Brazil

The financial reporting framework in Brazil is established under the Corporations Law No. 6.404 of 1976, amended in 2007 by Law No. 11.638 to align financial reporting requirements in Brazil with the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB). The Corporations Law requires all companies to prepare financial statements in accordance with Brazilian generally accepted accounting principles (Brazilian GAAP). Public Interest Entities (PIEs) are defined in Brazil as listed companies, mutual funds, financial institutions, insurance companies, and large companies. In addition to complying with the requirements of the Corporations Law, PIEs are under the legal obligation to prepare additional financial reporting in accordance with requirements issued by the respective regulatory and supervisory bodies, amongst them:

• The Securities and Exchange Commission (CVM) for listed companies and investment funds;
• the Central Bank of Brazil (BCB) for the banking sector and financial institutions;
• the Superintendence of Private Insurance (SUSEP) for the insurance and private pension markets; and
• the National Superintendence for Complementary Pensions (PREVIC) for the closed pension funds.

All corporate entities must comply with the National System of Commercial Registry (SINREM) filing requirements.

As defined in the Corporations Law, a company or group of companies under common control whose total assets in the previous year amounted to over R$240 million or whose total gross annual revenues exceed R$300 million are considered large companies. An entity not meeting one of those thresholds is considered a small- and medium-sized entity (SMEs).

Accounting Framework

The Decree Law 9.295 of 1946, amended by the Law 12.249 of 2010, delegates to the Federal Council of Accounting (CFC) the responsibility for issuing accounting standards. In 2005, the Brazilian Accounting Pronouncements Committee (CPC) was created by the CFC Resolution 1.055, to systematize and centralize the standard-setting process and promote convergence with the international accounting standards. The CPC issues Brazilian GAAP, and its standards are enforced by the CVM, BCB, SUSEP, PREVIC, and CFC. As reported by the CFC, since 2010, Brazilian GAAP has been fully converged with IFRS, with an ongoing system in place to incorporate new and revised IFRS as they become available.

Non-PIEs are obliged to prepare their financial statements in accordance with the Brazilian GAAP but are permitted to use IFRS for the consolidated financial statements, although there are no differences between Brazilian GAAP and IFRS. SMEs are required to apply the Brazilian GAAP for SMEs that is converged with the IFRS for SMEs as issued by the IASB and are also allowed to use full Brazilian GAAP. In 2021, CFC issued a standard for small entities (annual gross less than R$ 78 million) and another for micro-sized companies (annual gross less than R$ 4.8 million). Both standards are aligned with the IFRS for SMEsAccounting Framework

The Decree Law 9295/46, amended by the Law 12249/10, delegates the Federal Council of Accounting (CFC) the responsibility for issuing accounting standards. In 2005, the Brazilian Accounting Pronouncements Committee (CPC) was created by the CFC Resolution 1055/05, to systematize and centralize the standard-setting process and promote international convergence of accounting standards. The CPC issues Brazilian GAAP, and its standards are enforced by the CVM, BCB, SUSEP, PREVIC, and CFC. As reported by the CFC, since 2010, Brazilian GAAP has been fully converged with IFRS, with an ongoing system in place to incorporate new and revised IFRS as they become available.

Non-PIEs are obliged to prepare their financial statements in accordance with the Brazilian GAAP but are permitted to use IFRS for the consolidated financial statements, although there are no differences between Brazilian GAAP and IFRS. SMEs are required to apply the Brazilian GAAP for SMEs that is converged with the IFRS for SMEs or are allowed to use full Brazilian GAAP. In 2021, CFC issued a standard for small entities (annual gross less than R$ 78 million) and another for micro-sized companies (annual gross less than R$ 4.8 million). Both standards are aligned with the IFRS for SMEs.

Auditing Framework

The Corporations Law No. 6404/76, amended in 2007 by Law No. 11638/07, establishes the requirements for performing audits of financial statements. Audits are to be conducted by an independent auditor registered with the CVM.

The CFC has the legal mandate to set auditing standards for all companies—including PIEs—under Decree Law 9295/46, as amended by Law 12249/10. CFC and the Brazilian Institute of Independent Auditors (IBRACON) report that, since 2005, Brazilian auditing standards had been fully converged International Standards of Auditing (ISA), with an ongoing system in place to incorporate new and revised ISA as they become available.

