Action Plan Developed by

Philippine Institute of Certified Public Accountants (PICPA)

BACKGROUND NOTE ON ACTION PLANS

Action Plans are developed by IFAC members and associates to address policy matters identified through their responses to the IFAC Compliance Self-Assessment
Questionnaire. They form part of a continuous process within the IFAC Member Body Compliance Program to support the ongoing development and improvement of
the accountancy profession around the world.

Action Plans are prepared by members and associates for their own use based on the national frameworks, priorities, processes and challenges specific to each
jurisdiction. As such, they will vary in their objectives, content and level of detail, consistent with their differing national environments and stages of development, and
will be subject to periodic review and update.

Refer to responses to the Part 1 Assessment of the Regulatory and Standard-Setting Framework Questionnaire and Part 2 SMO Self-Assessment Questionnaire
provide background information on each member and associate their environment and existing processes. These responses may be viewed at:
http://www.ifac.org/ComplianceAssessment/published_surveys.php

Use of Information
Please refer to the Disclaimer published on the Compliance Program website.

ACTION PLAN

IFAC Member: Philippine Institute of Certified Public Accountants (PICPA)
Approved by Governing Body: National Board of the Philippine Institute of Certified Public Accountants
Original Publish Date: August 2011
Last Update: J anuary 2014
Next Update: J anuary 2015
Status as of Date of Publication Page 1 of 20
Action Plan Developed by
Philippine Institute of Certified Public Accountants (PICPA)

GLOSSARY

AASC Auditing and Assurance Standards Council
ACPACI Association of CPA in Commerce and Industry
ACPAE Association of CPAs in Education
ACPAPP Association of CPA in Public Practice
AIU Audit Inspection Unit
BOA Board of Accountancy
CHED Commission on Higher Education
COA Commission on Audit
CPA Certified Public Accountant
CPE/CPD Continuing Professional Education/Continuing Professional Development
ETC Educational Technical Council
FRSC Financial Reporting Standards Council
GAAP Generally Accepted Accounting Principles
GAAS Generally Accepted Auditing Standards
GACPA Government Association of Certified Public Accountants
GIFMIS Government Integrated Financial Management Information System
GOCC Government Owned and Controlled Corporation
I &D Investigation and Discipline
IAASB International Assurance and Auditing Standards Board
IAESB International Accounting Education Standard Board
IAPS International Auditing Practice Statement
IASB International Accounting Standards Board
IES International Education Standards
IESBA International Ethics Standards Board for Accountant
IFRS International Financial Reporting Standards
IPSAS International Public Sector Accounting Standards
IRR Implementing Rules and Regulations
ISA International Standard on Auditing
ISAE International Standards on Assurance Engagements
ISQC 1 International Standard on Quality Control 1
ISREs International Standards on Assurance Engagement
ISRSs International Standards on Related Services
KFW Kreditanstalt fur Wieteraufbau
MOA Memorandum of Agreement
NGAS New Government Accounting System
PGAS Philippine Government Accounting Standards
PICPA Philippine Institute of Certified Public Accountants
PPSAS Philippine Public Sector Accounting Standards

Status as of Date of Publication Page 2 of 20
Action Plan Developed by
Philippine Institute of Certified Public Accountants (PICPA)

PRC Professional Regulations Commission
PSASB Public Sector Accounting Standards Board
QA Quality Assurance
QARD Quality Assurance Review Division
QAREC Quality Assurance Review Executive Committee
QARP Quality Assurance Review Program
QRC Quality Review Committee
RA Republic Act
ROSC Report on the Observation of Standards and Codes
SEC Securities and Exchange Commission
SMO Statements of Membership Obligation
TCA Technical Committee for Accountancy
TRO Temporary Restraining Order
TWG Technical Working Group
Status as of Date of Publication Page 3 of 20
Action Plan Developed by
Philippine Institute of Certified Public Accountants (PICPA)

Action Pl an Subject: SMO 1Quality Assurance
Action Pl an Objective: Continue to Use Best Endeavors to Support the Professional Regulatory Commission Board of Accountancy (BOA)
in Addressing SMO 1

# Start Date Actions Completion
Date
Responsibility Resource

Background:

The Board of Accountancy (BOA) under the Philippine Regulation Commission, as the regulator for accountancy, has been given the power to supervise
the registration, licensure and practice of accountancy in the Philippines by R.A. No. 9298 The Philippine Accountancy Act of 2004. The law gives it the
power to conduct an oversight into the quality of audits of financial statements through a review of the quality control measures instituted by auditors to
ensure compliance with the auditing standards and practices.

The implementation of the oversight function of the BOA was addressed with the assistance of the World Bank which is helping the Philippines in
undertaking key initiatives towards strengthening the practice of accountancy in the Philippines under the Report on the Observation of Standards and
Codes (ROSC) study. The 1st ROSC led to the adoption of International Financial Reporting Standards (IFRSs), International Standard on Auditing (ISAs)
and International Ethics Standards Board for Accountant (IESBA) Code of Ethics in the Philippines. In 2006 under the 2nd ROSC, it was disclosed that all
recommendations under the 1st ROSC were implemented in the Philippines except for the oversight function. The 2nd ROSC led to a World Bank
consultancy program to conceptualize and implement the oversight function in 2009 on the accreditation of Certified Public Accountants (CPAs).

