Ordem dos Revisores Oficiais de Contas
Member | Established: 1974 | Member since 1985
The OROC, which was established in 1974 by Ministerial Order 83/74 of February 6, amended by Decree Law No. 140/2015, is the mandatory professional accountancy organization for statutory auditors, (Revisores Oficiais de Contas (ROCs)) and statutory audit firms (Sociedades de Revisores Oficiais de Contas (SROCs)). OROC members are the only professional accountants authorized to provide audit or audit-related services. In accordance with the law, OROC carries out the following regulatory activities: (i) implementing IPD and CPD requirements for statutory auditors; (ii) maintaining a registry of statutory auditors and audit firms; (iii) setting ethical requirements for its members; (iv) administering and monitoring of the CPD program; (v) establishing a QA system for audits of non-public interest entities; and (vi) establishing an I&D system for its members.
In addition to being a member of IFAC, the OROC is a member of Accountancy Europe.
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 Portugal, the Comissão do Mercado de Valores Mobiliários (CMVM) is responsible for quality assurance (QA) reviews for public interest entities (PIEs) and the OROC conducts QA reviews for non-PIEs, under the supervision of the CMVM. Based on available information on the QA review system being carried out by the CMVM, it seems that it is aligned with the SMO 1 best practices. Additionally, OROC reports that its QA system fulfills all the requirements of SMO 1.
Prior to the transposition of the European Union’s Audit Directive No. 2014/56/EU, the OROC carried out the QA reviews of all statutory auditors in the jurisdiction. To fulfill its responsibility, the OROC established the Quality Control Committee (CCQ), responsible for the implementation of the QA system. The OROC system now reviews non-PIE audit professionals at both the individual and firm level and explores the individual/firm’s internal quality policies and procedures as well as the quality of specific audit engagements. Auditors and audit firms are selected at random and are reviewed at least once every six years. Reviewers prepare a written report after the QA review which is discussed and approved by the Quality Control Committee (CCQ).
To support the implementation of the requirements, the OROC reports that it prepared an inspection manual to guide the review process, developed implementation guidelines and has a mandatory annual training program for reviewers. In addition, the OROC supports members by offering courses on effective quality control systems and provides mandatory training on ISQC 1.
During the next round of updates, the OROC is encouraged to collaborate with the CMVM to complete the self-assessment checklist of its QA review mechanism against SMO 1 requirements to affirm alignment. The OROC is encouraged to provide an update on its efforts and actions to promote CMVM alignment of its QA review system with SMO 1 requirements.
SMO 2: International Education Standards
Universities, the OROC, and the Ordem dos Contabilistas Certificados (OCC)—under the oversight of the Ministry of Finance (MoF), have a role in implementing initial professional development (IPD) and continuous professional development (CPD) requirements for professional accountants, which are established in the Law No. 148/2015, Decree Law No. 140/2015, and the Decree Law No. 139/2015.
To be eligible to practice as statutory auditors and become a member of OROC, individuals must: have a university degree, complete entrance examinations (4 written exams and 1 oral exam), have work experience of at least three years (under a supervision of a mentor with minimum five years’ experience) and pass a final assessment. In addition, OROC members are required to complete 60 credits of CPD (240 hours) over a three-year period. The OROC reports that the requirements for statutory auditors comply with the revised IES.
The OROC states that it maintains an ongoing process to monitor new and revised standards and other pronouncements issued by the IAESB and participates in the international standard-setting process by providing comments to exposure drafts issued by the IAESB. The OROC focuses on strengthening its CPD program through the provision of relevant courses for its members and monitoring compliance with the CPD requirements.
SMO 3: International Standards on Auditing
Auditing requirements are set in Law No. 148/2015. The law directly adopts ISA as issued by the IAASB, and requires statutory audits to be performed according to the standards. In addition, the law mandates the Comissão do Mercado de Valores Mobiliários (CMVM) with the overall responsibility of implementing and translating ISA. In turn, the OROC translated the 2015 IAASB Handbook and is in the process to translate the 2018 IAASB Handbook.
To support the ongoing adoption of the standards, the OROC reports that it monitors new and amended standards issued by the IAASB and it has recently translated and published the fourth edition of the ISA Guide for SMEs.
