Latin American Capital Markets

ACCOUNTING AND AUDITING STANDARDS 225Innovation coupled with the need to create global standards has generatedthe necessity for FASB and IASB to reevaluate accounting standards. In addition, thecreation of accounting standards is not static; rather; it has to be continually adaptedto new commercial and financial transactions in a global environmentThe Impact of Standard Setting on Quality Control in Latin Americaand the CaribbeanSome emerging market countries have benefited by adopting either IAS or U.S.GAAP as their national accounting standards. This is especially true for those countriesthat had no national standards or whose national accounting standards did notprovide adequate transparency.In Latin America and the Caribbean, the adoption and convergence of thenational standard-setting bodies to one of the existing standards have been mixed(see table 7-1):• Two countries, Canada and Mexico, have convergence to IAS on their agendas.Canada's policy is to conform to IAS unless there is a fundamental disagreementor circumstances that warrant a different approach. In Mexico,Bulletin A-8 requires the use of IAS in the absence of a Mexican standard.• Brazil and Uruguay issue national GAAP standards influenced by IAS. Argentinaissues its own national standards and has announced that, in the future,it plans to base most, but not all, of its standards on IAS.• Peru, Costa Rica, Honduras, the Dominican Republic, Panama, Guatemala,Ecuador, El Salvador, Nicaragua, and Haiti have adopted IAS in their entiretyas the national accounting standards.• Chile and Venezuela follow their own national GAAP and, in the absence ofa national standard, require the use of IAS. Colombia also follows its own nationalstandard, which is influenced by U.S. GAAP• Bolivia and Paraguay follow their own national GAAR and there is no indicationthat they will adopt or converge to IAS.The diversity of the standard-setting process in Latin America makes difficult, if notimpossible, the comparison of financial statements prepared under the national GAAPwith IAS or U.S. GAAR The difficulty of the comparison includes those countriesCopyright © by the Inter-American Development Bank. All rights reserved.For more information visit our website: www.iadb.org/pub