As an offshoot of the 2nd ROSC on Accounting and Auditing (ROSC A & A), the terms of reference for the implementation of the Quality Assurance
Review Program (QARP) in the Philippines started with the determination of the needed components: 1. Authority to Implement the QAR System; 2.
Credible Independent Entity; 3. CPA Practitioners must enroll in the QAR Program; 4. Audit Inspection Unit (AIU) with Capable Personnel; 5. Methodology
for Quality Assurance; 6. Funding. This led to the creation of the Quality Assurance Review Department (QARD) and the Quality Assurance Review
Executive Committee (QAREC) by BOA which were approved by the Professional Regulation Commission followed by the creation of a Council for
Accreditation and Quality Control of Practicing CPAs under a Memorandum of Agreement (MOA) executed on August 12, 2009 by BOA, Securities and
Exchange Commission (SEC), Bangko Sentral ng Pilipinas and Insurance Commission.

The events that followed were: (1) Philippine Institute of Certified Public Accountants (PICPA) as the accredited professional organization entered into a
MOA with BOA to formalize its commitment to provide the necessary infrastructure and mechanism to implement the Quality Assurance Review Program
(QARP); (2) Professional Regulations Commission (PRC)-BOA Resolution No. 23, Series of 2010 for the adoption of QARP was published in the
Philippines Official Gazette on April 7, 2010; (3) A handbook on QARP was published in 2010 and distributed for free to all public practitioners ; (4) A
number of information dissemination conferences were conducted all over the country, jointly by BOA and PICPA.

CPAs in public practice have to undergo accreditation (new and renewal) before they can conduct assurance services. Part I of the accreditation process is
compliance with the Continuing Professional Education (CPE) and Continuing Professional Development (CPD) while Part II is enrollment in the QARP.
Part I is ongoing while Part II is on hold.

A temporary set-back emerged in 2011 when a small group of practitioners filed a case with the Regional Trial Court of Caloocan City. The group was able
to secure a temporary restraining order (TRO) against the implementation of PRC BOA Resolution No.23, citing the QAR fees as being overly onerous.
Status as of Date of Publication Page 4 of 20
Action Plan Developed by
Philippine Institute of Certified Public Accountants (PICPA)

# Start Date Actions Completion
Date
Responsibility Resource
PRC and BOA as respondents are being represented in court by the Solicitor General of the Philippines. The Regional Trial Court dismissed the case. The
Board of Accountancy immediately met to implement the QAR, however the petitioners filed a Motion for Reconsideration. Now the case is still pending with
the court. FY 2012-2013 President J ojo Sorrera-Ty created a QAR Committee whose Chair and Vice-Chair were tasked to arrange a meeting with the
heads of the petitioners to discuss the issues and demands. President Sorrera-Ty met with the Board of Accountancy to offer a possible mediation that may
lead to reconciliation and settlement of the case.

PICPAs Board of Directors approved the Oct. 4, 2012 QAR Committee position paper and submitted the paper to the PRC-BOA on PICPAs
recommendation on the QAR. The position paper noted the importance and necessity of the QAR. It highly recommended the following: (1) the return of
the fees collected for the QARP, (2) only auditors of publicly-listed companies shall be subject to the QARP, (3) auditors of public interest entities be
covered by QARP following a transition period of three (3) to five (5) years; and (4) voluntary QAR for the auditors of non-public interest entities (non-PIEs).

On August 2013, the PICPA Committee on QA has decided to spearhead a Voluntary QAR Program for practitioners who shall be willing to submit their
practices to a quality review, notwithstanding the TRO against the mandated QAR. Two modules are being developed: (1) QAR Module for Practitioners,
and (2) Training Module of QAR Examiners to prepare the practitioners and examiners for reviews that are planned to commence by the last quarter of FY
2013-2014.

Implementation of Quality Assurance Review Program
1. October 2012


Once the TRO is lifted, assist BOA in the full implementation of
QARP by requiring all CPA in Public Practice to comply with the
QARP to be accredited.
Pending
resolution of
court case
PICPA National
President and the
Board
Committee on
Professional
Development,
Committee on Quality
Assurance (QA)
2. October 2012 Coordinate with Association of CPAs in Public Practice
(ACPAPP) in the nationwide information on QARP by holding
joint symposia and conferences.
Pending
resolution of
court case
PICPA President

ACPAPP, Committee on
Professional
Development (CPD),
Committee on QA
3. August
2013
Promulgate the Guidelines for Voluntary QARP. October
2013
Completed
PICPA QA
Committee
Executive Director,
Technical Director
4. September
2013

Develop the Voluntary QAR Module for Practioners.

