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Standards Compliance Index 7.50 out of 100 76
Business Indicator Index 5.49 out of 12 71
Venezuela

International Standards on Auditing

Summary
On June 19, 2004 the Venezuelan Federation of Certified Public Accountants (Federacion de Colegios de Contadores Publicos de Venezuela, or FCCPV), adopted a draft Plan on the Adoption of the International Standards, including International Standards on Auditing (ISAs) and International Public Sector Accounting Standards (IPSASs) issued by the International Federation of Accountants (IFAC), as well as International Financial Reporting Standards (IFRSs). The plan was to be executed within 3 years, and involved mandatory adoption of the international standards for periods commencing on January 1, 2007. In August 2006, the FCCPV approved the schedule of adoption of IFRSs in Venezuela. All companies, except for public companies and Small and Medium-size Enterprises (SMEs), should adopt international standards for the periods ending on December 31, 2008. SMEs should adopt the above mentioned standards for the periods ending on December 31, 2010, and finally, for public companies the date of the adoption will be determined by the National Securities Commission (CNV). Meanwhile, auditors are required to apply Venezuelan auditing standards which, according to Deloitte & Touche, are based on the U.S. auditing standards.

    General Overview

    On June 19, 2004 the FCCPV, adopted a draft Plan on the Adoption of the International Standards. According to the Plan, "the harmonization of the Venezuelan GAAP with the international standards aims at achieving more transparency and comparability of financial information provided by companies and institutions operating in Venezuela" (p. 1). To achieve this objective, the FCCPV decided to adopt ISAs and IPSASs issued by the IFAC, as well as IFRSs. The plan was to be executed within 3 years and involved mandatory adoption of the international standards for periods commencing on January 1, 2007.
    In August 2006 the FCCPV approved the schedule of adoption of IFRSs in Venezuela. According to the FCCPV's March 2007 Press Release, all companies, except for public companies and SMEs, will adopt international standards for the periods ending on December 31, 2008. SMEs shall adopt the above mentioned standards for the periods ending on December 31, 2010. Finally, for public companies the date of the adoption is to be determined by the CNV. It was noted that the adoption of IFRSs and ISAs should comply with the Plan on the Adoption of the International Standards issued in June 2004.
    Deloitte & Touche, in its 2004 publication "Venezuela - A Business Environment" observes that the Commercial Code does not require companies to have their financial statements audited, with the exception of companies that fall into one of the following categories: (1) companies with foreign investments; (2) banks; (3) insurance companies; (4) listed companies; and finally (5) companies which are approved registered vendors of the Petróleos de Venezuela, S.A. (PDVSA) and its affiliates. This publication further notes that the standards applied in the audits of financial statements are similar to those in the United States.
    The Federation of Colleges of Public Accountants of Venezuela is a member of the International Federation of Accountants (IFAC). (IFAC website)


    The Principles

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

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

    ISA 210 Terms of Audit Engagements (effective 2006)

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

    ISA 230R Documentation (effective 2006)

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

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

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

    ISA 320 Audit Materiality (effective 2004)

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

    ISA 500 Audit Evidence (effective 2004)

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

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

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

    ISA 505 External Confirmations (effective 2004)

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

    ISA 510 Initial Engagements — Opening Balances (effective 2004)

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

    ISA 520 Analytical Procedures (effective 2004)

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

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

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

    ISA 540 Audit of Accounting Estimates (effective 2004)

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

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

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

    ISA 550 Related Parties (effective 2004)

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

    ISA 560 Subsequent Events (effective 2006)

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

    ISA 570 Going Concern (effective 2004)

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

    ISA 580 Management Representations (effective 2004)

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

    ISA 600 Using the Work of Another Auditor (effective)

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

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

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

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

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

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

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

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

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

    ISA 710 Comparatives (effective 2004)

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

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    Sources of Assessment

    Ernst & Young, "Business and Investment Guide - Venezuela," 2006. Available from Ernst and Young Venezuela website. Accessed on July 12, 2007. (E&Y 2007).

    Federation of Certified Public Accountants of Venezuela, "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 on July 12, 2007. (FCCPV 2006)

    Federation of Certified Public Accountants of Venezuela, "To the Users of Financial Information, Issuers of Securities, Governmental Organizations, Public Accountants, Companies Established in Venezuela, and the Public in General," Press Release, March 2007. Available from Federation of Certified Public Accountants of Venezuela website. Accessed on July 12, 2007. (FCCPV 2007a)

    Federation of Certified Public Accountants of Venezuela, "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, May 2007. Available form International Federation of Accountants website. Accessed on July 2, 2007. (FCCPV 2007b)

    Relevant Organizations

    Caracas Stock Exchange - Bolsa de Valores de Caracas (BVC)

    Federation of Certified Public Accountants of Venezuela - Federación de Colegios de Contadores Públicos de Venezuela (FCCPV) (in Spanish only)

    Mexican Institute of Public Accountants - Instituto Mexicano de Contadores Públicos (IMCP) (in Spanish only)

    Ministry of Finance - Ministerio de Finanzas (MoF) (in Spanish only)

    National Securities Commission - Comisión Nacional de Valores (CNV) (in Spanish only)

    Superintendency of Banks and Other Financial Institutions - Superintendencia de Bancos y Otras Instituciones Financieras (SUDEBAN) (in Spanish only)



    Relevant Legislation/Regulation

    Commercial Code No. 475, 1955 - Codigo de Comercio No. 475, 1955 (in Spanish only)

    Capital Markets Law No. 36.565, 1998 - Ley de Mercado de Capitales No. 36.565, 1998 (in Spanish only)

    Plan on the Adoption of the International Standards (Draft), June 2004 - Plan de Adopción de las Normas Internacionales (Borrador), Junio de 2004 (in Spanish only)

    CNV Accounting Manual - CNV Manual de Contabilidad (in Spanish only)

    Caracas Stock Exchange Listing Requirements - Bolsa de Valores de Caracas Requisitos para la Inscripcion de Valores

    Decree with the Force of Law on the Reform of the General Law on Banks and Other Financial Institutions Act, 2001 - Decreto con Fuerza de Ley de Reforma de la Ley General de Bancos y Otras Instituciones Financieras, 2001 (in Spanish only)



    Supplementary Sources

    Deloitte & Touche, "Venezuela - A Business Environment," July 2004. Available from Deloitte & Touche website. Accessed on July 12, 2007. (Deloitte & Touche 2004)

    International Federation of Accountants website. Accessed on July 12, 2007. (IFAC website)
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