RESTRICTED
WORLD TRADE S/WPPS/W/7/Add.15
2October 1996
ORGANIZATION(96-3888)
Original: Spanish Working Party onProfessional Services
COMMUNICATION FROM CHILE
Response totheQuestionnaire ontheAccountancy Sector
Thefollowing communication iscirculated attherequest ofChile.
_______________
I. GENERAL
1. What aretheprofessional titles ofaccountants inyour country? Arethese professional
titles protected? Please specify how.
There aretwoprofessional titles inthefieldofaccounting: public accountant andauditing
accountant. Professionals whoobtain oneofthese titles mayjointheAssociation ofAccountants.
2. How istheaccountancy sector regulated inyour country: bylaw, professional
self-regulation, acombination ofboth?
LawNo.13.011, bywhich theAssociation ofAccountants ofChile wasformed in1958,
stipulates thattheAssociation 'sobjective is"touphold theprogress, prestige andprerogatives ofthe
profession ofaccountant andtoensure thatitisproperly andcorrectly exercised, tomaintain professional
discipline andtooffer protection toaccountants".
3. Arethere anyprovisions toprotect company names, whether national orforeign, inyour
country?
Anyfirmorcompany mayprotect itsmark orname intheRegister ofMarks, which isapublic
institution withpowers tothateffect.
4. What aretheprofessional bodies inyour country? Aretheyrecognized bylawasa
regulatory ordisciplinary body fortheaccountancy profession inyour country, orarethese
functions fulfilled byother institutions (please specify)?
Theprofessional bodies aretheProfessional Associations which, until1981, wereconstituted
under thelaw.TheAssociation ofAccountants ofChile wasestablished byLawNo.13.011 of1958.
On11September1980anewconstitutionwasadoptedand,inFebruary1981,DecreeLaw3.621
wasissued granting theProfessional Associations thestatus oftradeassociation. Membership inthese
bodies isvoluntary.
5. Howmany members dothese professional bodies have? What istheestimated proportion
ofthose?S/WPPS/W/7/Add.15
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Thebreakdown according toactivity ofaccountants belonging totheAssociation ofAccountants
ofChile isasfollows:
- Inpublic practice: 1,500
- Inthepublic sector: 2,000
- Inindustry andcommerce: 6,000
- Ineducation: 1,000
- Retired 1,500
12,000
6. What isthescope ofactivities regularly practised byaccountants inyour country?
Theactivities are:
- Statutory audit;
- audit ofmergers;
- audit ofcontributions inkind;
- other audits;
- accounting;
- taxadvice;
- investment advice;
- consulting;
- expert witness inaccounting.
7. Which ofthese activities areregulated inyour country?
- Statutory audit;
- accounting.
8. Which ofthese activities arereserved bylawtoaccountants, shared byaccountants with
other professions (please specify), orevenforbidden toaccountants inyourcountry, e.g.byfull
prohibition orbynotallowing cumulation ofcertain activities which areconsidered incompatible
ormutually exclusive?
- Statutory audit;
- accounting.
II. QUALIFICATION REQUIREMENTS
9. What arethequalification requirements forthese activities inyour country interms of
university/higher education degree, practice andprofessional exam? Specify thenumber ofyears
required foreachelement, andthedifferences according totheactivities (audit, insolvency, tax,
etc.)covered bythequalification.
Theuniversities offer thequalification ofAuditing Accountant, following acourse ofeight
to10semesters, onthebasisofafinalexamination. Thedegree awarded isaBachelor ofAccounting
andAuditing.1Theholder isentitled toexercise alloftheactivities listed inthereply toquestion 8.
1There arevariations: other universities callitaBachelor 'sDegree inAccounting andAdministration, etc.S/WPPS/W/7/Add.15
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10. Arethere anypreconditions tomeet tostart theprofessional education: minimum age,
particular diploma ortitle, prior education, registration withaprofessional body, payment of
afee,other (please specify)?
Theuniversity entrance requirements are:
- Adegree insecondary education;
- aptitude test(minimum required score);
- payment ofafee.
11. What arethesubjects tobecovered bytheeducation: accounting, audit, tax,general
law,economics, ethics, information technology, other (please specify)?
Accounting,mathematics,administration,economics,finances,statistics,fiscallaw,auditing,etc.
III. TECHNICAL STANDARDS AND ETHICS
12. Inrelation towhich activities donational standards exist(audit, accounting, insolvency,
other)? Please specify their main policy objectives.
Accounting: Compliance withthegenerally accepted principles ofaccounting.