In 2020, the CFC published Resolution nº 1.601, which mandates the adoption of ISA for all financial audits of public sector standards. The independent auditors must adopt them by 2024, and early adoption is permitted.

The accountancy profession in Brazil is self-regulated under the Decree Law 9295/46, as amended by the Law 12249/10. The Law recognizes the Federal Council of Accounting (CFC) as an independent, non-governmental entity responsible for regulating the accountancy profession.

The CFC along with its regional arms—Regional Accounting Councils (CRCs)—carries out the following regulatory activities: (i) monitoring accountancy practices; (ii) setting accounting and auditing standards; (iii) conducting the professional examination; (iv) establishing the requirements for technical qualifications; (v) setting ethical standards for the profession; (vi) establishing and operating a quality assurance (QA) review system for all audits; (vii) setting and enforcing Continuing Professional Development (CPD) requirements; and (viii) implementing an investigation and discipline system for the profession. As subsidiaries of the CFC, the CRCs are responsible for administering the CFC directives, registering professional accountants, and providing support in overseeing the profession.

Individuals wishing to qualify as a public accountant or auditor—the only regulated categories of professional accountants in the jurisdiction—are required to complete a bachelor’s degree in accounting sciences offered by an institution recognized by the Ministry of Education. Subsequently, candidates must complete the CFC’s professional examination and be registered members of a CRC in the jurisdiction in which they reside. In addition, regulatory bodies (i.e., the Securities and Exchange Commission (CVM), Central Bank of Brazil (BCB), Superintendence of Private Insurance (SUSEP), and/or the National Superintendence for Complementary Pensions (PREVIC)) require a Technical Qualification Exam, administered by the CFC, for auditors providing services to regulated companies.

Auditors registered on the CFC’s Cadastro Nacional dos Auditores Independentes (CNAI) and those providing services to companies participating in the securities market and companies with a turnover over R$78 million are subject to mandatory CPD requirements. In addition, in 2015, CFC issued a new regulation that requires public accountants who prepare or oversee the preparation of financial statements of public interest entities (PIEs) to also fulfill CPD obligations.

In accordance with Securities Law No 6385/76, the Securities and Exchange Commission (CVM) is authorized to regulate the activities of CVM-registered auditors. This includes maintaining a registry of auditors, establishing and operating systems of quality assurance (QA) in a peer review system and investigation and discipline (I&D), and prescribing CPD requirements. These auditors must attend the CFC’s and IBRACON’s CPD programs, which are monitored by the CVM.

Only auditors providing services to companies participating in the securities market (PIEs & listed companies) are subject to independent audit oversight. In accordance with Securities Law No 6385/76, the Securities and Exchange Commission (CVM) is authorized to regulate the activities of these registered auditors. This includes maintaining a registry of auditors, establishing and operating quality assurance systems (QA) and investigation and discipline (I&D), and prescribing CPD requirements. The CVM is a member of the International Forum of Independent Audit Regulators.

All other auditors are subject to regulation by the Federal Council of Accounting (CFC) which is further described in the

The Federal Council of Accounting (CFC)

The CFC, established by the Decree Law 9295/46, as amended by Law 12249/10, is an independent, non-governmental entity responsible for regulating the accountancy profession. The CFC, along with its regional arms—Regional Accounting Councils (CRCs)—carries out regulatory activities throughout the country.

The CFC's responsibilities include: (i) monitoring accountancy practices; (ii) setting accounting and auditing standards; (iii) conducting the professional examination; (iv) establishing the requirements for technical qualifications; (v) setting ethical standards for the profession; (vi) establishing and operating a quality assurance (QA) review system; (vii) setting and enforcing Continuing Professional Development (CPD) requirements; and (viii) implementing an investigation and discipline system for the profession. The CRCs, as subsidiaries of the CFC, are responsible for administering the CFC directives, as well as for registering professional accountants (as either one of the two qualifications: public accountant or auditor) and providing support in overseeing 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 private organization established in 1971 to promote the advancement of the audit profession. As a voluntary professional organization comprised of auditors, IBRACON represents and promotes the audit profession, develops training activities, and drives improvements to professional practices.

IBRACON cooperates with the CFC regarding technical and ethical issues involving the accountancy profession, assists with the translation and interpretation of accounting and auditing standards, supports the implementation of quality control/management standards, and works towards enhancing professional education. IBRACON is the official translator of the IFRS, IFRS for SMEs, and IESBA Code of Ethics issued by the IASB in Brazil and provides translation assistance for the Brazilian auditing standards. IBRACON is also responsible for the translation of IFRS for Sustainability standards issued by International Sustainability Standards Board (ISSB).

