Conselho Federal de Contabilidade
Member | Established: 1946 | Member since 1986
The Conselho Federal de Contabilidade (CFC), along with its regional arms—Regional Accounting Councils or Conselhos Regionais da Contabilidade (CRC)—carries out regulatory activities for overseeing the accountancy profession throughout the country. Established in 1946 by Decree-Law 9695, the CFC is a special type of entity independent of the government. It is responsible for issuing the directives that govern the profession as well as for overseeing professional conduct. The CRCs, subordinate to the CFC, are responsible for administering CFC directives, as well as for registering accountants and providing support in the oversight of the profession. Accounting and auditing activities in Brazil can only be conducted by persons or firms registered with the CFC/CRC system.
Statements of Membership Obligations (SMOs)
The Statements of Membership Obligations form the basis of the IFAC Member Compliance Program. They serve as a framework for credible and high-quality professional accountancy organizations focused on serving the public interest by adopting, or otherwise incorporating, and supporting implementation of international standards and maintaining adequate enforcement mechanisms to ensure the professional behavior of their individual members.
The CFC shares responsibility with the Securities Exchange Commission (CVM), an IFIAR member, for complying with SMO 1. The Brazilian Institute of Independent Auditors (IBRACON) collaborates with the CFC on the design and implementation of the peer-review quality assurance (QA) review system through the External Quality Review Program Managing Committee (CRE). The CVM oversees the system. The CFC and IBRACON report that the QA system adopts the SMO 1 requirements. The only difference with SMO 1 is that all reviews are subject to a four-year cycle. The CFC and IBRACON are carrying out studies and evaluating the impact of change for the next cycle, creating different cycles for audit firms that audit public companies (three years) and for audit firms that do not audit public companies (four or six years). The changes depend on the negotiations with other regulators, including the CVM. The CRE’s methodology of work was reviewed and revised to ensure the efficiency and security of procedures.
The CFC and Brazilian Institute of Independent Auditors (IBRACON) have made substantial progress over the last five years, and both continue to actively work together with the Ministry of Education and the Securities Exchange Commission (CVM), with whom the CFC shares responsibility to adopt the requirements of the IESs. The CFC and IBRACON have ongoing processes for considering pronouncements issued by the IAESB. Brazil is the most advanced country in the Latin America region with the adoption of IESs. It is the only country that requires a uniform exam for all professional accountants to qualify to practice. The CFC and IBRACON continue to exert their best endeavors to execute plans to adopt the IESs, although a legal impediment is currently preventing advancing to adopt the missing SMO 2 requirement of practical experience.
The CFC and IBRACON are encouraged to analyze and report on whether the CVM’s additional requirements for independent auditors fulfill IES 8 requirements.
The CFC has the legal mandate to adopt audit standards. The Brazilian Institute of Independent Auditors (IBRACON) collaborates with the CFC in this adoption by providing translation support. Given the recent adoption of the ISAs in 2010 and 2012, respectively, for large audit firms and SMPs, the CFC and IBRACON continue to carry out implementation support activities. Both the CFC and IBRACON follow the IAASB work program, considering proposed changes to the standards.
The CFC and IBRACON should clarify plans to update the adopted standards in the most recent version of the IAASB Handbook.
The CFC has the legal mandate to adopt the Code of Ethics for all accountants in Brazil. The Brazilian Institute of Independent Auditors (IBRACON) collaborates closely with the CFC in the analysis and convergence of the IESBA Code of Ethics requirements. The CFC and IBRACON completed a project to adopt a converged Code in Brazil as of March 25, 2014. Prior to finalizing the project, the CFC and IBRACON carried out dissemination, education, and training activities for professional accountants in all jurisdictions. The CFC and IBRACON follow the IESBA work program closely to maintain ongoing adoption processes.
The CFC and Brazilian Institute of Independent Auditors (IBRACON) continue to collaborate with the Convergence Management Committee and the government to develop and execute an implementation plan for IPSASs. The current focus has been in carrying out training on IPSASs to prepare public sector professionals for the transition.
The CFC and IBRACON are encouraged to include the updated status of the adoption of IPSASs and the expected time frame for full adoption at the federal, state, and municipal levels.
The CFC and the regional councils have direct responsibility for the investigation and discipline of all professional accountants in Brazil. The CFC reports that the system is compliant with all of the SMO 6 requirements. The CFC and Brazilian Institute of Independent Auditors continue to analyze their I&D processes to enforce compliance with the Code of Ethics. Meanwhile, the CFC continues to review and consider the best strategy for potential legal reforms to include non-accountants in the Ethics and Discipline Courts.
IFAC bears no responsibility for the information provided in the SMO Action Plans prepared by IFAC member organizations. Please see our full Disclaimer for additional information.