Auditing: Fulfilment oftheauditing standards established bytheAssociation of
Accountants ofChile.
Inbothcases, professionals must comply withthestandards established bythesupervisory
bodies foreachsector:
-Open corporations: Securities andInsurance Supervision Department
-Insurance companies: Securities andInsurance Supervision Department
-Financial institutions: BankingandFinancialInstitutionsSupervisionDepartment
-Administration ofpension funds: SupervisionDepartmentforAdministratorsofPension
Funds
13. Which body orinstitution develops these standards andmonitors their implementation?
What aretheconsequences ofabreach ofthestandards (fortheprofessional, forclients, etc.)?
- Association ofAccountants ofChile;
- theState supervises theapplication ofallaccounting andauditing standards through
thesupervision department foreachbranch. Anybreach inthestandards ispunished
byafineandpossibly brought before thecourts.
14. Aretheinternational standards developed bytheIFAC (International Education Standards
andGuidelines, International Standards onAuditing) andIASC (International Accounting
Standards) recognized orusedinyourcountry? Ifyes,please explain how. Ifno,please explain
why.
There exist, inthecountry, accounting andauditing standards thatarebased onthose developed
bytheIFAC andtheIASC.S/WPPS/W/7/Add.15
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LawNo.13.011 provides theAssociation ofAccountants ofChile withthepower toissue
standards. Thebasic lawsgoverning theState supervisory bodies empower them toissue standards
withrespect toboththekeeping ofaccounting records andthepreparation andpresentation offinancial
statements.
These standards arelargely based onthose adopted bytheAssociation ofAccountants ofChile
andthose established byinternational bodies.
15. Inrelation towhich activities does aparticular ethical code exist (audit, accounting,
insolvency, other)? Please specify itsmain policy objectives.
Inrelation toaccounting:
- General standards (conduct);
- professional conduct;
- conduct withrespect tocolleagues.
Inrelation toaudit:
- Emphasis isplaced onprotecting theindependence oftheexternal auditor.
16. Which body orinstitution develops thiscode andmonitors itsimplementation? What
aretheconsequences incaseofbreach oftheethical codebyaprofessional orafirm?
Association ofAccountants ofChile.
Maymonitor itsimplementation onlywithrespect toitsregistered members.
17. Arethere restrictions onmarketing, solicitation, advertising?
TheCode ofEthics prohibits excessive advertising, limiting ittoinformation ontheparticular
branch andtheprofessional services offered.
18. Arethere restrictions onfee-setting (minimum/maximum levels imposed, indicative
scale, etc.)?
There arenorestrictions.
IV. LICENSING REQUIREMENTS AND PROCEDURES
19. Apart from thequalification requirements, what arethelicensing requirements for
individuals inyour country?
There arenorestrictions. However, fortheaudit oftheaccounting statements ofopen
corporations, theaccountant mustbeenrolled inaspecial register heldbytheSecurities andInsurance
Supervision Department forthepurpose ofensuring thesolvency andindependence ofauditors.
20. Arethere anyconditions imposed tobeeligible formembership oftherelevant professional
bodies? Please specify.S/WPPS/W/7/Add.15
Page5
Theperson inquestion musthaveadegree inaccounting awarded byaninstitution ofhigher
education (university orprofessional institute).
UndertheLawofCorporations(18.046),opencorporationsmustsubmittheirfinancialstatements
toanexternal auditor, whomayparticipate inthegeneral meetings ofshareholders withvoting rights,
butdonotthemselves havetherighttovote. Article 53oftheSupervision Department stipulates that
"external auditors maybeheldresponsible totheextent ofordinary negligence foranydamage caused
toshareholders asaresult oftheiractions, reports andomissions".
21. Arethere specific licensing requirements forprofessional firms?
No.
22. Cananapplication forlicensing befiledatanytimeoftheyearorarethere specific dates
torespect? How longdoesittaketocomplete thewhole licensing procedure? Please specify in
caseofdifferences between individuals andfirms.
There arenospecific dates ordifferences between individuals andfirms. Thetimerequired
forinscription doesnotexceed 30days.
23. Arethere differences interms oflicensing requirements and/or procedures, according
totheactivities covered bythelicence (audit, insolvency, etc.)? Please specify. What kindof
documentation isnecessary/accepted? Aredocuments issued inother countries acceptable? Please
specify.
External auditors ofopencorporations, whether natural orlegalpersons, mustbeenrolled in
theRegister ofAuditors oftheSecurities andInsurance Supervision Department.
