Brazil

The financial reporting framework in Brazil is established primarily by Corporations Law No. 6,404 of 1976, as amended by Law No. 11,638 of 2007, which aligned the national financial reporting framework with International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB). All companies are required to prepare financial statements in accordance with Brazilian generally accepted accounting principles (Brazilian GAAP).

Public interest entities (PIEs) in Brazil include listed companies, investment funds, financial institutions, insurance companies, and large companies. In addition to the requirements of the Corporations Law, PIEs are subject to financial reporting and supervisory requirements established by sector regulators, including the Securities and Exchange Commission (CVM), the Central Bank of Brazil (BCB), the Superintendence of Private Insurance (SUSEP), and the National Superintendence for Complementary Pensions (PREVIC). All corporate entities are required to comply with filing requirements established by the National System of Commercial Registry (SINREM).

Under the Corporations Law, a company or group of companies under common control is classified as a large company when total assets exceed R$240 million or annual gross revenues exceed R$300 million. Entities below these thresholds are generally considered small and medium-sized entities (SMEs).

Accounting Framework

Decree-Law No. 9,295 of 1946, as amended by Law No. 12,249 of 2010, delegates responsibility for issuing accounting standards to the Federal Council of Accounting (CFC). To support convergence with international standards, the Brazilian Accounting Pronouncements Committee (CPC) was established in 2005 through CFC Resolution No. 1,055. The CPC develops Brazilian accounting standards, which are endorsed and enforced by the CFC, CVM, BCB, SUSEP, and PREVIC.

Brazilian GAAP has been fully converged with IFRS since 2010, with an established process for incorporating new and revised IFRS as they become effective. Listed companies are required to apply IFRS-based Brazilian GAAP, and the IFRS Foundation reports that IFRS are required for the consolidated financial statements of listed entities.

SMEs apply a Brazilian GAAP for SMEs framework that is aligned with the IFRS for SMEs Accounting Standard issued by the IASB. SMEs may also elect to apply full Brazilian GAAP. In addition, the CFC has established simplified reporting frameworks for small and micro-sized entities based on annual revenue thresholds, which are derived from and aligned with the IFRS for SMEs framework.

Auditing Framework

Statutory audit requirements are established under Corporations Law No. 6,404 of 1976, as amended. Financial statement audits must be performed by independent auditors registered with the CVM where required by law or regulation.

The CFC is responsible for establishing auditing standards under Decree-Law No. 9,295 of 1946, as amended by Law No. 12,249 of 2010. The CFC works closely with the Brazilian Institute of Independent Auditors (IBRACON) in the standard-setting process. Brazilian auditing standards have been converged with International Standards on Auditing (ISA) since 2005, and a continuing process exists to incorporate new and revised ISA as issued by the International Auditing and Assurance Standards Board.

In 2020, the CFC issued Resolution No. 1,601 mandating the adoption of ISA for financial statement audits in the public sector, with full implementation required by 2024 and earlier application permitted.

The accountancy profession in Brazil is primarily self-regulated under Decree-Law No. 9,295 of 1946, as amended by Law No. 12,249 of 2010. The legislation recognizes the Federal Council of Accounting (CFC) as the statutory professional body responsible for regulating the profession and overseeing the registration of professional accountants.

The CFC operates through a network of Regional Accounting Councils (CRCs), which are responsible for registering professional accountants, implementing CFC regulations, and supporting supervision and enforcement activities within their respective jurisdictions. Together, the CFC and CRCs are responsible for establishing professional requirements, administering professional examinations, issuing accounting and auditing standards, establishing ethical requirements, overseeing continuing professional development, operating investigation and disciplinary mechanisms, and supporting quality assurance arrangements for the profession.

The regulated categories of professional accountants in Brazil are accountants and independent auditors. Individuals seeking registration as professional accountants are required to complete a bachelor's degree in accounting from a recognized higher education institution, pass the Unified Sufficiency Examination administered by the CFC, and register with the relevant CRC.

