According to the 2006 Inter-American Development Bank (IDB) Donor's Memorandum, the existing accounting and auditing framework in Bolivia is incomplete. Bolivia has approved just five auditing standards and none of the Bolivian standards are consistent with the International Standards on Auditing (ISAs) promulgated by the International Auditing and Assurance Standards Board. Therefore, in March 2006, the IDB approved the funding for a project to aid the adoption of International Financial Reporting Standards and ISAs in Bolivia. The 36-month long project is divided into three main components comprising (1) the alignment of national standards with international standards, (2) dissemination and training on the application of the newly developed standards, and finally (3) a voluntary certification system to improve the quality of Association of Auditors of Bolivia professional services. Upon completion, it is expected that Bolivian accounting and auditing standards will be harmonized with the international standards.

General Overview

As explained in the 2006 Inter-American Development Bank (IDB) Donors Memorandum report "Bolivia: Convergence with Accounting and Auditing Standards," under Law No. 2495 of August 2003, the authority to issue and enforce compliance with accounting and auditing standards lies with the Superintendency of Companies. However, given the fact that "the Superintendency does not have the technical expertise, experience, or structure to issue accounting and auditing standards because of insufficient resources" (IDB 2006, pp. 3-4), the Association of Auditors of Bolivia (CAUB), through its National Technical Council of Auditing and Accounting, plays the leading role in setting professional standards relating to accounting and auditing. The CAUB is a not-for-profit, autonomous professional association of accounting and auditing professionals and consulting firms legally established under the Supreme Resolution No. 209343 of July 1991. Under its charter and regulations, the CAUB sets accounting and auditing standards. It also oversees the auditing and public accounting profession and ensures compliance with professional ethics. With regard to the code of ethics, a 2007 CAUB self-assessment notes that Bolivia adopted the International Federation of Accountants (IFAC) Code without any modifications. However, this is a 1994 version whereas the latest IFAC Code was issued in 2006. The CAUB is listed as a member on the IFAC website.

The above-mentioned 2006 IDB report notes that the Bolivian accounting and auditing framework suffers from a number of shortcomings. Firstly, there is a lack of trained and experienced accounting professionals to help develop a conceptual framework for bringing national standards in line with international ones. Each year 2,000 students graduate from Bolivian universities trained mainly in bookkeeping. Educating these students in latest international accounting and auditing practices does not take place since most Bolivian teachers are not up to date with the current developments in international standards. As a result, the Memorandum states, entry-level professionals in most businesses do not apply international standards. Secondly, the existing regulatory framework in Bolivia is incomplete as the country has approved just five auditing standards which are not consistent with the International Standards on Auditing (ISAs) promulgated by the International Auditing and Assurance Standards Board.

Consequently, in March 2006, the IDB approved the funding for a project to aid the adoption of International Financial Reporting Standards (IFRSs) and ISAs in Bolivia. The Memorandum states that "the aim of the project is to help ensure that business financial reporting in Bolivia is technically reliable, objective, comparable, uniform, and

transparent. The objective is to ensure that professional members of the CAUB apply accounting and auditing standards that are in line with International Financial Reporting Standards (IFRS) and International Standards on Auditing (ISA)" (p. 1). Further, the successful implementation of the project would improve financial reporting and information management procedures and contribute to the professionalization of accounting in Bolivia. The 36-month long project is divided into three main components: (1) the alignment of national standards with international standards; (2) dissemination and training on the application of the newly developed standards; and finally (3) a voluntary certification system to improve the quality of CAUB professional services. The first component of the project will involve analyzing the existing Bolivian standards and the international accounting and auditing standards. The memorandum notes that "initially, standards that need to be applied immediately will be adapted and, if necessary, handbooks providing an interpretation of the standards and guidance on regulations will be prepared" (p. 5). Later, standards will be devised that are aligned with international standards along with a review of the new international standards issued each year. This will be coordinated by the CAUB Technical Council. Upon completion, it is expected that Bolivian accounting and auditing standards will be harmonized with international standards.

The Principles

ISA 200 Objective and General Principles Governing an Audit of Financial Statements (effective 2006)

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There is insufficient information publicly available as to Bolivia's compliance with this principle.

ISA 210 Terms of Audit Engagements (effective 2006)

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There is insufficient information publicly available as to Bolivia's compliance with this principle.