November
2013
Completed
PICPA QA
Committee
Technical Director,
Independent Consultant
Status as of Date of Publication Page 5 of 20
Action Plan Developed by
Philippine Institute of Certified Public Accountants (PICPA)

# Start Date Actions Completion
Date
Responsibility Resource
5. September
2013
Develop the Training Module for QAR Examiners. December
2013
Completed
PICPA QAR
Committee
Technical Director,
Independent Consultant
6. J anuary 2014 Establish the PICPA QAR Division. April 2014 PICPA Board PICPA QAR Committee,
Executive Director
7. J anuary 2014 Roll out the QAR Module for Practioners (at least three
sessions).

March 2014 Executive Director,
Technical and
Training Director
Technical and Training
Division
8. April 2014 Roll out Training Module for QAR Examiners (at least one
session).
April 2014 Technical and
Training Director
Technical and Training
Division
9. J une 2014 Deployment of Certified QAR Examiners. J une 2014 QAR Director QAR Division
10. J uly 2014 Evaluation of the Voluntary QAR Program. J uly 2014 PICPA QA
Committee
PICPA QAR Division
Review of PICPAs Compliance Information
11. Ongoing Perform periodic review of PICPAs response to the IFAC
Compliance Self-Assessment questionnaires and update
sections relevant SMO 1 as necessary. Once updated, inform
IFAC Compliance staff about the updates.
Ongoing Executive Director PICPA Committee on
QA and Technical
Director

Status as of Date of Publication Page 6 of 20
Action Plan Developed by
Philippine Institute of Certified Public Accountants (PICPA)

Action Pl an Subject: SMO 2International Education Standards for Professional Accountants and Other Pronouncements issued by the IAESB
Action Pl an Objective: Continue to Use Best Endeavors to Work with BOA and the Commission on Higher Education (CHED) to Address the
Requirements of SMO 2

# Start Date Actions Completion
Date
Responsibility Resource

Background:

Section 9 of R.A. No. 9298 provides BOA the following powers and responsibilities related to IES: (1) to ensure coordination with the Commission
on Higher Education (CHED) or other authorized government offices that all higher educational instructions and offering of accountancy comply with the
policies, standards and requirements of the course prescribed by the CHED in the areas of curriculum, faculty, library and facilities; and (2) to prepare,
adopt, issue or amend the syllabi of the subjects of examinations in consultation with the academe, determine and prepare questions for the licensure
examinations which shall strictly be within the scope of the syllabi of the subjects for examinations as well as administer, correct and release the result of the
licensure examination.

In its Implementing Rules and Regulations, the PRC upon the recommendation of BOA shall create an Educational Technical Council (ETC) to assist the
Board in carrying the above to make Filipino CPAs globally competitive. The ETC was organized but did not take off because CHED appointed the Vice-
Chair of the BOA as Chair of the Technical Committee for Accountancy (TCA) which duplicated the function of the ETC. The BOA then took key initiatives in
coordination with the TCA of CHED, in the revision of the curricula for Accounting Education for undergraduate academic programs.

Presently BOA with PICPA and the Association of CPAs in Education (ACPAE), Association of CPAs in Commerce and Industry (ACPACI),
Government Association of CPAs (GACPA) and ACPAPP, are working on: (1) Review of the curriculum for Bachelor of Science in Accountancy to
update the contents and make responsive to the current demands of the market.; and (2) Revision of the Syllabi for the CPA Licensure Examination.

In May 2011, the BOA increased the CPE, now referred to as Continuing Professional Development (CPD) requirements for those CPAs in Public
Practice who are auditing public-interest entities - to eighty (80) units effective 2012; one hundred (100) units effective 2013; and one hundred
twenty (120) units effective 2014.

On April 16, 2012, BOA issued Board Resolution No. 59, series 2012, mandating the accreditation and monitoring of CPD
Providers and Programs to be the sole responsibility of the PRC CPD Council. The major functions of the PICPA CPD Council which is a creation of the
PICPA By-laws have been transferred to the PRC-CPD Council, rendering null the existence of the former. A new CPD Committee was formed
effective J uly 1, 2012, with representative from the four (4) sectors of PICPA with the objective of focusing on the CPD needs of members, providing a CPD
Framework that will lead to the creation of a PICPA CPD Academy.

A CPD Committee was formed in J uly 2012, the objective of which is to establish a vibrant and relevant learning academy offering a comprehensive
professional development program for its members. Said proposal was approved by the Board of Directors with the supporting budget of Php 3,000,000 for
the development of learning modules. Under its operational plan, it will set up the CPD Learning Academy; redesign CPD Courses following a learning
framework and considering IES Nos. 1-8 and Board of Accountancy Resolution No. 59, and start building a learning culture among members.


Status as of Date of Publication Page 7 of 20
Action Plan Developed by
Philippine Institute of Certified Public Accountants (PICPA)

# Start Date Actions Completion
Date
Responsibility Resource

In J uly 2012 PICPA entered into a MOA with Association of Certified Chartered Accountants (ACCA), Institute of Certified Accountants in England and
Wales (ICAEW), and National Council of Philippine American Canadian Accountants (NCPACA) with the common objective of exchanging and developing
knowledge and skills of members.

