Colegio de Contadores Públicos Autorizados de Panamá

Member | Established: 1957 | Member since 1977

The CCPAP, established in 1957, unites professional accountants and firms on a voluntary basis. The CCPAP promotes the adoption and implementation of international standards, represents and promotes the accountancy profession, develops training, and promotes professional practices improvements.

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

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Statements of Membership Obligation (SMO)

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.

Methodology
Last updated: 12/2021
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SMO Action Plan

Status of Fulfillment by SMO

  • SMO 1: Quality Assurance

    The Law 280 of 2021 empowered the Technical Board of Accounting (JTC), an agency under the Ministry of Commerce and Industries, to establish and implement quality assurance (QA) reviews for all audits of financial statements. As the Law was approved in December 2021, the JTC has until June 2022 to incorporate all new regulatory powers, including the QA review system.

    In the absence of national legislation requiring mandatory quality assurance reviews, the CCPAP, alongside the Association of Women Authorized Public Accountants, created the Alliance for Quality (ALCAPA) initiative, which in turn signed a contract with the Colegio de Contadores Publicos Autorizados de Puerto Rico to provide technical assistance and expertise in the development of the QA system. The project began in 2013 and included three phases, all of which were successfully implemented such that since 2016, the CCPAP is now conducting voluntary QA reviews for its member firms. As of 2021, nine firms have been inspected. The QA system partially aligns with the SMO 1 best practices. Gaps include missing the link between the investigation and disciplinary system in the jurisdiction and cooperation with the Technical Board of Accounting (JTC), the regulator of the profession, which has not officially endorsed the QA review system. Advocacy efforts continue to promote a legislative reform for the accountancy profession to address major regulatory gaps and adopt international best practices.

    An ALCAPA Regulatory Committee was formed to operationalize the QA system, and the CCPAP independently formed its Professional Practice Commission. The CCPAP’s Professional Practice Commission participates in the meetings and activities of the Regulatory Committee, which is ultimately responsible for evaluating and approving the QA reviews. To support the implementation of the reviews, the CCPAP disseminates information on quality control standards to its members and stakeholders on an ongoing basis through the ALCAPA’s website and its newsletter, in addition to providing training activities.

    The CCPAP states that incorporating more members and firms to participate in the voluntary QA review system is the main challenge to progress further with the implementation of the QA review system. In addition, the CCPAP reports that it has been working with the regulators of the profession to obtain an official endorsement and require mandatory participation in the program.

    CCPAP has undertaken several commendable actions to drive the adoption and implementation of a QA system for all auditors that aligns with the SMO 1 requirements in the jurisdiction. As the Law 280 of 2021 was recently approved, the CCPAP is encouraged to provide a status update on the approved changes and impacts on QA system and SMO 1 fulfillment.

    Importantly, the new suite of IAASB Quality Management standards that will become effective in December 2022 will require significant change management for regulators and firms. CCPAP is encouraged to refer to the new changes from quality control standards to quality management standards as it progresses with implementation of the QA reviews and prepare members and other relevant stakeholders for the change.

    Current Status: Review & Improve

  • SMO 2: International Education Standards

    In Panama, the Ministry of Education, universities, and the Technical Board of Accounting (JTC) are responsible for setting and implementing initial professional development (IPD) requirements for professional accountants. Individuals wishing to qualify as a Panamanian Certified Public Accountant and thereby be authorized to practice as a public accountant or auditor must be registered with the JTC after completing a bachelor’s degree in accounting and not having a criminal record.

    As an entity established by general consensus with voluntary membership, the CCPAP lacks the authority to adopt IES requirements for its members. Therefore, its activities primarily include actions to promote adopting and implementing IES requirements to the accountancy regulator and education providers. For example, the CCPAP has consistently advocated for establishing practical experience requirements and an assessment; however, there is significant resistance to implementing these requirements. To further consider how IES requirements might be incorporated into accountancy education, the CCPAP has benchmarked Panama against other professional accountancy organizations in the region and has participated in governmental consultations. After its regional benchmark analysis, the CCPAP has decided to follow the Puerto Rican IPD and continuing professional development (CPD) model and has contacted the regulators to promote this model and address gaps in educational requirements.

    The CCPAP has also developed a program to promote the IES to the universities and outlined plans to review and assess the various accountancy curricula against the IES requirements to identify missing requirements and better align with the IES.

    The institute’s advocacy efforts continue to promote a legislative reform for the accountancy profession to address major regulatory gaps and adopt international best practices. The CCPAP has established mandatory CPD requirements for its members, although as noted, its membership is voluntary.