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 (QA) reviews are specifically required for audit firms registered before CVM that provide professional services to entities of public interest, including publicly traded companies, banking institutions, financial service providers, and insurance companies. This obligation stems from the provisions of the Securities Law No. 6.385/76, which designates the Securities and Exchange Commission of Brazil (CVM) as the authority responsible for overseeing the implementation and enforcement of these reviews.

While the CVM holds the legal mandate, in practice, it exercises supervisory oversight over a system that is jointly managed and executed by the Federal Council of Accounting (CFC) and the Brazilian Institute of Independent Auditors (IBRACON). Under the current framework, CVM and CFC share regulatory and operational responsibilities related to the QA review process for audit firms operating within the country.

To ensure effective implementation of these procedures, CFC and IBRACON established the External Quality Review Managing Committee Program (CRE), which governs the quality assurance system at the national level. According to reports from both institutions, the QA review mechanism aligns substantially with the core principles of Statement of Membership Obligation (SMO) 1, issued by IFAC, although a notable divergence exists: the audit engagements involving Public Interest Entities (PIEs) are reviewed on a four-year cycle instead of the standard three-year interval recommended by international benchmarks.

However, it is important to note that CFC and IBRACON emphasize that a considerable proportion of audit firms undergo reviews more frequently than every four years. This is particularly the case for firms or practitioners whose previous assessments yielded qualifications or adverse findings, as these are automatically scheduled for follow-up reviews in the subsequent year—thus enhancing the system’s responsiveness and continuous improvement.

In a move to further strengthen the monitoring environment, in 2019, the CFC launched the Cadastro Nacional dos Auditores Independentes Pessoa Jurídica (CNAIPJ)—a voluntary national registry for audit firms that serve non-PIEs. As of 2021, entities registered in the CNAIPJ have become subject to periodic QA reviews, thereby extending the quality control framework beyond firms serving high-public-impact clients and promoting a culture of accountability and excellence throughout the audit profession.

Current Status: Partially Adopted

In Brazil, the Ministry of Education (MEC), the Federal Council of Accounting (CFC), the CFC’s Regional Accounting Councils (CRCs), under Decree Law 9295/46, amended by the Law 12249/10, and the Securities and Exchange Commission (CVM), under the Securities Law No 6385/76, are all involved in setting initial professional development (IPD) and continuing professional development (CPD) requirements for professional accountants.

Individuals seeking to qualify as a public accountant or auditor—the only regulated categories of professional accountants in the jurisdiction—are required to complete a bachelor’s degree in accounting sciences offered by an institution recognized by the MEC. The MEC regulates the content of the curriculum of undergraduate courses in accounting sciences.

Subsequently, candidates must pass the CFC’s professional examination and be registered as a member of a CRC in the jurisdiction in which they reside. In addition, other regulatory bodies (i.e., the Securities and Exchange Commission (CVM), Central Bank of Brazil (BCB), Superintendence of Private Insurance (SUSEP), and/or the National Superintendence for Complementary Pensions (PREVIC)) require a Technical Qualification Exam, administered by the CFC, for auditors providing services to regulated companies.

The CFC and the Brazilian Institute of Independent Auditors (IBRACON) report that the IES 1–4, and IES 6 requirements are aligned with the international requirements. Regarding IES 5, in accordance with the Resolution CNE/CES No. 1, of March 27, 2024, which establishes the National Curriculum Guidelines for the Undergraduate Course in Accounting Sciences, supervised internships have become a mandatory component for course completion, thereby meeting the international requirements.

As to IES 7 and CPD requirements, auditors registered in the CFC’s Cadastro Nacional dos Auditores Independentes (CNAI) are subject to mandatory CPD requirements. The CVM also prescribes CPD requirements for CVM-registered auditors. These auditors must participate in the CPD programs of the CFC or IBRACON, which are monitored by the CVM.

In addition, since 2021, the CFC created a new technical qualification exam for auditors of complementary pension plans supervised by the National Superintendence for Complementary Pensions (PREVIC). Audit professionals who provide services to these entities must pass the exam, be registered in the CNAI and comply with CPD requirements. To further align with international standards, the CFC issued the NBC PA 12, which updated the procedures and documentation of compliance with the CPD program.