In addition, the CPD Computerized Data Base System is now fully operational. With this database system, there is ease in tracking the CPD units earned
by every PICPA member for a given period. The CPD completion reports are inventoried and numbered. Information regarding the different CPD Programs
offered by PICPA can be easily retrieved.

In August 2012, PICPA finalized the Accountancy Roadmap for approval of the PRC to be presented at the Global Competitiveness Workshop and
Professional Summit.

In August 2013 PICPA published the Accountants Research J ournal FY 2012 2013.

Continuing Plans to Address SMO 2 Requirements
12. September
2013
Implement ACCA-PICPA MOA as part of the CPD of PICPA by
organizing international conferences in the Philippines and
inviting ASEAN speakers with the assistance of ACCA.
Ongoing

CPD Committee

Executive Director,
Technical and Training
Division
13. September
2013

Encourage and identify accountancy and business researches for
publication.

J une 2014

PICPA Committee
on Research
CPD Committee,
ACPAE, PICPA
members in the
academe
14. September
2013
Develop CPD Competencies Framework for the four sectors of
the CPA profession (Public Practice, Commerce and Industry,
Education, and Government).
October
2013
Completed
PICPA CPD
Committee
Technical Division
15. October 2013 Map out current training modules into the Competencies
Framework and develop new modules based on the
Competencies Framework.
April 2014 PICPA CPD
Committee
Technical Division
16. April 2014 Develop and train a pool of accredited trainers to roll out modules
to PICPA members all over the Philippines.

J une 2014 PICPA Board,
PICPA CPD
Committee
Training Division
Status as of Date of Publication Page 8 of 20
Action Plan Developed by
Philippine Institute of Certified Public Accountants (PICPA)

# Start Date Actions Completion
Date
Responsibility Resource
17. November
2013
Develop the capability of PICPA to conduct seminars and
conferences with international resource speakers.
Ongoing PICPA Board,
PICPA CPD
Committee
International
professional and
academic linkages
18. J anuary 2014 Develop and implement PICPA-assisted apprenticeship program
for accountancy students.

April 2014 PICPA President,
Committee on
Faculty/Students
Development
PICPA Chapter
presidents, ACPAE

19. J anuary 2014 Develop Student Leadership Program. Ongoing PICPA President,
Committee on
Faculty/Students
Development
PICPA Chapter
presidents, National
Federation of J unior
Philippine Institute of
Accountants
Review of PICPAs Compliance Information
20. Ongoing


Perform periodic review of PICPAs response to the IFAC
Compliance Self-Assessment questionnaires and update
sections relevant to SMO 2 as necessary. Once updated inform
IFAC Compliance staff about the updates.
Ongoing

PICPA Executive
Director
Committee on IES,
Technical Director

Status as of Date of Publication Page 9 of 20
Action Plan Developed by
Philippine Institute of Certified Public Accountants (PICPA)

Action Pl an Subject: SMO 3International Standards and Other Pronouncements Issued by the IAASB
Action Pl an Objective: Use Best Endeavors for the Adoption of all ISAs Released by the IAASB

# Start Date Actions Completion
Date
Responsibility Resource

Background:

Under Section 9, Subsection 3 of R.A. 9298, the BOA shall monitor the conditions affecting the practice of accountancy and adopt such measures, including
promulgation of accounting and auditing standards, rules and regulations and best practices as may be deemed proper for the enhancement and
maintenance of high professional, ethical, accounting and auditing standards: Provided, that domestic accounting and auditing standards rules and
regulations shall include the international accounting and auditing standards, and generally accepted best practices.

In 2006, in accordance with the Implementing Rules and Regulations of R.A. 9298, BOA created an auditing standard setting body known as the Auditing
and Assurance Standards Council (AASC) to assist BOA in carrying out its powers and functions. The AASC is composed of a senior practitioner in public
accountancy as Chairman and sixteen (16) representatives from the following: BOA 1; SEC 1; BSP -1; Commission on Audit (COA) -1; Association of
CPAs in Public Practice 1; Accredited National Professional Organization of CPAs which is PICPA, divided on a per sector basis, as follows: Public
Practice 6; Commerce and Industry 1; Education -1; and Government 1.

The AASC is the body authorized to establish and promulgate generally accepted auditing standards (GAAS) in the Philippines, and recommend them to
BOA and PRC for adoption in the Philippines. The AASC pronouncements are developed based on the International Standards on Quality Control, Auditing,
Review, Other Assurance and Related Services and International Practice Statements issued by the International Auditing and Assurance Standards Board
(IAASB). Compliance with these standards is monitored by the Securities and Exchange Commission (SEC).

As at September 2013, the PRC and BOA have approved the following revised and redrafted standards as recommended by AASC for adoption:
International Standard on Quality Control 1 (ISQC) 1; 37 International Standards on Auditing (ISAs); eleven (11) International Auditing Practice Statement
(IAPSs); two (2) International Standards on Review Engagement (ISREs); three (3) International Standards on Assurance Engagements (ISAEs); and, two
(2) International Standards on Related Services (ISRSs). These were posted in the AASC website and prominently linked to the PICPA website.

