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 issued by the IASB without modifications. Subsequently, in 2014, the Central Bank of Uruguay (BCU) adopted IFRS 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 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 RPBB (Net Asset Value for Financial Accountability); (iv) do not have the participation of the state; and (v) do not control or are not 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, companies with debts over 20% of RPBB are required to have audited financial statements.

In accordance with Law No. 18.401 of 2008, the individual regulators of financial institutions, listed companies, insurance companies, and pension funds were integrated into a 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 audits 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 provide 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 accountancy 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 assurance reviews, complying with ethical standards, being subject to investigation and disciplinary procedures, and applying ISA when conducting audits, among other matters.

There are no independent audit oversight arrangements in Uruguay. The supervision and regulation of auditors and firms are outlined in the Regulation section.

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 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 Integration Committee Europe—Latin America, and a member of the Group of Latin-American Accounting Standard Setters.

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. The BCU carries out reviews when a suspicion or risk is identified. As reported by the Colegio de Contadores, Economistas y Administradores del Uruguay (CCEAU), the BCU procedures are not in line with the best practices of SMO 1.

Auditing standards are also not specified in law or regulation. De facto, all audits are conducted in accordance with the standards issued by the CCEAU. The institute adopted IAASB standards as issued for application by its members through the Pronouncement No. 18 in 2010. Therefore, the relevant standards for QA review systems (ISQM 1, 2, and ISA 220 revised) are adopted. The BCU as the audit standard setter for financial institutions, listed companies, insurance companies, and pension funds, has adopted ISA as issued by CCEAU.

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; however, these requirements are not linked to those of the IES.

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

Current Status: Partially Adopted

In Uruguay, financial institutions, listed companies, insurance companies, and pension funds are regulated by the Central Bank of the Republic (BCU) and must undergo an audit. Additionally, other companies with debts over 20% of RPBB (Net Asset Value for Financial Accountability) are required to have audited financial statements.

De facto, all audits are conducted in accordance with the standards issued by the Colegio de Contadores, Economistas y Administradores del Uruguay (CCEAU), which adopted IAASB standards as issued through the Pronouncement No. 18 in 2010. As the official standard-setter for the abovementioned entities, the BCU has adopted ISA as adopted by the CCEAU through Regulation Nº 2136 of 2013.

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 ethical requirements in Uruguay.

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

The CCEAU has adopted the IESBA Code of Ethics by reference through Pronouncement No. 18 in 2010 for all auditors. The other members are subject to CCEAU own Code of Ethics based on the 2009 IESBA Code of Ethics while utilizing the latest version of the IESBA Code as a supplement to its own Code.

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 has adopted national standards on a partial accrual-basis (IFAC/CIPFA International Public Sector Financial Accountability Index 2020) through the Ordinance No. 81 of 2002, as amended by the Ordinance No. 89 of 2017.

Current Status: Not 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; however, it is not evident if the I&D system established by the BCU aligns with the best practices of SMO 6.

With respect to its membership, the CCEAU has set up an Ethics Commission, which is independent of the Board. The Ethics Commission receives complaints about malpractices and misconduct, which is defined as criminal activity, breaches of professional standards, and breaches of ethical requirements. The CGE reports that its system is aligned with the main requirements of SMO 6.

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. 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.

Presidential Decree No. 291 of 2014 adopted IFRS for Small- and Medium-sized Entities for all other companies.

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, 2024.
• IFRS Foundation, "IFRS Application Around the World, Jurisdictional Profile: Uruguay," June 2016.
• FOCAL and BID, “Contabilidad Gubernamental en América Latina y Convergencia a las Normas Internacionales de Contabilidad del Sector Público (NICSP),” August 2019.
• World Bank, Report on the Observance of Standards and Codes: Accounting and Auditing, Uruguay, 2006.