Nicaragua

Member Organizations

Member Organization Associate Other PAOs

  Colegio de Contadores Públicos de Nicaragua

Legal and Regulatory Environment

  • Overview of Statuatory Framework for Accounting and Auditing

    The financial reporting framework in Nicaragua is established under the Commercial Code of 1914 and its subsequent amendments. The Commercial Code requires all companies to annually prepare a balance sheet and an inventory report that is to be published in the Official Gazette; however, accounting and auditing standards to be used are not specified.

    In fact, Nicaragua does not have legally binding corporate financial reporting standards. However, in practice, the standards established by the professional accountancy organization (PAO)—the Colegio de Contadores Públicos de Nicaragua (CCPN)—are being applied. The CCPN, as empowered by the Law on the Practice of Public Accounting, Law No. 6 of April 14, 1959, issues accounting and auditing standards for its members. In 2002, the CCPN adopted ISA and in 2011, the CCPN formally adopted IFRS for application by its members providing services to public interest entities (PIEs) and IFRS for IFRS for Small- and Medium-sized Entities (SMEs) for all other non-PIEs.

    Separately, the Superintendent of Banks and Other Financial Institutions (SIBOIF) is authorized to regulate listed companies, banks, and insurance companies, in accordance the Law No. 244 and 245 of 1940 and amendments. In 2017, the Superintendence of Banks and Other Financial Institutions issued Resolution No. CD-SIBOIF-1020-1-OCT10-2017, requiring the application of IFRS for all companies under its supervision—listed companies, banks, and insurance companies—effective as of January 1, 2019.

    In regards to applicable auditing standards, SIBOIF adopted ISA as the auditing standards for its regulated companies. There are no other requirements for statutory audits for other companies in Nicaragua; however, the SIBOIF does require financial institutions to obtain audited financial statements from debtors for loans greater than US$750,000.

  • Regulation of Accountancy Profession

    In Nicaragua the accountancy profession is regulated at the state level by the Ministry of Education (MoE) as established by the Presidential Agreement No. 41–J, included in the Official Gazette No. 112 of 1967, and at the professional level by the Colegio de Contadores Públicos de Nicaragua (CCPN). Under the Nicaraguan law, the MoE is responsible for issuing a license to professional accountants who are then permitted to use the title of authorized public accountants (CPA). A university accounting degree and membership in CCPN are the only entry requirements established by the MoE in order to practice as a CPA and conduct audits.

    In accordance with the Law on the Practice of Public Accounting, Law No. 6 of April 14, 1959, the CCPN is authorized to carry out certain regulatory responsibilities for its members, which include CPAs and audit firms, such as: (i) establishing initial professional development (IPD) and continuing professional development (CPD) requirements for CPAs; (ii) setting accounting, auditing, ethical, and other professional standards for its members; (iii) monitoring its members’ compliance with the ethical requirements; (iv) carrying out investigative and disciplinary procedures; (v) maintaining a registry of accountancy professionals; (vi) providing training programs for its members; and (vii) promoting improvements to the profession.

    To qualify as a CPA, individuals must have a university degree in accountancy, five years’ practical experience, pass an entry competence exam, and receive a registration approval by the MoE. The CPPN also offers another designation of public accountant (PA) for which only a university degree is necessary. For all members, the CCPN has established mandatory CPD requirements. Additionally, the CPA certification requires individuals to obtain and maintain a 5,000 NIO insurance policy.

    While all graduates must register with the CCPN to receive MoE approval, individuals do not have to maintain an active membership, apart from CPAs. Furthermore, to work as a professional accountant in a private business or for the government, individuals do not need to join CCPN’s membership.

    Lastly, the Superintendent of Banks and Other Financial Institutions (SIBOIF) maintains registries of PAs, CPAs, and audit firms providing services to companies under its supervision. Nevertheless, it is unclear if the regulator establishes any other requirements or carries out other regulatory functions such as investigation and discipline or quality assurance.

  • Audit Oversight Arrangements

    There are no independent audit oversight arrangements in Nicaragua and auditors in the country are regulated at the state level by the Ministry of Education (MoE) and at the professional level by the Colegio de Contadores Públicos de Nicaragua (CCPN). Under the Nicaraguan law, the MoE is responsible for issuing a license to professional accountants who are then permitted to use the title of authorized public accountants (CPA) and conduct audits. A university accounting degree and membership in CCPN are the only entry requirements established by the MoE in order to practice as auditor.

