the BCU, they become subject to the BCU's regulatory procedures such as completing professional experience requirements, undergoing quality control reviews, complying with ethical standards, investigation and disciplinary procedures and applying ISA when conducting audits, among other matters.

There are no independent audit oversight arrangements in Uruguay. Only auditors providing services to entities supervised by the Superintendence of Financial Services within the Central Bank of the Republic (BCU)—financial institutions, listed companies, insurance companies, and pension funds—are subject to regulation. The BCU has established its own auditor's registry through Regulation Nº 2136 of 2013. Once auditors register with the BCU, they become subject to the BCU's regulatory procedures such as completing professional experience requirements, undergoing quality control reviews, complying with ethical standards, investigation and disciplinary procedures and applying ISA when conducting audits, among other matters.

In addition, auditors can voluntarily join the Colegio de Contadores, Economistas y Administradores del Uruguay (CCEAU) and then become subject to its regulations. The CCEAU regulates its members by setting professional standards, representing and promoting the accounting profession, providing training activities, and investigating and disciplining its members.

The Colegio de Contadores, Economistas y Administradores del Uruguay (CCEAU)

The CCEAU is a voluntary association comprised of accountants, economists, and business administration professionals in Uruguay. There are also state and provincial level professional associations affiliated with the CCEAU.

The CCEAU, the oldest accounting association in South America, provides training on accounting and auditing standards, sets ethical requirements for its members, represents and promotes the accountancy profession, and is recognized as a technical resource and a contributor to accounting and auditing standard-setting in Uruguay. In addition, the CCEAU investigates and disciplines its members in cases of misconduct.

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

The CCEAU is working with the Uruguay congress to update the Commercial Companies Law No. 16.060 of 1989. The CCEAU is promoting the update of the role and activities of the accountancy profession, formalizing CCEAU’s role as an auditing standard setter, and advocating for mandatory membership at CCEAU for certain segments of the profession.

There is no legal requirement to implement a quality assurance review system for audits of financial statements in Uruguay.

The Central Bank of the Republic (BCU), through Regulation Nº 2136 of 2013, requires audit firms providing services to entities under its supervision to establish quality control mechanisms. In addition, the BCU as audit standard setter for listed entities, banks, and financial institutions, has adopted ISA 220 and ISQC 1. As reported by the CCEAU, the BCU procedures are not in line with the requirements of SMO 1.

Auditing standards are also not specified in law or regulation. De facto, all other audits aside from those of BCU-supervised entities are conducted in accordance with the standards issued by the Colegio de Contadores, Economistas y Administradores del Uruguay. The institute adopted ISA 220 and ISQC 1 for application by its members through the Pronouncement No. 18 in 2010.

Current Status: Partially Adopted

In accordance with Decree No. 103 of 1991 professional accountants are required to have a university accounting degree to practice the profession. No professional examination or professional experience is required. University graduates must register with the Ministry of Education to practice as a public accountant or auditor.

Auditors providing services to entities regulated by the Central Bank of the Republic (BCU) are subject to additional regulation. The BCU Regulation Nº 2136 of 2013 establishes professional experience requirements for auditors that wish to register with the BCU and conduct audits of entities under its supervision. However, these requirements are not linked to those of the IES.

Although some of the components of the IES seem to have been incorporated into the national requirements, such as university accounting degree and practical experience for auditors of regulated entities, it does not appear that the existing requirements align with the IES, nor are there any other national requirements that incorporate the IES requirements.

Current Status: Partially Adopted

In Uruguay, companies are not legally required to have audited financial statements except for listed entities, banks, and financial institutions regulated by the Central Bank of the Republic, which adopted ISA, as issued and translated into Spanish, through Regulation Nº 2136 of 2013. As of the time of the assessment, ISA 2016–2017 handbook has been translated into Spanish.

De facto, all other audits are conducted in accordance with the standards issued by the Colegio de Contadores, Economistas y Administradores del Uruguay (CCEAU), which adopted ISA as translated into Spanish and issued by the IAASB through the Pronouncement No. 18 in 2010. While the CCEAU recommends the application of ISA, because the CCEAU resolution lacks legal backing, ISA are viewed only as guidelines by practicing auditors.

