Paraguay

Member Organizations

Member Organization Associate Other PAOs

  Colegio de Contadores de Paraguay

Legal and Regulatory Environment

  • Overview of Statuatory Framework for Accounting and Auditing

    The financial reporting framework in Paraguay is established under the Code of Commerce No. 1034 of 1983. The Code establishes the obligation for companies to keep books of accounts and provides the basic legal framework for accounting. The Code stipulates that all companies with equity in excess of 1,000 daily minimum wages have to present the accounts to the Department of Public Records.

    The Decree No. 2421 of 2004 empowers the Ministry of Finance (MoF) to set Paraguayan national accounting standards for entities and individuals in Paraguay for tax purposes, except for regulated companies. The MoF has adopted Paraguayan accounting standards (Paraguayan GAAP) which are not aligned with IFRS.

    The Decree No. 2421 of 2004, as amended, authorizes the MoF to establish mandatory audit requirement for entities and individuals in Paraguay, and prescribes the auditing standards to be applied. The MoF has adopted ISA version 2004 for application in audits. Companies with revenues equal or above USD 1.09 million (approx.) are required to undergo mandatory audits. In addition, companies that have total loans of more than USD one million or their debt with the financial system exceeds USD three million, must be audited according to requirements of the Central Bank of Paraguay.

    In Paraguay regulated companies are required to present audited financial statements. The Central Bank of Paraguay, the Superintendent of Banks, the National Securities Commission, the Superintendent of Insurance, and the National Institute of Cooperatives each establish financial reporting requirements, including accounting and auditing standards, for the companies they regulate. Regulated companies must follow accounting standards established by each regulator, none of which are linked with IFRS, nevertheless IFRS are permitted for companies whose securities are traded. In addition, regulated companies are required to be audited using a combination of ISA (the version of which is unclear) and their own sector-specific standards. Each regulator maintains a registry for external auditors. Furthermore, the Tax Authority maintains a registry of auditors authorized to audit companies for tax purposes.

  • Regulation of Accountancy Profession

    In Paraguay only auditors of regulated entities and members of professional accountancy organization (PAO) with voluntary membership, are subject to regulation. The Superintendent of Banks, the National Securities Commission (CNV), the Superintendent of Insurance, the Tax Authority, and the National Institute of Cooperatives, maintains separate registries for external auditors. These registries are intended to regulate the professional audit practice, provide a basis for quality control, and set minimum professional standards. The requirements for auditors include practical experience, membership in a PAO, and having adequate institutional capacity for audit firms and individual practices. None of the regulators require a professional examination or certification. Only the CNV requires continuing professional development (CPD), as a requirement for auditors providing services to entities under its supervision. In addition, the Tax Authority maintains a registry of auditors authorized to audit companies for tax purposes.

    As far as investigative and discipline (I&D) procedures are concerned, the Laws No. 1183 of 1985 and No. 1160 of 1997, empowered the Public Ministry as the entity responsible I&D professional accountants based on complaints. However, the system applies only for tax evasion.

    A university accounting degree is the only requirement to practice the profession. No law or regulation exists in Paraguay to define the initial professional development or CPD requirements for the profession. The Autonomous Council of Universities and the National Agency of Evaluation and Accreditation of Higher Education regulate the university education and the Ministry of Education authorizes universities to issue a degree in accounting to students that have completed the relevant programs.

    Professional accountants, other than the above mentioned auditors, are not regulated at the state level. Individuals who voluntarily join a PAO are self-regulated through the membership requirements of the PAOs. The PAOs regulate their members by setting professional standards, representing and promoting the accounting profession, providing training activities, and investigating and disciplining their members.

  • Audit Oversight Arrangements

    There are no independent audit oversight arrangements in Paraguay. Only auditors providing services to entities regulated by the Central Bank of Paraguay, the Superintendent of Banks, the National Securities Commission (CNV), the Superintendent of Insurance, the Tax Authority, and the National Institute of Cooperatives are subject to regulation. Each regulator maintains separate registries for external auditors. These registries are intended to regulate the professional audit practice, provide a basis for quality control, and set minimum professional standards. The requirements for auditors include practical experience, membership in a professional accountancy organization, and having adequate institutional capacity for audit firms and individual practices. None of the regulators require a professional examination or certification. Only the CNV requires continuing professional development as a requirement for auditors providing services to entities under its supervision. In addition, the Tax Authority maintains a registry of auditors authorized to audit companies for tax purposes.

