Colegio de Contadores Públicos y Auditores de Guatemala
Associate | Established: 2001 | Associate since 2013
The CCPAG, established by the Decree No. 72 of 2001, unites public accountants and auditors. Membership of the CCPAG is mandatory for all professional accountants to publicly practice. The CCPAG mandate includes (i) establishing membership requirements; (ii) maintaining a registry of professional accountants; iii) setting CPD requirements; (iv) setting accounting and auditing standards for its members; (v) setting ethical requirements; (vi) carrying out investigative and disciplinary procedures; (vi) establishing and implementing a Quality Assurance (QA) review system; (vii) providing training programs for its members, and (viii) promoting improvements to the profession.
In addition to being an IFAC Member, the CCPAG is a member of the Inter-American Accounting Association (AIC), the Group of Latin American Accounting Standard Setters (GLENIF), and the Committee of Integration for Latin Europe and America (CILEA).
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
There is no legal requirement to establish a quality assurance (QA) review system for all audits of financial statements in Guatemala. However, the Decree No. 72 of 2001 does empower the Colegio de Contadores Públicos y Auditores de Guatemala (CCPAG) as the regulator of the accountancy profession. As such, it has determined it is within its purview to establish a QA review system.
In 2013, the CCPAG adopted ISQC 1, ISA 220, and created a National Quality Control Board. To implement and operate a mandatory QA review system in line with SMO 1 requirements though, the CCPAG must first amend legislation and regulations. This initiative is expected to be completed by 2022; however, CCPAG has reported these plans since 2018 without significant progress. In the meantime, the National Quality Control Board, has not been operating due to governance and operational challenges at the CCPAG.
In 2017, the CCPAG signed a cooperative agreement with the French International and Development Partnerships Directorate (DDPI) to receive technical support in the design of a roadmap aimed at establishing a QA review system as well as training in the implementation of the ISQC 1. It is unclear what actions might have been executed under the agreement. The CCPAG reports it plans to reactivate this cooperation with DDPI.
The CCPAG states that it will support members’ implementation of the quality control standards by providing training activities, designing questionnaires for audit firms to assess quality control standards, and preparing procedures and implementation guidelines.
CCPAG's plans to develop and operate a QA review system are commendable in serving the public interest and aligning with best practices. Due to governance challenges, not all activities have been executed on an ongoing basis. Resolving these issues should be the priority for the institute to continue to meet its public interest mandate. The CCPAG should continue using its best efforts to collaborate with regulators and relevant stakeholders to support the establishment of a unified, mandatory QA system at the jurisdiction level that meets SMO 1 requirements.
Importantly, the new suite of Quality Management standards that will become effective in 2021–2022 will require significant change management for regulators and firms. The CCPAG is encouraged to prepare members and raise awareness of the changes from quality control standards to quality management standards and update its training programming to ensure that its members are sufficiently prepared to apply the standards once they become effective.
SMO 2: International Education Standards
In Guatemala, universities, the CCPAG, and other regulatory entities set and implement initial professional development requirements for professional accountants. These include earning a bachelor’s degree in accounting and at least two years’ practical experience before graduating university. The CCPAG indicates that it has limited authority to incorporate the requirements of IES into national requirements, which it tried to do in 2015, and is only legally capable and responsible for regulations related to its membership requirements. Universities only view IES as guidelines.
To further promote the adoption of the IES requirements, in 2017, the Instituto Guatemalteco de Contadores Públicos y Auditores (IGCPA) and CCPAG developed a gap analysis on the training of public accountants and auditors, which has been shared with the universities.
The CCPAG plans to establish an Education Commission responsible for promoting the IES to universities and other relevant stakeholders. Within the scope of activities of the commission, the CCPAG plans to draft an accountancy curriculum for universities aligned with the IES; and develop a certification process, including an entry exam, for individuals seeking CCPAG membership. It has also stated plans to assess the feasibility of leveraging international certifications such as ACCA or ICAEW. Lastly, the commission will be tasked with working with regulators to promote the IES and mandatory CPD for individuals providing services to companies under the control of each financial regulator.
Currently, the CCPAG offers CPD voluntarily in seminars, workshops, short courses, and conferences. In addition, the CCPAG reports plan to provide certifications to professionals providing specialty services, such as IFRS, IPSAS, and ISA.
The CCPAG has outlined positive plans to enhance education requirements in Guatemala. The CCPAG should continue collaborating with regulators and universities to promote and support the adoption and implementation of the IES requirements. A voluntary certification aligned with the IES could be one option, as well as a university accreditation scheme, and CCPAG can refer to examples in the region for best practices and learnings. The CCPAG is also encouraged to adopt specific mandatory CPD requirements for its members, which it is authorized to do.
