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Standards Compliance Index 35.83 out of 100 50
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Peru

International Standards on Auditing

Summary
In 1998, International Standards on Auditing (ISAs) were fully adopted in Peru. However, according to the assessment of accounting and auditing practices in Peru conducted by the World Bank in 2004, these standards have not been adapted to reflect the changes subsequently introduced to ISAs by the International Auditing and Assurance Standards Board (IAASB). In 2007 the Council of Heads of Associations of Public Accountants of Peru completed a self-assessment as a part of the International Federation of Accountants' Member Body Compliance Program, wherein they stated that the 2006 Edition of the IFAC Handbook of International Auditing, Assurance, and Ethics Pronouncements issued by the IAASB would take effect in Peru beginning on January 1, 2007.

    General Overview

    In 2004, the World Bank assessed Peru's accounting and auditing practices in order to evaluate the strengths and weaknesses of the relevant framework and make recommendations for enhancing transparency. It was noted that, in 1998, Peru had adopted International Standards on Auditing (ISAs). However, the changes introduced to ISAs since then had not yet been incorporated into Peruvian requirements. The World Bank recommended that Peru establish an independent oversight board for the audit profession and require large, non-listed companies to have their financial statements audited. According to the self-assessment prepared in February 2007 by the Councils of Heads of Associations of Public Accountants of Peru (Junta de Decanos de Colegios de Contadores Publicos del Peru, or JDCCPP) as a part of the International Federation of Accountants' (IFAC) Member Body Compliance Program, the 2006 Edition of the IFAC Handbook of International Auditing, Assurance, and Ethics Pronouncements will be put into effect in Peru beginning January 1, 2007.
    In describing the statutory framework for accounting and auditing in Peru, the World Bank's 2004 accounting and auditing assessment reports that Peru's Commercial Code of 1902 and the General Companies Law of 1997 contain general requirements for accounting, auditing, and financial reporting. The Commercial Code requires corporations to keep basic accounting records, while the General Companies Law obliges all companies to follow Peruvian Generally Accepted Accounting Principles (GAAP), although the principles are not specified. However, corporate entities, defined in the assessment as "enterprises of any size which do not belong to the financial (i.e. banking, insurance, brokerages, investment management, etc.) sector" (p. 3), must follow IFRSs endorsed by the CNC.
    The 2004 World Bank assessment goes on to state that listed companies and companies with a certain shareholder structure are regulated by the National Supervisory Committee of Enterprises and Securities (Comisión Nacional Supervisora de Empresas y Valores, or CONASEV). CONASEV-issued regulations on financial information require the application of ISAs in the mandatory audits of such companies. CONASEV makes audited financial statements available on its website. At the time of the World Bank assessment, large, non-listed companies were not required to file their financial statements with CONASEV. The World Bank noted that CONASEV did not control the licensing of auditors for listed companies. Banks and insurance companies are regulated by the Superintendence of Banks, Insurance and Pension (Superintendencia de Banca, Seguros y AFP, or SBS) and, in addition to the General Law of the Financial and Insurance Systems, must follow norms established by the SBS. Pension funds are subject to the requirements of the Law on Private Pension System and SBS regulations. The SBS sets certain requirements for the appointment of auditors for banks and insurance companies.
    The International Federation of Accountants' website discloses that JDCCPP is a member of IFAC.


    The Principles

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

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

    ISA 210 Terms of Audit Engagements (effective 2006)

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

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

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

    ISA 230R Documentation (effective 2006)

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

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

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

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

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

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

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

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

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

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

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

    ISA 320 Audit Materiality (effective 2004)

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

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

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

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

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

    ISA 500 Audit Evidence (effective 2004)

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

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

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

    ISA 505 External Confirmations (effective 2004)

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

    ISA 510 Initial Engagements — Opening Balances (effective 2004)

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

    ISA 520 Analytical Procedures (effective 2004)

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

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

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

    ISA 540 Audit of Accounting Estimates (effective 2004)

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

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

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

    ISA 550 Related Parties (effective 2004)

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

    ISA 560 Subsequent Events (effective 2006)

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

    ISA 570 Going Concern (effective 2004)

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

    ISA 580 Management Representations (effective 2004)

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

    ISA 600 Using the Work of Another Auditor (effective)

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

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

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

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

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

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

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

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

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

    ISA 710 Comparatives (effective 2004)

