Recovering in Latin America: Accountability and Ethical Decision Making Will Lead the Way

The amount of funds being disbursed by governments and other organizations to help mitigate the damage of COVID-19 and spur recovery is unprecedented. Correspondingly, there is a critical need for accountability, transparency, ethical decision making, and the skills, competence, and expertise of professional accountants to ensure funds are used as intended. Professional accountants have essential roles within the larger financial ecosystem by oftentimes serving as members of a board or audit committee, organizational leaders, preparers, or auditors and need to be attuned to the heightened risks of the economic effects of the health crisis. It is a public interest responsibility that concerns professional accountants worldwide.

In Latin America, the pandemic has spurred a greater need to disseminate and raise awareness of the International Code of Ethics for Professional Accountants (the Code). This led IFAC, the International Ethics Standards Board for Accountants (IESBA) and the Interamerican Accounting Association (AIC) to host a virtual conference to highlight the practical ethics and independence challenges that are impacting the accountancy profession in Latin American due to the COVID-19 pandemic.

Featured speakers, including IFAC Board Member Idésio S. Coelho, AIC President Maria Clara Bugarim, IESBA Consultative Advisory Group member Daniel Sarmiento Pavas, all agreed that adoption—first and foremost—and, subsequently, implementation support and knowledge of the latest Code, is imperative for professional accountants. Particularly in the Latin American region, universities urgently need to include the Code in their accountancy curricula and professional accountancy organizations should offer continuing education programs that cover ethical matters on an ongoing basis.

Compliance with the five fundamental principles outlined in the Code—integrity, objectivity, confidentiality, professional competence, and due care and professional behavior—are necessary irrespective of the disruption and practical challenges arising from the COVID-19 pandemic, and perhaps even more so. While it is not necessarily possible for professional accountants to prevent corporate failures, they are essential in providing fair and reliable financial reporting and disclosures that appropriately incorporate best judgments, estimates, and assessments. Confidence and trust in financial information during a crisis will contribute to a quicker recovery.

IFAC, IESBA, and AIC will continue to collaborate during the pandemic to share guidance and advice. A video recording of this conference is available in Spanish on the AIC YouTube Channel, and readers can regularly refer to the IESBA support and resources web page and register and subscribe to the IESBA for updates.