Financial Crime World

Gaps in Alignment with Best Practices Found in Security Markets and Superintendence of Banking, Insurance, and Pensions

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Lima, Peru - The Security Markets (SM) and the Superintendence of Banking, Insurance, and Pensions (SBS) are responsible for setting regulations for their respective sectors. According to a recent report by JDCCPP, these regulatory bodies have review procedures for auditors who provide services for entities under their supervision, but there are gaps in alignment with best practices.

Review Procedures

The SMV has required the use of International Financial Reporting Standards (IFRS) for financial statement preparation through Resolution No. 011 of 2012, as amended. The SBS has also required the application of IFRS as endorsed by the CNC through Resolution No. 7036 of 2012.

Areas for Improvement

However, a review of the investigative and disciplinary procedures of JDCCPP found several gaps in administrative processes, liaison with external bodies, and regular review of implementation and effectiveness of the system.

  • Establishing a process for the independent review of complaints on which there was no follow-up
  • Making results of investigative and disciplinary proceedings available to the public

Accounting Standards

The SMV and SBS have the authority to set accounting standards for listed companies, banks, insurance, and pension companies. The SMV has required the use of IFRS for financial statement preparation through Resolution No. 011 of 2012, as amended. The SBS has also required the application of IFRS as endorsed by the CNC through Resolution No. 7036 of 2012.

Consejo Normativo de Contabilidad (CNC)

The CNC is responsible for setting accounting standards for all non-regulated companies. It has adopted IFRS and IFRS for Small- and Medium-sized Enterprises (SMEs) by reference as issued by the International Accounting Standards Board (IASB).

Junta de Decanos de Colegios de Contadores Públicos de Perú (JDCCPP)

The JDCCPP has created national commissions to issue investigation and disciplinary procedures, which are then adopted by each departmental association.

SMO Action Plan 2022

In its SMO Action Plan 2022, JDCCPP identified several areas for improvement, including:

  • The need for more transparency in investigative and disciplinary proceedings
  • The need for a clearer process for handling complaints
  • The need for better coordination between different bodies responsible for oversight

Conclusion

The report highlights the importance of aligning regulatory procedures with best practices to ensure the integrity of the financial system. IFAC will continue to monitor the progress of JDCCPP and other regulatory bodies in Peru to ensure that they are meeting their responsibilities and improving transparency and accountability.

Sources:

  • Junta de Decanos de Colegios de Contadores Públicos de Perú (JDCCPP)
  • Consejo Normativo de Contabilidad (CNC)
  • Superintendence of Banking, Insurance, and Pensions (SBS)
  • Security Markets (SMV)
  • Relevant Legislation
  • JDCCPP SMO Action Plan 2022

Disclaimer:

IFAC bears no responsibility for the information provided in the SMO Action Plans prepared by IFAC member organizations. Please see our full Disclaimer for additional information.