    As the Law 280 of 2021 was recently approved, the CCPAP is encouraged to provide a status update on the approved changes and update its benchmark to assess if gaps continue to exist. As implementation of the changes progresses, CCPAP may need to develop a plan with key stakeholders to address any gaps in order for the latest (2019) IES requirements to be incorporated nationally. CCPAP is encouraged to utilize the IFAC Accountancy Education E-Tool and the IES Checklist (available in Spanish) for benchmarking exercises.

    Current Status: Execute

  • SMO 3: International Standards on Auditing

    The Technical Board of Accounting (JTC) and the financial sector regulators—Superintendent of Banks (SBP), Superintendence of Insurance and Reinsurance (SSRP) and National Securities Commission (SMV)—are responsible for setting auditing standards in Panama. The JTC, SMV, and SSRP have adopted ISA while the SBP requires ISA or U.S. Generally Accepted Auditing Standards issued by the Auditing Standards Board of the American Institute of Certified Public Accountants for audits of financial institutions.

    The CCPAP plays an important role in the standard-setting process through its representation and participation in the Commission of Financial Accounting Standards (NOCOFIN)—the commission responsible for recommending regulation related to the auditing standards to the JTC. The CCPAP also maintains permanent communication with the financial sector regulators.

    To support members’ implementation of the standards, the CCPAP has established a Professional Practice Commission responsible for working with NOCOFIN, monitoring changes and modifications to the standards, providing comments on IAASB exposure drafts, and including ISA in its continuing professional development activities and seminars. Additionally, the CCPAP has communication channels to share information and international developments in the area through its website, technical blogs, and newsletters. Lastly, the CCPAP reports collaborating with universities to incorporate ISA into their accountancy curricula.

    The 2020 IAASB Handbook is available, which includes ISA 540 revised (effective December 2019), ISA 315 revised (effective December 2021) and conforming amendments arising from the IESBA Code of Ethics. The COHPUCP may also consider disseminating available translations of ISA 315, ISQM 1, ISQM 2, ISA 220, and ISRS 4000 (revised) that will become effective throughout 2021 – 2022 to prepare auditors to properly apply the standards upon effective date.

    Current Status: Sustain

  • SMO 4: Code of Ethics for Professional Accountants

    In Panama, professional accountants are subject to ethical requirements set by the Technical Board of Accounting (JTC), which as reported by the CCPAP, are contained within a Code of Ethics that is not based on the IESBA Code of Ethics. The Law 280 of 2021 requires the JTC to update the national code of ethics or adopt the International Code of Ethics for Professional Accountants. As the Law was approved in December 2021, the JTC has until June 2022 to address this requirement. In addition, the Superintendent of Banks and the Superintendence of Insurance and Reinsurance have adopted the IESBA Code of Ethics for auditors providing services to companies under their supervision.

    The institute successfully advocated for a legislative reform for the accountancy profession that addressed major regulatory gaps and adopt international best practices. In addition, the CCPAP indicates that it has developed training activities on the IESBA Code of Ethics and plans to continue promoting the IESBA Code of Ethics to the JTC, other key regulators, universities, and other professional accountancy organizations operating in the country.

    As the Law 280 of 2021 was recently approved, the CCPAP is encouraged to provide a status update on the approved changes and impacts on the adoption of the 2021 IESBA Handbook of the International Code of Ethics for Professional Accountants for all professional accountants in the jurisdiction.

    Current Status: Execute

  • SMO 5: International Public Sector Accounting Standards

    The CCPAP is not responsible for setting public sector accounting standards adopted by the National Comptroller Office (CGR) of Panama. The CGR has developed national standards that are on a partial-accrual basis with reference to IPSAS. The CCPAP actively supports the standard-setting process and promotes the adoption of IPSAS through its two representatives on the Commission of Financial Accounting Standards—the commission responsible for recommending regulation for the accounting and auditing standards to the Technical Board of Accounting (JTC). The JTC, in turn, raised awareness and encouraged the adoption and implementation of robust public sector accounting and reporting standards, and recommended the IPSAS.

    Furthermore, the CCPAP supports the implementation of IPSAS and has established a Public Sector Committee, which is responsible for providing training on IPSAS. The institute has identified supporting the CGR in its training initiatives on IPSAS as a priority activity. In addition, the CCPAP monitors changes to the standards and pronouncements issued by the IPSASB and disseminates the information amongst its members and stakeholders.

