Guatemala

Member Organizations

Member Organization Associate

  Colegio de Contadores Públicos y Auditores de Guatemala
  Instituto Guatemalteco de Contadores Públicos y Auditores

Legal and Regulatory Environment

  • Overview of Statuatory Framework for Accounting and Auditing

    The financial reporting framework in Guatemala is established under the Code of Commerce of 1970. The Code establishes accounting and financial reporting requirements for all companies. It mandates private companies to keep books of accounts and provides the basic legal framework for accounting.

    Accounting Framework

    As stipulated in the Code of Commerce, all companies must prepare financial statements in accordance with generally accepted accounting principles (Guatemalan GAAP); however, this does not refer specifically to IFRS, and the Code does not define Guatemalan GAAP either. Therefore, as reported by the IFRS Foundation, companies prepare financial statements based on the Tax Legislation Decree No. 10 of 2012.

    The Tax Legislation Decree requires medium and large-sized companies to present annual audited financial statements using income tax rules for calculating taxable income. Financial statements prepared in accordance with the Tax Legislation Decree are considered special purpose financial statements. In addition, the tax authority—Superintendencia de Administración Tributaria (SAT)—also permits companies to prepare statements using IFRS or IFRS for Small- and Medium-sized Entities (SMEs).

    The Decree No. 72 of 2001 authorizes the Colegio de Contadores Públicos y Auditores (CCPAG), a professional accountancy organization with mandatory membership, to set accounting and auditing standards for its members. The CCPAG adopted IFRS through a Resolution on December 20, 2007 and IFRS for SMEs in 2010. However, the CCPAG’s resolutions are not legally binding.

    In addition, the Superintendence of Banks (SIB), empowered by the Banks Act No. 19 of 2002, requires banks, other financial institutions, and insurance companies to prepare financial statements based on the SIB accounting manual. Any issues not addressed by the SIB manual should be addressed using IFRS. The SIB also sets requirements for companies within the Guatemalan financial system with loans or financing over US$ 600,000. These companies are mandated to present audited financial statements using IFRS or IFRS for SMEs.

    Lastly, listed companies that are supervised by the Securities and Commodities Market (BVNSA) are also permitted but not required to use IFRS.

    Auditing Framework

    The SAT and the BVNSA require companies under their supervision to have their statements audited in accordance with standards issued by the CCPAG. In 2007, the CCPAG adopted ISA through a Resolution with a provision stating all subsequent revisions and updates as issued by the IAASB, including the stated effective date. Additionally, the SIB has adopted the 2013 ISA, as issued by the IAASB, for entities subject to its regulation, and, as the SIB has issued its own auditing manual, a modification has been made to ISA 700 to address the different accounting basis within its manual.

  • Regulation of Accountancy Profession

    The accountancy profession in Guatemala is regulated at the professional level. There is one mandatory professional accountancy organization (PAO)—the Colegio de Contadores Públicos y Auditores de Guatemala (CCPAG). The accountancy profession in Guatemala is comprised of public accountants and auditors.

    The CCPAG was established by Decree No. 72 of 2001. The decree does not set initial professional development or continuous professional development (CPD) requirements; however, it does state that all professional accountants must become members of the CCPAG to practice. Candidates aspiring to become members of CCPAG are required to obtain a bachelor’s accounting degree.

    In accordance with the Decree No. 72 of 2001, the CCPAG’s responsibilities include: (i) establishing membership requirements; (ii) maintaining a registry of professional accountants; (iii) setting CPD requirements; (iv) setting accounting and auditing standards for its members; (v) setting ethical requirements; (vi) carrying out investigative and disciplinary procedures; (vi) establishing and implementing a Quality Assurance (QA) review system; (vii) providing training programs for its members, and (viii) promoting improvements to the profession. Furthermore, although the CCPAG is empowered to set mandatory CPD requirements for its members, the organization has adopted voluntary CPD.

    In addition, individuals who voluntarily join the Instituto Guatemalteco de Contadores Públicos y Auditores (IGCPA), another PAO in the jurisdiction that was established in 1968, become subject to its regulations. Candidates who wish to join the IGCPA are required to be members of the CCPAG. The IGCPA sets ethical standards and investigates and disciplines its members in addition to promoting the adoption and implementation of international standards.

    Lastly, the Tax Administration, the Superintendence of Banks, and the Securities and Commodities Market maintain registries of public accountants, auditors, and audit firms providing services to companies under their supervision. Regulators require these individuals to have the relevant practical experience and be a member of the CCPAG.

  • Audit Oversight Arrangements

    There are no independent audit oversight arrangements in Guatemala.