Revised requirements of the IES 2, 3, 4 and 8 are effective as of 2021. The revisions to these standards reflect the need for competency-based approaches as well as the increasing demand for accountants skilled in information and communications technologies and place further emphasis on professional skepticism skills and behaviors. These apply to both aspiring and professional accountants. The Accountancy Education E-Tool and the IES Checklist developed by IFAC may be useful to identify implementation support materials and the CCPAG’s Education Commission should review these available tools as part of its work plan.
SMO 3: International Standards on Auditing
The CCPAG is empowered to set auditing standards for its membership—which is mandatory for all auditors. It has adopted ISA as issued without modifications and with the IAASB-stated effective date. The Superintendencia de Administración Tributaria and the Securities and Commodities Market require companies under their supervision to have their statements audited in accordance with standards issued by the CCPAG. Meanwhile, the Superintendence of Banks (SIB) requires auditors providing services to entities under its supervision to prepare annual audited financial statements in accordance with ISA. A modification has been made to ISA 700 to account for the differences in the accounting manual issued by the SIB.
To support the ongoing adoption of the standards, the CCPAG monitors new and amended standards issued by the IAASB and disseminates information on updates to the standards and international developments in the area through printed materials and its website. The CCPAG reports plans to create the Public and Private Sector International Standards on Auditing Commission, responsible for monitoring new and amended standards, raising awareness of the standards, promoting education activities, and supporting the Education Commission initiatives. The CCPAG’s former commissions have not been operating due to governance challenges at the CCPAG.
To facilitate its members’ implementation of the standards, the CCPAG has developed implementation guidelines for its members; included ISA in its continuing professional development activities; and provided additional trainings to Guatemalan business chambers and regulators through conferences in order to enhance stakeholders’ understanding of the standards.
Resolving governance issues should be the priority for the institute to continue to meet its public interest mandate and maintain its ongoing adoption and implementation initiatives with the establishment of a new commission. The SIB’s modification of ISA 700 is withholding the jurisdiction from being assessed as fully adopting the ISA. The CCPAG is encouraged to demonstrate how it may be promoting the importance and benefits of fully adopting the ISA as issued by the IAASB to the SIB.
SMO 4: Code of Ethics for Professional Accountants
Decree No. 72 of 2001 grants authority to the Colegio de Contadores Públicos y Auditores de Guatemala (CCPAG) to adopt ethical requirements for all professional accountants. In March 2013, the CCPAG adopted the IESBA Code of Ethics through a Resolution, which was published in the Guatemalan Official Gazette. The Resolution states that any changes to the Code will automatically be adopted as issued by the IESBA. All individuals seeking CCPAG membership must attend training on the IESBA Code of Ethics before admission to the CCPAG.
The CCPAG, through its Court of Honor, has ongoing processes to adopt and update its ethical requirements. In addition, in 2021, the CCPAG created the Ethics Commission responsible for monitoring new and amended standards, raising awareness of the standards, and promoting educational activities. In February 2021, the Ethics Commission developed a survey to gauge members’ knowledge about the IESBA Code of Ethics. The results serve as a basis for drafting the action plan of the commission’s activities.
The Ethics Commission is expected to enhance and continue CCPAG’s activities to support members’ understanding and implementation of the Code, such as seminars and courses, publishing articles on the Code in its magazine and website, disseminating the Code to universities, and encouraging universities to incorporate the Code of Ethics into their accounting curricula.
The CCPAG is committed to meet the SMO 4 and has reported planning and executing actions to fulfill the obligation., The CCPAG is encouraged to include specific actions in its SMO Action Plan about its processes to ensure professionals understanding and adherence to the revised and restructured 2018 International Code of Ethics for Professional Accountants (including International Independence Standards). CCPAG should also take note of future revisions to the Code in the 2020 Handbook, including revisions to Part 4B of the Code to reflect terms and concepts used in the IAASB's International Standard on Assurance Engagements (ISAE) 3000 (Revised), which will come into effect in June 2021 and revisions to promote the role and mindset expected of all professional accountants which are effective in December 2021.
It is essential to the public interest that professional accountants adhere to the latest ethics requirements and that CCPAG is providing training and guidance on the ethics requirements to support proper implementation and application.
SMO 5: International Public Sector Accounting Standards
The National Constitution of the Republic of Guatemala establishes the Accounting Administration Authority of the Ministry of Public Finance (MoF) as the accounting standard-setter for the public sector. Accordingly, the MoF has adopted accrual-basis IPSAS as issued, via national standards, through Decree No. 109 of 2019 (IFAC, CIPFA 2018). The CCPAG reports that, while it has no direct responsibility in this standard-setting area, it significantly contributed to the consultation activities and meetings that led to the MoF adopting IPSAS.