Additional requirements apply to independent auditors. Auditors providing services to entities regulated by the Securities and Exchange Commission (CVM), the Central Bank of Brazil (BCB), the Superintendence of Private Insurance (SUSEP), or the National Superintendence for Complementary Pensions (PREVIC) are required to pass the Technical Qualification Examination administered by the CFC and meet applicable registration requirements established by the relevant sector regulator.

Continuing professional development requirements apply to independent auditors registered in the National Register of Independent Auditors (CNAI), as well as to other categories of professionals specified by CFC regulations, including accountants responsible for the preparation or oversight of financial statements of public interest entities.

The Securities and Exchange Commission (CVM) exercises additional regulatory authority over auditors registered to audit entities under its supervision. Pursuant to Securities Law No. 6,385 of 1976, the CVM maintains a registry of authorized auditors and establishes supplementary requirements relating to auditor registration, continuing professional development, quality assurance reviews, and investigation and disciplinary procedures applicable to auditors operating in the securities market.

Independent audit oversight in Brazil applies to auditors registered with the Securities and Exchange Commission (CVM) to provide services to entities under its supervision. Under Securities Law No. 6,385 of 1976 and related CVM regulations, the CVM is responsible for registering and supervising independent auditors operating in the securities market.

The CVM’s authority includes establishing requirements for auditor registration, continuing professional development, external quality control reviews, and investigation and disciplinary procedures. CVM Resolution No. 23 requires registered independent auditors to undergo external quality control reviews every four years, in accordance with guidelines issued by the Federal Council of Accounting (CFC).

Auditors outside the scope of CVM supervision are regulated by the CFC, as described in the Regulation of the Accountancy Profession section. The CVM is a member of the International Forum of Independent Audit Regulators.

The Federal Council of Accounting (CFC)

CFC was established by Decree-Law No. 9,295 of 1946, as amended by Law No. 12,249 of 2010, and is the statutory body responsible for regulating the accountancy profession in Brazil. The CFC operates through the Regional Accounting Councils (CRCs), which register professional accountants, implement CFC requirements, and support supervision and enforcement activities at the regional level.

The CFC’s responsibilities include establishing professional requirements, administering the Unified Sufficiency Examination, issuing accounting and auditing standards, setting ethical requirements, establishing continuing professional development requirements, supporting quality assurance arrangements, and operating investigation and disciplinary processes for the profession.

In addition to being an IFAC Member, the CFC is a member of the Inter-American Accounting Association (AIC), the Group of Latin American Accounting Standard Setters (GLENIF), the Committee of Integration for Latin Europe and America (CILEA), and the Union of Accountants and Auditors of Portuguese Language (UCALP).

The Brazilian Institute of Independent Auditors (IBRACON)

IBRACON is a voluntary, not-for-profit professional organization established in 1971 to represent and support the independent audit profession in Brazil. IBRACON promotes the development of the audit profession through technical activities, professional education, advocacy, and engagement with regulators and standard-setting bodies.

IBRACON cooperates with the CFC and other stakeholders on technical and ethical matters affecting the profession. It supports the translation, interpretation, and implementation of international accounting, auditing, ethics, and sustainability reporting standards, including through its role as the entity authorized by the IFRS Foundation to translate IFRS Standards into Portuguese in Brazil.

In addition to being an IFAC Member, IBRACON is a member of the Inter-American Accounting Association (AIC), the Committee of Integration for Latin Europe and America (CILEA), and the Union of Accountants and Auditors of Portuguese Language (UCALP).

Mandatory quality assurance reviews are established for independent auditors registered with the Securities and Exchange Commission (CVM). Under CVM Resolution No. 23, CVM-registered auditors are required to undergo an external quality control review every four years, in accordance with guidelines issued by the Federal Council of Accounting (CFC).