    The Colegio de Contadores Públicos y Auditores de Guatemala (CCPAG), established by the Decree No. 72 of 2001, unites all professionals offering auditing services. Membership in the CCPAG is mandatory to practice publicly. In accordance with the decree, the CCPAG mandate includes (i) establishing membership requirements; (ii) maintaining a registry of professional accountants; iii) setting CPD requirements; (iv) setting accounting and auditing standards for its members; (v) setting ethical requirements; (vi) carrying out investigative and disciplinary procedures; (vi) establishing and implementing a Quality Assurance (QA) review system; (vii) providing training programs for its members, and (viii) promoting improvements to the profession. In 2013, the CCPAG adopted ISQC 1 and created a National Quality Control Board with the mandate to adopt and subsequent implementation of a QA review system. As of the time of the assessment, no policy or procedure to establish the QA system has been developed.

    In addition, individuals that may offer auditing services and who voluntarily join the Instituto Guatemalteco de Contadores Públicos y Auditores (IGCPA), another professional accountancy organization in the jurisdiction, become subject to its regulations. The IGCPA sets ethical standards and investigates and disciplines its members.

    Lastly, the Tax Administration, the Superintendent of Banks, and the Securities and Commodities Market maintain registries of auditors and audit firms providing services to companies under their supervision. Regulators require these individuals to have the relevant practical experience and be a member of the CCPAG.

  • Professional Accountancy Organizations

    The Colegio de Contadores Públicos y Auditores (CCPAG)

    The CCPAG, established by the Decree No. 72 of 2001, unites public accountants and auditors. Membership of the CCPAG is mandatory for all professional accountants in the CCPAG to practice. The CCPAG mandate includes (i) establishing membership requirements; (ii) maintaining a registry of professional accountants; iii) setting CPD requirements; (iv) setting accounting and auditing standards for its members; (v) setting ethical requirements; (vi) carrying out investigative and disciplinary procedures; (vi) establishing and implementing a Quality Assurance (QA) review system; (vii) providing training programs for its members, and (viii) promoting improvements to the profession.

    In addition to being an IFAC Member, the CCPAG is a member of the Inter-American Accounting Association (AIC), the Group of Latin American Accounting Standard Setters (GLENIF), and the Committee of Integration for Latin Europe and America (CILEA).

    The Instituto Guatemalteco de Contadores Públicos y Auditores (IGCPA)

    The IGCPA, established in 1968, is a professional accountancy organization with voluntary membership. The IGCPA sets ethical standards and investigates and disciplines its members in addition to promoting the adoption and implementation of international standards.

    The IGCPA is a member of IFAC and of the AIC.

  • Projects or Other Information

Adoption of International Standards

  • Quality Assurance

    There is no legal requirement to establish a quality assurance (QA) review system for all audits of financial statements in Guatemala. However, the Decree No. 72 of 2001 does empower the Colegio de Contadores Públicos y Auditores de Guatemala (CCPAG) as the regulator of the profession and, as such, it is taking steps to establish a QA review system.

    The CCPAG is working to amend the law and the regulations to permit the creation of a QA review system. In 2013, the CCPAG adopted ISQC 1 and created a National Quality Control Board with the mandate to adopt and subsequent implementation of a QA review system. As of the time of the assessment, no policy or procedure to establish the QA system has been developed. The timeline for the QA implementation remains unclear.

    Current Status: Not Adopted

  • International Education Standards

    In accordance with the Decree No. 72 of 2001, all professional accountants are required to be a member of the Colegio de Contadores Públicos y Auditores de Guatemala (CCPAG) in order to practice. Individuals who wish to join the CCPAG are required to complete an accounting degree. In addition, the CCPAG has adopted voluntary continuing professional development requirements for its members.

    Universities set the curriculum for accounting degrees as well as the requirement to obtain two years’ practical experience prior to graduation. In 2015, the CCPAG adopted the IES for all professional accountants; nevertheless, because the CCPAG lacks legal authority in this area, the IES are viewed only as guidelines by universities.

    Finally, professional accountants regulated by the Tax Administration, the Superintendence of Banks, and the Securities and Commodities Market are subject to the respective rules of each agency. Regulators require these individuals to have the relevant practical experience and be a member of the CCPAG.

    Professional accountants may also voluntarily join the Instituto Guatemalteco de Contadores Públicos y Auditores (IGCPA) and become subject to its membership requirements. Candidates who wish to join the IGCPA are required to be members of the CCPAG.

    Although some of the requirements of IES appear to have been incorporated into the national requirements, such as obtaining a university accounting degree and practical experience requirements, it does not appear that any other national educational requirements incorporate the IES. Furthermore, it is unclear if the education requirements in place align with the latest IES requirements.

