Peru

The financial reporting framework in Peru is established by the Code of Commerce of 1902 and the Company Law of 1997. The Code of Commerce sets the obligation for companies to keep books of accounts and provides the basic legal framework for accounting. The Company law requires that financial statements be prepared in accordance with generally accepted accounting principles in Peru.

Law No. 24680 of 1987, as amended recently by the Decree 1525 of 2022, established the Accounting Standards Board (CNC)—which operates under the auspices of the National Direction of Public Accounting (DGCP) as part of the Ministry of Economy and Finance—as the organization responsible for setting accounting standards for private companies. The DGCP has adopted IFRS and IFRS for Small- and Medium-sized Enterprises (SMEs) by reference as issued by IASB, through Resolution Nº 059-2015-EF/30 of 2015, amended by the Resolution Nº 002-2022-EF/30, and Resolution No. 045-2010-EF/94 of 2010, amended by the Resolution Nº 003-2020-EF/30, respectively.

Listed companies are regulated by the Superintendence of Security Markets (SMV). Banks, insurance, and pension companies are supervised by the Superintendence of Banking, Insurance, and Pensions (SBS). These companies are required to prepare annual audited financial statements in accordance with the accounting standards established by the SMV and SBS, respectively. The SMV has required the use of IFRS through Resolution No. 011 of 2012, as amended, for its regulated entities. The SBS Resolution No. 7036 of 2012 requires the application of IFRS as endorsed by the CNC.

In accordance with Law No. 29720 of 2011, all corporations with annual revenues or assets of 3,000 tax reference units or more must present their audited financial statements to the Superintendence of Security Markets (SMV). Setting auditing standards for all types of audits is delegated to the departmental associations of public accountants by Law No. 28951 of 2007. In practice, however, all departmental associations defer to the auditing standards issued by the Junta de Decanos de Colegios de Contadores Públicos de Perú (JDCCPP), which is the national board of the departmental associations. The departmental associations must adopt JDCCPP-issued standards to become mandatory for application in their jurisdictions. The JDCCPP has been adopting ISA since 2006, and the most recent Resolution No. 004 of 2021 requires the 2018 version of ISA to be applied by all auditors.

The accountancy profession in Peru is regulated by Law No. 28951 of 2007. According to the law, professional accountants are regulated in each of Peru’s departments (i.e., regional jurisdictions within the country) by the corresponding departmental associations of public accountants. The respective departmental association must license individuals and firms to practice. The deans of the departmental associations sit on the Junta de Decanos de Colegios de Contadores Públicos de Perú (JDCCPP), the national board of the departmental associations.

There are two designations for accountancy professionals—public accountants and certified independent auditors. According to the law, a university accounting degree is the only requirement to be licensed as a public accountant by the departmental associations. Universities and the Ministry of Education set accounting curriculum requirements. To become a certified independent auditor, departmental associations require an additional practical experience requirement of five years, or three years plus a specialization acquired in an approved auditing course.

Empowered by Law No. 25892 of 1992 and Law No. 28951, the JDCCPP advises universities on their accounting curricula and is authorized to certify and recertify public accountants at the national level. This is a voluntary certification to enable the national mobility of professionals. The JDCCPP requires candidates for the national level certification to attend an ethics seminar and pass a final exam of competencies. To maintain the certification, individuals must complete the professional development requirements of 120 hours of CPD over a four-year rolling period.

Departmental associations have the legal authority to issue rules regulating professional practice, which include the following: (i) maintaining a registry of public accountants, certified independent auditors and firms; (ii) setting auditing standards for all companies; (iii) establishing ethical standards; (iv) implementing an investigation and discipline (I&D) system; and (v) establishing and operating a quality assurance (QA) review system. The departmental associations collaborate through the JDCCPP to set standards and regulations that are adopted in each department.

In addition, auditors providing services to companies regulated by the financial sector regulators—Superintendence of Security Markets (SMV) and the Superintendence of Banking, Insurance, and Pensions (SBS)—are subject to specific regulations by the respective regulator. The entities are authorized to: (i) register auditors providing services to entities under their supervision; (ii) establish and operate a QA review system; and (iii) set sector-specific accounting standards for professionals.

There is no independent audit oversight in Peru. Certified independent auditors and firms are regulated in each of Peru’s departments (i.e., regional jurisdictions within the country) by the corresponding departmental association of public accountants, in accordance with Law No. 28951 of 2007.