The External Quality Review Managing Committee Program (CRE), established by the CFC and the Brazilian Institute of Independent Auditors (IBRACON), administers the peer review process under NBC PA 11. The framework is aligned with several key requirements of SMO 1, including an operational review system, defined review procedures, and follow-up mechanisms for deficiencies. However, the system does not fully align with the SMO 1 benchmark because the review cycle for public interest entity audits is four years rather than three years, and the scope does not demonstrably cover all mandatory audits.

The CFC has adopted NBC PA 01, Gestão de Qualidade para Firmas, and NBC PA 02, Revisão de Qualidade do Trabalho, which are correlated with International Standard on Quality Management 1 and International Standard on Quality Management 2, respectively.

Current Status: Partially Adopted

In Brazil, initial professional development requirements are established by the Ministry of Education (MEC) and the Federal Council of Accounting (CFC). Candidates seeking registration as accountants must complete a bachelor’s degree in accounting from a recognized higher education institution, pass the CFC’s Unified Sufficiency Examination, and register with the relevant Regional Accounting Council (CRC). The 2024 National Curriculum Guidelines for undergraduate accounting programs introduced supervised practical training as a mandatory component, further aligning the jurisdiction-level framework with International Education Standards 1 to 6.

Additional requirements apply to independent auditors. Auditors providing services to entities regulated by the Securities and Exchange Commission (CVM), the Central Bank of Brazil, the Superintendence of Private Insurance, or the National Superintendence for Complementary Pensions must pass the CFC’s Technical Qualification Examination and be registered in the National Register of Independent Auditors.

Continuing professional development requirements are established under NBC PG 12 (R5). These apply to independent auditors, accounting experts, and professionals responsible for preparing or overseeing financial statements of regulated entities, large companies, and certain other entities meeting specified revenue thresholds. However, CPD requirements have not yet been extended to all professional accountants, and International Education Standard 8 has not been fully adopted for engagement partners.

Current Status: Partially Adopted

Decree-Law No. 9,295 of 1946, as amended by Law No. 12,249 of 2010, empowers the Federal Council of Accounting (CFC) to set auditing standards for audits of all companies, including public interest entities. The CFC adopts International Standards on Auditing (ISA) as Brazilian Standards on Auditing, known as NBC TA, through a convergence process supported by the Brazilian Institute of Independent Auditors (IBRACON).

CFC adopts ISA on a standard-by-standard basis and publishes the corresponding NBC TA standards, with an established process for incorporating new and revised ISA. The CFC’s current NBC TA standards include correlations to ISA, including revised standards such as NBC TA 315 (R2) and NBC TA 600 (R2).

ISA for LCE has been translated and reviewed by IBRACON and submitted to the CFC; however, formal adoption as a Brazilian standard could not be verified from available CFC sources.

Current Status: Adopted

Decree-Law No. 9,295 of 1946, as amended by Law No. 12,249 of 2010, authorizes the Federal Council of Accounting (CFC) to establish ethical requirements for the accountancy profession in Brazil. The CFC has issued the Code of Ethics for Professional Accountants as NBC PG 01 and has adopted professional ethics and independence requirements through the NBC PG and NBC PA standards, including NBC PG 100 (R1), NBC PG 200 (R1), and NBC PG 300 (R1), which are correlated with the International Code of Ethics for Professional Accountants issued by the International Ethics Standards Board for Accountants.

CFC incorporates ethics and independence requirements into national standards on an ongoing basis. However, pending incorporation of the latest 2025 IESBA Code updates into national requirements, the International Code of Ethics for Professional Accountants remains Partially Adopted.

Current Status: Partially Adopted

Decree-Law No. 9,295 of 1946, as amended by Law No. 12,249 of 2010, authorizes the Federal Council of Accounting (CFC) to establish public sector accounting standards. The CFC issues the Brazilian Public Sector Accounting Standards (NBC TSP), which are based on International Public Sector Accounting Standards (IPSAS) issued by the International Public Sector Accounting Standards Board and adapted to the Brazilian legal and institutional environment.