Current Status: Partially Adopted

Auditors of entities regulated by the Central Bank of the Republic (BCU) and individuals who voluntarily join the Colegio de Contadores, Economistas y Administradores del Uruguay (CCEAU) are subject to ethical requirements in Uruguay.

The BCU has adopted the IESBA Code of Ethics, as issued and translated into Spanish, through Regulation Nº 2136 of 2013 for auditors registered with the BCU.

The CCEAU has developed its own Code of Ethics based on the 2009 IESBA Code of Ethics and requires application by its members through Pronouncement No. 18 in 2010.

Current Status: Partially Adopted

In accordance with the Uruguay Constitution, the Court of Accounts (TCR) is the body responsible for setting accounting standards for public sector entities. The TCR adopted IPSAS, as issued and translated into Spanish, by the Ordinance No. 81 of 2002, as amended by the Ordinance No. 89 of 2017. As of the time of the assessment, IPSAS 2020 handbook has been translated into Spanish

The scope of application was defined "as an autonomous entity that administers public funds and that, according to the law, is obliged to present financial statements to the TCR."

Current Status: Adopted

Auditors of entities regulated by the Central Bank of the Republic (BCU) and individuals who voluntarily join the Colegio de Contadores, Economistas y Administradores del Uruguay (CCEAU) are subject to investigative and disciplinary (I&D) systems. No regulation sets the legal foundation for an I&D system for all professional accountants in Uruguay.

The BCU has responsibility for the I&D of auditors registered in its registry. The extent to which the I&D system established by the BCU aligns with the requirements of SMO 6 is unclear.

The CCEAU has set up an Ethics Commission, which is independent of the Board. The Commission receives complaints about malpractices and misconduct, which is defined as criminal activity, breaches of professional standards, and breaches of ethical requirements. While the CCEAU has established and operationalized an I&D system, the CCEAU reported that it has identified gaps, such as members of the I&D committee do not include non-accountants, and limits on disciplinary sanctions, among others.

Current Status: Partially Adopted

In accordance with Resolution No. 90 of 1991, the Permanent Commission of Adequate Accounting Standards within the Ministry of Economy and Finance is the body responsible for defining accounting principles, which are set through Presidential Decrees.

The Presidential Decree No. 266 of 2007, as amended by Decree No. 291 and Decree No. 124 of 2011, adopted IFRS for listed companies. Decree No. 291 of 2014 adopted IFRS for Small- and Medium-sized Entities for all other companies. In addition, the Central Bank of the Republic has required the application of IFRS for banks, insurance companies, and other financial institutions since 2014. The standards were adopted as issued and translated into Spanish.

Current Status: Adopted

Relevant Organizations

• Colegio de Contadores, Economistas y Administradores del Uruguay (CCEAU)
• Court of Accounts (TCR)
• Central Bank of the Republic (BCU)
• Permanent Commission of Adequate Accounting Standards (CPNCA)

Relevant Legislation

• Compilation of the Central Bank (BCU) regulation
• Regulation No. 2136, Central Bank of the Republic (BCU), 2013
• Regulation No. 2216, Central Bank of the Republic (BCU), 2015
• TCR, Ordinance No. 89 of 2017

Relevant Publications

• CCEAU, SMO Action Plan, March 2021.
• IFRS Foundation, "IFRS Application Around the World, Jurisdictional Profile: Uruguay," June 2016.
• EY, “Consultoría en la implementación de las Normas Internacionales de Contabilidad para el Sector Público (NICSP) en la República Oriental del Uruguay,” January 2020.
• FOCAL and BID, “Contabilidad Gubernamental en América Latina y Convergencia a las Normas Internacionales de Contabilidad del Sector Público (NICSP),” August 2019.
• PwC, Doing Business in Uruguay, 2018.
• World Bank, Report on the Observance of Standards and Codes: Accounting and Auditing, Uruguay, 2006.