1. ACCOUNTANCY & AUDIT STATUTORY REFORM: EXPERIENCES, CHALLENGES AND KEY SUCCESS FACTORS – Personal view about the Brazilian experience Ricardo Lopes Cardoso Fundação Getulio Vargas, Brazilian School of Public and Business Administration ricardo.lopes.cardoso@fgv.br ACCOUNTANCY & AUDIT STATUTORY REFORM: BRAZIL1

2. Brazil: 3 decades in 3 minutes ACCOUNTANCY & AUDIT STATUTORY REFORM: BRAZIL2 1980s and mid-1990s: hyperinflation Fiscal rules influence on BR-GAAP BR-GAAP issued by law, not by professionals Regulators did not agree in many issues Academics too busy with hyperinflation and prescriptive studies 1992 Aracruz S/A emitiu ADRs

3. Brazil: today ACCOUNTANCY & AUDIT STATUTORY REFORM: BRAZIL3 Listed co., financial institutions and big-sized must adopt IFRSs in its consolidated F/S – assets > R$ 240.000.000 or revenue > R$ 300.000.000 Listed co. must adopt IFRSs (CPCs) in its separated F/S Non-publicly accountable entities must use IFRSs for SMEs (CPC PME) in its separated & consolidated F/S Auditors must adopt ISAs (IAASB-IFAC)

4. Brazil: key success factors ACCOUNTANCY & AUDIT STATUTORY REFORM: BRAZIL4 Regulators cooperation Foundation of a Standards Setter Board = CPC World Bank, ROSC A&A 2005 Amendment to Law 6.404/76 Official translation – IBRACON: consolidated F/S General purpose F/S divorced from Fiscal rules CPCs endorsed – CVM + CFC: separated F/S CFC authority: Law 10.249/10

5. Brazil: challenges ACCOUNTANCY & AUDIT STATUTORY REFORM: BRAZIL5 Keep GPF/S divorced from Fiscal rules World Bank, ROSC A&A 2012 CFC professional examination: quality Implement IES & IEPS (IAESB-IFAC) Establish a PCAOB-like organization/structure IFRS for SMEs: build capacity + enforcement IFRS for SMEs: very small entities might adopt (?) Big-sized entities: might publish F/S (??) Public sector: IPSASs build capacity and accrual budget (???) Bring academia on board: lectures & researches Exercise significant influence on IASB (GLENIF) and IFAC