    In accordance with the Law on the Practice of Public Accounting, Law No. 6 of April 14, 1959, the CCPN is authorized to carry out certain regulatory responsibilities for CPAs and audit firms such as: (i) establishing initial professional development (IPD) and continuing professional development (CPD) requirements for CPAs; (ii) setting accounting, auditing, ethical, and other professional standards for its members; (iii) monitoring its members’ compliance with the ethical requirements; (iv) carrying out investigative and disciplinary procedures; (v) maintaining a registry of accountancy professionals; (vi) providing training programs for its members; and (vii) promoting improvements to the profession. To receive the CPA designation from CCPN, individuals are required to have a university degree in accountancy, five years’ practical experience, pass an entry competence exam, have their registration approved by the MoE, and fulfill mandatory CDP requirements. Additionally, CPAs are required to obtain and maintain a 5,000 NIO insurance policy.

    In addition, the Superintendent of Banks and Other Financial Institutions (SIBOIF) maintains registries of CPAs and audit firms providing services to companies under its supervision—listed companies, banks, and insurance companies. Nevertheless, it is unclear if the regulator establishes any other requirements or carries out other regulatory functions such as investigation and discipline or quality assurance.

  • Professional Accountancy Organizations

    The Colegio de Contadores Públicos de Nicaragua (CCPN)

    The CCPN, established by the Law on the Practice of Public Accounting, Law No. 6 of April 14, 1959, is the only institution legally recognized as the representative body of the accounting profession in Nicaragua. Its membership is comprised of public accountants and authorized public accountants (CPAs) It is authorized to carry out certain regulatory responsibilities such as: (i) establishing initial professional development (IPD) and continuing professional development (CPD) requirements for CPAs; (ii) setting accounting, auditing, ethical, and other professional standards for its members; (iii) monitoring its members’ compliance with the ethical requirements; (iv) carrying out investigative and disciplinary procedures; (v) maintaining a registry of accountancy professionals; (vi) providing training programs for its members; and (vii) promoting improvements to the profession.

    In addition to being an IFAC Member, the CCPN is a member of the Inter-American Accounting Association (AIC).

  • Projects or Other Information

    As of 2018, there are a number of initiatives underway that impact the accountancy profession.

    A World Bank-funded project is being implemented by the Government of Nicaragua to develop a new Commercial Code. In October 2014, the Colegio de Contadores Públicos de Nicaragua (CCPN) submitted its comments on the section that relates to the accounting and auditing standards. The CCPN proposed the application of IFRS and ISA as national standards and that the role of CCPN as a technical body responsible for regulating all the accountancy profession, in addition to the certified public accountants, be formalized in the law. In 2015, the proposed Commercial Code was submitted by the Government of Nicaragua to the National Assembly for approval, however, as of 2018 the Commercial Code has not been approved by the National Assembly.

    In addition, a proposed new Law on the Accounting Profession has been drafted by the CCPN and submitted to the National Assembly. The law seeks to bring the requirements to be a professional accountant in line with international developments. It would require certified public accountants to undergo a quality control review at least once every three years in order to renew their license. The proposed Law also increases the amount of the required insurance policy and extends the terms of the CCPN-elected Board of Directors; however, as of 2018, the Law has not been approved by the National Assembly. The CCPN will continue to promote the Law to the National Assembly of Nicaragua for approval.

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 Nicaragua. However, the Law on the Practice of Public Accounting, Law No. 6 of April 14, 1959 does empower the Colegio de Contadores Públicos de Nicaragua (CCPN) as the regulator for authorized public accountants (CPA)—the only individuals permitted to carry out audits in the jurisdiction—and, as such, it is taking steps to establish a QA review system.

    As of 2018, the CCPN reports that it is in the process of planning the design of a mandatory QA system in line with the ISQC 1 and ISA 220 for its members—which includes all CPAs. Furthermore, as auditing standard-setter for its members, the CCPN has adopted ISQC 1 and ISA 220.

    Current Status: Not Adopted

  • International Education Standards

    In Nicaragua, the Ministry of Education (MoE), universities, and the Colegio de Contadores Públicos de Nicaragua (CCPN) have a role in setting initial professional development (IPD) and continuing professional development (CPD) requirements for professional accountants. A university accounting degree and membership in CCPN are the only entry requirements established by the MoE in order to practice as authorized public accountants (CPA) and publicly practice. Universities have authority over the accounting curriculum and issuing professional degrees.

