Compliance Responses and Action Plans

  • Compliance Responses and Action Plans

    IFAC members and associates have provided self-assessment information about the regulatory and standard-setting framework in their countries (Part 1) and their organizations' activities in addressing IFAC's membership requirements (Part 2) as described in the Statements of Membership Obligations. Based on an analysis of this information, they are developing SMO Action Plans for continuous development and improvement.

    Some organizations have qualified to submit SMO Action Plans on a biennial basis by meeting eligibility criteria. These organizations are indicated with an asterisk (*).

    In the interest of transparency and providing information to the profession, regulators, and other stakeholders, all responses and SMO Action Plans are accessible below.

    Instituto dos Auditores Independentes do Brasil - IBRACON

     

    Introduction

    The information below has been submitted as part of the IFAC Member Body Compliance program. The Program has two components:

    Part 1: Assessment of the Regulatory and Standard-Setting Framework (provides information about regulatory requirements and standard-setting processes in member body countries); and
    Part 2: Assessment of Compliance (provides information on compliance by member bodies with the Statements of Membership Obligations). Part 2 of the Compliance Program will begin later this year, and the results will also be posted to the website.

    The responses to Part 1 are provided below. IFAC staff has reviewed the responses and, where necessary, validated them with external knowledgeable parties. A list of key terms is available to assist readers in understanding the responses.

    The purpose of this Part 1 Assessment is to collect information on the roles of IFAC member bodies and other organizations (including government, regulatory or other appointed authorities) with respect to:

    1. Setting auditing, accounting, ethics, public sector and education standards; and
    2. Regulating the accountancy profession.

    Sections 1 and 2 of Part 1 contain an introduction and instructions for member body respondents. For this reason, they are not included here, and the responses begin with Section 3.

    Questions or comments may be sent to complianceassessment@ifac.org.


    Section 3 -- Member Body General Information

    1. Country:

      Brazil


    2. Name of member body:
      Instituto dos Auditores Independentes do Brasil - IBRACON

      Or please specify name:



    3. Individual responsible for preparation:
      Guy Almeida Andrade


    4. Date member body became a member of IFAC:
      Note: Please enter a numeric date (e.g., 12/2001, Month/Year)

      10 / 1977



    Questions 5 - 22 are for internal use only


    Section 3G -- Affiliations


    23. Please list those regional organizations to which your organization belongs (e.g., FEE, CAPA, ECSAFA, IAA, etc.):
      Interamerican Accounting Association (IAA)



    Section 4 -- Statutory Framework


    Responses to this section will provide a description of the legal framework governing the commercial aspects of auditing and financial reporting in your country.

    Section 4A -- The Companies Act or Commercial Code


    The following questions concern the Companies Act (the Act) or Commercial Code (the Code) or similar Legal authority in your country. If no Legal authority exists, or the Legal authority does not address particular questions, please indicate "N/A" for Not Applicable.

    24. What is the full name of:
      a). the Act or the Code: Lei 6.404/76 â Lei das Sociedades por Ações â Corporation Law and Lei 10406/2002 Código Civil â Civil Code
      b). the Enacting body: National Congress
      c). date the Act or Code came into force: 12 /


    25. How can IFAC obtain a copy of the Act or Code?
      The Corporation Law in English is available at http://www.cvm.gov.br/ingl/indexing.asp. There is no translation of the Civil Code.


    26. Is the Act or Code available in English?
      Yes   No


    27. What are the types of entities covered by the Act or the Code?
      Please check all that apply.
      Listed entities   Other (please specify):
      Private companies   Other (please specify):
      Governmental   Other (please specify):
      Not-for-profit   Other (please specify):


    28. Is there a requirement for the following entities to prepare annual statutory financial statements? If YES, please describe the financial reporting requirements including the accounting standards to be followed.
      Please check all that apply.
        No Yes (If YES, please describe)
      Listed entities Listed companies have to follow the Accounting Standards prescribed by the Corporation Law, with some other directives issued by the CVM (Security Commission), IBRACON and CFC. Publicly traded companies are also required to comply with the rules of the Brazilian Securities Exchange Commission (CVM). Regulated industries are required to comply with the requirements of the related industry regulator (the Brazilian Central Bank for financial institutions, SUSEP for insurance companies).
      Private companies Regardless of size, Brazilian companies generally follow the concepts that are included in corporation law in preparing their financial statements. For all non regulated entities the financial reporting includes balance sheet, income statement, and explanatory notes. In most of the entities the prevailing accounting rules are those influenced by the Income Tax Law.
      Governmental
      Not-for-profit Regardless of size, Brazilian companies generally follow the concepts that are included in corporation law in preparing their financial statements. For all non regulated entities the financial reporting includes balance sheet, income statement, and explanatory notes. In most of the entities the prevailing accounting rules are those influenced by the Income Tax Law.
      Other (please describe)
      Other (please describe)


    29. Is there a statutory requirement for the following entities to be audited? If YES, describe the requirement including the auditing standards to be followed:
      Please check all that apply.
        No Yes (If YES, please describe)
      Listed entities Auditing Standards that are issued jointly by CFC and IBRACON.
      Private companies Auditing Standards that are issued jointly by CFC and IBRACON.
      Governmental
      Not-for-profit Auditing Standards that are issued jointly by CFC and IBRACON.
      Other (please describe)
      Other (please describe)