    Current Status: Partially Adopted

  • International Standards on Auditing

    In accordance with the Decree No. 72 of 2001, the Colegio de Contadores Públicos y Auditores de Guatemala (CCPAG) is empowered to set auditing standards for its members. In 2007, the CCPAG adopted ISA through a Resolution, which was included in the Guatemalan Official Gazette that included a provision stating the ongoing adoption of all subsequent revisions and updates as issued by the IAASB without modifications and including the IAASB-stated effective date.

    The Superintendencia de Administración Tributaria and the Securities and Commodities Market require companies under their supervision—medium and large sized companies that file special purpose financial statements and listed companies, respectively—to have their statements audited in accordance with standards issued by the CCPAG.

    The Superintendence of Banks (SIB) requires auditors providing services to entities under its supervision to prepare annual audited financial statements in accordance with ISA as issued by the IAASB. A modification has been made to ISA 700 for the entities regulated by the SIB to account for the differences in the accounting manual issued by the SIB.

    Current Status: Partially Adopted

  • Code of Ethics for Professional Accountants

    The Decree No. 72 of 2001 grants authority to the Colegio de Contadores Públicos y Auditores de Guatemala (CCPAG) to adopt ethical requirements for all professional accountants. In March 2013, the CCPAG adopted the IESBA Code of Ethics through a Resolution, which was published in the Guatemalan Official Gazette. The Resolution states that any changes to the Code will automatically be adopted as issued by the IESBA.

    In addition, the Instituto Guatemalteco de Contadores Públicos y Auditores (IGCPA), a professional accountancy organization with voluntary membership, has also adopted the IESBA Code of Ethics for its members since 2012.

    Current Status: Adopted

  • International Public Sector Accounting Standards

    The National Constitution of the Republic of Guatemala establishes the Accounting Administration Authority of the Ministry of Public Finance (MoF) as the accounting standard-setter for the public sector. Accordingly, the MoF has adopted accrual basis IPSAS, via national standards, through Decree No. 109 of 2019 (IFAC, CIPFA 2018).

    Current Status: Adopted

  • Investigation and Discipline

    The Decree No. 72 of 2001 authorizes the Colegio de Contadores Públicos y Auditores de Guatemala (CCPAG) to establish an investigative and disciplinary (I&D) system for all professional accountants. Accordingly, the CCPAG has established I&D procedures for all professional accountants, which is led by its Honor Tribunal. In addition, the Instituto Guatemalteco de Contadores Públicos y Auditores (IGCPA) has an Honor Tribunal to investigate and discipline its members who have voluntarily joined the institute and became subject to its rules and regulations.

    As indicated by CCPAG and the IGCPA although both I&D systems incorporate some of the SMO 6 requirements, it would require an update of the Decree No. 72 of 2001 to align the I&D system entirely with the SMO 6 requirements for all professional accountants.

    Current Status: Partially Adopted

  • International Financial Reporting Standards

    As stipulated in the Code of Commerce, all companies must prepare financial statements in accordance with generally accepted accounting principles (Guatemalan GAAP); however, this does not refer specifically to IFRS, and the Code does not define Guatemalan GAAP either. Therefore, as reported by the IFRS Foundation, companies prepare financial statements based on the Tax Legislation Decree No. 10 of 2012.

    The Tax Legislation Decree requires medium and large-sized companies to present annual audited financial statements using income tax rules for calculating taxable income. Financial statements prepared in accordance with the Tax Legislation Decree are considered special purpose financial statements. In addition, the tax administration—Superintendencia de Administración Tributaria (SAT)—also permits companies to prepare statements using IFRS or IFRS for Small- and Medium-sized Entities (SMEs).

    In accordance with the Decree No. 72 of 2001 authorizes the Colegio de Contadores Públicos y Auditores (CCPAG), a professional accountancy organization with mandatory membership, to set accounting standards for its members. The CCPAG adopted IFRS through a Resolution on December 20, 2007 and IFRS for SMEs in 2010. However, the CCPAG’s resolutions are not legally binding.

    In addition, the Superintendence of Banks (SIB), empowered by the Banks Act No. 19 of 2002, requires banks, other financial institutions, and insurance companies to prepare financial statements based on the SIB accounting manual. Any issues not addressed by the SIB manual should be addressed using IFRS. The SIB also sets requirements for companies within the Guatemalan financial system with loans or financing over US$ 600,000. These companies are mandated to present audited financial statements using IFRS or IFRS for SMEs.

    Lastly, listed companies that are supervised by the Securities and Commodities Market (BVNSA) are also permitted but not required to use IFRS.

    Current Status: Partially Adopted

Disclaimer

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.

 

Methodology

Methodology
Last updated: 08/2020
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