Inorder toenrolintheRegister ofExternal Auditors oftheSecurities andInsurance Supervision
Department, auditing firms andindividual auditors mustprovide anumber ofdocuments, inparticular:
(1) Inthecaseoffirms, complete records regarding thecompany itself, itslegal
representatives, by-laws, partners, capital structure, background, organization, a
complete listofspecialized staffdescribing theirfunctions andqualifications, curricula
vitaeoftheshareholders describing theirindividual experience inthefieldofexternal
auditing, alistofaudit clients, andpending lawsuits against thefirmoritspartners.
(2) Inthecaseofindividual professionals, complete identification, listsofclients, pending
lawsuits andacurriculum vitae which should essentially contain thefollowing
information:
(a) Technical andvocational training:
- Establishment inwhich vocational studies werecarried out,indicating
dates anddegrees obtained;
- specialized training courses (only those lasting more thansixmonths);
- teaching experience;
- specialized publications.S/WPPS/W/7/Add.15
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(b) Professional background, indicating theposts occupied andprofessional
responsibilities, aswellas:
- Thenames ofthefirms;
- abriefdescription oftheposts occupied;
- thetimespent ineachpost(beginning andenddates).
24. What happens when thelicensing conditions arenotlonger respected bytheindividual
orthefirm?
Theindividual orfirmisdeleted from thespecial register.
V. RECOGNITION OFQUALIFICATIONS
25. Arethere anypossibilities fortaking account ofqualifications acquired byforeign
professionals inanother country? Arethere bilateral agreements withother countries inthis
respect?
Inorder tobeabletoexercise theirprofession, foreign professionals mustholddegrees that
aredulyapproved bythecompetent authorities, andmust meet therequirements laiddown bythe
University ofChile, which hastheexclusive authority torecognize foreign degrees.
Itistheexclusive right oftheUniversity ofChile torecognize, revalidate andauthenticate
professional degrees obtained abroad, without prejudice totheinternational treaties inthatrespect
(DFL 153/81 MINEDUC, ART.3). Asfrom 1April 1994, thenational authority incharge of
recognizing foreign professional degrees subject tointernational agreements istheChief oftheHigher
Education Division oftheMinistry ofEducation.
Procedure
Theformalities areasfollows:
(a) Submission ofanapplication totheRector oftheUniversity ofChile indicating the
applicant 'saddress andtelephone number andaccompanied by:
- Anoriginal copyofhisdiploma authenticated bytheconsulate;
- anauthenticated transcript withagrade scale;
- anauthenticated programme ofstudy;
- hiscurriculum vitae;
- acertificate ofentitlement topractice inhisplace oforigin.
(b) Submission ofdocuments totheFaculty concerned;
(c) Examination ofthecasebytheRevalidation Commission, which decides whether or
nottorevalidate thedegree andestablishes therequirements tobemetbytheapplicant
inorder toobtain recognition. Areply willbegiven within 30to60days;
(d) Oncetheabove formalities havebeenfulfilled, delivery ofacertificate andqualification
bytheUniversity ofChile.S/WPPS/W/7/Add.15
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26. Arethere anyautomatic recognition ormutual recognition agreements between your
professional bodies andtheir counterparts inother countries? Ifso,please specify themain
characteristics ofsuchagreements; ifnot,please explain why.
International agreements arecurrently ineffect withthefollowing countries:
- Uruguay andEcuador, forallprofessions, butwithanationality requirement for
lawyers;
- Brazil andColombia, forallprofessions, withnoreciprocal nationality requirement
forlawyers;
- Spain, withrespect to14professions:
- Bachelor ofMedicine andSurgery;
- Bachelor ofLaw(without nationality requirement);
- Bachelor ofMathematics orBachelor ofScience inMathematics;
- Bachelor ofChemistry orBachelor ofScience inChemistry;
- Bachelor ofPhysics orBachelor ofScience inPhysics;
- Bachelor ofBiology orBachelor ofScience inBiology;
- Bachelor ofPharmacy;
- BachelorofVeterinaryMedicine,specializationinMedicineandAnimalHealth;
- Bachelor ofBusiness Administration, Economics section orBusiness section;
- Agricultural engineer, specialized inthePlantIndustry, Animal husbandry and
Agricultural Economics;
- Bachelor ofPhilosophy andEducational Sciences, Education section;
- Bachelor ofPhilosophy andEducational Sciences, Philosophy section;
- Doctor ofDentistry orDental Surgery.