To facilitate the implementation of the standards, the OROC indicates: (i) offers training activities on the standards, including an e-learning ISA course; (ii) develops implementation guidelines; (iii) disseminates information on updates to the standards and international developments in the area through printed materials and its website; and (iv) promotes discussion with universities to further include the updated ISA in their curricula.
Additionally, the OROC is a member of Accountancy Europe and provides comments to IAASB exposure drafts through this regional grouping.
SMO 4: Code of Ethics for Professional Accountants
The OROC sets ethical standards for the auditing profession in accordance with its prescribed mandate in Decree Law No. 140/2015. The OROC approved a revised Code of Ethics effective January 2012, which is aligned with the 2009 version of the IESBA Code of Ethics and it reports plans to translate the 2018 version of the IESBA Code of Ethics to incorporate the requirements of the latest IESBA Code of Ethics.
To better align its ethical requirements, the OROC reports that it monitors changes to the IESBA Code of Ethics in order to review, approve, and publish new sections of its Code of Ethics or amending existing parts when necessary.
The OROC supports the implementation of its Code amongst its members by providing trainings and seminars on ethics-related courses, integrating ethical requirements into professional exams, and disseminating updates of its Code.
During the next round of updates, the OROC is encouraged to provide an update on its efforts and actions to adopt the 2018 IESBA Code of Ethics and the effective date of its application for its members, thereby eliminating differences with IESBA Code and its own Code. Also, if deemed feasible and relevant, it would be beneficial for the OROC, 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 OROC is not responsible for the adoption of public sector accounting standards, which are adopted by the Comissão de Normalização Contabilística (CNC), under the purview of the Ministry of Finance. The CNC has adopted a public sector accounting framework based on 2014 IPSAS.
The OROC has promoted the use of IPSAS or IPSAS-based accounting framework through its participation and representation on the CNCP and has been an active member in the implementation of an IPSAS-based framework. As part of its contribution to the adoption process, the OROC translated the 2012 IPSAS Handbook.
To support implementation of the standards, the OROC: (i) organizes conferences and workshops to assist with the application of the local accounting standards; (ii) participates in the Ministry of Finance’s implementation process of the IPSAS; and (iii) disseminates information on updates to the standards and international developments in the area through printed materials and its website. In addition, the OROC indicates that it participates in the international standard-setting process exposure drafts and other IPSASB pronouncements.
During the next round of updates, the OROC is encouraged to provide an update on the CNC efforts to update the public sector accounting standards.
SMO 6: Investigation and Discipline
In Portugal, the Comissão do Mercado de Valores Mobiliários (CMVM) and the OROC share responsibility for establishing investigative and disciplinary (I&D) systems for statutory auditors. Accordingly, the OROC has implemented an I&D system which it reports is fully aligned with the requirements of SMO 6 without overlaps in responsibilities between the CMVM and OROC I&D processes.
To fulfill its responsibility, OROC maintains a Disciplinary Committee with powers to investigate and sanction auditors for legal and professional breaches. The OROC states it has established ongoing processes to conduct assessments of its own I&D policies and processes against the requirements of SMO 6. In addition, the OROC has mechanisms in place to raise awareness of the I&D processes and disciplinary sanctions are disclosed in annual reports.
SMO 7: International Financial Reporting Standards
In accordance with the EU Accounting Directive, EU-endorsed IFRS are mandatory for the preparation of consolidated financial statements of regulated companies and permitted for corporate sector entities. In addition, the Comissão de Normalização Contabilística (CNC), under the purview of the Ministry of Finance, is authorized to set accounting standards for corporate sector entities. The CNC standards differ from the IFRS.
The OROC states it is proactive in this area by participating in CNC’s working groups, promoting convergence with IFRS, and raising awareness of the requirements of the adopted EU-endorsed IFRS
Among its members, the OROC supports IFRS implementation by providing training activities; integrating IFRS in both OROC´s annual education plan and initial professional development offerings; and distributing information on the standards through various means, such as its website.
Additionally, the OROC is a member of Accountancy Europe and provides comments to IASB exposure drafts through this regional grouping.
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.