    30. Are the auditors ("statutory auditors") that are appointed for audits required by the Act or Code ("statutory audits") appointed for a specific period?
      Yes   No
      If YES, please indicate the term of appointment: Year(s)


    31. Who appoints the statutory auditors?
      Please check all that apply.
      Shareholders   Management
      Board of directors   Other (please specify):
      Audit committee   Other (please specify):
      Government agency   Other (please specify):


    32. Does the Act or Code require joint auditors for the statutory audit?
      Yes   No
      If yes, please describe the requirement:


    33. Does the Act or Code require the rotation of the auditors or audit firms performing statutory audits?
      Yes   No
      If yes, please describe the requirement:



    Section 4B -- Securities Market Regulations


    Responses to this section will provide a description of the financial reporting and auditing requirements for listed entities in your country.

    34. What are (a) the major items of Legal authority for such requirements, (b) the Enacting body(ies) and (c) the latest amendment date? Please identify the specific articles or sections that pertain to auditing and financial reporting:
    1. the major items of Legal authority for such requirements

      Law 6.404 of December 1976; CVM Instruction 308 of May, 1999; Central Bank. Resolution 3081 of 2003

    2. the Enacting body(ies)

      Comissão de Valores Mobiliários – CVM (Securities Commission); Banco Central do Brasil
      (Central Bank); Superintendência de Seguros Privados – SUSEP (Superintendency of Private
      Insurances); Secretaria de Previdência Complementar – SPC (Secretariat of Complimentary
      Pension Benefits); several Agencies regulating Energy, Petroil, Public Concessions etc.

    3. the latest amendment date?

      N/A


    35. How can IFAC obtain a copy of the Legal authority?
      www.cvm.gov.br,
      www.bacen.gov.br,
      www.susep.gov.br,
      www.cfc.org.br,
      www.ibracon.org.br


    36. Is the Legal authority available in English?
      Yes   No


    37. Are there any additional or alternative financial statement reporting requirements for listed entities that are not described in your answer to Question 28?
      Yes   No
      If YES, please describe the requirement:
      It is recommended for listed companies the issuance of the Cash Flow Statement, and The Social Balance. CVM issues accounting instructions which must be adopted by listed Companies


    38. Are there any additional auditing requirements that apply to listed entities other than those described in your answer to Question 29 (e.g., additional GAAS requirements, additional independence requirements, requirements to report to those charged with governance, etc.)?
      Yes   No
      If YES, please describe the requirement:
      Auditors must follow the Brazilian Auditing Standards (Normas Brasileiras e Contabilidade – NBC T-11) that are included in the set of Brazilian Accounting Standards issued by the CFC. The standards, that are written by a joint team of IBRACON and CFC, are accepted by the CVM, Central Bank and other local regulators. Auditors must also follow the rules set by CVM on the
      Instruction 308 (May, 1999), or by the Central Bank on the Resolution 3081/2003.
      In 2004 all Banks and other entities regulated by the Central Bank, with Shareholders’ equity of R$ 1 billion or with deposits of R$ 1 billion are required to constitute an Audit Committee responsible for auditing, risk control and internal controls. (Resolution 3081)


    39. Who appoints the statutory auditors of listed entities?
      Please check all that apply.
      Shareholders   Management
      Board of directors   Other (please specify):
      Audit committee   Other (please specify):
      Government agency   Other (please specify):


    40. Are auditors who perform audits of listed entities appointed for a specified period?
      Yes   No
      If YES, please indicate the term of appointment: 5 Year(s)


    41. Are joint auditors required for audits of listed entities?
      Yes   No
      If YES, please describe the requirement:


    42. Is rotation of the auditor or audit firm for audits of listed entities required?
      Yes   No
      If YES, please describe the requirement:
      NOTE: According to the article 31 of the Instruction 308 issued by the CVM, an Independent Auditor, whether an Individual or a Company, may not provide services for the same client for a period of more than five consecutive years, counted from the date of the issue of that Instruction, and requiring a minimum interval of three years before being re-contracted.



    Section 5 -- Auditing Standards


    Responses to this section will provide a description of the legal and professional framework governing audit and other assurance standards in your country. The section focuses on the establishment of such standards. Please indicate the role your organization plays within this framework.

    Section 5A -- Statutory Framework


    43. Please provide the name of the Legal authority and/or self-regulatory rules that establish audit and other assurance standards in your country, the date of the last amendment of such authority or rules and the name of body responsible for setting audit and other assurance standards. If the standards are different for different entities (e.g., listed entities, private companies, governmental bodies, not-for-profit organizations, etc.), please specify the details that apply to each:
      Type of entity Name of
      applicable
      legal
      authority
      Date of last
      amendment
      (e.g. MM/YYYY 06/2001)
      Name of body responsible
      for setting audit and
      other assurance standards
      Listed entity See note below CFC/IBRACON
      Other (please describe) Listed Entity See note below CVM
      Other (please describe) Financial Institutions See note below Central Bank
      Other (please describe)

      a. How can IFAC obtain copies of these documents?

