Panama

In Panama, the legal framework for accounting and auditing is established through the Code of Commerce of 1916 and the Companies Law of 1927, which require companies to maintain accounting records and provide the foundation for corporate financial reporting requirements.

Law No. 57 of 1978, as amended by Law No. 280 of 2021 on the Accounting Profession, designates the Technical Board of Accounting (Junta Técnica de Contabilidad (JTC)), operating under the Ministry of Commerce and Industries, as the authority responsible for establishing accounting and auditing standards in the jurisdiction. The JTC established the Commission of Financial Accounting Standards to support the development and recommendation of accounting and auditing regulations applicable to non-financial sector entities.

Law No. 6 of 2005 requires the application of International Financial Reporting Standards (IFRS) and the IFRS for Small and Medium-sized Entities (IFRS for SMEs). In practice, IFRS and IFRS for SMEs are applied across the jurisdiction, including for tax reporting purposes under the Tax Code of 1956 and subsequent amendments.

Sector-specific regulators also establish financial reporting requirements for entities under their supervision. The Superintendency of Banks (SBP), the Superintendency of Insurance and Reinsurance (SSRP), and the Superintendency of the Securities Market (SMV) are authorized to prescribe accounting requirements for regulated entities. Banks and listed entities are permitted to apply either IFRS or U.S. Generally Accepted Accounting Principles (U.S. GAAP) in accordance with SBP Agreement No. 4 of 1999 and SMV Agreement No. 8 of 2000, respectively. Insurance entities are required to apply IFRS under Law No. 12 of 2012 issued by the SSRP.

The Tax Code establishes mandatory statutory audit requirements for entities with capital exceeding PAB 100,000 or annual sales or gross income exceeding PAB 50,000. Statutory audits must be conducted by Panamanian Certified Public Accountants and performed in accordance with auditing standards applicable in Panama.

The JTC adopted International Standards on Auditing (ISA) for statutory audits outside the financial sector pursuant to Law No. 6 of 2005. Financial institutions are permitted to apply either ISA or U.S. Generally Accepted Auditing Standards in accordance with SBP Agreement No. 4 of 2010. Listed entities and insurance companies are required to apply ISA under applicable SMV and SSRP regulations.

The accountancy profession in Panama is regulated under Law No. 57 of 1978, as amended by Law No. 280 of 2021 on the Accounting Profession. The law designates the Technical Board of Accounting (Junta Técnica de Contabilidad (JTC)), operating under the Ministry of Commerce and Industries, as the authority responsible for regulating the profession.

Individuals wishing to practice as Panamanian Certified Public Accountants (CPAs) or auditors are required to register with the JTC. Entry requirements include completion of a university degree in accounting and compliance with legal and professional eligibility requirements, including the absence of a criminal record. Universities are responsible for establishing accounting curricula and delivering initial academic education programs.

The JTC is responsible for regulating the profession, including establishing accounting, auditing, and ethical requirements; issuing professional licenses; maintaining the registry of CPAs; overseeing quality assurance arrangements; and administering investigative and disciplinary processes for the profession.

Panama operates a mixed regulatory framework in which professional accountancy organizations (PAOs) also play a role in supporting and promoting professional standards and member oversight on a voluntary basis. Professional accountants may voluntarily join PAOs and become subject to their membership requirements and professional obligations.

The Colegio de Contadores Públicos Autorizados de Panamá and the Association of Women Authorized Public Accountants (Asociación de Mujeres Contadoras Públicas Autorizadas (AMUCOPA)) have established continuing professional development requirements and quality assurance review mechanisms for their members. Other PAOs operating in the jurisdiction include the Association of Authorized Public Accountants (Asociación de Contadores Públicos Autorizados de Panamá (ACONTAP)) and the Movement of Independent Public Accountants. These organizations support professional development, training, and the promotion of international standards and professional practices within the jurisdiction.

