On July 4, 2003, the Argentine Federation of Professional Councils of Economic Sciences (FACPCE) issued Resolution No. 284 whereby it approved a project to adopt International Standards on Auditing (ISAs) issued by the International Auditing and Assurance Standards Board (IAASB) of the International Federation of Accountants (IFAC). Adoption was set to take effect as of June 30, 2004. The Resolution stipulated that the FACPCE retains its right to adopt ISAs either in full or in part, and that the text of the eventually approved standard shall include: (1) ISAs translated into Spanish, using Argentine vocabulary and expressions on the basis of a translation that the FACPCE will prepare or adopt; (2) variations introduced that take into account the particular conditions in Argentina; and (3) a manual on ISAs for small entities. In a subsequent 2007 self-assessment prepared as part of the IFAC's Member Body Compliance Program, the FACPCE states that Resolution No. 7 stipulates the convergence to ISAs. Although a plan to incorporate ISAs has been designed, FACPCE Resolution No. 1118 (issued in January 2007), postponed their implementation. As of January 2008, there was no information on whether this project had been completed.

General Overview

Local adoption of International Standards on Auditing (ISAs) was addressed by the Federation of Professional Councils of Economic Sciences' (FACPCE) 2003 plan based on the then-latest international standards issued by the International Auditing and Assurance Standards Board (IAASB) of the International Federation of Accountants (IFAC), according to the Ernst & Young (E&Y) 2007 report. The plan contemplated the right of the FACPCE to fully or partly incorporate ISAs, stipulating that the text on the ISAs adoption should (1) be translated into Spanish, (2) take into consideration local conditions, (3) provide a manual for small entities and (4) stipulate future modifications. The report E&Y states that the FACPCE was expecting to approve the project during 2007. However, the website of the Professional Council of Economic Sciences of the City of Buenos Aires (CPCECAB) notes that FACPCE Resolution No. 1118, dated January 2007, has postponed the actual implementation of the ISAs .

The E&Y 2007 report states that FACPCE Technical Resolution (TR) 7 lays down the auditing standards, which "do not differ substantially, in basic respects, from ISAs of IFAC" (p.43). According to the Veiras and Paulone 2004 report, there are only 33 differences between the auditing standards issued by TR 7 and the ISAs. Almost half of these differences have to do with ISAs, not with the national standards. The rest are matters that have more to do with IAS than with TR 7.

In February 2007, the FACPCE completed Part 2 of the Responses of the IFAC's Member Body Compliance Program, which consists of a self-assessment questionnaire about the actions taken so as to promote and incorporate, among other standards, ISAs. The self-assessment states that the FACPCE TR 7 has set convergence to IAASB as a target. The self-assessment mentions that convergence with auditing standards has not yet been reached, although plans to accomplish this objective are being analyzed. According to the self-assessment, Resolution 284 of 2003 describes the plan to converge to IASs. It also asserts that IAASB pronouncements are translated into Spanish according to IFAC's translation policies, identifying the FACPCE as the primary translator. The translation process includes a list of key words and is revised by accounting, auditing, and financial specialists. The FACPCE commits itself to promoting the adoption of ISAs through professional associations and universities.

The E&Y 2007 report notes that the Companies Law No. 19.550 requires that financial statements be audited annually; that stock companies and partnerships have an oversight board (Comisión Fiscalizadora) composed of accountants and lawyers; and that public companies and banks constitute a statutory audit committee . Grant Thornton's 2007 report lists the type of entities encompassed by Law No. 19.950: Stock Companies, Limited Liability Companies, Limited Partnerships (simple or through shares), General Partnership Companies, and Capital and Industry Companies. The National Securities Commission (CNV) regulates capital markets and is governed by Law No. 17811. The CNV sets the legal framework of the public offerings of securities, according to the U.S. Department of Commerce's 2007 Country Commercial Guide. According to the 2006 report by the Organization for Economic Co-operation and Development (OECD), listed companies shall provide for the intervention of the Audit Committee (with a mandatory majority of independent directors) when carrying out a transaction with a related party.

The Central Bank of Argentina (BCRA) sets the accounting and auditing standards to be used by banks and other financial institutions. These standards must be consistent with the guidelines set by the FACPCE and with the U.S. Generally Accepted Accounting Principles (GAAP). The 1999 IMF report states that financial statements must be submitted on a semi-annual basis by the controlling shareholders and must include the opinion of a certified public accountant. As mention by the E&Y 2007 report, the term for filing annual and quarterly financial statements by financial institutions is the 20th day of the following month. E&Y add that the Superintendency of Insurance (SSN) is responsible for monitoring compliance with and enforcing auditing requirements for insurance companies. The OECD's 2005 report affirms that the SSN sets the conditions to be met by a statutory auditor of insurance companies. According to the same report, an auditor and actuary registry office has been established. The SSN decides on the acceptance and the permanence of its members. The SSN has issued detailed guidelines for the auditor performance and more rigorous norms for the financial statements. In addition, according to the 2005 FACPCE report and a 2006 report by KPMG, limited review report on interim quarterly financial statements is required by the respective supervisory authorities for banks and insurance companies.

