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Adopting and implementing international accountancy standards and inspection & enforcement mechanisms is hard work, and the process often requires years of advocacy, public education, outreach, and coalition building.

Over the past 15 years, adopting international standards in Latin American countries has made great strides—primarily around auditing standards, private sector financial reporting standards, and the International Code of Ethics for Professional Accountants. Adopting these standards creates a universal understanding of financial information for global investors, regulars, and other stakeholders. Still, there is room for improvement around some specific areas that could build further confidence in the application of the standards—i.e., quality assurance, education, and investigation and discipline.

Adoption statistics in Latin America

Source: IFAC's International Standards: 2022 Global Adoption Status Snapshot

The complexity of progressing adoption and implementation is especially true in jurisdictions where professional accountancy organizations (PAO) have a shared responsibility to adopt related standards for professional accountants and/or the PAO has no legal authority to adopt standards. Data gathered through IFAC’s Member Compliance Program shows that in Latin America, on average, only 7% of IFAC member organizations have the sole, legal authority to adopt accountancy standards. To meet IFAC’s membership requirements and benchmarks, IFAC member organizations must maintain strong relationships with key stakeholders to advocate, influence, and advance the adoption and implementation of best practices.

Furthermore, IFAC’s 2019 Global Status Report found that over 120 IFAC member organizations operate in jurisdictions where English is not the official or business language. Therefore, translation is essential and can add to the adoption and implementation challenges. Eighteen (15%) of those PAOs are in Spanish-speaking jurisdictions, representing most of the Latin American jurisdictions.

To address its memberships’ needs, in 2021, IFAC and the Inter-American Accounting Association (AIC) partnered on a series of webinars in Spanish, emphasizing Spanish guidance, resources, and sharing regional experiences on the adoption and implementation of international standards and best practices. By demonstrating success factors for meeting IFAC membership requirements, the series also aimed to showcase how successful fulfillment and commitment to the IFAC membership requirements could strengthen the relevance and reputation of PAOs in Latin America. The series ran from May 5-June 23, 2021, and has over 9k views on YouTube.

Click each webinar to access the video recording and presentation slides.

 

 

 

 

 

 

 

 

 

 

 

 

 

The series has fostered productive conversations and further knowledge exchanges among PAOs in the region.

  • For over ten years, IFAC has supported the Colegio de Contadores Públicos Autorizados de Panamá (CCPAP) in promoting legislative reform for the accountancy profession in Panama. This has included multiple discussions with the government and other stakeholders. Finally, in 2021, the Law 280 of 2021 on the Accounting Profession was approved, addressing major regulatory gaps and adopting international best practices. Leading up to the approval of the Law, the Instituto Mexicano de Contadores Públicos (IMCP) met with CCPAP and representatives of the Technical Board of Accounting (the Panamanian accountancy regulator) to support the regulation related to educational standards and ensure that it would enable effective implementation of the revised 2019 International Education Standard requirements. The interaction was based on CCPAP hearing the success stories of the Mexican institute to promote educational changes.
  • The Junta de Decanos de Colegios de Contadores Públicos de Perú (JDCCPP) is also developing an update to national Law No. 28951 of 2007 that regulates the profession. IFAC has continuously supported the JDCCPP in drafting proposals and sharing best practices from other jurisdictions. The Colegio de Contadores Públicos de Costa Rica (CCPACR) is meeting with JDCCPP to share their success, manuals, and best practices around implementing an effective investigation and discipline mechanism aligned with the investigation and discipline benchmark.
  • In Honduras the Colegio Hondureño de Profesionales Universitarios en Contaduría Pública, the Colegio de Peritos Mercantiles y Contadores Publicos de Honduras, and the Accounting and Auditing Standards Technical Board (the national standard setter) are working together to update the Accounting and Auditing Law No. 189 of 2004. One significant component of the discussion is the urgency to establish and implement a mandatory quality assurance system for all auditors in the jurisdiction. IFAC is providing ongoing input into the jurisdictional discussion and has reached out to development partners operating in the jurisdiction for further support. A visit to Honduras is planned for September 2022, when IFAC and the IMCP will actively collaborate and join forces to support the legislative reforms.

Equally exciting, the webinar series inspired additional webinars. From the end of 2021 into early 2022, IFAC and the ASEAN Federation of Accountants partnered to run similar monthly workshops on IFAC’s requirements, sharing best practices from the ASEAN region and supporting PAOs in their journey to fulfill the requirements.

Engaging regional peers to continue creating a more robust regulatory environment in each jurisdiction is essential. IFAC is committed to supporting adoption and implementation efforts, especially in priority areas that have lower rates of full adoption. To help PAOs conduct a gap analysis and prioritize actions in the adoption and implementation of standards, IFAC has translated self-assessments on: Quality Assurance Review Systems, International Education Standards, and Investigation & Discipline Systems into five languages (Arabic, French, Portuguese, Russian, and Spanish).

But our actions do not stop there. COVID-19 significantly accelerated the need for regional and country-to-country cooperation as PAOs reflected on their value proposition and service delivery to expand their scope of activities. Therefore, IFAC is also regularly publishing material and tools to promote the resilience & value of our member organizations, including digital transformation. These initiatives help ensure that PAOs can maintain their essential role as advocates and technical advisors and build upon their successes.

Sarah Gagnon

Senior Manager, IFAC

Sarah Gagnon is a Senior Manager at IFAC where she provides membership and development services for IFAC's member organizations across Central, Southern, and Eastern Europe. Sarah also leads IFAC's Member Compliance Program and spearheads the external & internal strategic communications and reports on adoption & implementation of global accountancy standards. Prior to joining IFAC, Sarah worked at the SEEP Network in Arlington, VA to support research and membership services for SEEP's global membership of microfinance associations. She holds a bachelor's degree from Union College in Political Science and a graduate degree in Latin American Studies/Development from Georgetown University’s School of Foreign Service.

Manuel Arias
Manuel Arias

Principal, IFAC

Manuel Arias serves as a Principal at the International Federation of Accountants (IFAC), where he plays a pivotal role in enhancing membership engagement, shaping policy, and organizing data collection within the financial regulatory landscape. Manuel coordinates with diverse stakeholders across Latin America, North America, and select European regions. His collaborations extend to professional accountancy organizations, regulatory bodies, public authorities, professional firms, development banks, and various non-accountancy entities, fostering robust partnerships and advancing the profession's objectives.

Manuel started his career in the Colombian Red Cross before transitioning into the accountancy profession with the Colombian National Institute of Public Accountants, leading the strategy and public policy before joining IFAC in 2014, where he has helped to drive the organization's strategic initiatives.

Manuel has a Master of Business Administration (MBA) from the Universidad de Los Andes—Colombia and a degree in Economics from the Universidad Nacional de Colombia.