Sectoral regulators also exercise oversight responsibilities for auditors providing services to regulated entities. The Superintendency of Banks (SBP) and the Superintendency of Insurance and Reinsurance (SSRP) maintain registries of auditors authorized to provide services to supervised entities and may establish additional ethical, educational, and practical experience requirements. In addition, the SBP, SSRP, and the Superintendency of the Securities Market are authorized to prescribe sector-specific accounting and auditing requirements applicable to professionals and entities under their supervision.

Panama does not have an independent public audit oversight authority. Oversight, supervision, and regulation of auditors and audit firms are carried out through the regulatory framework established under Law No. 57 of 1978, as amended by Law No. 280 of 2021 on the Accounting Profession, and through sectoral financial regulators.

The Technical Board of Accounting (Junta Técnica de Contabilidad (JTC)), operating under the Ministry of Commerce and Industries, is responsible for the overall regulation of the accountancy profession, including the registration of Certified Public Accountants, establishment of professional standards, oversight of quality assurance arrangements, and implementation of investigative and disciplinary procedures.

Sector-specific oversight responsibilities are also exercised by the Superintendency of Banks (SBP), the Superintendency of Insurance and Reinsurance (SSRP), and the Superintendency of the Securities Market. These authorities maintain registries of auditors authorized to provide services to regulated entities and may establish additional sector-specific requirements related to auditing, ethics, professional qualifications, and reporting obligations applicable to entities under their supervision.

Law No. 57 of 1978, as amended by Law No. 280 of 2021, empowers the Technical Board of Accounting (Junta Técnica de Contabilidad (JTC)), under the Ministry of Commerce and Industries, to establish the quality assurance (QA) review program for professionals and firms providing audit, review, compilation, and other assurance services. The JTC is recognized as the authority responsible for regulating the Certified Public Accountant profession in Panama.

In March 2025, the JTC issued Resolution No. 02-2025 regulating the implementation of the QA review system. The Resolution requires firms and individual Certified Public Accountants providing audit, review, compilation, and attestation services to submit a sworn declaration by June 30, 2026 confirming implementation of a system of quality management based on International Standard on Quality Management 1 (ISQM 1) and International Standard on Quality Management 2 (ISQM 2). QA reviews are scheduled to commence on December 31, 2026.

Resolution No. 02-2025 recognizes the international quality management standards issued by the International Auditing and Assurance Standards Board as adopted in Panama pursuant to Law No. 280 of 2021.

The jurisdiction-level framework now incorporates key elements of SMO 1, including mandatory quality management requirements, review mechanisms, and sanctions for non-compliance. However, as the mandatory QA review system has not yet become operational, the system is not yet fully aligned with all SMO 1 requirements.

Current Status: Partially Adopted

Law No. 57 of 1978 amended by the Law 280 of 2021, regulates the accountancy profession in Panama and recognizes the Technical Board of Accounting (Junta Técnica de Contabilidad (JTC)), under the Ministry of Commerce and Industries, as the authority responsible for regulating Certified Public Accountants. Individuals seeking authorization as Certified Public Accountants must obtain registration from the JTC. Current JTC requirements include a bachelor’s degree in accounting, notarized declaration, and related registration documentation.

Universities establish accounting degree curricula. There is no evidence that the latest International Education Standards (IES) have been adopted in law or regulation, nor that national requirements fully incorporate IES-based initial professional development, practical experience, professional competence assessment, or continuing professional development requirements for all professional accountants.

Some professional accountancy organizations (PAOs), including the Colegio de Contadores Públicos Autorizados de Panamá and the Association of Women Authorized Public Accountants, have established continuing professional development requirements for their members. Auditors providing services to regulated financial sector entities are also subject to additional requirements established by sector regulators, including the Superintendency of Banks.

The jurisdiction-level framework incorporates some IES elements but does not demonstrate full alignment with the current SMO 2 requirements.

Current Status: Partially Adopted

The Law No. 57 of 1978 amended by the Law 280 of 2021 on the Accounting Profession, empowers the Technical Board of Accounting (Junta Técnica de Contabilidad (JTC)), under the Ministry of Commerce and Industries, to establish auditing standards in Panama. Law No. 6 of 2005 adopted International Standards on Auditing (ISA) and provides for the ongoing adoption of subsequent revisions and updates issued by the International Auditing and Assurance Standards Board (IAASB).