The CFC has also issued a regulation that requires accountants who prepare or oversee the preparation of financial statements of any public interest entity (PIE) to fulfill CPD obligations. In 2020, CPD obligations came into effect for accountants of closed pension funds. The CFC reports it is planning to gradually extend the CPD requirement to all public accountants.

Lastly, IES 8 has not been adopted; however, the CFC, IBRACON, and CVM stated in 2022 that they are working on enhancing the educational requirements for auditors.

Current Status: Partially Adopted

The Decree Law 9295/46, as amended by Law 12249/10 empowers the Federal Council of Accounting (CFC) to set auditing standards for audits of all companies—including public interest entities. CFC and the Brazilian Institute of Independent Auditors (IBRACON) reported that since 2005, Brazilian auditing standards had been fully converged ISA, with an ongoing system in place to incorporate new and revised ISA as they become available.

Current Status: Adopted

The Decree Law 9295/46, as amended by Law 12249/10, grants the Federal Council of Accounting (CFC) the authority to establish ethical requirements for the accountancy profession in Brazil. In collaboration with the Brazilian Institute of Independent Auditors (IBRACON), the CFC has adopted a Code of Ethics that is fully aligned with the 2024 edition of the IESBA Handbook of the International Code of Ethics for Professional Accountants (including International Independence Standards).

Current Status: Adopted

In accordance with the Decree Law 9295/46, as amended by Law 12249/10, the Federal Council of Accounting (CFC) is authorized to set public sector accounting standards. Federal, state, and municipality governments are ultimately responsible for implementing public sector accounting standards, which currently follow a hybrid approach (accrual-cash basis).

In 2015, CFC reconstituted the Convergence Management Committee—which had previously made the decision to converge Brazilian public sector standards with IPSAS as issued by the IPSASB—through Act 112/2015 with the objective of further driving the convergence process. The convergence process started in 2017 and is expected to be completed by 2024. New IPSAS issued by IPSASB from 2016 to 2025 will be translated and adopted by 2026.

In October 2021, CFC updated its Advisory Council for Public Sector Accounting Standards (GA/NBC TSP) into a Permanent Committee for Standards Applied to the Public Sector (CP CASP). This change improved the committee's governance and ensure an ongoing system is in place to incorporate new and revised IPSAS as they become available.

The Federal Council of Accounting (CFC), in accordance with its legal authority, has already completed the convergence of 33 public sector accounting standards based on the 2016 edition of the Handbook of International Public Sector Accounting Standards (IPSAS), issued by the IPSASB. These standards were adapted to the Brazilian context and legal framework, taking into account national legislative constraints and specificities. Among the converged standards are the Conceptual Framework and standards addressing revenue, provisions, assets, liabilities, financial statements, social benefits, and financial instruments. Currently, the CFC is undertaking a comprehensive review and update of these standards based on the most recent 2024 IPSAS Handbook, aiming to ensure the ongoing alignment of Brazilian public sector accounting with international standards. This ongoing effort reinforces the CFC's commitment to international accounting harmonization and to strengthening transparency, comparability, and the overall quality of financial reporting in the public sector.

Current Status: Partially Adopted

In Brazil, the Federal Council of Accounting (CFC) and its the Regional Accounting Councils (CRCs), under Decree Law 9295/46, as amended by Law 12249/10, have the authority for Investigating and Disciplining (I&D) professional accountants. Accordingly, the CFC and its CRCs have established I&D systems; however, the CFC reports that the I&D systems operating under its ultimate supervision are not fully in line with the SMO 6 requirements due to a legal impediment that prevents the inclusion of include non-accountants as members of the disciplinary committee.

In addition, the Securities and Exchange Commission (CVM), empowered by the Securities Law No 6385/76, is responsible for the I&D of auditors providing services to companies participating in the securities market. The CFC reports that the CVM’s I&D system it is aligned with the requirements of the SMO 6.

