The adoption of accounting and auditing pronouncements is a multi-stakeholder effort. Many actors participate in this space: the government with its regulators, professional accounting and auditing bodies, entrepreneurs, information users and academics, among others, making it a culturally and politically sensitive endeavor. Adoption becomes even more complicated when multiple laws and regulations in a single jurisdiction establish the requirements. In our country, Bolivia, this is no exception; however, our profession’s leadership puts the country at the forefront. Leaders in professional accounting actively participate in the convergence process for the adoption and application of international professional standards, maintaining a strong commitment to the public interest and contributing to the country's continued economic growth and prosperity, under a framework of transparency and the generation of useful information for decision making.  

In Bolivia, the entity in charge of formulating and approving accounting and auditing standards is the Colegio de Auditores o Contadores Públicos de Bolivia (CAUB), through its Consejo Técnico Nacional de Audioría y Contabilidad (CTNAC). The technical pronouncements are generally accepted, both by professionals and by society as a whole; however, these pronouncements must be agreed on by the authorities to achieve general acceptance of the standards and at the same time ensure their mandatory application. 

All professional standards in Bolivia require government approval in order to have a legal value that ensures their mandatory compliance. In accordance with Bolivia's regulatory framework, the Government created the Superintendence of Companies, establishing among its attributions and functions: to issue, control and supervise the application of national and international accounting standards. Likewise, to control and determine the form of presentation, frequency and disclosure of financial statements and external audit reports of the persons, entities, companies and activities subject to its jurisdiction. Subsequently, Supreme Decree No. 0071 of April 9, 2009, established the creation of the Corporate Auditing Authority (AEMP), defining that the attributions, competencies, rights and obligations of the former Superintendence of Companies be assumed by the AEMP. On this basis, the AEMP is the supreme instance of approval of accounting and auditing standards; and the one that defines their legal validity and, therefore, their mandatory compliance.

The regulatory process in Bolivia has been supported by international financial development agencies. In 2006, the CAUB signed the Donor Memorandum BO-M1005 BID, with the Inter-American Development Bank. In turn, on February 9, 2007, the Multilateral Investment Fund (BID-FOMIN) signed the Technical Cooperation Agreement ATN/MT-10078-BO, which financed the Project "BO - M1005 Convergence to International Accounting and Auditing Standards", the purpose of which was to contribute to make the financial information of companies operating in Bolivia technically reliable, objective, comparable, uniform and transparent. Its objective was for CAUB member professionals to apply accounting and auditing standards in accordance with international IFRS and ISA standards. As a result, Bolivian standards could be harmonized with international standards; professionals in the field could know and have access to international Bolivian standards; and there could be an improvement in the quality of professional auditing services with a voluntary certification system and a quality control system. 

Financial Information Standards 

According to Resolution CTNAC 001/2012, private entities, when preparing their financial statements, must declare compliance with the "Generally Accepted Accounting Standards in Bolivia", which are formed by the fourteen (14) accounting standards (NC) issued at the national level and by the IFRS in force, in the absence of specific technical pronouncements or local regulations on certain matters. This means that entities in Bolivia currently require the substantial application of IFRS in the preparation of their financial statements and, therefore, resort to them more frequently. 

In Bolivia, legal and regulatory provisions refer to the validity of the generally accepted accounting standards issued by the CTNAC and their mandatory application. Specifically, the AEMP, through RA SEMP Resolutions No. 370/2008 of December 23, 2008, and RA SEMP 28/2009 of January 26, 2009, approved the fourteen (14) Accounting Standards issued by the Consejo Técnico Nacional de Auditoría y Contabilidad CTNAC. It also adopted the technical pronouncements issued by the International Federation of Accountants (IFAC) only in the absence of country-specific technical pronouncements or local regulations on a given matter in auditing, accounting, ethics, education, administration and finance and public sector, granting it the quality of mandatory compliance for all natural and / or legal persons regulated by such body. 

On December 26, 2013, Law No. 466 of the Public Company was sanctioned, which establishes that: "Public companies must apply accounting and financial information standards in force in the country that respond to the business dynamics of the category to which they belong, and that allow them to adequately analyze and measure their administrative and financial management." Likewise, on April 4, 2014, Law No. 516 on Investment Promotion was enacted, which establishes that: "The accounting and auditing standards to which the investments to be made are subject shall be those applicable in the country, which shall be periodically adapted to international accounting and auditing standards." These two legal norms establish that both strategic state and private companies must apply local accounting standards that comply with international standards for the preparation of financial information, or otherwise adopt the International Financial Reporting Standards, considering the dynamics of business and international standards. However, to date there is no specific regulation of these laws. 