ISA 220R Quality Control for Audits of Historical Financial Information (effective 2005)

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There is insufficient information publicly available as to Bolivia's compliance with this principle.

ISA 230R Documentation (effective 2006)

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There is insufficient information publicly available as to Bolivia's compliance with this principle.

ISA 240 The Auditor’s Responsibility to Consider Fraud in an Audit of Financial Statements (effective 2004)

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There is insufficient information publicly available as to Bolivia's compliance with this principle.

ISA 250 Consideration of Laws and Regulations in an Audit of Financial Statements (effective 2004)

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There is insufficient information publicly available as to Bolivia's compliance with this principle.

ISA 260 Communications of Audit Matters With Those Charged With Governance (effective 2004)

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There is insufficient information publicly available as to Bolivia's compliance with this principle.

ISA 300 Planning an Audit of Financial Statements (effective 2004)

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There is insufficient information publicly available as to Bolivia's compliance with this principle.

ISA 315 Understanding the Entity and Its Environment and Assessing the Risks of Material Misstatement (effective 2004)

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There is insufficient information publicly available as to Bolivia's compliance with this principle.

ISA 320 Audit Materiality (effective 2004)

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There is insufficient information publicly available as to Bolivia's compliance with this principle.

ISA 330 The Auditor’s Procedures in Response to Assessed Risks (effective 2006)

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There is insufficient information publicly available as to Bolivia's compliance with this principle.

ISA 402 Audit Considerations Relating to Entities Using Service Organizations (effective 2004)

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There is insufficient information publicly available as to Bolivia's compliance with this principle.

ISA 500 Audit Evidence (effective 2004)

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There is insufficient information publicly available as to Bolivia's compliance with this principle.

ISA 501 Audit Evidence - Additional Considerations for Specific Items (effective 2004)

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There is insufficient information publicly available as to Bolivia's compliance with this principle.

ISA 505 External Confirmations (effective 2004)

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There is insufficient information publicly available as to Bolivia's compliance with this principle.

ISA 510 Initial Engagements — Opening Balances (effective 2004)

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There is insufficient information publicly available as to Bolivia's compliance with this principle.

ISA 520 Analytical Procedures (effective 2004)

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There is insufficient information publicly available as to Bolivia's compliance with this principle.

ISA 530 Audit Sampling and Other Selective Testing Procedures (effective 2004)

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There is insufficient information publicly available as to Bolivia's compliance with this principle.

ISA 540 Audit of Accounting Estimates (effective 2004)

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There is insufficient information publicly available as to Bolivia's compliance with this principle.

ISA 545 Auditing Fair Value Measurements and Disclosures (effective 2004)

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There is insufficient information publicly available as to Bolivia's compliance with this principle.

ISA 550 Related Parties (effective 2004)

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There is insufficient information publicly available as to Bolivia's compliance with this principle.

ISA 560 Subsequent Events (effective 2006)

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There is insufficient information publicly available as to Bolivia's compliance with this principle.

ISA 570 Going Concern (effective 2004)

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There is insufficient information publicly available as to Bolivia's compliance with this principle.

ISA 580 Management Representations (effective 2004)

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There is insufficient information publicly available as to Bolivia's compliance with this principle.

ISA 600 Using the Work of Another Auditor (effective)

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There is insufficient information publicly available as to Bolivia's compliance with this principle.

ISA 610 Considering the Work of Internal Auditing (effective 2004)

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There is insufficient information publicly available as to Bolivia's compliance with this principle.

ISA 620 Using the Work of an Expert (effective 2005)

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There is insufficient information publicly available as to Bolivia's compliance with this principle.

ISA 700 The Auditor’s Report on Financial Statements (effective 2006)

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There is insufficient information publicly available as to Bolivia's compliance with this principle.

ISA 701 Modifications to the Independent Auditor's Report (effective 2006)

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There is insufficient information publicly available as to Bolivia's compliance with this principle.

ISA 710 Comparatives (effective 2004)

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There is insufficient information publicly available as to Bolivia's compliance with this principle.

ISA 720 Other Information in Documents Containing Audited Financial Statements (effective 2004)

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There is insufficient information publicly available as to Bolivia's compliance with this principle.

ISA 800 The Auditor’s Report on Special Purpose Audit Engagements (effective 2006)

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There is insufficient information publicly available as to Bolivia's compliance with this principle.