Mexico Convention Multilateral Agreement (1902): covers alloftheprofessions except the
legal professions, andprovides foraprior examination inthefieldofhealth, including pharmacy.
Signed byBolivia, Costa Rica, ElSalvador, Guatemala, Honduras, Nicaragua andPeru.
- These international agreements generally provide forautomatic recognition permitting
foreigners toexercise theirprofession byobtaining acertificate fromtheMinistry of
Education2,upon presentation oftheirdegrees andtranscripts authenticated inthe
country oforigin andinChile.
- Recognition isnotautomatic forprofessionals inthefieldofhealth inthecountries
oftheMexico Convention Agreement, whomust sitanexamination.
- These agreements arevalid onlyforprofessionals whoarenationals ofthecountry
withwhich theywerenegotiated andwhohavecarried outtheirstudies inthatcountry.
- These agreements provide forrecognition ofthedegree only; aprofessional wishing
topractice inthecountry mustmeetadditional requirements deriving from thelaws
onaliens andthelabour laws.
2Except forlawyers inthecaseofEcuador, Uruguay andthecountries oftheMexico Convention Agreement.S/WPPS/W/7/Add.15
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27. Where possibilities oftaking account offoreign qualifications exist, isafulllocal
examination oralocaltraining exceeding 12months required? Please specify. Isalocallicence
always necessary topractice aregulated accountancy activity? Please specify when thisisnot
thecase.
Seethereply toquestion 26.
Foreign firms musthaveatleastonepartner holding alocallicence toexercise hisprofession
inthecountry.
28. What aretheaccreditation/licensing requirements imposed onforeign professionals
authorized topractice intheir home country? Maycertain (regulated) activities becarried out
onthebasis ofaforeign licence?
Degrees earned abroad must berevalidated inChile. Thisisaprerequisite topractising in
Chile (seethereply toquestion 26).
VI. REGULATIONSGOVERNINGTHEESTABLISHMENTOFACOMME RCIALPRESENCE
29. Arethere anyrestrictions ontheform under which onecanestablish (partnership,
incorporation, other)? Please specify.
Asregards participation, anyonepartner maypossess amaximum of15percentofshares
inthecapital ofthecompany ofprofessionals.
30. Arethere restrictions onforeign direct investment andownership, including restrictions
applying tonotlocally qualified individuals orfirms? Please specify.
There arenorestrictions.
31. Isthere arequirement ofaminimum number orpercentage oflocaldirectors, managers,
orstaff(please specify)?
Thepartners whosignfinancial statements mustbeauthorized todosobytheSecurities and
Insurance Supervision Department.
Foreign firms must haveatleastonepartner whopossesses alocal licence toexercise the
profession inthecountry.
Atleast85percentofthestaffworking forthesameemployer mustbeofChilean nationality.
Anexception ismade foremployers employing nomore than25persons (Article 19oftheLabour
Code).
32. Arethere anyrestrictions ontheability oflocally established firms todevelop international
relations (membership ofaninternational network, association withforeign firms, etc.)? Please
specify.
Nosuchrestrictions exist.
33. Istheuseofinternational orforeign names restricted forfirms?
No.S/WPPS/W/7/Add.15
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VII. REGULATIONS GOVERNING THEENTRY AND TEMPORARY STAY OFNATURAL
PERSONS FOR THE PURPOSE OFSUPPLYING ACCOUNTANCY SERVICES
34. Istheentryandstayofprofessionalssubjecttolabourmarkettestsoranyotherrestrictions?
Please specify.
Theentry offoreigners intoChile, theirtemporary orpermanent stayandtheirexitfromthe
country aregoverned bytheLawonAliens (DLNo.1.094 of1975anditsRegulation DS828ofthe
Ministry oftheInterior, dated 24November 1984). Bothofthese instruments refer tothecontrol
towhich foreigners aresubjected during theirstayinthecountry andtotheauthorities exercising that
control.
I. General requirements forentry intothecountry
(a) Entry through anauthorized entry point;
(b) presentation oftherequired documents;
(c) absence ofgrounds forprohibiting orblocking entry.
II. Foreigners mayenterChile as:tourists, residents andimmigrants. Onlythefirsttwo
categories willbediscussed below:
(1) Tourists
Anyforeigner whoenters thecountry forpurposes ofrecreation, sports, health,
study, business, family, religion orforother similar reasons, withnointention
ofimmigrating, establishing residence orconducting gainful activities, will
beconsidered atourist.
