Colegio de Contadores Públicos de Pichincha y del Ecuador
Associate | Established: 1943 | Associate since 2019
The CCPPE, established by Ministerial Decree No.1638 of 1943, is a voluntary professional accountancy organization, representing accountants and accounting technicians, with responsibilities such as: (i) establishing membership requirements; (ii) issuing professional and ethical standards for its members; (iii) investigating and disciplining its members; (iv) providing training programs; and (v) representing and promoting the accounting profession.
The CCPPE is a member of the Inter-American Accounting Association and the Integration Committee Europe—Latin America, and a member of the Group of Latin-American Accounting Standard Setters.
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 Ecuador, the financial sector regulators—Superintendence of Companies, Securities and Insurance (SCVS) and the Superintendence of Banks (SB)—are empowered to regulate auditors and audit firms providing services to regulated companies, which include the establishment of a quality assurance (QA) review system.
Although the CCPPE has no legal authority or responsibility to establish a mandatory QA review system for all audits of financial statements, in 2018, the CCPPE conducted a comparison of the SCVS’ QA review system against the requirements of SMO 1 and identified main gaps, such as audit reviews are only carried out when a suspicion or risk is identified, and the scope of reviews does not cover all audits of financial statements, among others. The CCPPE indicates that it regularly promotes the need to adopt a mandatory QA system at the jurisdiction level by meeting with the financial sector regulators to promote the best practices; providing technical support and training activities on ISQC 1; and disseminating information on quality control standards.
The CCPPE supports the financial regulators by meeting regularly on working groups to increase the discussion and understanding of the QA review system and provides training to regulatory officials and its members on ISQC 1 and ISA 220. The CCPPE indicates it plans to provide audit manuals for small and medium practitioners and support members’ understanding of QA reviews.
The CCPPE is encouraged to provide an update on its advocacy and technical support activities with the financial sector regulators by incorporating into its SMO Action Plan specific actions it undertakes to promote the establishment of a mandatory QA review system at the jurisdiction level for all audits and to promote such a system’s compliance with the revised SMO 1 best practices. In addition, the CCPPE is encouraged to clarify if the SB has established a QA system for auditors providing services to companies under its supervision.
SMO 2: International Education Standards
In Ecuador, universities and the Ministry of Education have a role in establishing initial professional development requirements for professional accountants, which are outlined in the Accountants Law of 1966. A university accounting degree, for accountants, and a secondary education degree, for accounting technicians, are the only requirements to practice in the profession in Ecuador. In addition, auditors providing services to the financial sector regulators—Superintendence of Companies, Securities and Insurance (SCVS) and the Superintendence of Banks (SB)—are subject to registration requirements which include a practical experience component.
As an entity established by general consensus and with voluntary membership, the CCPPE lacks authority to further adopt IES requirements for its members. Therefore, its activities primarily include promoting an update of the universities’ curricula and proposing legal changes to the government that would require the accountancy profession in Ecuador to adopt and implement IES requirements. The CCPPE has a Continuing Education and Professional Development Committee which is responsible for promoting the IES to the regulators and disseminating the standards to universities for implementation support.
The CCPPE reports that it is promoting the update if the Accountants Law, to incorporate the practical experience and a qualification exam before practicing requirements. In the meantime, the CCPPE indicates that it is developing a voluntary system of certification in line with the revised IES.
Lastly, the CCPPE indicates it has disseminated the IES requirements through its CPD training and publication; advocated the inclusion of IES requirements in university curricula, including a memorandum of understanding with the FEUE of the Universidad Central del Ecuador; and developed a qualification exam for the financial sector regulators consideration, as part of its requirements to register auditors. The CCPPE plans actively participate in the discussion of drafts published by IAESB.
The CCPPE is encouraged to provide an update on the legislative proposal to update the Accountant Law and in its efforts to develop a voluntary system of certification in line with the IES, particularly with the revised IES requirements, which emphasize demonstrating competencies with a learning outcomes approach. In addition, the CCPPE is encouraged to collaborate with other stakeholders involved in the education of professional accountants in the jurisdiction, such as other professional organizations, universities, and regulators, to develop a roadmap for bringing national educational requirements for all professional accountants in line with the revised IES.
