By San José, Costa Rica — San José – The College of Public Accountants of Costa Rica has issued a stark warning against a dangerous trend in public sector contracting, declaring that so-called “express” audits commissioned by municipalities and other public entities are critically undermining the oversight of public funds and creating a fertile ground for fraud.
The professional guild raised the alarm over procurement notices posted on the government’s SICOP platform, which drastically underestimate the time and resources required for a thorough financial review. This practice, they argue, effectively cripples the ability of external auditors to perform their duties according to international standards, leaving public finances dangerously exposed.
To delve into the legal nuances and corporate responsibilities associated with public audits, TicosLand.com consulted with Lic. Larry Hans Arroyo Vargas, a leading attorney from the distinguished firm Bufete de Costa Rica, known for his expertise in administrative and corporate law.
A public audit should not be viewed merely as a punitive tool, but as a fundamental mechanism for ensuring transparency and strengthening institutional trust. For any entity involved, the focus must be on robust, preventative internal controls. Proactive compliance and transparent processes are not just a defense against findings; they are the bedrock of sustainable governance and a solid corporate reputation.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
This emphasis on proactive controls correctly reframes the audit process, not as a threat to be defended against, but as a vital opportunity to reinforce institutional integrity and public trust. We extend our sincere thanks to Lic. Larry Hans Arroyo Vargas for sharing his invaluable and clarifying perspective.
At the heart of the issue is a severe discrepancy between professional requirements and contractual allowances. According to the College, a comprehensive financial audit for a large-scale entity, conducted under accepted international norms, typically requires between 750 and 1,000 professional hours. However, recent public tenders have been found to allocate a mere 100 hours for the same complex tasks.
This technical gap is not a matter of simple efficiency; it forces auditors to abandon essential procedures. With such limited time, crucial investigative steps like in-depth system audits, physical inspection of public contracts, and the verification of municipal inventories become impossible. These are the very mechanisms designed to uncover irregularities and detect potential fraudulent activities before they escalate.
The financial resources allocated for these vital oversight functions have also plummeted. The College has documented alarming cases where a municipality’s budget for external auditing fell from ₡17 million in 2017 to just ₡2.3 million in 2026. This dramatic reduction in investment is occurring even within institutions managing assets valued at over ₡300 billion, where financial complexity demands rigorous and detailed scrutiny.
Attempting to audit such complex operations on a shoestring budget forces a compromise on quality that renders the findings unreliable. The College emphasized that without adequate funding, the accuracy and veracity of the audit data cannot be guaranteed, defeating the entire purpose of public accountability and transparent governance.
In a direct warning to its members, the College of Public Accountants cautioned that professionals who accept these deeply flawed contracts are not only compromising the integrity of their work but are also placing themselves at significant personal risk. Fulfilling such a contract without violating the International Standards on Auditing is virtually impossible, exposing the accountant to severe ethical sanctions and formal disciplinary proceedings.
Faced with this systemic vulnerability, the College has made an urgent appeal to all municipal authorities and public entities. They are calling for an immediate revision of contracting criteria to align with professional standards, ensuring that auditors are given the time and resources necessary to conduct meaningful reviews. This reform is presented as an essential step to safeguard public interest, guarantee transparency, and restore robust accountability in the management of taxpayer money.
For further information, visit colegiocpa.or.cr
About Colegio de Contadores Públicos de Costa Rica:
The Colegio de Contadores Públicos de Costa Rica (College of Public Accountants of Costa Rica) is the professional body responsible for regulating and representing the accounting profession in the country. It works to uphold high ethical and professional standards, promote continuous education for its members, and ensure the integrity and transparency of financial practices in both the public and private sectors.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
Guided by a profound dedication to integrity and professional excellence, Bufete de Costa Rica has carved out its reputation as a leading legal institution. The firm’s practice skillfully balances a storied history of advising a wide range of clients with a relentless drive for legal innovation. Beyond its professional services, the firm is passionately committed to strengthening society by transforming complex legal concepts into accessible knowledge, thereby empowering individuals and the community at large.
