This article presents the accounting and auditing environment in Brazil.
Legal and Regulatory Environment
Brazilian Accounting and Auditing Standards
An accounting entity called Comitê de Pronunciamentos Contábeis (CPC), equivalent to a Brazilian IASB, is responsible to publish accounting standards that are in compliance with IFRS to comply with the legal requirement of convergence that is defined in Law No. 11638/07.
The Brazilian Accounting and Auditing Standards are published by Federal Accounting Council (CFC).
NBC TG standards are equivalent to Brazilian CPCs.
The audit requirements defined in Brazilian Auditing Standards are similar to International Auditing Standards.
Brazilian Certified Public Accountants
There are two classes of accountants in Brazil: Certified Public Accountants (Contadores) and Accounting technicians (Técnicos de contabilidade). In Brazil, a Certified Public Accountant (CPA) holds a bachelor’s degree in accounting sciences and passed the proficiency examination organized by the Federal Council of Accounting. The Brazilian CPA is permitted by law to perform all types of professional accounting work. Accounting technicians (técnicos de contabilidade) are Non-graduates professionals whose field of activity is restricted by law.
Accountants are registered in the Federal Accounting Council (CFC) and holds a CRC registry number (Conselho Regional de Contabilidade).
Brazilian Independent Auditors
Independent Auditors in Brazil are Certified Public Accountants that passed the professional technical audit qualification examinations (Exames de Qualificação Técnica de auditoria) organized by the Federal Council of Accounting (Conselho Federal de Contabilidade) in order to be registered in the National Registry of Independent Auditors (CNAI, Cadastro Nacional de Auditores Independentes) of the of the Federal Accounting Council (CFC).
There are 4 professional technical audit qualification examinations for registration in the National Registry of Independent Auditors (CNAI) : QTG, CVM, BCB and SUSEP .
QTG: Professional qualification required to audit financial statements and to be registered in the National Registry of Independent Auditors (CNAI, Cadastro Nacional de Auditores Independentes).
CVM: Additional Audit qualification required to audit listed companies regulated by the Brazilian Securities and Exchange Commission (Comissão de Valores Mobiliários).
BCB: Additional Audit qualification required to audit financial institutions regulated by the Brazilian Central Bank (Banco Central do Brasil).
SUSEP: Additional Audit qualification to audit insurance companies regulated by the Superintendence of Private Insurance (SUSEP, Superintendência de Seguros Privados).
Brazilian Internal Auditors
In Brazil, the internal audit activity is a protected by law and is a legal prerogative of CPAs. Internal auditors must be Certified Public Accountants and must be registered in the Federal Accounting Council (CFC). Internal auditors cannot be used as statutory auditors.
Audit requirements in Brazil
Corporations that are not large (see criteria in the table below) or listed are not required to be audited by independent auditors. Even if a company is not required by regulation or bylaws to be audited, banks frequently require audited financial statements from borrowers. SA corporations are required to publish their annual financial statements.
Financial institutions and other entities regulated by the Central Bank, as well as insurance companies regulated by SUSEP, are required to prepare annual and biannual audited financial statements.
Listed companies and entities regulated by the CVM must prepare quarterly audited financial statements.
|Type of Entity||Criteria||Auditor|
|Listed companies||Regulated by CVM||Auditor with QTG and CVM qualifications|
|Large companies||Entities with total assets of over BRL 240 million or annual revenue over BRL 300 million||Auditor with QTG and CVM qualifications|
|Financial institutions and other entities regulated by
the Central Bank
|Regulated by Central Bank||Auditor with QTG and BCB qualifications|
|Investment funds||Regulated by Central Bank||Auditor with QTG and BCB qualifications|
|Insurance companies regulated by the SUSEP||Regulated by SUSEP||Auditor with QTG and SUSEP qualifications|
|Private pension funds||Regulated by SUSEP||Auditor with QTG and SUSEP qualifications|
This article is not intended to provide detailed information to allow you to assess and understand audit requirements and accounting practices in Brazil. Its objetive is to inform you about Brazilian specificity and the need to use qualified accountants, auditors and internal auditors in your subsidiaries in Brazil. Therefore, we strongly advise you to seek assistance exclusively from CPAs duly registered in Brazil.