PICPA regularly offers seminars on auditing standards and updates to its members. Under BOA Resolution No. 59 Series of 2012, CPA professionals
engaged in public practice are mandated to attain at least 24 hours of continuing professional education (CPE) in the thematic area no. 2 which covers
standards applicable to the profession, within three years as a requirement prior to getting initially accredited or renewed for accreditation by the BOA.

Maintaining Ongoing Processes
21. September
2013

Assist AASC in the exposure to CPAs and other stakeholders of
drafts and proposed amendments to ISAs and PPs (EDs),
including the formation of focus groups to discuss issues arising
from EDs, and collate comments for the timely submission to
AASC.
Ongoing

Technical Director PICPA Committee on
Website, PICPA
members, ACPAPP,
ACPACI, ACPAE,
Technical Division
Status as of Date of Publication Page 10 of 20
Action Plan Developed by
Philippine Institute of Certified Public Accountants (PICPA)

# Start Date Actions Completion
Date
Responsibility Resource
22. September
2013
Coordinate with AASC for timely submission of the approved
ISAs and Eds to PRC BOA for final adoption.
Ongoing PICPA Board VP for Public Practice,
ACPAPP, PRC BOA
23. September
2013
Assist AASC in the exposure and distribution of newly adopted
ISAs and IAPPs to stakeholders and users of financial
information.
Ongoing Technical Director PICPA Committee on
Website
PICPA members in
public practice, ACPAPP
24. September
2013

Conduct seminars on the content and applications of updates on
ISAs and IAPs.

Ongoing Training Director Training Division,
Chapter presidents,
ACPAE, ACPAPP,
ACPACI
25. September
2013
Coordinate with the officers of ACPAPP and ACPACI in the
nationwide dissemination and information campaign for newly
adopted ISAs and PPs.
Ongoing Training Division Chapter presidents,
ACPAPP, ACPACI
26. September
2013
Coordinate with the officers of ACPAE in the nationwide
dissemination and information campaign for newly adopted ISAs
and PPs.
Ongoing Training Division ACPAE, PICPA
members in the
academe
27. September
2013
Form focus groups to discuss issues arising from the standards
and interpretations.
Ongoing Technical Division Committee on
Professional
Development
Review of PICPAs Compliance Information
28. October 2012

Perform periodic review of PICPAs response to the IFAC
Compliance Self-Assessment questionnaires and update
sections relevant to SMO 3 as necessary.
Quarterly
Ongoing
PICPA Executive
Director
AASC, PICPA CPD

Status as of Date of Publication Page 11 of 20
Action Plan Developed by
Philippine Institute of Certified Public Accountants (PICPA)

Action Pl an Subject: SMO 4IESBA Code of Ethics for Professional Accountants
Action Pl an Objective: Continue to Use Best Endeavors for the Ongoing Adoption and Implementation of the latest IESBA Code of Ethics
by the Board of Accountancy in the Philippines in Compliance with the Requirements of SMO 4

# Start Date Actions Completion
Date
Responsibility Resource

Background:

PICPA has the responsibility for establishing ethical requirements with regards to its members. The Institute has adopted a version of the IESBA Code of
Ethics issued prior to 2010 with minor modifications which take into account local circumstances. PICPA disseminates the ethical requirements through its
website and organizes courses on the IESBA Code.

On J uly 22, 2011, the PICPA Board in a Board Resolution approved for adoption the 2010 Edition of the IESBA Code of Ethics and this was endorsed to the
BOA for its final disposition after final exposure jointly sponsored by PICPA and BOA.

A new Ethics Committee was formed effective J uly 1, 2012 for the FY 2012-2013. The new draft as revised and resubmitted to the Board was published in
the PICPA website and was emailed to all Chapter Presidents. Chapter Presidents then forwarded the same to all the members for further comments.
Collation of the comments is presently being done to be forwarded to the Ethics Committee for one last final review, documentation and endorsement.

In August 2012, PIPCA formed a Committee on Performance Governance System that will ensure the institutionalization of the Roadmap for the Philippine
Accountancy Profession which includes ensuring the upholding of ethics in pursuing excellence.

In J une 2013 PICPA has joined the Integrity Initiative, a coalition spearheaded by the Makati Business Club (composed of over 800 chief executive officers
and senior executives representing almost 450 of the largest and most dynamic corporations in the Philippines) and the European Chamber of Commerce of
the Philippines. This is in line with PICPAs joining of Project Shine under the Integrity Initiative. Project Shine is a four-year project that sets up an
accreditation system for companies to consistently uphold integrity in their business process.

PICPA regularly offers seminars on the Code of Ethics to its members. Under BOA Resolution No. 59 Series of 2012, CPA professionals engaged in public
practice are mandated to attain at least ten hours of continuing professional education (CPE) in the thematic area no. 3 Ethical, Governance and Quality
Principles, within three years as a requirement prior to getting initially accredited or renewed for accreditation by the BOA.

Maintaining Ongoing Processes
29. J uly 2012

Launch the Adoption of the 2010 Code of Ethics together with
BOA.

