Peru

4 Chapter Accounting

    • Overview

        In Peru the Legal Accounting framework is established by the Code of Commerce of 1992 and the Company Law of 1997. The Code of Commerce establishes the obligation for companies to keep books of accounts and a basic legal framework for accounting. The Company Law establishes that the financial statements need to be prepared in accordance with generally accepted accounting principles in the country.
       

       

      Accounting Rules.

      Tax year.

      The fiscal year begins on January 1st and ends on December 31st of the same year.

      Accounting Regulation Bodies.

      Ministerio de Economía y Finanzas and CCPL Colegio de Contadores Públicos de Lima.

      Main Professional Accountancy Bodies.

      National Directorate of Public Accounting and the Ministerio de Economía y Finanzas.

    • Accounting Standard

       

      Accounting Standards.

      As mentioned before Peru´s financial reporting framework is established by the Code of Commerce of 1902 and the Company Law of 1997 and in 1987 the Law No. 28708 established the Accounting Standards Board (CNC), that operates under the auspices of the National Direction of Public Accounting (DGCP) as part of the Ministry of Economy and Finance. Is the organization responsible for setting accounting standards for all non-regulated companies.

       

      Listed companies are regulated by the SMV (Superintendencia del Mercado de Valores) and Banks, insurance, and pension companies are regulated by the Superintendence of Banking, Insurance, and Pensions (SBS). Regulated companies are required to prepare annual audited financial statements in accordance with the accounting standards established by the SMV and SBS, respectively. According to 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). 

       

       

      Accounting Records.

      According to the Commercial Code, merchants must keep their accounting books with the intervention of certified public or commercial accountants. The inventory and balance sheet book will begin with the inventory that the merchant must form at the time of beginning its operations, and will contain the following:

       

      1) The exact relationship between money, securities, credits, collection effects, movable and immovable property, merchandise and effects of all kinds, appreciated in their real value and that constitute their asset.

       

      2) The exact relationship of debts and all kinds of outstanding obligations, if any, and that form your liability.

       

      3) The exact difference between the asset and the liability, which will be the capital with which it begins its obligations.

       

      The law also indicates that the merchant will also form annually and extend in the same book, the general balance of his business, and in accordance with the journal entries, without reservation or omission, under his signature and responsibility.

       

      Daily book content.

      The daily book is where the result of the inventory will be settled, divided into one or several consecutive accounts, (depending on the accounting system adopted). They will then follow all their operations day by day, each seat expressing the charge and discharge of the respective accounts. As well, all dates on which there are cash withdrawals, the amounts that the merchant allocates to your household expenses, must be noted and will be taken to a special account that will be opened in the ledger.

       

      Content of the ledger.

      Accounts with each object or person, must be specified in the accounts by “Debit" and "Credit" in the ledger; and to each of these accounts, the journal entries referring to them will be transferred, in strict order of dates.

       

      Content of the book of minutes.

      In the book of minutes that each company will keep, the agreements taken at its meetings or those of its administrators will be consigned to the letter; expressing the date of each one, those attending them, the votes cast and the rest that leads to the exact knowledge of the agreement; authorizing with the signature of the managers, directors or administrators that are in charge of the management of the company, or that determines the statutes or bases by which it is governed.

    • Quality Assurance.

       Quality Assurance.

      In accordance with the 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. However, all departmental associations defer to the standards and regulation issued by the “Junta de Decanos de Colegios de Contadores Públicos” de Perú (JDCCPP). The JDCCPP (Junta de Decanos de Colegios de Contadores Públicos de Perú) has adopted ISA 220 and ISQC1, as of 2019, no specific rules have been issued regarding a QA review system by JDCCPP or any departmental association. The JDCCPP reports plan to carry out a voluntary Quality Assurance program in 2022 and make it mandatory in 2023.