      www.cfc.org.br; www.ibracon.com.br; www.cvm.gov.br/English; www.bacen.gov.br;
      www.susep.gov.br

      NOTE:
      Brazilian Auditing Standards are included in the set of Brazilian Accounting Standards issued by the CFC (Normas Brasileiras e Contabilidade – NBC) as NBC T-11. The standards are written jointly by IBRACON and CFC. Although the CFC has no legal authority to set the auditing standards, its standards are accepted by the regulators: Securities and Exchange Commission – CVM and Central Bank. CVM and Central Bank are informed about all new standards and they review them. After standards are published they notify the market about that fact.
      Auditors must also follow the rules set by CVM on the Instruction 308 (May, 1999), or by the Central Bank on the Resolution 3081/2003.


      b. Are the documents available in English?
      Yes   No


    Section 5B -- Standard-Setting (CFC/IBRACON)


    44. For CFC/IBRACON, please indicate the nature of the body (i.e., whether it is part of a government ministry or department, an agency appointed by government, a private organization established by the profession, or other [please describe]) and the name of the standards.
      a. Nature of body

      CFC isa private organization created by law, but managed by the profession.

      IBRACON is a private, voluntary organization created by the profession.

      CFC was created in 1946 by law (Decreto-lei 9295). This legislation gives authority to CFC to register professionals and supervise the practice. There are two levels of professionals in Brazil and both must be registered by the CFC. The Law does not gives authority to CFC to set accounting or auditing standards, but the standards issued by CFC are generally accepted auditing practices in Brazil.

      IBRACON is a civil organization with non mandatory association. It was founded in 1972 by the merger of two Institutes of Auditors, one of them (Institute of the Public Accountants of Brazil) was founded 1957. IBRACON was created following the Brazilian Stock Market crash of 1970. Their members convinced the authorities that Brazil needed a set of accounting standards, with rules for reporting and disclosure and that all financial statements should be audited by independent auditors. After that IBRACON started to issue accounting and auditing standards and had the CFC to approve and issue the first auditing standard in Brazil (written by IBRACON). IBRACON has a tradition in writing accounting and auditing standards that are accepted by the market. Since the mid 80's, IBRACON joined CFC in the effort to write what is called Brazilian Accounting Standards.


      b. Name of standards

      Normas Brasileiras e Contabilidade – NBC


    45. How many voting members does the standard-setting body have?
      17


    46. Are the members of the standard-setting body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe:


    47. What are the criteria considered in selecting members of the standard-setting body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?
      Best person for the job.


    48. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      Members of the joint committee are appointed by CFC and IBRACON


    49. What is the term of appointment for members?
      4 Year(s)


    50. For how many years has the standard-setting body been in existence?
      25 Year(s)


    51. Please indicate the budget in US$ of the standard-setting body for the last fiscal year:
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)



    52. To what entity is the standard-setting body accountable?
      Boards of CFC and IBRACON


    53. Describe the due process followed by the standard-setting body. Please include explanations of the following:
    1. public exposure of standards

      Exposure drafts are published on the internet

    2. accessibility of meetings (i.e., public or private)

      All meetings of the Committee are private. Standards are finally approved by the Board in meetings open to the public.

    3. approval process for final standards (i.e., majority required to approve final standards)

      2/3 of votes of members of the committee

    4. other relevant due process activities

      Brazilian auditing standards are based on International Standards on Auditing.

      The draft standards are sent to CVM for revision. CVM issues notes to the market informing about the new standards published by CFC/IBRACON. IBRACON also discusses drafts standards with the Central Bank and receive informal insights from the Central Bank.


    54. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      24 Day(s)


    Section 5B -- Standard-Setting (CVM)


    44. For CVM, please indicate the nature of the body (i.e., whether it is part of a government ministry or department, an agency appointed by government, a private organization established by the profession, or other [please describe]) and the name of the standards.
      a. Nature of body

      Securities and Exchange Commission. An agency appointed by government

      b. Name of standards

      Instructions.

      Note: The Instructions provide guidance only on some limited aspects of auditing.
      Comprehensive auditing guidance is to be found in CFC/IBRACON jointly written standards. Those standards have no legal recognition but are reviewed and promoted by CVM.


    45. How many voting members does the standard-setting body have?
      N/A


    46. Are the members of the standard-setting body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe:


    47. What are the criteria considered in selecting members of the standard-setting body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?
      N/A


    48. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      Members are chosen by the Finance Ministry


    49. What is the term of appointment for members?
      Year(s)


    50. For how many years has the standard-setting body been in existence?
      28 Year(s)


    51. Please indicate the budget in US$ of the standard-setting body for the last fiscal year:
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)



    52. To what entity is the standard-setting body accountable?
      Ministry of Finance


    53. Describe the due process followed by the standard-setting body. Please include explanations of the following:
    1. public exposure of standards

      Standards are submitted to a public hearing

    2. accessibility of meetings (i.e., public or private)

      Meetings are private

    3. approval process for final standards (i.e., majority required to approve final standards)

      Simple majority

    4. other relevant due process activities

      N/A


    54. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      Day(s)


    Section 5B -- Standard-Setting (Central Bank)


    44. For Central Bank, please indicate the nature of the body (i.e., whether it is part of a government ministry or department, an agency appointed by government, a private organization established by the profession, or other [please describe]) and the name of the standards.
      a. Nature of body

      Central Bank

      b. Name of standards

      Resolutions

      Note: The Resolutions provide guidance only on some limited aspects of auditing.
      Comprehensive auditing guidance is to be found in CFC/IBRACON jointly written standards. Those standards have no legal recognition but are reviewed and promoted by Central Bank.


