The Mexican Commercial Code and
income tax laws include requirements for keeping certain overview accounting
records and preparing financial statements , but their influence on financial confirming
is generally minimal. Accounting standards tend to be issued by the Council with regard to Research
and Development of Monetary Information Standards (Consejo Mexicano para
la Investigación b Desarrollo de Normas de Información Financiera, or CINIF).CINIF is an independent public/private-sector partnership patterned after the
U.S. Financial Accounting Standards Board and the International Accounting
Standards Board. Its specific aim would be to converge Mexican GAAP with IFRS. The
Mexican Institute associated with Public Accountants (Instituto Mexicano de Contadores
Públicos) issues auditing Standard through its Auditing Standards and Procedures
Commission. The institute, the federation of state and other nearby associations of
registered open public accountants, is an independent nongovernmental professional
organization representing the overwhelming most of public accountants. The
Mexican accounting profession is mature, well organized, and highly regarded by
the business community.
Despite a legal system based on civil law, accounting standard setting in
Mexico takes a British-American, or Anglo-Saxon, approach rather than a continental
European one. The standard-setting process is well toned. Before standards are
completed, exposure drafts of suggested standards are issued with regard to review and public
remark. Accounting standards are recognized as respected by the government,
and in particular through the National Banking and Investments Commission, which
regulates the actual Mexican Stock Exchange. Mexican accounting principles do not distinguish
between large and small companies, and so are applicable to all business
entities. In some cases the National Banking and Securities Commission issues rules
for listed companies that limit certain options in generally accepted accounting
principles.
Requirements for preparing financial statements and having them audited vary
through type and size of company. Just about all companies incorporated under Mexican| law
(sociedades anónimas) must appoint a minumum of one statutory auditor to report to the actual
shareholders on the annual financial statements.Statutory auditors do not have to
be open public accountants, but when a firm uses impartial auditors, a member of theauditing firm frequently acts as statutory auditor. Companies or consolidated groups
that meet certain size criteria must file a tax-compliance audit report every year with
the Federal Tax Audit Department of the Ministry of Finance. The report consists of
audited financial statements, additional schedules, and a statement by the auditor
that no irregularities were observed regarding compliance with tax laws. This audit
must be done by a Mexican public accountant. Finally, companies listed on the
Mexican Stock Exchange must submit annual consolidated financial statements
audited by a Mexican public accountant both to the exchange and to the National
Banking and Securities Commission.
Starting in 2012, just about all companies listed on the Mexican Stock Exchange will be
required to use IFRS within their financial statements. Listed companies also have the actual
option of using IFRS earlier (through 2008 on). Mexican GAAP, because developed by CINIF,
will continue to be required for nonlisted businesses.
