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 trainings, and promotes improvements to professional practices. In addition to being an IFAC member, the IMCP is a member of the Inter-American Association of Accountants.
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.
SMO 1: Quality Assurance
In the absence of national legislation, 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 as of 2016, the CCPAP is now conducting voluntary QA reviews for its member firms. The adopted QA system partially aligns with the SMO 1 requirements. 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.
To operationalize the QA system an ALCAPA Regulatory Committee was formed and the CCPAP independently formed its own Professional Practice Commission. The COO of the CCPAP’s Professional Practice Commission participates in the meetings and activities of the Regulatory Committee which is ultimately responsible for the evaluation and approval of the QA reviews. To support 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. Most recently, in 2017, the CCPAP developed a webinar platform to deliver training activities throughout the country.
The CCPAP states that the incorporation of 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 is has been working with the regulators of the profession in order to obtain an official endorsement and require mandatory participation in the program.
Lastly, ALCAPA is working to incorporate an additional professional accountancy organization—the Association of Authorized Public Accountants—into the ALCAPA to further strength the program.
The CCPAP is encouraged to provide further details related to actions it has undertaken to further promote the development of a mandatory QA review system in line with the SMO 1 requirements to the accountancy regulator—JTC—and/or the financial sector regulators.
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 authority to adopt IES requirements for its members. Therefore, its activities primarily include actions to promote the adoption and implementation of IES requirements to the accountancy regulator and education providers. For example, the CCPAP has consistently advocated for the establishment of practical experience requirements and an assessment; however, there is significant resistance to the implementation of 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. At the conclusion of 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 conduct a review and assessment of the various accountancy curricula against the IES requirements in order to identify missing requirements and better align with the IES.
The institute has created a commission to evaluate the creation of a voluntary certification process in line with the revised IES requirements while advocacy efforts continue to promote a legislative reform for the accountancy profession to address the 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. Most recently, in 2017, the CCPAP developed a webinar platform to deliver CPD courses throughout the country and beginning in March 2018, the institute began an educational tour to more remote areas of the country to raise awareness about the important of continuing education. The CCPAP is emphasizing the importance of communication and technology skills in recent trainings.
Lastly, the CCPAP reports that it has established mechanisms to distribute information to members regarding recent developments and revisions issued by the IAESB.
The CCPAP is encouraged to continue its efforts to promote a new regulatory framework to incorporate the missing IES requirements for all professional accountants. The CCPAP is also encouraged to provide a status update on the proposed voluntary certification for its members that would align with IES.
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 a permanent communication with the financial sector regulators.
To support members’ implementation of the standards, the CCPAP has established a Professional Practice Commission that is 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. For example, in 2018, the institute plans to offer training focused on the new auditor’s report and offer implementation guides. Additionally, the CCPAP has communication channels in place to share information and international developments in the area through its website, technical blogs, and newsletters. Lastly, the CCPAP reports that it has collaborated with universities to incorporate ISA into their accountancy curricula.
The CCPAP is encouraged to clarify the regulation that adopts ISA for SMV regulated companies.
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. However, 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 CCPAP reports that it has promoted the importance of adoption and implementation of the IESBA Code of Ethics to the JTC over several years, however, no significant progress has been achieved.
In light of this, the CCPAP is working on a proposal to adopt the IESBA Code of Ethics by the end of 2018. It intends to present this proposal to its members as the adoption of these ethical requirements would require the approval of the general assembly. 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.
The CCPAP is encouraged to provide an update on its efforts and actions to adopt the IESBA Code of Ethics requirements and its application for its members. The CCPAP is also encouraged to continue promoting the adoption of the IESBA Code of Ethics to the JTC and National Securities Commission in order to apply to all professional accountants. Lastly, if deemed feasible and relevant, it would be beneficial for the CCPAP, in collaboration with the JTC, to participate in the international standard-setting process by providing comments on exposure drafts and other IESBA pronouncements.
SMO 5: International Public Sector Accounting Standards
The CCPAP is not responsible for setting public sector accounting standards, which are adopted by the National Comptroller Office (CGR) of Panama. The CGR has adopted IPSAS since 2014. The CCPAP does actively participate in supporting the standard-setting process and promoting 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 diseminates the information amongst its members and stackeholders.
Recently, in October 2017, Panama hosted the “IV Foro de Contadurias Gubernamental de America Latina-Foca.l” under the leadership of CCPAP’s IPSASB board member. The event was designed to raise awareness of the benefits of IPSAS and create synergies between Latin-American countries in the adoption and implementation of IPSAS.
The CCPAP is encouraged to update its plans to support the CGR in its training activities on IPSAS.
SMO 6: Investigation and Discipline
In Panama, the Technical Board of Accounting (JTC) is responsible for investigating and disciplining (I&D) all professional accountants and, 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.
In 2017, the institute reports that there were an unspecified, minimal number of complaints handled by the JTC. These cases either received verbal warnings or a letter of reprimand.
As the CCPAP lacks authority to adopt an I&D system for its members, it has 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 incorporation of the missing SMO 6 requirements, the CCPAP has created a special commission on Research, Development & Innovation to promote the best practices to the JTC and support the implementation process. The commission plans to develop specific research that will offer JTC the information, analysis, and tools required to strengthen its I&D mechanism for the profession. The CCPAP has also suggested that the JTC benchmark its I&D procedures against other countries in order to further strengthen the system.
In addition, the CCPAP will continue promoting legislative reforms for the accountancy profession to address the regulatory gaps and adopt international best practices. This includes I&D procedures for all professional accountants that align with SMO 6 requirements.
The CCPAP is encouraged to provide an update in its Action Plan on the initiative to promote the incorporation of the missing SMO 6 requirements into the JTC’s I&D system. The CCPAP is encouraged to also provide an update on the proposed legislative reform.
The CCPAP is encouraged to clarify in its Action Plan if the financial sector regulators have established investigation and discipline procedures for auditors providing services to companies under their supervision. In addition, the CCPAP is encouraged to establish communications channels with the financial sector regulators regarding any I&D case of its members in order to be aware and provide trainings to support members accordingly with standard implementation.
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 regulation for the accounting and auditing standards to the JTC—and working closely with the regulators to support ongoing adoption and implementation of 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 and, 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 working the JTC to enhance 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.
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