    45. How many voting members does the standard-setting body have?
      N/A


    46. Are the members of the standard-setting body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe:


    47. What are the criteria considered in selecting members of the standard-setting body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?
      Public servants


    48. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      N/A


    49. What is the term of appointment for members?
      Year(s)


    50. For how many years has the standard-setting body been in existence?
      Year(s)


    51. Please indicate the budget in US$ of the standard-setting body for the last fiscal year:
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)



    52. To what entity is the standard-setting body accountable?
      Ministry of Finance


    53. Describe the due process followed by the standard-setting body. Please include explanations of the following:
    1. public exposure of standards

      Standards are submitted to public hearings

    2. accessibility of meetings (i.e., public or private)

      Private meetings

    3. approval process for final standards (i.e., majority required to approve final standards)

      N/A

    4. other relevant due process activities

      N/A


    54. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      Day(s)



    Section 6 -- Ethics


    Responses to questions in this section will provide a description of the legal and professional framework governing ethics standards for accountants in your country. This section focuses on the establishment of such standards. Please indicate the role your organization plays within this framework.

    Section 6A -- Statutory Framework


    55. For each of the following types of professionals, please indicate the name of the Legal authority and/or self-regulatory rules establishing ethics standards for accountants and auditors in your country, the date of the last amendment of such authority or rules and the name of body responsible for setting the ethics standards.
      Type of professional covered Name of
      applicable
      legal
      authority
      Date of last
      amendment
      (e.g. MM/YYYY 06/2001)
      Name of body responsible
      for setting ethics standards
      Professional Accountants in Public Practice See note below CFC/IBRACON
      Professional Accountants in Business See note below CFC/IBRACON
      Professional Accountants in the Public Sector See note below CFC/IBRACON
      Other (please describe)

      a. How can IFAC obtain copies of these documents?

      www.cfc.org.br

      Note:
      The ethical rules for professional accountants are included as part of Brazilian Accounting Standards (NBC) developed by CFC/IBRACON and in Code of Ethics issued by CFC. Those rules are mandatory for CFC and IBRACON Members. Joint Committee of CFC and IBRACON is working to harmonize Brazilian ethical standards to the IFAC Code of Ethics, especially Section 8.


      b. Are the documents available in English?
      Yes   No


    Section 6B -- Standard-Setting (CFC/IBRACON)


    56. For CFC/IBRACON, please indicate the nature of the body (i.e., whether it is part of a government ministry or department, an agency appointed by government, a private organization established by the profession, or other [please describe]) and the name of the standards.
      a. Nature of body

      CFC is a private organization created by law, but managed by the profession.

      IBRACON is a private, voluntary organization created by the profession.


      b. Name of standards

      Code of Ethics for Professional Accountants (Codigo de Etica Professional dos Contabilistas)
      Brazilian Accounting Standards: NBC-P1, NBC-P1-IT-01 and NBC-P1-IT-02.

      NOTE: The answers to questions 57-66 are the same as to questions 45-54


    57. How many voting members does the standard-setting body have?


    58. Are the members of the standard-setting body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe:


    59. What are the criteria considered in selecting members of the standard-setting body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?


    60. Who appoints these members (e.g., member body, government, user, regulator, etc.)?


    61. What is the term of appointment for members?
      Year(s)


    62. For how many years has the standard-setting body been in existence?
      Year(s)


    63. Please indicate the budget in US$ of the standard-setting body for the last fiscal year:
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)



    64. To what entity is the standard-setting body accountable?


    65. Describe the due process followed by the standard-setting body. Please include explanations of the following:
    1. public exposure of standards



    2. accessibility of meetings (i.e., public or private)



    3. approval process for final standards (i.e., majority required to approve final standards)



    4. other relevant due process activities



    66. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      Day(s)



    Section 7 -- Education


    Responses to questions in this section will provide a description of how education requirements for the profession are established. Please indicate the role your organization plays within this process.

    Section 7A -- Education Requirements


    67. Please describe in general terms the education system in your country including the different stages of education from early childhood education through to tertiary level study. Please indicate which aspects / levels are compulsory as part of the national education system:
      National education system is comprised of three levels, being mandatory the primary and secondary levels. Accountants must have the University degree.


    68. Is there a legal authority or regulation that specifies the requirements for an individual to operate as an accountant or auditor in your country?
      Yes   No

      If YES, please provide the name and describe the requirements, including any relating to education, experience or qualifications.

      According to the Decree 9245 of 1946, the accountancy profession can be exercised by those who get the college grade of Bachelor in Science of Accounting, a 5 year course. To obtain the mandatory register at the CFC, the graduated must pass an examination. To work as auditor of listed Companies, the accountant must pass an examination to measure his/her knowledge in this area. The same is asked for those who want to audit financial institutions.