J anuary
2013
Completed
PICPA President BOA, Committee on
Ethics, Committee on
Publication
Status as of Date of Publication Page 12 of 20
Action Plan Developed by
Philippine Institute of Certified Public Accountants (PICPA)

# Start Date Actions Completion
Date
Responsibility Resource
30. J uly 2013 Establish a program for public information campaign on the role
of accountants and the ethics of the profession.
Ongoing PICPA Committee
on Ethics
PICPA Publications
Committee
31. October
2013
Develop monitoring system to ensure compliance with the revised
Code of Ethics.
November
2013
Completed
Executive Director Committee on Ethics,
Ethics Board
32. Ongoing

Conduct seminars on the content and applications of the revised
code of ethics.
Ongoing Training Director Training Division,
Chapter presidents,
ACPAE, ACPAPP,
ACPACI, GACPA
Review of PICPAs Compliance Information
33. Ongoing

Perform periodic review of PICPAs response to the IFAC
Compliance Self-Assessment questionnaires and update
sections relevant to SMO 4 as necessary.
Ongoing Executive Director Committee on Ethics
Status as of Date of Publication Page 13 of 20
Action Plan Developed by
Philippine Institute of Certified Public Accountants (PICPA)

Action Pl an Subject: SMO 5International Public Sector Accounting Standards and Other Pronouncements Issued by the IPSAS
Action Pl an Objective: Continue to Use Best Endeavors for the Implementation of IPSAS by the Commission on Audit in Compliance with SMO 5

# Start Date Actions Completion
Date
Responsibility Resource

Background:

Presidential Decree No. 898 passed on March 3, 1976 has given the Commission on Audit (COA) the authority and power on all matters relating to auditing
and accounting procedures, systems and controls for the Philippine government. Presidential Decree No. 1445 otherwise known as the Government Code
of the Philippines mandated COA to promulgate accounting and auditing rules and regulations in the Philippines.

As such, the government has adopted the Philippine Government Accounting Standards (PGAS) by virtue of COA Resolution No. 2006-006 (J anuary 31,
2006) as its standards for government accounting. Additionally, the Government adopted the New Government Accounting System (NGAS) under COA
Circular No. 2001-004 (October 30, 2001) as the system for government accounting. PGAS consists of thirteen (13) government accounting standards as
promulgated by COA.

On Oct, 2008, COA formed a Technical Working Group (TWG) and Sub-Technical Working Group in J uly 2009 to harmonize the PGAS with IPSAS and to
update NGAS and Chart of Accounts.

Under COA Resolution No. 2008-12 dated October 10, 2008, PSASB shall assist the COA in formulating and implementing Public Sector Accounting
Standards, and establish and maintain linkages with international bodies, professional organizations and academe on accounting and related fields and
financial management. The PSASB is composed of one Commissioner, Assistant Commissioners of National Government Sector, Corporate Government
Sector, Local Government Sector, Government Accountancy Sector and Planning, Finance and Management Sector.

Based on TWG Accomplishment Report as of J une 30, 2011, 20 IPSASs have been studied and reviewed and eight (8) are for study/review. TWG proposes
the implementation of 23 IPSASs with Philippine Application Guidance to be called as Philippine Public Sector Accounting Standards in 2013 and five (5)
IPSASs in 2014. Two IPSAS are not applicable hence, will not be adopted: IPSAS 7 Investments in Associates and IPSAS 10 Financial reporting in
Hyperinflationary Economies)

The TWG output shall be discussed in Focus Group Discussion with national government agencies and local government units financial and management
personnel (finance officers, accountants and budget officers) and auditors before the end of the year to solicit comments/inputs. The final output together
with a COA Resolution shall be submitted to the PSASB and Commission Proper for approval.

Another initiative of government relative to financial accounting or management information system is the Government Integrated Financial Management
Information System (GIFMIS) is a project of the oversight agencies under the Public Financial Management Program which aims to improve efficiency of a
governments financial management and facilitate adoption of modern public expenditure practices that are consistent with international standards and
benchmarks.


Status as of Date of Publication Page 14 of 20
Action Plan Developed by
Philippine Institute of Certified Public Accountants (PICPA)

# Start Date Actions Completion
Date
Responsibility Resource
Facilitate Implementation of IPSAS
34. October 2013


Profile all CPAs in government and determine the number to be
trained for IPSAS.