    The CCPAP has supported the international standard-setting process with an IPSASB Member, and Technical Advisor serving on the board from 2014–2019.

    The CCPAP is encouraged to promote the adoption and implementation of the 2021 IPSAS Handbook. The IFAC’s Train the Trainers: Introduction to IPSAS resource might be helpful to CCPAP to continue providing support to public sector accountants in the jurisdiction. It would also be beneficial to demonstrate how the CCPAP engaged with universities to incorporate these standards into the accounting education curriculum as well.

    Current Status: Sustain

  • SMO 6: Investigation and Discipline

    In Panama, the Technical Board of Accounting (JTC) is responsible for investigating and disciplining (I&D) all professional accountants. As reported by the CCPAP, it has implemented an I&D system that is not fully in line with the SMO 6 best practices. For example, gaps include a lack of publicly available information about the types of misconduct which may bring about investigative actions and the results of the investigative and disciplinary proceedings and no separate disciplinary committee. The Law 280 of 2021 requires the JTC to modernize the investigation and discipline system for the profession. As the Law was approved in December 2021, the JTC has until June 2022 to address this requirement.

    Additionally, as a professional accountancy organization with voluntary membership, the CCPAP has established an I&D system for its members.

    The institute reports a minimal number of complaints handled by the JTC since 2018. These cases either received verbal warnings or a letter of reprimand.

    The CCPAP focused its activities on promoting the SMO 6 requirements to the JTC and raising awareness of the JTC’s investigative processes and possible disciplinary sanctions. To support the incorporation of the missing SMO 6 requirements, the CCPAP created a special commission on Research, Development & Innovation to promote the best practices to the JTC and support the implementation process. The commission developed specific research that will offer JTC the information, analysis, and tools required to strengthen its I&D mechanism for the profession.

    The CCPAP successfully advocated for legislative reform for the accountancy profession to address major regulatory gaps and adopt international best practices. This includes I&D procedures for all professional accountants aligned with SMO 6 requirements.

    As the Law 280 of 2021 was recently approved, the CCPAP is encouraged to provide a status update on the approved changes and impacts on the incorporation of the missing SMO 6 requirements into the JTC’s I&D system

    The CCPAP is encouraged to develop a comparison exercise of its I&D policies against the requirements of SMO 6. Once differences are identified, the CCPAP is encouraged to include a plan to address the existing gaps.

    Current Status: Plan

  • SMO 7: International Financial Reporting Standards

    It is the responsibility of the Technical Board of Accounting (JTC) and the financial sector regulators—Superintendent of Banks (SBP), Superintendence of Insurance and Reinsurance (SSRP) and National Securities Commission (SMV)—to set corporate accounting standards for the financial statements of the respective companies under each agency’s supervision. The JTC issued Law No. 6 of 2005 requiring the application of IFRS and IFRS for Small- and Medium-sized Entities (SMEs) since 2006 while listed companies and financial institutions are required to use IFRS or U.S. Generally Accepted Accounting Principles in accordance with the SBP Agreement No. 4 of 1999 and SMV Agreement No. 8 of 2000, respectively. Finally, insurance companies are required to apply IFRS in accordance the SSRP Law No. 12 of 2012.

    The CCPAP indicates that it actively participates and contributes to the JTC’s standard-setting process and pushed for the adoption of IFRS and IFRS for SMEs by the JTC. It does this through two representatives on the Commission of Financial Accounting Standards (NOCOFIN)—the commission responsible for recommending accounting and auditing standards to the JTC—and working closely with the regulators to support ongoing adoption and implementation the standards.

    The CCPAP has supported its NOCOFIN representatives by monitoring changes to the standards and pronouncements issued by the IASB. Additionally, the NOCOFIN is a member of the Latin American Accounting Standard Setters Group. Through its NOCOFIN representation, the CCPAP participates in the international standard-setting process by providing comments to exposure drafts on a regional level.

    To support the proper implementation of the standards, the CCPAP has incorporated IFRS and IFRS for SMEs into its annual training program; recommended that the JTC and regulators establish means to oversee compliance with IFRS and is working the JTC to enhance the application of IFRS for SMEs; encouraged the Ministry of Education and universities to incorporate the standards into their curricula; and disseminated information to members and stakeholders on new and revised IASB pronouncements.

    Current Status: Sustain

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.

 

Contact

Urbanizacion Los Angelos
Calle 60 Oeste No. J-18
5 Panama
Panama
Tel: 507-236-6571
Fax: 507-236-6570
info@colegiocpapanama.org
http://www.colegiocpapanama.org

 

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