      By that law, all accountants have the right to practice as auditor, but CVM (Brazilian Securities Commission and the Central Bank established that to audit a listed company and all kind of financial institutions, the accountant must submit to an examination controlled by CFC and IBRACON.

      The Technicians are not allowed to practice as auditors.


    69. Please select from below all the relevant key levels of requirements to obtain certification from your member body (i.e. to qualify as a certified or chartered accountant) and provide a general description of the requirement.
      Academic requirements
      University degree in Science of Accounting. 5 years.
      Professional examinations
      One exam to enter the profession. The exam is given by the CFC.
      Practical experience
      CVM requires that the auditor must have 5 years of experience to audit listed Companies
      Final qualifying examination
      One exam for the accountants who want to act as auditors for listed companies. The exam is given by the CFC. Another exam for auditors who want to audit financial institutions.
      Other (please describe)


    70. Which of the following arrangements best describes who establishes the education requirements for the accounting profession in your country? Please select one option.
      A government ministry, department or agency establishes education requirements for the accounting profession with no additional requirements set by the member body(ies).
      A government ministry, department or agency establishes minimum education requirements for the accounting profession, and member body(ies) supplement these requirements.
      Member body(ies) establishes the education requirements for the accounting profession.
      Other (please describe)


    71. Please provide the name(s) of the relevant body in the government ministry, department, agency and / or member body who establishes the education requirements.
      Ministry of Education and Culture - MEC
      CFC and IBRACON set only the requirements of the Continued Professional Education.

    1. A general description of the role of the relevant body(ies) including how it operates and its due process in establishing the education requirements.

      N/A

    2. How many voting members does the relevant body(ies) have

      N/A

    3. Are the members of the relevant body(ies) involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe:

    4. For how many years has the body been in existence?

      Year(s)


    72. How would you describe the authority that the education requirements have?
      Requirements are legally-based
      Requirements are set in the constitution, by-laws or other rules of the relevant body(ies).
      Requirements are set in member body(ies) policy document(s).
      Other (please describe)

    72 a. How can IFAC obtain copies of these documents?
      www.mec.gov.br

    72 b. Are these documents available in English?
      Yes   No


    73. Are the education requirements for accountants and auditors the same throughout your country, or do they differ among regions, provinces or states?
      Same   Different
      If different, please briefly describe the main differences:
      Re Q. 74 The education program is delivered by education institutions but the final examination is delivered by CFC


    74. Please indicate the scenario that best describes who delivers the education and examination process for members of the profession. Please only select one option.
      The education program and final examination are delivered by the member body.
      The education program and final examination are delivered by the member body and other education institutions (e.g., universities, colleges, and others).
      The education program and final examination are delivered by education institutions (e.g., universities, colleges, and others).
      Other (please explain) See Q. 73


    75. Once qualified as a member of your professional body, can members offer their services directly to the public?
      Yes   No



    Section 7B -- Licensing


    76. Are there licensing requirements for auditors in your country?
      Yes (continue with Question 77)   No (proceed to Section 8)


    77. Who sets the requirements to obtain a license?
      In general, the requirements are set by CFC.
      To audit Listed Companies, the requirements are set by the CVM.


    78. What are the requirements to obtain a license (please select all relevant requirements.)?
      Academic study specific for obtaining a license
      Practical experience
      Licensing examination
      Final qualifying examination
      Other (please describe)
      • To audit all kind of Companies there is only one requirement - be a registered at CFC (academic study and the examination).
      • To audit Listed Companies the registered accountant must pass an examination delivered by the CFC (starting in 2004.).
      • To audit financial institutions, the auditor – in addition to the exam required for auditing of listed companies – needs to pass another examination delivered by the CFC (starting in 2005.). This examination needs to be renewed every 5 years.


    79. Are there ongoing requirements to retain a license?
      Yes   No

      If YES, please select all relevant requirements.
      Continuing professional development
      Re-examination
      Other (please specify):


    80. What entity grants the license?
      CFC


    81. Describe any additional licensing requirements for auditors of listed entities (e.g., additional education requirements, registration, etc.).
      To work as auditor of listed Companies, the accountant must pass an examination to measure his/her knowledge in this area. This examination is delivered by CFC.



    Section 8 -- Public Sector Accounting Standards


    Responses to this section will provide a description of the legal and professional framework governing public sector accounting standards in your country. The section focuses on the establishment of such standards. Please indicate, where appropriate, the role of your organization within this framework.

    Section 8A -- Statutory Framework


    82. Please provide the name of the Legal authority and/or self-regulatory rules establishing public sector accounting standards in your country, the date of last amendment and the name of the body responsible for setting public sector accounting standards. If the standards are different for different entities (e.g., whole of government, ministry/department, statutory authority/agency, profit entity owned by government, state governments, local governments, other [please specify]), please specify the details that apply to each.
      Type of entity Name of
      legal
      authority
      Date of last
      amendment
      (e.g. MM/YYYY 06/2001)
      Name of body responsible
      for setting public sector
      accounting standards
      Whole of government Law 4.320 1964 National Congress
      Ministry/department
      Statutory authority/agency
      Profit entity owned by government Law 6404 1976 National Congress
      State governments
      Local governments
      Other (please describe)
      Other (please describe)

      a. How can IFAC obtain copies of these documents?