Departmental associations have the legal authority to issue rules regulating professional practice, which include the following: (i) maintaining a registry of public accountants, certified independent auditors and firms; (ii) setting auditing standards for all companies; (iii) establishing ethical standards; (iv) implementing an investigation and discipline system; and (v) establishing and operating a quality assurance (QA) review system. The departmental associations collaborate through the Junta de Decanos de Colegios de Contadores Públicos de Perú to set standards and regulations that are adopted in each department.

In addition, auditors providing services to companies regulated by the financial sector regulators—Superintendence of Security Markets (SMV) and the Superintendence of Banking, Insurance, and Pensions (SBS)—are subject to specific regulations set by the respective regulator. The entities are authorized to: (i) register auditors providing services to entities under their supervision; (ii) establish and operate a QA review system; and (iii) set sector-specific accounting standards for professionals.

The Junta de Decanos de Colegios de Contadores Públicos de Perú

JDCCPP was established by Law No. 25892 of 1992 as an umbrella organization with mandatory membership, uniting representatives from the 24 departmental associations of public accountants.

JDCCPP is the representative body of the public accountancy profession domestically and internationally. It provides advice to universities on their accounting curricula and is authorized to certify and recertify public accountants at the national level.

Law No. 28951 of 2007 delegates audit and ethics standard-setting authority to the departmental associations of public accountants. In practice, however, all departmental associations defer to the national technical commissions established by the JDCCPP to set and adopt the standards. The departmental associations adopt the standards issued by the JDCCPP for mandatory application in their jurisdictions.

In addition to being an IFAC member, JDCCPP is a member of the Inter-American Association of Accountants and the Integration Committee Europe—Latin America.

In accordance with Law No. 28951 of 2007, each departmental association of public accountants has the legal authority to issue rules regulating the professional practice of its members, which include establishing and operating a quality assurance (QA) review system for all audits of financial statements. In practice, however, all departmental associations defer to the standards and regulations issued by the Junta de Decanos de Colegios de Contadores Públicos de Perú (JDCCPP). In turn, JDCCPP-issued standards and regulations must be adopted by the departmental associations to be applied in their jurisdictions.

While JDCCPP has adopted ISA 220 and ISQC1, as of 2022, no specific rules have been issued regarding a QA review system by JDCCPP or any departmental association. The JDCCPP indicates it will carry out a voluntary QA program in 2023 and then on a mandatory basis in 2024.

In addition, the financial sector regulators—the Superintendence of Security Markets (SMV) and the Superintendence of Banking, Insurance, and Pensions (SBS)—are empowered to set regulations for their respective sectors. Both regulators have practice review procedures for auditors who provide services for entities under their respective supervision. JDCCPP reports that these procedures are not fully aligned with SMO 1 best practices.

Current Status: Partially Adopted

In Peru, the Ministry of Education, universities and each departmental association of public accountants have a role in implementing initial professional development requirements for professional accountants, which are established in Law No. 28951 of 2007.

There are two designations for accountancy professionals—public accountants and certified independent auditors. According to the law, a university accounting degree is the only requirement to be licensed as a public accountant by the departmental associations. To become a certified independent auditor, departmental associations require an additional practical experience requirement of five years, or three years plus a specialization acquired in an approved auditing course. Mandatory continuing professional development (CPD) is not required.

The departmental associations collaborate through the Junta de Decanos de Colegios de Contadores Públicos de Perú (JDCCPP) to set standards and regulations that are adopted in each department. Resolution No. 004 of 2021 adopted the 2019 IES.

The JDCCPP is empowered by the Law No. 25892 of 1992 and Law No. 28951 to certify and recertify Public Accountants at the national level. This is a voluntary certification to enable the national mobility of professionals, according to Law No. 25892 of 1992. The JDCCPP requires candidates for the national level certification to attend an ethics seminar and pass a final exam to demonstrate competencies. To maintain the certification, individuals must complete professional development requirements of 120 hours of CPD over a four-year rolling period.

Although some of the requirements of the IES appear to have been incorporated into the national requirements, such as holding a university accounting degree and practical experience requirements for certified independent auditors, there are still gaps where national requirements do not align with the IES requirements for all professional accountants in Peru.

Current Status: Partially Adopted

Law No. 28951 of 2007 grants authority to the departmental associations of public accountants to set auditing standards for all audits. In practice, however, all departmental associations defer to the national commissions established by the Junta de Decanos de Colegios de Contadores Públicos de Perú (JDCCPP) to set and adopt the standards. These standards are, in turn, adopted for mandatory application in each department.