Current Status: Partially Adopted

The Corporations Law requires all companies to prepare financial statements in accordance with Brazilian generally accepted accounting principles (Brazilian GAAP) which from 2010 on must be aligned to international standards. Public interest entities (PIEs) are defined in Brazil as listed companies, mutual funds, financial institutions, insurance companies, and large companies. In addition to complying with the requirements of the Corporations Law, PIEs are under the legal obligation to additional financial reporting requirements issued by the respective regulatory bodies

In accordance with the Decree Law 9295/46, as amended by Law 12249/10, the Federal Council of Accounting (CFC) has the responsibility for setting accounting standards. In 2005, the Brazilian Accounting Pronouncements Committee (CPC) was created by the CFC Resolution 1055/05, with the goal of systematizing and centralizing the standard-setting process and promoting international convergence of accounting standards. The CPC issues Brazilian generally accepted accounting principles (Brazilian GAAP) and its standards are enforced by the Securities and Exchange Commission (CVM), Central Bank of Brazil (BCB), Superintendence of Private Insurance (SUSEP), National Superintendence for Complementary Pensions (PREVIC) and CFC. As reported by the CFC, since 2010, Brazilian GAAP have been fully converged with IFRS, with an ongoing system in place to incorporate new and revised IFRS as they become available. The IFRS are reviewed, translated, and republished as Brazilian GAAP.

Non-PIEs are obliged to prepare their financial statements in accordance with the Brazilian GAAP but are permitted to use IFRS for the consolidated financial statements, although there are no differences between Brazilian GAAP and IFRS. SMEs are required to apply the Brazilian GAAP for SMEs that is converged with the IFRS for SMEs and are allowed to use full Brazilian GAAP. In 2021, CFC issued a standard for small entities (annual gross less than R$ 78 million) and another for micro-sized companies (annual gross less than R$ 4.8 million). Both standards are aligned with the IFRS for SMEs.

In October 2023, the Brazilian Secutrities and Exchange Commission enacted Resolution no. 193 which requires from listed companies the publication on Sustainability Reports in accordance to IFRS S1 and IFRS2 , with reasonable assurance beginning 2026. In case of early adoption, reasonable assurance would be acceptable. Brazil was the first country in the world to officially require IFRS S1 e S2.

Current Status: Adopted

Relevant Organizations

• Brazilian Institute of Independent Auditors (IBRACON)
• Brazilian Accounting Pronouncements Committee (CPC)
• Central Bank of Brazil (BCB)
• Federal Council of Accounting (CFC)
• International Forum of Independent Audit Regulators (IFIAR)
• National Superintendence for Complementary Pensions (PREVIC)
• Securities and Exchange Commission (CVM)
• Superintendence of Private Insurance (SUSEP)
• Brazilian Committee for Sustainability Pronouncements (CBPS)

Relevant Legislation

• Brazilian Presidency, Decree Law 9295/46, 1946
• Brazilian Presidency, Decree Law 12249/10, 2010
• CFC, Brazilian Accounting Pronouncements
• HYPERLINK "https://www2.cfc.org.br/sisweb/sre/detalhes_sre.aspx?Codigo=2021/001638&arquivo=Res_1638.doc" CFC, Resolution 1638/21
• CFC, Resolution 1601/20
• CFC, Resolution 1055/05
• CPC, Brazilian GAAP
• CPC, Brazilian GAAP for SMEs
• CPC, Brazilian auditing standards
• CVM, Resolution 308/99
• Securities Law No 6385/76
• CVM, Resolution 193/23, as amended by Resolutions 219/24 and 227/25
• CFC, Resolution 1710
• CMN, Resolution 5185/24

Relevant Publications

• CFC–IBRACON, SMO Action Plan, March 2019.
• CFC, Code of Ethics, April 2017.
• Crowe Horwath, Country by Country Financial Reporting and Auditing Framework, Brazil, July 2014.
• IASB, Memorandum of Understanding CFC, CPC, and IASB, 2010.
• IFRS Foundation, “IFRS Application Around the World, Jurisdictional Profile: Brazil,” March 2017.
• IFIAR, IFIAR 2022 Member Profile – CVM, 2022.
• PWC, Doing Business and Investing in Brazil, March 2013.
• National Treasury Secretary (NTS), “The move to accrual accounting and IPSASs Adoption in Brazil: Challenges and Perspectives.”
• Revista de Educação e Pesquisa em Contabilidade, “Brazilian and International Accounting Standards Applied to the Public Sector and the Challenge of Convergence: a Comparative Analysis - IPSAS and NBCTSP,” December 2012.
• World Bank, Report on the Observance of Standards and Codes (ROSC), Accounting and Auditing: Brazil, June 2013.