      N/A

      Note:
      CFC has created a working group to develop accounting standards for the Brazilian public sector.


      b. Are the documents available in English?
      Yes   No


    Section 8B -- Standard-Setting (National Congress)


    83. For National Congress, please indicate the nature of the body (i.e., whether it is part of a government ministry or department, an agency appointed by government, a private organization established by the profession, or other [please describe]) and the name of the standards.
      a. Nature of body

      National Congress

      b. Name of standards

      Law


    84. How many voting members does the standard-setting body have?
      N/A


    85. Are the members of the standard-setting body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe:


    86. What are the criteria considered in selecting members of the standard-setting body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?
      N/A


    87. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      N/A


    88. What is the term of appointment for members?
      Year(s)


    89. For how many years has the standard-setting body been in existence?
      Year(s)


    90. Please indicate the budget in US$ of the standard-setting body for the last fiscal year:
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)



    91. To what entity is the standard-setting body accountable?
      N/A


    92. Describe the due process followed by the standard-setting body. Please include explanations of the following:
    1. public exposure of standards

      No public hearings

    2. accessibility of meetings (i.e., public or private)

      Meetings are held in private

    3. approval process for final standards (i.e., majority required to approve final standards)

      N/A

    4. other relevant due process activities

      N/A


    93. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      Day(s)



    Section 9 -- Private Sector Accounting Standards


    Responses to the questions in this section will provide a description of the legal, statutory and professional framework governing private-sector accounting standards in your country. The section focuses on the establishment of such standards. Please indicate what role your organization plays within this framework.

    Section 9A -- Statutory Framework


    94. Please provide the name of the Legal authority and/or self-regulatory rules that establish private-sector accounting standards in your country, the date of last amendment, and the name of the body responsible for setting private sector accounting standards. If the standards are different for different entities (for example, listed entities, private companies, governmental organization, not for profit organizations, etc.), please specify the requirements that apply to each.
      Type of entity Name of legal
      authority or
      applicable
      rules
      Date of last
      amendment
      (e.g. MM/YYYY 06/2001)
      Name of body responsible
      for setting private sector
      accounting standards
      Listed entity See note below CFC/IBRACON
      Other (please describe) Listed entities See note below CVM
      Other (please describe) Financial Institutions See note below Central Bank
      Other (please describe)
      Other (please describe)

      a. How can IFAC obtain copies of these documents?

      www.crc.org.br, www.ibracon.com.br, www.bacen.gov.br, www.cvm.gov.br

      Brazilian Accounting Standards are written jointly by IBRACON and CFC. Although the CFC has no legal authority to set the accounting standards, those standards are accepted by the regulators: Securities and Exchange Commission – CVM and Central Bank. CVM and Central Bank are informed about all new standards and they review them. After standards are published they notify the market about that fact.
      CVM and Central Bank has the legal authority to issue accounting standards, but they only published limited number of standards – mainly on specialized subject matters like financial instruments.


      b. Are the documents available in English?
      Yes   No


    Section 9B -- Standard-Setting (CFC/IBRACON)


    95. For CFC/IBRACON, please indicate the nature of the body (i.e., whether it is part of a government ministry or department, an agency appointed by government, a private organization established by the profession, or other [please describe]) and the name of the standards.
      a. Nature of body

      NOTE: For answers to questions 95-105 see answers to questions 45-54

      b. Name of standards



    96. How many voting members does the standard-setting body have?


    97. Are the members of the standard-setting body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe:


    98. What are the criteria considered in selecting members of the standard-setting body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?


    99. Who appoints these members (e.g., member body, government, user, regulator, etc.)?


    100. What is the term of appointment for members?
      Year(s)


    101. For how many years has the standard-setting body been in existence?
      Year(s)


    102. Please indicate the budget in US$ of the standard-setting body for the last fiscal year:
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)



    103. To what entity is the standard-setting body accountable?


    104. Describe the due process followed by the standard-setting body. Please include explanations of the following:
    1. public exposure of standards



    2. accessibility of meetings (i.e., public or private)



    3. approval process for final standards (i.e., majority required to approve final standards)



    4. other relevant due process activities



    105. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      Day(s)


    Section 9B -- Standard-Setting (CVM)


    95. For CVM, please indicate the nature of the body (i.e., whether it is part of a government ministry or department, an agency appointed by government, a private organization established by the profession, or other [please describe]) and the name of the standards.
      a. Nature of body



      b. Name of standards



    96. How many voting members does the standard-setting body have?


    97. Are the members of the standard-setting body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe:


    98. What are the criteria considered in selecting members of the standard-setting body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?


