2013年-世界发展银行全球_Brazil___Report_on_the_Observance_of_Standards_and_Codes--Accounting_and_Auditing_54页_923kb

Summary of Brazil ROSC A&A Report (June 11, 2013)

Core Content

This report, titled Report on the Observance of Standards and Codes: Accounting and Auditing (ROSC A&A), was prepared under the Financial Sector Assessment Program (FSAP) in Brazil. It evaluates the implementation of policy recommendations from the 2005 ROSC A&A, highlights recent improvements in Brazil's corporate financial reporting framework, and identifies emerging challenges in the institutional foundations of accounting and auditing practices.

Main Viewpoints

• Legal and Regulatory Improvements: Brazil has made significant legislative and regulatory changes to align with international standards. The 2007 amendment to the Corporations Law (Law No. 11638/07) aimed to bring financial reporting requirements in line with global practices.

• Accounting and Auditing Standards: The application of International Financial Reporting Standards (IFRS) and International Standards on Auditing (ISA) has been mandated for certain sectors, including listed companies, banks, and financial institutions. The CFC, BCB, and CVM have played key roles in setting and enforcing these standards.

• Institutional Capacity: While the BCB and CVM have significantly improved their institutional capacity to monitor and enforce financial reporting and auditing requirements, the insurance and pension regulators (SUSEP and PREVIC) still lack sufficient capacity in this area.

• Professional Development: The Continuing Professional Development (CPD) requirement is currently only applicable to practicing auditors, not to the broader accounting profession. There is a need to align Brazil’s professional education and training with International Education Standards (IESs) issued by IFAC's International Accounting Education Standards Board (IAESB).

• Accounting Education: The accounting curriculum in higher education institutions needs strengthening to better prepare future professionals for the practical aspects of IFRS, IPSAS, and ISA. A "train the trainers" program is recommended to support this.

• Need for Independent Oversight: Key stakeholders emphasize the need for an independent oversight body to monitor and enforce accounting and auditing standards across the entire economy, not just regulated sectors. The CFC currently plays a supervisory role but is not independent from the profession.

Key Information

• Currency: Brazilian Real (BRL)
• Exchange Rate: 1 USD = 2.11 BRL (as of June 1, 2013)
• ROSC A&A Report: Part of the World Bank and IMF joint initiative on Standards and Codes, launched in response to the Asian financial crisis.
• ROSC A&A Objectives: To consolidate the institutional framework for accounting and auditing in Brazil, support business conditions, and facilitate access to financial resources.

Policy Recommendations

Institutional Framework Overview

• Regulatory Bodies:

  • CFC: Issues accounting standards and oversees the accounting profession.
  • CVM: Supervises listed companies and investment funds.
  • BCB: Oversees the banking sector and financial institutions.
  • SUSEP: Supervises the insurance and open pension funds sectors.
  • PREVIC: Supervises closed pension funds.

• Legal Obligations:

  • Corporate entities must comply with filing requirements set by SINREM and the Junta Comercial.
  • Different types of entities (listed companies, non-listed companies, banks, insurance companies, and pension funds) have varying accounting and auditing requirements.

Financial Sector Overview

• Banking Sector:

  • Brazil has around 160 banks, over 1,000 credit cooperatives, and dozens of leasing companies.
  • Domestic private banks account for 40% of total banking loans, while foreign banks account for 17%.
  • The four largest banks hold 73% of total deposits and are responsible for 70% of total credit.
  • Bank credit has grown at an average of 20% per year since 2005, reaching R$2 trillion by 2011.

• Capital Market:

  • BM&F Bovespa is a leading exchange in Latin America and among the largest globally.
  • The equity market capitalization reached R$2.3 trillion at the end of 2011, with 373 publicly traded companies.
  • Some companies are also listed in the US via American Depositary Receipts.

• Insurance and Pension Funds:

  • Brazil is the largest insurance market in Latin America, with 167 insurance companies and 121 foreign-owned reinsurance companies.
  • The closed pension fund market is highly concentrated, with the three largest funds representing nearly 50% of total investments.
  • Closed pension funds are significant investors in domestic capital and debt markets, with total assets under management reaching R$574 billion by 2011.

Conclusion

The report underscores the progress made in aligning Brazil’s accounting and auditing standards with international practices, but also identifies key areas requiring further improvement, particularly in the institutional and regulatory framework. The establishment of an independent oversight body, enhancement of professional education, and strengthening of compliance mechanisms are highlighted as critical steps for the continued development of the accounting profession and financial reporting system in Brazil.