The FACPCE 2007 self-assessment states that current legislation and regulation empower it to act as the national standard-setter with the responsibility to set auditing standards for use in the auditing of listed and non-listed companies, and that there is only one set of auditing standards both for listed and non-listed entities. The assessment observes that provincial Professional Councils may issue their own standards as well. As explained by the 2007 E&Y report, Argentina is a federated state with 23 provinces and the Capital City of Buenos Aires. Each state has its own Professional Council on Economic Sciences which issues standards applicable to its particular jurisdiction. All Argentine Professional Councils are members of the FACPCE, with the exception of the CPCECAB, the council that serves the City of Buenos Aires. The FACPCE issues standards according to the following procedure: (1) the Special Commission on Accounting and Auditing Regulations (CENCyA) of the FACPCE proposes accounting and auditing standards, (2) the professional councils and other interested parties comment on the proposal within a determined period of time and (3) at the end of that period, the proposal is approved and a technical resolution is issued. E&Y note that the CPCECAB is the largest professional council in Argentina in terms of membership, and most business entities fall under its jurisdiction. The CPCECAB has approved the regulations set up by TR7, albeit with some modifications. In 2004 the CPCECAB and the FACPCE stated their intention to establish a single accounting and auditing standard for the country. Nevertheless, as of January 2008, this had not been done. The 1999 IMF report states that the professional councils are responsible for granting licenses and supervising auditors. Licensed auditors must comply with the standards set up by the CENCyA. Otherwise, penalties such as the withdrawal of their license could be applied. The IFAC website lists the FACPCE as a full member of the IFAC.

The Principles

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

ID

FACPCE Resolution No. 284, issued in 2003, committed to the incorporation of ISAs released as of June 30, 2004. However, FACPCE Resolution No. 1118, issued in January 2007, postponed the implementation of ISAs. As of January 2008, there was no information publicly available on whether this project had been completed.

ISA 210 Terms of Audit Engagements (effective 2006)

ID

See ISA 200.

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

ID

See ISA 200.

ISA 230R Documentation (effective 2006)

ID

See ISA 200.

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

ID

See ISA 200.

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

ID

See ISA 200.

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

ID

See ISA 200.

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

ID

See ISA 200.

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

ID

See ISA 200.

ISA 320 Audit Materiality (effective 2004)

ID

See ISA 200.

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

ID

See ISA 200.

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

ID

See ISA 200.

ISA 500 Audit Evidence (effective 2004)

ID

See ISA 200.

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

ID

See ISA 200.

ISA 505 External Confirmations (effective 2004)

ID

See ISA 200.

ISA 510 Initial Engagements — Opening Balances (effective 2004)

ID

See ISA 200.

ISA 520 Analytical Procedures (effective 2004)

ID

See ISA 200.

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

ID

See ISA 200.

ISA 540 Audit of Accounting Estimates (effective 2004)

ID

See ISA 200.

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

ID

See ISA 200.

ISA 550 Related Parties (effective 2004)

ID

See ISA 200.

ISA 560 Subsequent Events (effective 2006)

ID

See ISA 200.

ISA 570 Going Concern (effective 2004)

ID

See ISA 200.

ISA 580 Management Representations (effective 2004)

ID

See ISA 200.

ISA 600 Using the Work of Another Auditor (effective)

ID

See ISA 200.

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

ID

See ISA 200.

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

ID

See ISA 200.

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

ID

See ISA 200.

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

ID

See ISA 200.

ISA 710 Comparatives (effective 2004)

ID

FACPCE Resolution No. 284, issued in 2003, committed to the incorporation of ISAs released as of June 30, 2004. FACPCE Resolution No. 1118, issued in January 2007, postponed the implementation of the ISAs. As of January 2008, there was no information publicly available on whether this project had been completed.

The FACPCE's 2006 report states that the agency's "Project 5" addresses the audit reports dealing with comparative financial statements. The resolution provides several guidelines on this topic but does not distinguish between two alternative financing reporting frameworks for comparative purposes: corresponding figures and comparative financial statements. Given this important deficiency, the auditor may choose whether or not to specifically identify the comparatives. If the auditor refers to the prior period financial statements, she/he must indicate whether the information has been audited or not. If it has, the auditor must mention the characteristics of the original report and, if it has been modified, the auditor must explain the reason for the changes. If the auditor deals only with the current period, he or she shall make specific reference to any modification of the information of the prior period that became necessary for comparative purposes. When the financial statements of the prior period have been audited by another auditor, this must be disclosed in the report by the current auditor. The auditor can only refer to the report of the prior auditor as they first appeared, without modification. However, the auditor can comment on the evolution of the information.

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

ID

See ISA 200.

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

ID

See ISA 200.