  • Professional Accountancy Organizations

    The Colegio de Contadores del Paraguay (CCPy)

    The CCPy, established in 1916, is the oldest professional accountancy organization in Paraguay that unites auditors and accountants on a voluntary basis. The CCPy promotes the adoption and implementation of international standards, develops trainings activities, investigates and disciplines its members, and promotes improvements to professional practices. In addition to being an IFAC member, the CCPy is a member of the Inter-American Accounting Association.

    The Consejo de Contadores Públicos del Paraguay

    The Consejo de Contadores Públicos del Paraguay (the Consejo), established in 2005, is the other recognized PAO in Paraguay. It also represents and brings together auditors and accountants on a voluntary basis. It undertakes activities related to promoting the accounting profession, providing trainings activities, and investigating and disciplining its members. The Consejo has also developed a strategic plan that calls for issuing and enforcing accounting and auditing standards and advises the Ministry of Finance in regards to national accounting standards.

  • Projects or Other Information

Adoption of International Standards

  • Quality Assurance

    A mandatory quality assurance review system in line with SMO 1 requirements does not exist in Paraguay. Limited quality control reviews of auditors providing services to regulated entities are conducted separately by the Central Bank of Paraguay, the National Securities Commission, the Superintendent of Insurance, the Tax Authority, and the National Institute of Cooperatives. However, the extent of compliance of each regulators’ quality control reviews with the requirements of the SMO 1 is unclear.

    Current Status: Not Adopted

  • International Education Standards

    Apart from auditors of regulated entities and members of professional accountancy organization with voluntary membership, the rest of the accountancy profession is not regulated and does not seem to be subject to initial professional development (IPD) and continuing professional development (CPD) requirements.

    A university accounting degree is the only requirement to practice the profession. The Ministry of Education authorizes universities to issue a degree in accounting to students that have completed the relevant programs. The Autonomous Council of Universities and the National Agency of Evaluation and Accreditation of Higher Education regulate the university education.

    Only auditors providing services to entities regulated by the Central Bank of Paraguay, the Superintendent of Banks, the National Securities Commission (CNV), the Superintendent of Insurance, the Tax Authority, and the National Institute of Cooperatives are subject to the respective regulations of each agency. Each regulator maintains separate registries for external auditors. These registries are intended to regulate the professional audit practice and set minimum professional standards. The requirements for auditors include practical experience; however, none of the regulators require a professional examination or certification. Only the CNV requires CPD as a requirement for auditors providing services to entities under its supervision.

    The accountancy profession other than auditors providing services to regulated entities, may choose to join professional accountancy organization (PAO) and be subject to their educational requirements for obtaining voluntary certifications. A university accounting degree is the only IPD requirement requested by the PAOs in Paraguay.

    Although some of the requirements of IES appear to have been incorporated into the national requirements for auditors, the extent of alignment with the revised IES needs to be clarified.

    Current Status: Partially Adopted

  • International Standards on Auditing

    In accordance with the Decree No. 2421 of 2004, the Ministry of Finance (MoF) is responsible for setting auditing standards for entities and individuals. The MoF has adopted the 2004 version of ISA for application in all audits.

    The Superintendent of Banks (SB), the Superintendence of Insurance, and the National Securities Commission (CNV) have issued resolutions on the auditing requirements of regulated entities (listed, financial, and insurers). The SB Resolution No. 313 of 2001 and the CNV Resolution No. 4 of 2011 each specify auditing standards. The regulators require a combination of ISA (the version of which is unclear) and their own sector-specific standards. ISA are mentioned as complementary to regulations issued by the respective regulators.

    The National Institute of Cooperatives requires external auditors to use standards issued by the Colegio de Contadores Públicos de Paraguay (CCPy), which are the ISA as issued by the IAASB. The CCPy adopted ISA through Technical Resolution (TR) No.7 of 1999 and modified by the TR No. 8 of 2004. The CCPy has adopted the 2013 version of ISA.