1st Quarter
of 2014

VP for Government
Sector

PICPA Regional Council
Chairs and PICPA
Chapter Presidents and
Heads of Government
Agencies Nationwide
35. October 2013

Organize an IPSAS Speakers Pool for the nationwide
implementation of IPSAS.
Ongoing

PICPA President

VP Government Sector,
CPE/CPD Council,
PICPA Speakers Bureau
Training Division
36. Ongoing Train the Trainers of IPSAS. Ongoing VP Govt. Sector Training Director, PICPA
Speakers Bureau
37. October 2013 Assist COA in training government accountants for IPSAS. 1st Quarter
2014
Executive Director,
VP Government
Sector
COA PGASB, Head of
TWG, Technical
Director, Training
Division, Speakers
Bureau
38. J uly 2012

Implementation of IPSAS in government offices. J anuary
2014
COA Chairman and
PICPA President
COA, Executive
Director, Technical
Director, VP for
Government Sector,
Heads of Government
Agencies
Review of PICPAs Compliance Information
39. October 2013 Perform periodic review of PICPAS response to the IFAC
Compliance Self-Assessment questionnaires and update
sections relevant to SMO 5 as necessary. Once updated inform
IFAC Compliance staff about the updates.
Ongoing Executive Director VP Government Sector
Status as of Date of Publication Page 15 of 20
Action Plan Developed by
Philippine Institute of Certified Public Accountants (PICPA)

Action Pl an Subject: SMO 6Investigation and Discipline
Action Pl an Objective: Strengthening of the Investigation and Discipline Process

# Start Date Actions Completion
Date
Responsibility Resource

Background:

Sub-section (i) , Section 9, of R.A. 9298 gives BOA the power to investigate any violation of the accountancy law and for this purpose issue
summons and subpoena to violators or witness thereof. Under Section 39 of the same law, any person may bring before the PRC BOA cases of illegal
practice. The BOA shall assist the PRC in filing the appropriate charges through the concerned prosecution office in accordance with law and rules of court.
The law provides that the BOA upon approval of the PRC may, delegate the fact-finding aspect of such investigations to the accredited national professional
organization of Certified Public Accountants which is PICPA, with the BOA and/or the PRC adopting the findings of facts as may be seems fit.

The articles of incorporation of PICPA provides for the creation of the Ethics Board composed of a Chairman and 8
members to be appointed by the PICPA Board upon the recommendation of the President for a term of 3 years provided that at least 1/3 or at least 3 are
CPAs who are also lawyers duly licensed as members of the Integrated Bar of the Philippines.

The Ethics Board may hear and decide cases: (1) involving violations of the PICPA Constitution and By-laws; (2) involving
violations of the Code of Ethics; (3) involving violations of any provisions of the Rules of Professional Conduct of the BOA; and (4) involving any of
the grounds provided by the Rules and Regulations of BOA. The PICPA Board on the other hand, shall have the exclusive and original jurisdiction
to hear and decide cases involving any member of the Ethics Board.

A copy of the decision of the Ethics Board that has reached finality shall be forwarded to the PICPA Board and the BOA, unless the decision of the
Ethics Board has been appealed to the PICPA Board in which case it is the duty of the PICPA Board to forward its final decision to the BOA, which,
after the hearing may reprimand, recommend for suspension for a period not exceeding two (2) years or recommended for the revocation of his
membership from PICPA. The suspension or revocation of membership shall not become final until after the approval of the PRC and upon
recommendation of the BOA.
Another welcome development is House Bill No. 1381 to amend the Accountancy Law of 2004 that will empower BOA to regulate public accountants. Under
the proposed bill, the BOA has the power to sue and implement sanctions against erring accountants, whereas under the present law, the BOA functions
only as an oversight body.

A new Ethics Committee was created by the PICPA President for FY 2012-2013. PICPA activities and projects on SMO 6 are coordinated with
ACPAE, ACPAPP, ACPACI and GACPA. No cases were handled by the Ethics Board in the preceding fiscal year.

In November 2012, PICPA issued a Primer on Violations of the Accountancy Law; Definition of Misconduct that are punishable; Types of Sanctions; Liaison
with Outside Bodies; Right of Representation and Appeal. These were published in the PICPA website.

PICPA regularly offers seminars on the Code of Ethics to its members. Under BOA Resolution No. 59 Series of 2012, CPA professionals engaged in public
practice are mandated to attain at least ten hours of continuing professional education (CPE) in the thematic area no. 3 Ethical, Governance and Quality
Principles, within three years as a requirement prior to getting initially accredited or renewed for accreditation by the BOA.
Status as of Date of Publication Page 16 of 20
Action Plan Developed by
Philippine Institute of Certified Public Accountants (PICPA)

# Start Date Actions Completion
Date
Responsibility Resource
Continue Raising Public Awareness of System of Investigation and Discipline
40. Ongoing


Conduct seminars on the content and applications of the Revised
code of ethics.

Ongoing Training Director Training Division,
Chapter presidents,
ACPAE, ACPAPP,
ACPACI, GACPA
41. October
2013
Develop monitoring system to ensure compliance with the revised
Code of Ethics.
Ongoing

PICPA President
PICPA Ethics
Committee
Committee on Ethics,
Ethics Board
42. J uly 2013

Set up process to receive feedback and complaints. October
2013
Completed
PICPA President
PICPA Ethics
Committee
PICPA Ethics Board
43. October 2013 Institute process for handling and resolutions of complaints. November
2013
Completed
PICPA President
PICPA Ethics
Committee
PICPA Ethics Board
Maintaining Ongoing Processes
44. J uly 2011 Continue to use best endeavors to ensure PICPAs investigation
and disciplinary mechanism that addresses all SMO 6
requirements.
Ongoing PICPA Executive
Director
PICPA Ethics Board,
PICPA Committee on
Ethics
45. November
2013
Conduct a review of the revised SMO6 and align current PICPA
investigation and disciplinary mechanism to SMO6.
February
2014
PICPA Executive
Director
PICPA Committee on
Ethics
Review of PICPAs Compliance Information
46. J uly 2011