Since 2015, the CCPAG holds courses and conferences on IPSAS and provides training activities for its members and relevant stakeholders.
The CCPAG’s technical commissions have not been fully operational due to internal governance challenges. The CCPAG reports it plans to create a Public Sector International Accounting Standards Commission, responsible for monitoring new and amended standards, raising awareness of the standards, providing technical support to the MoF with the implementation of IPSAS and when appropriate, develop an implementation review plan, developing implementation guidance, and promoting educational activities. In addition, the CCPAG plans to offer certifications to professionals providing specialty services, including one in IPSAS.
Resolving governance issues should be a high priority for the institute to meet its public interest mandate and execute its implementation initiatives with the establishment of a new commission. As CCPAG progresses its stated plans, it should continue monitoring international developments in this area and disseminate information on IPSAS and the value the standards bring to public financial management amongst its members and key stakeholders through its publications. It is also encouraged to include IPSAS-related material in its training and educational activities for members who might work in the public sector. It may find IFAC’s Train the Trainers: Introduction to IPSAS resource helpful in this regard.
SMO 6: Investigation and Discipline
The Decree No. 72 of 2001 authorizes the Colegio de Contadores Públicos y Auditores de Guatemala (CCPAG) to establish an investigative and disciplinary (I&D) system for all professional accountants. Accordingly, the CCPAG has established I&D procedures, which are led by its Honor Tribunal.
Since 2014, the CCPAG and the Instituto Guatemalteco de Contadores Públicos y Auditores (IGCPA) have reported that they are collaborating to prepare amendments to Decree No. 72 of 2001 which would be necessary to address gaps in current I&D Procedures that would fulfill SMO 6 requirements. Identified gaps include: the system only being “complaints-based” (and not information-based as well); no linkage with the results of QA reviews; only having professional accountants serve on the Tribunal; a limited range of penalties; and the results of the I&D procedures are not made publicly available, among others. The initiative was expected to be completed by 2021. However, as of the date of the assessment, no actions have been reported.
In 2021, the CCPAG created the Ethics Commission responsible, among other activities, for addressing the identified gaps and supporting the necessary amendments to Decree No. 72 of 2001.
I&D procedures that meet the SMO 6 benchmark are foundational to maintaining public trust and confidence in the profession. CCPAG's system continues to have gaps since its last Action Plan update in 2017. It is strongly recommended that it invest time and resources in strengthening its procedures, as all professional accountants must be members of the CCPAG. CCPAG is encouraged to connect with other PAOs in the region that have overcome similar obstacles to learn from them and formulate a plan for progressing in this area. Advancing amendments that would help to address the gaps should be a priority for CCPAG’s new Ethics Commission.
SMO 7: International Financial Reporting Standards
The CCPAG, the tax administration (Superintendencia de Administración Tributaria (SAT)), the Securities and Commodities Market (BVNSA), and the Superintendence of Banks (SIB) are the entities legally responsible for the adoption of accounting standards. The SAT and the BVNSA permit but do not require the application of IFRS. The SAT also requires companies to prepare special purpose financial statements. The SIB has its own accounting manual for banks, financial institutions, and insurance companies – if any issues are not addressed by the SIB manual, IFRS should be used. Finally, the CCPAG has adopted IFRS and IFRS for Small- and Medium-sized Entities (SMEs) for application among its membership but its resolutions are not legally binding in this area.
The CCPAG monitors new and amended standards issued by the IASB, provides training activities, and disseminates information on updates to the standards and international developments through its website. The CCPAG reports it plans to create a Private Sector International Accounting Standards Commission, responsible for monitoring new and amended standards, raising awareness of the standards, promoting education activities, and supporting the Education Commission initiatives. The CCPAG’s previous technical commissions have not been operating due to governance challenges at the CCPAG.
The CCPAG also collaborates with regional organizations such as the Group of Latin American Accounting Standard Setters (GLENIF) to provide additional training activities. In addition, the CCPAG has a representative in GLENIF and participates in the international standard-setting process by making comments to exposure drafts at the regional level.
Resolving governance issues should be a high priority for the institute to meet its public interest mandate and execute its implementation initiatives with the establishment of a new commission. A key focus should be on advocating to the Tax Administration and SIB for the full adoption of IFRS and IFRS for SMEs, which would help bring financial reporting in line with international best practices and should benefit the SME financial reporting environment in Guatemala. Additionally, the CCPAG is encouraged to consider providing more technical, implementation guidance on IFRS and IFRS for SMEs to support its members with proper application.
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