    The CCPy recommends the application of ISA, however, because the CCPy resolutions lack legal backing, international standards are viewed only as guidelines by practicing auditors.

    Current Status: Partially Adopted

  • Code of Ethics for Professional Accountants

    Only auditors of regulated entities and members of professional accountancy organization with voluntary membership are subject to ethical requirements in Paraguay. The Colegio de Contadores del Paraguay (CCPy) and the Consejo de Contadores Públicos del Paraguay (the Consejo) each set ethical requirements which its members voluntarily adhere to. Additionally, auditors in Paraguay providing services to entities regulated by the Central Bank of Paraguay, the Superintendent of Banks (SB), the National Securities Commission (CNV), the Superintendent of Insurance (SI), the Tax Authority, and the National Institute of Cooperatives (INCOOP) are subject to ethical requirements established by each regulator.

    The SB Resolution No. 313 of 2001, the SI Resolution No. 241 of 2004, the INCOOP No. 823 of 2004 and the CNV Resolution No. 4 of 2011 all stipulate adherence to the IESBA Code of Ethics. Nevertheless, the resolutions do not specify the version of the Code to be applied.

    The CCPy has adopted the 2011 IESBA Code of Ethics through Technical Resolution No.7 of 1999 (as updated in 2007), for its members.

    The Consejo has adopted a Code of Ethics for its members. However, the extent of compliance of the Consejo’s Code with the requirements of the IESBA Code of Ethics is unclear.

    Current Status: Partially Adopted

  • International Public Sector Accounting Standards

    The Financial Administration Law No. 1539 of 1999 and its regulatory Decree No. 8127 of 2000 establish public sector accounting standards. The Ministry of Finance sets accounting standards for the public sector through the Direction of Public Accounting (DGCP). The nature (cash-basis, accrual, or modified) of the existing public sector accounting standards is unclear.

    An integrated financial management system is reported to have been adopted by the DGCP. According to the Colegio de Contadores del Paraguay, the DGCP plans to adopt IPSAS by 2017–2018.

    Current Status: Not Adopted

  • Investigation and Discipline

    In accordance with Laws No. 1183 of 1985 and No. 1160 of 1997, the Public Ministry is responsible for investigating and disciplining (I&D) professional accountants based on complaints. However, the system applies only for tax evasion. According to the Colegio de Contadores del Paraguay (CCPy), the Public Ministry’s I&D system is not in line with the requirements of the SMO 6.

    The CCPy has created an Ethical and Professional Discipline Committee as an I&D system for its members. The CCPy plans to incorporate the SMO 6 requirements into its I&D system.

    The Consejo de Contadores Públicos del Paraguay (the Consejo) has an Ethical Committee for investigating and disciplining its members. The extent of fulfillment of the Consejo’s I&D with the requirements of the SMO 6 is unclear.

    Current Status: Partially Adopted

  • International Financial Reporting Standards

    The Decree No. 2421 of 2004 empowers the Ministry of Finance to set Paraguayan accounting standards (Paraguayan GAAP) for entities and individuals, except for regulated companies.

    IFRS are permitted for companies whose securities are traded. A small number of large companies apply IFRS as issued by the IASB and are not required to reconcile with Paraguayan GAAP. Nevertheless, neither IFRS nor IFRS for SMEs have been officially adopted.

    The Superintendent of Banks and the National Securities Commission have plans to adopt IFRS. However, as of 2017, the applicable accounting standards required by the Superintendence of Insurance and the National Institute of Cooperatives are unclear.

    The Colegio de Contadores del Paraguay (CCPy) adopted IFRS through Technical Resolution (TR) No.7 of 1999 as modified by the TR No. 8 of 2004. In practice the CCPy recommends the application of IFRS; however, because the CCPy resolutions lack legal backing, international standards are viewed only as guidelines by practicing accountants and auditors. Accordingly, it is not clear what version of the standards might be being used by CCPy members.

    Current Status: Not 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: 08/2017
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