JDCCPP has been adopting ISA since 2006, and the most recent Resolution No. 004 of 2021 requires the 2018 version of ISA to be applied by all auditors. JDCCPP reports that it plans to adopt the 2020 ISA when available in Spanish.

Current Status: Partially Adopted

Law No. 28951 of 2007 grants authority to each departmental association of public accountants to set ethical requirements for their members. In practice, however, all departmental associations defer to the national commissions established by the Junta de Decanos de Colegios de Contadores Públicos de Perú (JDCCPP) to set and adopt the standards. These standards are, in turn, adopted for mandatory application in each department.

JDCCPP has adopted the 2018 IESBA Code of Ethics by Resolution No. 004 of 2021 with effective application in 2023. The JDCCPP reports it will adopt the 2022 International Code of Ethics once the handbook is available in Spanish.

Current Status: Partially Adopted

According to Law No. 28708 of 2006, as amended recently by the Decree 1525 of 2022, the National Direction of Public Accounting (DGCP) under the Ministry of Economy and Finance establishes public sector accounting standards. The DGCP has adopted accrual IPSAS since 2011 (IFAC/CIPFA International Public Sector Financial Accountability Index 2020) and regularly uses new resolutions to update IPSAS handbooks.

Current Status: Adopted

Law No. 28951 of 2007 empowers each departmental association of public accountants the right to establish and implement investigative and disciplinary (I&D) procedures for their members.

Article 10 of the law specifies that departmental associations are to implement disciplinary sanctions for ethics breaches in accordance with each association's by-laws. Each association is responsible for maintaining an Ethics Committee to receive and resolve allegations or complaints of malpractice. The law requires the establishment of an Honor Tribunal in each association to resolve appeals.

The Junta de Decanos de Colegios de Contadores Públicos de Perú (JDCCPP) has created national commissions to issue investigation and disciplinary procedures, which are, in turn, adopted by each departmental association. JDCCPP issued Resolution No. 004 of 2021 to adopt the SMO 6 requirements. The JDCCPP conducted an assessment of its I&D policies and processes against the requirements of SMO 6 and has identified several gaps in administrative processes (e.g., a process for the independent review of complaints on which there was no follow-up has not been established and results of the investigative and disciplinary proceedings are not made available to the public), liaison with external bodies, and there is no regular review of implementation and effectiveness of the system.

Current Status: Partially Adopted

Law No. 28708 of 1987 established the Accounting Standards Board (CNC)—which operates under the auspices of the National Direction of Public Accounting (DGCP). The DGCP is part of the Ministry of Economy and Finance and is responsible for setting accounting standards for all non-regulated companies (described below). The DGCP has adopted IFRS and IFRS for Small- and Medium-sized Enterprises (SMEs) by reference as issued by IASB, through Resolution Nº 059-2015-EF/30 of 2015, amended by the Resolution Nº 002-2022-EF/30, and Resolution No. 045-2010-EF/94 of 2010, amended by the Resolution Nº 003-2020-EF/30, respectively.

In addition, the Superintendence of Security Markets (SMV) and the Superintendence of Banking, Insurance, and Pensions (SBS) have the authority to set accounting standards for listed companies, banks, insurance, and pension companies. The SMV has required the use of IFRS for financial statement preparation through Resolution No. 011 of 2012, as amended. The SBS Resolution No. 7036 of 2012 also requires the application of IFRS as endorsed by the CNC.

Current Status: Adopted

Relevant Organizations

• Junta de Decanos de Colegios de Contadores Públicos de Perú (JDCCPP)
• Consejo Normativo de Contabilidad (MEF)
• Superintendente de Bancos, Seguros, y AFP (SBS)
• Superintendencia del Mercado de Valores (SMV)

Relevant Legislation

• Code of Commerce of 1902
• Company Law of 1997
• DGCP, Resolution Nº 059-2015-EF/30 of 2015
• DGCP, Resolution No. 045-2010-EF/94 of 2010
• DGCP, Resolution No. 010-2018-EF/51.01 of 2018
• Law No. 28708 of 1987
• Law No. 25892 of 1992
• Law No. 28708 of 2006
• Law No. 28951 of 2007
• SMV, Resolution No. 011 of 2012
• SBS, Resolution No. 7036 of 2012

Relevant Publications

• JDCCPP, SMO Action Plan, 2022.
• IFRS Foundation, IFRS Application Around the World, Jurisdictional Profile: Peru, June 2016.
• World Bank, Report on the Observance of Standards and Codes: Accounting and Auditing, Peru, June 2004.