    In accordance with the Law on the Practice of Public Accounting, Law No. 6 of April 14, 1959, the CCPN is authorized to establish IPD and CPD requirements for CPAs. To qualify as a CPA, individuals must have a university degree in accountancy, five years’ practical experience, pass an entry competence exam, and receive a registration approval by the MoE. The CCPN also offers another designation of public accountant (PA) for which only a university degree is necessary. For all members, the CCPN has established mandatory CPD requirements.

    A proposed new Law on the Accounting Profession has been drafted by the CCPN and submitted to the National Assembly. The law seeks to further align national educational requirements with the IES requirements for all professional accountants; however, as of 2018, the Law has not been approved by the National Assembly.

    Although some of the requirements of IES appear to have been incorporated into the national requirements, such obtaining a university accounting degree and practical experience for CPAs, the full extent of adoption of the revised IES requirements, which as of 2015 emphasize learning-outcome approaches, is unclear.

    Current Status: Partially Adopted

  • International Standards on Auditing

    The Colegio de Contadores Públicos de Nicaragua (CCPN) has the mandate to set auditing standards for its members—which include all auditors in the jurisdiction who provide services in public practice— according the Law on the Practice of Public Accounting, Law No. 6 of April 14, 1959. The CCPN has adopted the Spanish translations of ISA since 2004.

    In addition, under the Decree Law No. 244 and 245 of 1940 and amendments, the Superintendent of Banks and Other Financial Institutions (SIBOIF) is authorized to set standards for audits of its regulated entities, which include listed companies, banks, and insurance companies, and requires the application of currently effective ISA as issued by the IAASB. Companies that borrow more than USD $750,000 are also subject to SIBOIF’s auditing standards.

    Current Status: Adopted

  • Code of Ethics for Professional Accountants

    The Law on the Practice of Public Accounting, Law No. 6 of April 14, 1959 authorizes the Colegio de Contadores Públicos de Nicaragua (CCPN) to set ethical requirements for its members, which include public accountants and authorized public accountants (CPAs—the only individuals who practice as auditors). Accordingly, the CCPN has developed its own Code of Ethics based on the 2009 IESBA Code of Ethics.

    As of the date of the assessment, the CCPN has not stated plans to review the latest IESBA Code of Ethics and update its ethical requirements.

    Current Status: Partially Adopted

  • International Public Sector Accounting Standards

    The Constitution of Nicaragua establishes the Ministry of Finance and Public Credit as the accounting standard-setter for the public sector. The Government Accounting Manual is based on the Nicaraguan Generally Accepted Accounting Principles. IPSAS have not been adopted in Nicaragua. No plans are in place nor has a declaration of intent been made to adopt IPSAS.

    Current Status: Not Adopted

  • Investigation and Discipline

    The Law on the Practice of Public Accounting, Law No. 6 of April 14, 1959 authorizes the Colegio de Contadores Públicos de Nicaragua (CCPN) to establish an investigative and disciplinary (I&D) system for its members, which include public accountants and authorized public accountants (CPAs—the only individuals who practice as auditors).

    The institute does have I&D procedures in place and while some components of the SMO 6 requirements seem to have been incorporated into the I&D system, the full extent of fulfillment with the SMO 6 requirements requires further clarification.

    Current Status: Partially Adopted

  • International Financial Reporting Standards

    Although the Code of Commerce sets basic accounting requirements, corporate accounting standards to be applied are not specified. According the Law on the Practice of Public Accounting, Law No. 6 of April 14, 1959, the Colegio de Contadores Públicos de Nicaragua (CCPN) is empowered to set accounting standards for its members, which include public accountants and authorized public accountants (CPAs—the only individuals who practice as auditors).

    The CCPN adopted IFRS for application by its members providing services to public interest entities (PIEs) and IFRS for IFRS for Small- and Medium-sized Entities (SMEs) for all other non-PIEs. The CCPN has adopted the Spanish translations of IFRS issued by the IFRS Foundation and IFRS for SMEs since 2011.

    In 2017, the Superintendence of Banks and Other Financial Institutions (SIBOIF) issued Resolution No. CD-SIBOIF-1020-1-OCT10-2017, requiring the application of IFRS for all companies under its supervision—listed companies, banks, and insurance companies—effective as of January 1, 2019.

    Current Status: Adopted

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Methodology

Methodology
Last updated: 12/2018
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