Financial sector regulators also prescribe audit requirements for entities under their supervision. The Superintendency of Banks (SBP) requires regulated entities to obtain external audits in accordance with high auditing and ethical standards, and the Superintendency of Insurance and Reinsurance (SSRP) requires audits to be performed in accordance with ISA.

Lastly, ISA for Less Complex Entities have been adopted, pending specific regulation for full effectiveness.

Current Status: Adopted

Law No. 57 of 1978, as amended by Law 280 of 2021, empowers the Technical Board of Accounting (Junta Técnica de Contabilidad (JTC)), under the Ministry of Commerce and Industries, to establish ethical requirements for the accountancy profession in Panama. The national Code of Ethics for Certified Public Accountants was approved through Decree No. 26 of 1984 remains the legally enforceable ethical framework applicable to professional accountants in the jurisdiction. Law No. 280 of 2021 requires the JTC to update the national Code or adopt the International Code of Ethics for Professional Accountants (including International Independence Standards) issued by the International Ethics Standards Board for Accountants (IESBA). However, no evidence was identified that the JTC has formally adopted any version of the IESBA Code for all professional accountants, and available sources indicate that the 1984 national Code remains in effect.

Law No. 280 of 2021 permits professional accountants to apply the IESBA Code as supplementary guidance while the national Code remains in force. The IFAC translations database indicates that the 2024 Handbook of the International Code of Ethics for Professional Accountants (including International Independence Standards) is available in Spanish-Latin America translation; however, no evidence was identified that this version has been formally adopted by the JTC.

Additional ethical and independence requirements apply to auditors providing services to regulated financial sector entities. The Superintendency of Banks (SBP), through Agreement No. 3 of 2025, requires external auditors of regulated entities to comply with the ethical and independence requirements established by the IESBA Code. The Superintendency of Insurance and Reinsurance (SSRP), through Agreement No. 6 of 2013, requires registered external auditors to observe both the national Code of Ethics and the IESBA Code applicable at the time of the engagement. However, the specific version of the IESBA Code referenced by the SSRP could not be confirmed based on publicly available information.

The jurisdiction-level framework incorporates the IESBA Code for certain regulated auditors through sectoral regulation, but the latest IESBA Code has not been formally adopted for all professional accountants in Panama. Accordingly, the IESBA Code of Ethics remains assessed as Partially Adopted.

Current Status: Partially Adopted

Law No. 32 of 1984 establishes the National Comptroller Office (Contraloría General de la República (CGR)) as the authority responsible for setting public sector accounting standards in Panama. The CGR has adopted and implemented governmental accounting requirements based on International Public Sector Accounting Standards (IPSAS) through Decree No. 220-2014-DMySC and Decree No. 288-2014-DMySC, which approved the General Government Accounting Manual based on IPSAS for public sector entities.

The CGR’s framework is based on IPSAS and applies to public sector entities, including central government, municipalities, and state-owned entities. The framework is designed to modernize governmental accounting and improve the consistency, reliability, and timeliness of public sector financial information.

The IFAC translations database indicates that translations of IPSASB pronouncements are available, including the 2024 Handbook of International Public Sector Accounting Pronouncements; however, no evidence was identified that the latest IPSAS as issued by the International Public Sector Accounting Standards Board have been adopted in full on an accrual basis for all public sector entities in Panama.

The jurisdiction-level framework incorporates IPSAS-based public sector accounting requirements but remains based on a national governmental accounting manual rather than direct adoption of accrual-basis IPSAS in full. Accordingly, IPSAS remain assessed as Partially Adopted.

Current Status: Partially Adopted

The Law No. 57 of 1978 amended by the Law 280 of 2021 on the Accounting Profession empowers the Technical Board of Accounting (Junta Técnica de Contabilidad (JTC)), under the Ministry of Commerce and Industries, to regulate, supervise, investigate, and discipline Certified Public Accountants in Panama. Law No. 280 establishes the JTC as the governing authority for the profession and authorizes it to monitor professional practice, enforce the law, and apply sanctions.

