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    Country by Country Financial Reporting and Auditing Framework

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    Costa Rica – Despacho Lara Eduarte, S.C. (prepared February 2014)

    Preparation of and Filing of Statutory Financial Statements

    Corporations (Sociedades anónimas) are required to prepare audited annual financial statements and file these with the Ministerio de Hacienda only if classified to do so by Tax Authorities.

     

    Listed companies, financial institutions, pension funds, mutual funds administrators, insurance companies and stock brokers are required to file their audited annual financial statements with the local regulator 40 work days after the balance sheet date.

     

    There are no other statutory filling of financial statements required by law. Financial institutions require audited financial statements for clients with loans over $1,000,000 US Dollars.

     

    Financial Reporting Framework

    Listed companies and non-listed companies in Costa Rica are required to prepare their financial statements in accordance with International Financial Reporting Standards (IFRS).  IFRS is that adopted by the local accounting principles regulator.  Financial institutions, pension funds, mutual funds administrators, insurance companies and stock brokers are required to prepare their financial statements according to the accounting principles as established by the Consejo Nacional de Supervisión del Sistema Financiero (CONASSIF) which are based on IFRS except for prudential principles as established by this regulator.

     

    Also, IFRS financial statements are the starting point for determining the taxable income of an entity for corporation and trade tax purposes in Costa Rica with certain considerations as established by Tax Authorities and Income Tax Law.

     

    Audit Requirements for Corporations Registered in Costa Rica

     

    Corporations (Sociedades anónimas) are required to prepare audited annual financial statements and file these with the Ministerio de Hacienda only if classified to do so by Tax Authorities.

     

    Listed companies, financial institutions, pension funds, mutual funds administrators, insurance companies and stock brokers are required to file their audited annual financial statements with the local regulator 40 work days after the balance sheet date.

     

    There are no other statutory filling of financial statements required by law. Financial institutions require audited financial statements for clients with loans over $1,000,000 US Dollars.

     

    Audit Appointment, Rotation and Joint Audits

    Auditors are elected by the shareholders and appointed by management or - if present - the supervisory board of an entity.  Costa Rica does not have any rules relating to mandatory rotation of audit firms but there are guidelines within the ethical standards regarding partner rotation. 

     

    Auditing Standards

    Local regulations require auditors to carry out audits and express an opinion on financial statements in accordance with International Standards on Auditing. Those standards require us to comply with the Ethical Standards for Auditors in Costa Rica.

     

    Ethical Framework

    Costa Rican auditors are bound by the Code of Ethics promulgated by IASB as modified by the local accounting principles regulator. Modifications as established by the regulator are more stringent than the IFAC Code of Ethics (IESBA).

     

    Audit Regulation

     

    External Monitoring

    Currently there are no local regulations for external and internal monitoring processes with regard to their audit practice. The local auditing standards regulator has a plan to establish a quality control monitoring process due to start in 2016.

     

    Internal Monitoring

    We have a Quality control manual established under ISQC 1 that requires an internal monitoring process. We comply with ISQC 1 and have an internal monitoring process.

     

    Transparency Report

    There are no transparency report requirements in Costa Rica.                              

     


    Contact Us
    David Chitty - Audit
    London, United Kingdom
    +44 20.7842.7292


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