The CFC has issued a comprehensive suite of NBC TSP standards covering key areas of public sector financial reporting, including the Conceptual Framework, presentation of financial statements, revenue, expenses, assets, liabilities, financial instruments, leases, and social benefits. Through its Permanent Committee for Standards Applied to the Public Sector, the CFC maintains an ongoing process to review, update, and incorporate new IPSAS requirements into the national framework.

While Brazil has adopted accrual-based national standards that are substantially based on IPSAS, the standards are adapted for the local context and IPSAS have not been adopted directly for application by all public sector entities. Accordingly, IPSAS are assessed as Partially Adopted.

Current Status: Partially Adopted

Decree-Law No. 9,295 of 1946, as amended by Law No. 12,249 of 2010, authorizes the Federal Council of Accounting (CFC) and Regional Accounting Councils (CRCs) to investigate and discipline professional accountants. The CFC has established procedures for administrative enforcement processes within the CFC/CRC system, including sanctions for breaches of professional and ethical requirements.

The Securities and Exchange Commission (CVM), under Securities Law No. 6,385 of 1976 and CVM Resolution No. 23, has authority over independent auditors registered to operate in the securities market, including registration, supervision, and disciplinary measures.

The CFC/CRC system is operational, but it does not fully align with SMO 6 due to legal constraints that prevent the inclusion of non-accountants in disciplinary committees. Accordingly, investigation and discipline remains Partially Adopted.

Current Status: Partially Adopted

The jurisdiction-level framework in Brazil requires International Financial Reporting Standards (IFRS) Accounting Standards for the consolidated financial statements of all companies whose securities are publicly traded. The IFRS Foundation reports that IFRS have been mandatory for such entities for financial years ending December 31, 2010, and that Brazilian generally accepted accounting principles have been fully converged with IFRS since 2010.

Decree-Law No. 9,295 of 1946, as amended by Law No. 12,249 of 2010, authorizes the Federal Council of Accounting (CFC) to issue accounting standards. The Brazilian Accounting Pronouncements Committee (CPC), established by CFC Resolution No. 1,055 of 2005, issues technical pronouncements that incorporate IFRS into Brazilian generally accepted accounting principles and are endorsed by the relevant regulators. IBRACON is the official translator of IFRS and IFRS for SMEs in Brazil.

Brazil has also adopted IFRS Sustainability Disclosure Standards for listed entities through CVM Resolution No. 193 and related national sustainability pronouncements, with IFRS S1 and IFRS S2 incorporated locally as CBPS 01 and CBPS 02.

IFRS for SMEs is also Adopted through the Brazilian equivalent of the IFRS for SMEs Accounting Standard, which is required for small and medium-sized non-publicly accountable entities, with the option to apply full Brazilian generally accepted accounting principles.

Current Status: Adopted

Relevant Organizations

Brazilian Accounting Pronouncements Committee (CPC)Brazilian Institute of Independent Auditors (IBRACON)Federal Council of Accounting (CFC)Ministry of Education (MEC)National Treasury Secretariat (STN)Securities and Exchange Commission of Brazil (CVM)

Relevant Legislation

CNE/CES Resolution No. 1 of March 27, 2024 (National Curriculum Guidelines for Accounting Programs)Corporations Law No. 6,404 of 1976Decree-Law No. 9,295 of 1946, as amended by Law No. 12,249 of 2010Law No. 12,249 of 2010Securities Law No. 6,385 of 1976

Relevant Publications

CFC NBC PA StandardsCFC NBC PG StandardsCFC NBC TA StandardsCFC NBC TSP StandardsCFC Strategic Plan for the Permanent Committee for Standards Applied to the Public Sector (2025–2029)CVM Resolution No. 23CVM Resolution No. 193IFRS Foundation Jurisdiction Profile: BrazilIFRS Foundation Sustainability Jurisdiction Profile: BrazilManual de Procedimentos Processuais (2024)