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

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

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

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

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

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    Sources of Assessment

    Council of Heads of Associations of Public Accountants of Peru "Assessment of the Regulatory and Standard- Setting Framework," Self-assessment prepared as part of the International Federation of Accountants' (IFAC) Member Body Compliance Program, July 2006. Available from International Federation of Accountants website. Accessed August 20, 2007. (JDCCPP 2006)

    Council of Heads of Associations of Public Accountants of Peru "Response to the IFAC Part 2, SMO Self-Assessment Questionnaire," Self-assessment prepared as a part of the International Federation of Accountants' (IFAC) Member Body Compliance Program, February 2007. Available form International Federation of Accountants website. Accessed on August 20, 2007. (JDCCPP 2007)

    Ernst & Young, "Business & Investment Guide - Peru," 2005. Available from Ernst & Young website. Accessed on August 20, 2007. (E&Y 2005)

    PricewaterhouseCoopers, "Doing Business and Investing in Peru," January 1, 2003. Available from PricewaterhouseCoopers website. Accessed on August 20, 2007. (PWC 2003)

    World Bank, "Report on the Observance of Standards and Codes - Accounting and Auditing" June 2004. Available from World Bank website. Accessed on August 20, 2007. (World Bank 2004a)

    World Bank, "Republic of Peru: Report on the Observance Of Standards and Codes - Corporate Governance Country Assessment," June 2004. Available from World Bank website. Accessed on August 20, 2007. (World Bank 2004b)

    Relevant Organizations

    Accounting Standards Board - Consejo Normativo de Contabilidad (CNC) (website in Spanish only)

    Association of Public Accountants of Lima - Colegio de Contadores Publicos de Lima (CCPL) (website in Spanish only)

    Central Reserve Bank of Peru - Banco Central de Reserva del Peru (BCRP)

    Council of Heads of Associations of Public Accountants of Peru - Junta de Decanos de Colegios de Contadores Publicos del Peru (JDCCPP) (website in Spanish only)

    Lima Stock Exchange - Bolsa de Valores de Lima (BVL)

    Ministry of Economy and Finance - Ministerio de Economia y Fnanzaas (MEF) (website in Spanish only)

    National Accounting Office - Contaduria Publica de la Nacion (CPN) (website in Spanish only)

    National Public Accounting Department - Dirección Nacional de Contabilidad Pública (DNCP)

    National Supervisory Committee of Enterprises and Securities - Comisión Nacional Supervisora de Empresas y Valores (CONASEV) (website in Spanish only)

    Superintendence of Banks, Insurance and Pension - Superintendencia de Banca, Seguros y AFP (SBS) (website in Spanish only)



    Relevant Legislation/Regulation

    Commercial Code No. 15, 1902 - Codigo de Comercio No. 15, 1902 (subsequently amended) (in Spanish only)

    General Companies Law No. 26887, 1997 - Ley General de Sociedades No. 26887, 1997 (in Spanish only)

    Law on National Accounting System No. 24680, 1987 - Ley del Sistema Nacional de Contabilidad, No. 24680, 1987 (in Spanish only)

    Securities Markets Law No. 861, 1996 - Ley del Mercado de Valores, No. 861, 1996 (in Spanish only)

    General Law of the Financial and Insurance Systems, Organic Law of the Superintendency of Banking And Insurance, No. 26702, 1996 - Ley General del Sistema Financiero y del Sistema de Seguros y Orgánica de la Superintendencia de Banca y Seguros, No. 26702, 1996

    Law on Private Pension System, 1997 - Ley del Sistema Privado de Administracion de Fondos del Pension, 1997 (updated on March 2005) (in Spanish only)

    International Federation of Accountants 2007 Handbook of International Auditing, Assurance, and Ethics Pronouncements (includes final ISAs, IAPSs, ISREs, ISAEs and ISRSs, as of December 31, 2006)



    Supplementary Sources

    Deloitte & Touche Tohmatsu IAS Plus website. Accessed on October 10, 2006. (Deloitte IAS Plus website)

    Elorrieta, A.M., "Disclosure and Transparency Accounting and Auditing," Paper Presented at the Third Meeting of the Latin American Corporate Governance Roundtable, Mexico City, April 8-10, 2002. Available from Organization for Economic Cooperation and Development website. Accessed on November 14, 2006. (Elorrieta 2002)

    International Federation of Accountants website. Accessed on November 14, 2006. (IFAC website)
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