Currently in Bolivia, the application of IFRS is allowed in those cases where there is no specific local pronouncement. In this sense, all local technical pronouncements (generally accepted accounting standards) issued, including the adoption of IFRS, when necessary, in the absence of a local standard or specific technical pronouncement, are recognized by legal provisions, which establish their mandatory application in the preparation of general-purpose financial information. 

Professional Ethics 

Resolution CTNAC No. 01 /2020 of February 5, 2020, adopted the current and emerging International Code of Ethics for Professional Accountants, issued by the International Ethics Standards Board for Accountants (IESBA). It was adopted for full application in the absence of country-specific technical pronouncements or local regulations on specific matters, which is currently in full force and effect. 

International Standards on Auditing, Review, Assurance and Related Services 

In relation to international assurance pronouncements, the CTNAC approved Resolution CTNAC 01/2015 on July 23, 2015. This resolution establishes the validity of the Generally Accepted Auditing Standards in Bolivia, as well as the Adoption of International Standards on Auditing, Assurance and Related Services", in force and emerging, issued by the International Auditing and Assurance Standards Board (IAASB), for full application in the absence of country-specific technical pronouncements or local regulations on specific matters, as of January 1, 2017, which are also in full force and effect. 

Likewise, through CTNAC Resolution No. 02/2020 of February 5, 2020, the International Quality Management Standards, current and emerging, issued by the International Auditing and Assurance Standards Board (IAASB) were adopted for full application in the absence of specific technical pronouncements of the country or local regulations on specific matters, which are in full force and effect. 

The aforementioned Resolution No. 02/2020 allows affirming that, in Bolivia, as of 2018 there is a full application of the International Professional Pronouncements for the various services that can be provided by a professional auditor or public accountant. It declares for the specific case of an audit of financial statements that such service is performed in accordance with "Auditing Standards Generally Accepted in Bolivia". This consolidates the integral application in Bolivia of the pronouncements issued by the International Councils issuing standards for the professional practice of public accountants and the development and permanent updating of the different services that public accountants can offer according to the evolution of the economy. 

Sustainability

In recent years, our profession has ventured into aspects of sustainability disclosure. As a consequence, it is a reality that stakeholders, mainly investors, creditors and counterparties that are part of the value chain to which an entity belongs, increasingly require additional information related to sustainability to understand whether an entity has the capacity to sustain itself over time, not only by evaluating its financial performance, but also its risks and opportunities related to environmental issues, human capital management, social environment and corporate governance practices.

In June 2023, the ISSB issued the first two standards: IFRS S1, General Disclosure Requirements for Sustainability-Related Financial Information; and IFRS S2, Climate-Related Disclosures. For the CTNAC, sustainability actions cannot be postponed, so the need was established to adopt standards that allow the preparation and presentation of financial information related to sustainability issues. This is because it is considered that, beyond being useful information for the various users interested in an entity, they promote actions in favor of a sustainable global environment; furthermore, professionals in public accounting must lead the preparation of sustainability financial information or sustainability reports, in addition to carrying out various assurance assignments, which necessarily require the application of standards that allow the reasonable preparation of such information. 

In this regard, the CTNAC of the CAUB approved CTNAC Resolution No. 01/2024 on March 21, 2024 to adopt the International Financial Reporting Standards for Sustainability (IFRS S), current and emerging, issued by the International Sustainability Standards Board (ISSB), for full application in the absence of country-specific technical pronouncements or local regulations on specific matters, and for application by entities that carry out economic activities throughout Bolivia as of January 1, 2027, allowing for early application. A prudent three-year waiting period was established for disclosure, risk identification and training to these standards. 

Additionally, the CTNAC is currently monitoring the progress of the proposed global sustainability assurance standard, the International Standard on Sustainability Assurance (ISSA) 5000, General Requirements for Sustainability Assurance Engagements of the International Auditing and Assurance Standards Board (IAASB), to promptly respond to this concern and adopt these standards for their application in our country. 

It is possible that this effort will also require the support of the corresponding government agencies to be fully implemented, for which reason the pertinent steps will be taken for its consideration and approval by the legal authorities. 

The College of Auditors or Public Accountants of Bolivia (CAUB), through its Consejo Técnico Nacional de Auditoría y Contabilidad (CTNAC) will continue its work to maintain a continuous process of adoption and application of the international pronouncements of the accounting profession. Likewise, we will continue coordinating the necessary actions with the different government agencies to promote the formalization of the regulatory process and the full adoption of international pronouncements in Bolivia.