SMO 3: International Standards on Auditing
The financial sector regulators—Superintendence of Companies, Securities and Insurance (SCVS) and the Superintendence of Banks (SB)—are responsible for setting auditing standards in Ecuador. The SCVS has adopted ISA, by reference and without modification, for all companies under its purview, except for insurance companies, which are required to follow auditing norms as issued separately by the SCVS. The SB requires auditors providing audit services to banks and financial institutions to apply auditing norms issued by the SB, with ISA used as a supplement.
As part of its efforts to support ongoing ISA adoption, the CCPPE indicates that it: (i) monitors new and amended standards issued by the IAASB; (ii) accompanies and influences the regulators for the development of national regulation compatible with the provisions of international standards; (iii) disseminates information on updates to the standards and international developments in the area through printed materials and its website; and (iv) develops implementation guidelines and materials to support the implementation of the standards.
To facilitate members’ implementation of the standards, the CCPPE has ongoing processes to include the most recent amendments to the standards in its training programs and develops ISA courses, which are specialized 40 hours of training on the ISA. In addition, the CCPPE plans to organize training, with providers of auditing tools and software to advance the application of ISA in audit practices, develop training courses for Small- and Medium-sized Enterprises on the implementation of ISA, and is working to participate in the international standard-setting process by providing comments on exposure drafts and other IAASB.
The CCPPE is encouraged to provide detailed information on its efforts and actions to promote the adoption of ISA for insurance companies and financial institutions as this would ensure that all mandatory audits in the jurisdiction are conducted in accordance with the latest version of ISA.
SMO 4: Code of Ethics for Professional Accountants
The CCPPE is responsible for setting ethical requirements for its members and has adopted the 2014 IESBA Code of Ethics. As reported by the CCPPE, the financial sector regulators—Superintendence of Companies, Securities and Insurance and the Superintendence of Banks—are also empowered to set ethical requirements auditors of entities under their supervision; however, the regulators have not issued a specific regulation in this regard.
The CCPPE has established a Court of Honor that is responsible for monitoring new and amended standards issued by the IESBA along with disseminating new information and developments on the standards. This is currently done through printed materials and the CCPPE’s website. The CCPPE reports that in 2018 it adopted the 2014 IESBA Code of Ethics and it is working to adopt the 2018 IESBA Code of Ethics and ensure its adoption in 2019, pending publication of the Spanish version.
To support the effective implementation of the Code, the CCPPE reports that it raises awareness amongst its members and the financial sector regulators and includes ethical requirements in its training programs. The CCPPE has included the IESBA Code of Ethics in its training programs, developed publications covering ethical matters and worked with the regulators raising awareness on the IESBA Code of Ethics.
The CCPPE is encouraged to report its progress to adopt the latest version of the IESBA Code of Ethics, especially given the significant changes within the 2014 and 2018 IESBA Code of Ethics. In addition, the CCPPE is encouraged to include details in its SMO Action Plan about plans it may have in place to promote the importance of adopting the IESBA Code of Ethics for all professional accountants in the jurisdiction to relevant authorities and stakeholders. If deemed feasible and relevant, it would be beneficial for the CCPPE, 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 CCPPE is not responsible for the adoption of public sector accounting standards in Ecuador, which are adopted by the Ministry of Economy and Finance (MoF). The MoF adopted accrual IPSAS in 2016 with an effective application date set for 2019; however; the version of the IPSAS that was adopted is unclear.
The CCPPE actively advocated for and supported the adoption of IPSAS through its engagements with the MoF and the General Comptroller’s Office. One prominent example is that in 2015, the CCPPE co-organized the Accounting and Accountability for Regional Economic Growth (CReCER) conference with the MoF and the General Comptroller's Office, during which IPSAS-related topics were discussed. Additionally, the CCPPE also participated in public discussions on the benefits of adoption and implementation of IPSAS for Ecuador and joined the MoF’s Harmonization Committee, which discusses government policies and work plans.