    99. Who appoints these members (e.g., member body, government, user, regulator, etc.)?


    100. What is the term of appointment for members?
      Year(s)


    101. For how many years has the standard-setting body been in existence?
      Year(s)


    102. Please indicate the budget in US$ of the standard-setting body for the last fiscal year:
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)



    103. To what entity is the standard-setting body accountable?


    104. Describe the due process followed by the standard-setting body. Please include explanations of the following:
    1. public exposure of standards



    2. accessibility of meetings (i.e., public or private)



    3. approval process for final standards (i.e., majority required to approve final standards)



    4. other relevant due process activities



    105. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      Day(s)


    Section 9B -- Standard-Setting (Central Bank)


    95. For Central Bank, please indicate the nature of the body (i.e., whether it is part of a government ministry or department, an agency appointed by government, a private organization established by the profession, or other [please describe]) and the name of the standards.
      a. Nature of body



      b. Name of standards



    96. How many voting members does the standard-setting body have?


    97. Are the members of the standard-setting body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe:


    98. What are the criteria considered in selecting members of the standard-setting body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?


    99. Who appoints these members (e.g., member body, government, user, regulator, etc.)?


    100. What is the term of appointment for members?
      Year(s)


    101. For how many years has the standard-setting body been in existence?
      Year(s)


    102. Please indicate the budget in US$ of the standard-setting body for the last fiscal year:
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)



    103. To what entity is the standard-setting body accountable?


    104. Describe the due process followed by the standard-setting body. Please include explanations of the following:
    1. public exposure of standards



    2. accessibility of meetings (i.e., public or private)



    3. approval process for final standards (i.e., majority required to approve final standards)



    4. other relevant due process activities



    105. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      Day(s)



    Section 10 -- Monitoring (Quality Assurance) and Enforcement


    Responses to the questions in this section will provide a description of the legal and professional framework governing regulation of the profession in your country. Please indicate what role your organization plays within this framework.

    Section 10A -- Securities Market Regulatory Authority


    106. Name the authority that regulates the securities market:
      Comissao de Valores Mobiliarios - CVM
      (Securities and Exchange Commission)


    107. What responsibilities does this organization have for monitoring and enforcing compliance with accounting, reporting or auditing requirements? Please identify the Legal authority that establishes that responsibility:
      The CVM was created in 1976 by the law 6.385. The Commission has the power to regulate, oversight and discipline the capital market in Brazil, and includes the activity of auditing Listed Companies. The CVM has the authority to punish the professionals and other players. Punishment goes from fine to suspension.


    108. Briefly describe the role of the regulatory authority as it relates to the following:
    1. regulation of the audit profession

      CVM can set rules for the auditing function that includes examination, CPE, External Review of Practice, and inspection of working papers when considered necessary.

    2. accounting and auditing standard-setting

      CVM can issue accounting interpretations. Usually CVM adopts CFC/IBRACON pronouncements. There is a project in the Congress to change the law, giving power to CVM issue Accounting Standards. The project also establishes that CVM will be helped by an institution comprised by CFC, IBRACON, the association of listed companies, the association of analysts, and the academia.

    3. review of financial statements prepared by listed entities, and monitoring of their compliance with the accounting and disclosure requirements

      CVM has the power to review financial statements issued by listed companies and can ask for changes and more disclosure.



    Section 10B -- Stock Exchange


    109. Name the four largest stock exchangers (by market capitalization) and whether it is organized as a profit or not-for-profit organization:
      Profit Not
      for
      profit
      Stock Exchange
      Bolsa de Valores de Sao Paulo - BOVESPA



    Section 10B -- Stock Exchange
    Bolsa de Valores de Sao Paulo - BOVESPA Details


    110. For Bolsa de Valores de Sao Paulo - BOVESPA, is there a mechanism at the stock exchange(s) for monitoring and enforcing financial reporting, accounting and auditing of listed entities?
      Yes   No

      If YES, please describe the following:

    1. How the monitoring and enforcement of financial reporting, accounting and auditing is conducted.

      Companies have to send their quarterly financial statements to the BOVESPA. There are three levels of companies, and for the higher levels the rules on disclosure are stricter. The highest level requires that the company file its financial statements according to the BRGAAP and to IFRS or USGAAP.

    2. The consequences of non-compliance with the financial reporting, accounting or auditing requirements.

      N/A

    3. How enforcement actions are administered.

      N/A



    Section 10C -- Regulatory Oversight of the Accounting Profession


    111. Has an audit profession oversight body been established (e.g., to oversee the external quality assurance review process, etc.)?
      Yes   No

      If NO, proceed to the next section.

      If YES, please describe :

    1. What are the name and duties of the oversight body?



    2. The number of members on the oversight body



    3. Its powers



    4. How the oversight body conducts or oversees a program of inspections to assess the degree of compliance of each audit firm/auditor with applicable auditing standards and regulations



    5. The sanctions the oversight body may impose in the event of non-compliance



    6. How the oversight body is accountable to any public institution or body



    Section 10D -- Banks Regulatory Authority


    112. Name the authority that regulates the banks and similar financial institutions. Discuss how this authority differentiates between accounting requirements for regulatory reporting and general purpose external financial reporting:
      Banco Central do Brasil


    113. Discuss briefly the legal requirements with respect to monitoring and enforcement by the regulatory authority of accounting and auditing standards that apply to the banks and similar financial institutions:
      The Central Bank issues accounting standards inspired by the IAS, but does not issue Auditing Standards. However, the Central Bank can set rules for the auditing function as rotation of firm, the need of an examination for the auditors to audit financial institutions and forbidden auditors to perform some advisory services to their clients.