(2) Residents
(a) Officials;
(b) persons working under contract;
(c) temporary residents;
(d) students;
(e) political asylum seekers orrefugees;
(f) special status ofcrew member.
Only letters (b)-persons working under contract -and(c)-temporary
residents -willbediscussed below.
(a) General requirements forresidents
Avisaattesting thefollowing :
(i) Profession orposition, marital status, intended activities inChile,
financial solvency, studies, contracts depending onthevisarequested,
andanyother documents thataredeemed necessary;
(ii) clean record issued bythecompetent authorities;S/WPPS/W/7/Add.15
Page10
(iii) health certificate;
(iv) written commitment nottoparticipate inthecountry 'sinternal politics.
(b) Requirements forresidents working under contract
Thistypeofvisaisgranted topersons whohavemetthegeneral requirements
andare:
(i) Executing anemployment contract;
(ii) thespouse, parent orchild ofaperson working under contract.
During thevalidity ofthevisa,theforeigner under contract maynotcarry out
anygainful activities inconsistent with ordifferent from those mentioned inhis
employment contract.
Thevisarequirements forresidents working under contract areasfollow:
(i) Theemploying firm, institution orindividual must bedomiciled in
Chile;
(ii) theemployment contract mustbesigned inChile before anotary public
bytheemployer andtheemployee. Ifthecontract isconcluded abroad,
itmust besigned before theconsular ordiplomatic official and
subsequently authenticated bytheMinistry ofForeign Relations;
(iii) professionals orspecialists must provide proof oftheirprofessional
status intheform ofadulyauthenticated degree. Those whodonot
belong totheabove categories mustprovide proof oftheirspecialized
skills andknowledge bypresenting work certificates orother similar
documents;
(iv) exercise oftheprofession, activity oremployment provided forinthe
contract must beindispensable ornecessary forthedevelopment of
thecountry;
(v) theactivities tobeexercised inChile mustnotbeconsidered dangerous
orharmful tonational security;
(vi) thecontract must comply withChilean labour andsocial security
legislation;
(vii) thework contract must contain aclause whereby theemployer
undertakes topaythereturn journey tothecountry oforigin.
(c) Temporary resident
Thiscategory includes thefollowing persons:S/WPPS/W/7/Add.15
Page11
(i) Foreigners intending tosettle inChile, provided theycanprovide
evidence offamily tiesorinterests inthecountry, orwhose residence
isdeemed useful oradvantageous;
(ii) ex-residents having spent atleastoneyearinthecountry andwhose
absence from thecountry doesnotexceed fiveyears;
(iii) ex-residents having previously established permanent residence which
expired following aperiod ofuninterrupted absence fromthecountry
exceeding oneyear;
(iv) foreigners whose admission isrequested bynational legalentities or
sponsoredbyinternationalorganizationsrecognizedbytheGovernment,
provided theyareprofessionals, specialists orhighly-qualified persons;
(v) persons borninChile, children oftemporary foreign residents until
theyacquire Chilean nationality;
(vi) children ofChilean father ormother bornabroad.
Theholder ofatemporary residence permit isentitled tocarry outany
form oflawful activity inthecountry.
35. Isthere anyprocedure facilitating thetemporary entry andstayofprofessionals tosupply
accountancy services? Please explain.
They aresubject tothegeneral procedure described inthereply toquestion 34.
36. Arethereanyrestrictionsonhiringoflocalprofessionalsbyforeignfirmsandprofessionals?
Please explain.
Asageneral ruleapplicable toallsectors, atleast85percentofemployees working forthe
same employer mustbeofChilean nationality. Anexception ismade foremployers employing less
than25persons (Article 19oftheLabour Code).
VIII. NATIONALITY/RESIDENCY REQUIREMENTS
37. Isacondition ofnationality/citizenship imposed topractice certain activities, tostartan
education, toobtain alicence, tobecome amember ofaprofessional body, etc.? Please
specify.
Anyone wishing toexercise againful activity inChile mustbearesident working under contract
oratemporary resident (seereply toquestion 34).
38. Isacondition ofestablishment, prior residency ofresidency imposed topractice certain
activities, toobtain alicence, tobecome amember ofaprofessional body, etc.?Please specify
theconditions anddefinition ofestablishment, residency, etc.when relevant. Isitpossible to
have aprofessional establishment inmore thanonecountry?
Persons wishing tobecome members ofaprofessional bodymustholdadegree inaccounting
awardedbyaninstitutionofhighereducation.Aforeignermayhavehisdegreerevalidatedinaccordance
withtheprocedures described above.