The national Code of Ethics for Certified Public Accountants, approved through Decree No. 26 of 1984, provides for sanctions by the JTC in cases of non-compliance with the Code and the law governing the profession. Resolution No. 02-2025 further confirms that the JTC may apply sanctions under Law No. 280 and the Code of Ethics for breaches of quality assurance requirements.

The jurisdiction-level investigative and disciplinary (I&D) framework is operational but does not demonstrate full alignment with SMO 6 requirements. Publicly available information does not indicate that the JTC’s I&D system includes all SMO 6 elements, including clearly published categories of misconduct, a formal link with quality assurance review outcomes, public reporting of disciplinary outcomes, and transparent procedures for appeals and independent review.

The Colegio de Contadores Públicos Autorizados de Panamá (CCPAP), a voluntary professional accountancy organization, also carries out I&D procedures for its members. CCPAP reports that its procedures incorporate the SMO 6 requirements within the scope of its authority, although there remains no formal link between CCPAP’s system and the JTC’s jurisdiction-level system. It is unclear whether other professional accountancy organizations in Panama have established comparable enforcement mechanisms for their members.

As an I&D system has been established and is operational, but does not demonstrate full alignment with SMO 6 requirements for all professional accountants, I&D remains assessed as Partially Adopted.

Current Status: Partially Adopted

The Technical Board of Accounting (Junta Técnica de Contabilidad (JTC)), under the Ministry of Commerce and Industries, is responsible for setting accounting standards for companies outside the financial sector in accordance with Law No. 57 of 1978 amended by the Law 280 of 2021 on the Accounting Profession.

Law No. 6 of 2005 requires the application of International Financial Reporting Standards (IFRS Accounting Standards) and the IFRS for Small and Medium-sized Entities Accounting Standard, with ongoing adoption of subsequent revisions and updates issued by the International Accounting Standards Board. The IFRS Foundation jurisdiction profile confirms that Panama has adopted IFRS Accounting Standards and the IFRS for SMEs Accounting Standard.

For tax purposes, the Fiscal Code requires income tax returns to be prepared based on accounting records maintained on an accrual basis using IFRS Accounting Standards. Sector-specific regulators also establish requirements for entities under their supervision. Banks may apply IFRS Accounting Standards or U.S. Generally Accepted Accounting Principles under Superintendency of Banks Agreement No. 4-1999. Listed companies are required to apply IFRS Accounting Standards under Superintendency of the Securities Market Agreement No. 8-2000. Insurance companies are required to apply IFRS Accounting Standards under Law No. 12 of 2012.

The jurisdiction-level framework is aligned with SMO 7 requirements for IFRS Accounting Standards, as IFRS are adopted on an ongoing basis and apply to entities required to prepare financial statements under the framework. Accordingly, IFRS remain assessed as Adopted.

Current Status: Adopted

Relevant Organizations

Colegio de Contadores Públicos Autorizados de Panamá (CCPAP)

Contraloría General de la República de Panamá (CGR)

Ministerio de Comercio e Industrias de Panamá (MICI)

Superintendencia de Bancos de Panamá (SBP)

Relevant Legislation

Acuerdo No. 03-2025 de la Superintendencia de Bancos de Panamá

Acuerdo No. 04-2010 de la Superintendencia de Bancos de Panamá

Decreto No. 26 de 1984 Código de Ética Profesional

Decreto No. 288-2014-DMySC Manual General de Contabilidad Gubernamental basado en IPSAS

Ley No. 6 de 2005

Ley No. 32 de 1984

Ley No. 57 de 1978 y Ley No. 280 de 2021 sobre la Profesión de Contador Público Autorizado

Resolución No. 02-2025 Programa de Control de Calidad

Relevant Publications

IFRS Foundation Jurisdiction Profile: Panama

Panama Accountancy Education Research Publication

Programa de Control de Calidad de Panamá (ALCAPA)

Technical Article on the IESBA Code Published by CCPAP