    114. Briefly describe the role of the regulatory authority as it relates to the following:
    1. regulation of the audit profession

      No role.

    2. accounting and auditing standard-setting

      Can set accounting standards to be applied by financial institutions.

    3. review of financial statements prepared by listed entities

      For the Central Bank there is no difference between listed or non listed financial institution.

    4. enforcement of accounting, reporting and auditing requirements

      The Central Bank has the authority to enforce all accounting and reporting requirements. The Central Bank has a team of inspectors that go to the institutions and review its financial statements, controls, operations, etc.



    Section 10E -- Non-Banking Financial Institutions Regulatory Authority


    115. Name the regulatory authority(ies) responsible for monitoring compliance with and enforcing accounting, reporting and auditing requirements imposed on non-banking institutions.
      Banco Central do Brasil


    116. What is the source of Legal authority of the regulatory authority(ies)?
      Resolutions


    117. Briefly describe the role of the regulatory authority(ies) as it relates to the following:
    1. regulation of the audit profession

      See answer to Q 114 a.

    2. accounting and auditing standard-setting

      See answer to Q 114 b.

    3. review of financial statements prepared by listed entities

      See answer to Q 114 c.

    4. enforcement of accounting, reporting and auditing requirements

      See answer to Q 114 d.



    Section 10F -- Insurance Companies Regulatory Authority


    118. Name the regulatory authority responsible for monitoring compliance with and enforcing accounting, reporting and auditing requirements imposed on insurance companies.
      Superintendencia de Seguro Privado - SUSEP


    119. What is the source of Legal authority of the regulatory authority(ies)?
      N/A


    120. Briefly describe the role of the regulatory authority(ies) as it relates to the following
    1. regulation of the audit profession

      No Role

    2. accounting and auditing standard-setting

      The SUSEP can issue accounting standards, but no auditing standards

    3. review of financial statements prepared by listed listed entities

      The SUSEP is empowered to review the financial statements, no matter what form of constitution of the insurance Company.

    4. enforcement of accounting, reporting and auditing requirements

      The SUSEP review financial statements and enforce accounting and reporting requirements.



    Section 10G -- Other Regulatory Authority


    121. Name any other regulatory authority(ies) responsible for monitoring compliance with and enforcing accounting, reporting and auditing requirements.
      Secretaria da Preodencia Complementar - SPC


    122. What is the source of Legal authority of each regulatory authority?
      N/A


    123. Briefly describe the role of the regulatory authority(ies) as it relates to the following
    1. regulation of the audit profession

      No role.

    2. accounting and auditing standard-setting

      The SPC can issue accounting standards for the Private Pension Funds

    3. review of financial statements prepared by listed listed entities

      Yes.

    4. enforcement of accounting, reporting and auditing requirements

      N/A



    Section 10H -- Quality Assurance


    124. Does any organization of professional accountants/auditors organize a program of quality assurance review to monitor compliance with accounting, reporting and auditing requirements?
      Yes   No

      If NO, proceed to next Section.

      If YES, briefly describe the monitoring and enforcement mechanism.

      A joint Committee was created by CFC and IBRACON - the Management Committee of the External Review of the Quality Control Program, which oversees all peer reviews, with power to ask for explanations, additional procedures and determine a new review.
      The peer review cycle is 4 years.



    125. Under what authority does the organization conduct the program of quality assurance review?
      Although with some independence, the Committee works under the CFC, according to the standards of "External Review of Quality Control" and the "Standard on Audit Internal Quality Control." The Committee has set standards on the review process.


    126. Who performs the review (e.g., one firm reviewing another firm, staff from the national professional organization, contractors, or a combination of these)?
      The review is performed by one firm reviewing another firm. Within the peer review system the reviewed firm can choose its reviewer but is has to be a firm of similar size.
      The results of the review are sent to CFC and to CVM. Both entities have authority to punish the firms or the accountants.




    Section 10 I -- Investigation and Discipline


    127. Is there a process for investigating and disciplining the accounting profession in your country?

    128. Which of the following best describes the responsibility for the investigatory and disciplinary function in your country?
      Government or other agencies are solely responsible for this function.
      Government or other agencies have this responsibility, but the member body or bodies participate in the process.
      Government formally delegates this function to the member body or bodies, to exercise on its behalf.
      Member body or bodies have separate and independent processes that operate alongside processes of legal authorities.
      Other (please explain) CFC and CVM has authority to punish auditors


    129. Please indicate the name of the body or bodies responsible for investigation and discipline.
      Superior Ethics Tribunal


    Responses to the remaining questions in this Section are required if your organization has responsibility for investigation and disciplinary actions.

    130. How many voting members does the body have?
      17


    131. Are the members of the body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe:


    132. What are the criteria considered in selecting members of the body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?
      Best person for the job


    133. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      Members are elected by the profession


    134. What is the term of appointment for members?
      4 Year(s)


    135. For how many years has the body been in existence?
      58 Year(s)


    136. Please indicate the budget in US$ of the body for the last fiscal year.
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)

      (specify currency)



    137. To what entity is the body accountable?
      CFC


    138. Approximately how many days per year does the body meet in full session (including teleconferences)?
      24 Day(s)



     

     

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