Now that IPSAS are effective in the jurisdiction, the CCPPE reports that it plans to support the ongoing adoption of the standards by requesting to circulate translations of IPSAS in accordance with the IFAC Translation and Permissions policy and maintain its regular contact with the MoF and General Comptroller's Office.
To support the implementation of the standards, the CCPPE has plans to raise more awareness on the IPSAS and design training seminars for public sector professionals in coordination with the MoF.
The CCPPE is encouraged to clarify the version of IPSAS adopted by the MoF. In addition, the CCPPE is encouraged to provide further detail on its activities around supporting the adoption and implementation of IPSAS; for example, the training initiatives it has planned in coordination with the government. The CCPPE is encouraged to consider updating its website to include relevant information on IPSAS as part of disseminating information. Lastly, the CCPE may consider how it can participate in the international standard-setting process by providing comments on exposure drafts and other IPSASB pronouncements to share its perspective.
SMO 6: Investigation and Discipline
The CCPPE is responsible for establishing and operating an investigative and disciplinary (I&D) system for its members. In addition, the financial sector regulators—Superintendence of Companies, Securities and Insurance and the Superintendence of Banks—have a responsibility for the I&D of auditors and audit firms providing services to companies under their supervision; however, it is unclear if the regulators operate any I&D mechanisms.
As part of its bylaws, the CCPPE has in place a Court of Honor to operate its I&D system. The Court of Honor conducts investigations, complaints-based, related to misconduct/ethical issues and recommends sanctions to the CCPPE Board of Directors, which has the ultimate responsibility for the resolutions. The CCPPE has outlined a strategic plan to address the identified gaps of its I&D policies. This will include the establishment of a technical committee that will support the Court of Honor to prepare bylaws and internal reforms by the end of 2019, to propose an enhancement to the I&D system. As part of this initiative, the CCPPE plans to sign cooperative agreements with other accountancy regulators to jointly address any disciplinary issues and disseminate this information to its members and the general public through its website.
The CCPPE reports, that ss part of its memorandum of understandings with the local chambers of commerce (Quito, Ibarra, Santo Domingo, and Ambato), the CCPPE plans to start using the chamber of commerce arbitration processes to deal with significant I&D cases, to have the legal power to impose a sanction
The CCPPE is encouraged to report its progress in aligning its I&D policies with the requirements of SMO 6. In addition, the CCPPE is encouraged to include details in its SMO Action Plan about plans it may have in place to advocate for a unified national system that can investigate and discipline all professional accountants.
SMO 7: International Financial Reporting Standards
The financial sector regulators—Superintendence of Companies, Securities and Insurance (SCVS) and the Superintendence of Banks (SB)—are responsible for setting corporate accounting standards in Ecuador. The SCVS has adopted IFRS and IFRS for Small- and Medium-sized Enterprises (SMEs) by reference for listed companies and other companies under its supervision while the SB has developed accounting norms for application by banks and financial institutions, with IFRS used as a supplement.
To support the adoption of the standards, the CCPPE reports that it has established a technical group that monitors new and amended standards issued by the IASB and discusses the standards with the regulators to establish their applicability in the country. In addition, the CCPPE disseminates information on updates to the standards and international developments in the area through printed materials and its website and is working to participate in the international standard-setting process by setting up a system to collect comments from its members to provide comments on exposure drafts and other IASB pronouncements.
The CCPPE reports it has begun to approach SMEs and banking institutions to raise awareness on the benefits of improving the quality of financial information by applying the IFRS.
The CCPPE plays a prominent role in supporting IFRS implementation and is recognized by regulators for keeping professionals up-to-date. The CCPPE includes the most recent amendments to the standards in its training programs and has developed IFRS courses, which are specialized courses comprising 114 hours training on IFRS. Over the past four years, the CCPPE has trained over 3,000 professionals on IFRS nationwide.
The CCPPE is encouraged to continue efforts to advance the adoption and implementation of IFRS as the primary standards adopted by the SB. In addition, the CCPPE is encouraged to highlight whether it has also developed implementation tools to facilitate the application of the standards
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