      The financial sector regulators, the Superintendence of Security Markets (SMV) and the Superintendence of Banking, Insurance, and Pensions (SBS) are empowered to set regulation for their respective sector. Both regulators have practice reviews procedures for auditors who provide services for entities under their respective supervision.

    • Accountancy Profession regulations.

       Accountancy Profession regulations. 

      Code of Ethics.

      According to Law No. 28951 of 2007, each respective departmental association of public accountants has to set ethical requirements for their members. However, all departmental associations defer to the national technical 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.

      The Junta de Decanos de Colegios de Contadores Públicos de Perú (JDCCPP) adopted the 2014 IESBA Code of Ethics by Board Resolution No. 009 of 2015 and there are reports of a plan to adopt the 2018 International Code of Ethics by the end of 2020 and NOCLAR standard in 2021.

       

      Professional accountancy organizations.

      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. It is the representative body of the public accountancy profession domestically and internationally. It is member of IFAC member, the Inter-American Association of Accountants and the Integration Committee Europe in Latin America.

       

      Education Standards.

      The accountancy profession in Peru is regulated by Law No. 28951 of 2007, professional accountants are regulated in each of the departments, which are regional jurisdictions within the country, by the corresponding departmental associations of public accountants. Individuals and firms are required to be licensed by the respective departmental association to practice. The deans of the departmental associations sit on the “Junta de Decanos de Colegios de Contadores Públicos de Perú” (JDCCPP), There are two types of designations for accountancy professionals, one is public accountant and the other is certified independent auditor. According to the law, a university accounting degree is the only requirement to be licensed as a professional 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.

    • Internal and external audit.

       Internal and external audit.

      In accordance with Law No. 28951 of 2007 there is no independent audit oversight in the country and certified independent auditors and firms are regulated in each of the Departments, which are regional jurisdictions by the corresponding departmental association of public accountants.

       

      Departmental associations have the legal authority to issue rules regulating professional practice, includes the following:

       

      The departmental associations collaborate through the Junta de Decanos de Colegios de Contadores Públicos de Perú to set standards and regulation that are adopted in each Department.

       

      Auditors that provide services to companies regulated by the financial sector regulators, such as the 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:

      )    A)Register auditors providing services to entities under their supervision.

      b) B)Establish and operate a QA review system.

          C)Set sector-specific accounting standards for professionals. 

      a

       
       

    • International Standards on Financial Reporting and Auditing.

       International Standards on Financial Reporting and Auditing.

      The National Direction of Public Accounting (DGCP) has adopted IFRS and IFRS for Small- and Medium-sized Enterprises (SMEs) by reference, through Resolution Nº 059-2015-EF/30 of 2015, amended by the Resolution Nº 003-2019-EF/30, and Resolution No. 045-2010-EF/94 of 2010, respectively.

      The Superintendence of Security Markets (SMV) has required the use of IFRS for financial statement preparation through Resolution No. 011 of 2012, as amended, for its regulated entities, and the Superintendence of Banking, Insurance, and Pensions (SBS) adopted the SBS Resolution No. 7036 of 2012 requires the application of IFRS as endorsed by the CNC.

      About Auditing the Law No. 28951 of 2007 grants authority to the departmental associations of public accountants to set auditing standards for all audits, however, all departmental associations defer to the national technical 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

    • References

       References:

      Peru, IFAC International Federation of Accountants, 2019.

      https://www.ifac.org/about-ifac/membership/country/peru

       

      Ley General de Sociedades, LEY Nº 26887, Perú

      https://www.oas.org/juridico/PDFs/mesicic3_per_leysociedades.pdf

       

      CÓDIGO DE COMERCIO, Promulgado:15.02.1902. Vigencia:01.07.1902. Perú.

      https://scc.pj.gob.pe/wps/wcm/connect/3c0d35804d90aee08507f5db524a342a/C%C3%B3digo+de+Comercio.pdf?MOD=AJPERES&CACHEID=3c0d35804d90aee08507f5db524a342a