Perform periodic review of PICPAs response to the IFAC
Compliance Self-Assessment questionnaires and update
sections relevant to SMO 6 as necessary. Once updated inform
IFAC Compliance staff about the updates in order for the
Compliance staff to republish updated information.
Ongoing

PICPA Executive
Director
PICPA Ethics Board,
PICPA Committee on
Ethics


Status as of Date of Publication Page 17 of 20
Action Plan Developed by
Philippine Institute of Certified Public Accountants (PICPA)

Action Pl an Subject: SMO 7International Financial Reporting Standards and Other Pronouncements issued by the IASB
Action Pl an Objective: Use Best Endeavors for the Adoption and Implementation of IFRS

# Start Date Actions Completion
Date
Responsibility Resource

Background:

Under Section 9, Subsection 3 of R.A. 9298, the BOA shall monitor the conditions affecting the practice of accountancy and adopt such measures, including
the promulgation of accounting and auditing standards, rules and regulations and best practices as may be deemed proper for the enhancement and
maintenance of high professional, ethical, accounting and auditing standards: Provided, that domestic accounting and auditing standards rules and
regulations shall include the international accounting and auditing standards, and generally accepted best practices.

The FRSC is the body authorized to establish and promulgate generally accepted accounting principles (GAAP) in the Philippines, and recommend them to
BOA and PRC for adoption in the Philippines. The FRSC pronouncements are adopted from the International Accounting Standards Board (IASB).
Compliance with the standards is monitored by the Securities and Exchange Commission (SEC).
The FRSC is composed of a senior practitioner in any scope of accounting practice as Chairman and fourteen (14) representatives from the following: BOA
1; SEC 1; BSP -1; BIR -1; COA -1; A major organization composed of preparers and users of financial statements 1; Accredited National
Professional Organization which is PICPA on Public Practice Sector 2; PICPA Commerce and Industry Sector 2; PICPA Education Sector -2; and
PICPA Government Sector 2.

As of this point, FRSC has reviewed and recommended adoption of all IASB pronouncements. PRC and BOA have approved all the
recommendations of FRSC for adoption in the Philippines. As at September 30, 2013, IFRIC 15 Agreements for the Construction of Real Estatehas been
deferred for adoption by the SEC upon consultation with various stakeholders.

FRSC adopted the Investment Entities (1) Amendments to IFRS 10, IFRS 12 and IAS 27 (November 2012), (2) Amendments to Disclosure Requirements
in IAS 36 Impairment of Assets (J une 2013), and (3) New Interpretation on Levies (J une 2013). These were posted in the FRSC website and prominently
linked to the PICPA website.

FRSC approved new Philippine Interpretations Committee (PIC) Questions and Answers (Q&A) on (1) Pooling of Interest Method (J anuary 2013),
(2) Cost of a New Bulding Constructed on the Site of a Previous Building (J une 2013), and (3) Applicability of SMEIG Final Q&As to the Philippine SMEs
(J une 2013). These were posted in the FRSC website and prominently linked to the PICPA website.

FRSC made Invitations to Comment on the following: (1) Proposed amendments to IAS 28 Equity Method: Share of Other Net Asset Changes
(November 2012); (2) Exposure Draft on Annual Improvements to IFRSs 2011 2013 Cycle (November 28, 2012); (3) Limited Amendments to IFRS 9
(J anuary, 2013); (4) Sale or Contribution of Assets between an Investor and its Associates or J oint Venture (J anuary, 2013); (5) Acquisition of an Interest in
a J oint Operation (J anuary, 2013); (6) Recoverable Amount Disclosures for Non-Financial Assets (J anuary, 2013); (7) Novation of Derivatives and
Continuation of Hedge Accounting (J une, 2013); (8) Financial Instruments: Expected Credit Losses (J une 2013); (9) Defined Benefit Plans: Employee
Contributions (J une 2013); (10) Regulatory Deferral Accounts (J une 2013); (11) Leases (J une 2013). These were posted in the FRSC website and
prominently linked to the PICPA website.
PICPA regularly offers seminars on IFRS Updates to its members. Under BOA Resolution No. 59 Series of 2012, CPA professionals engaged in public
Status as of Date of Publication Page 18 of 20
Action Plan Developed by
Philippine Institute of Certified Public Accountants (PICPA)

# Start Date Actions Completion
Date
Responsibility Resource
practice are mandated to attain at least 24 hours of continuing professional education (CPE) in the thematic area no. 2 which covers standards applicable to
the profession, within three years as a requirement prior to getting initially accredited or renewed for accreditation by the BOA.

PICPA activities and projects on SMO 7 are coordinated with ACPAE, ACPACI and ACPAPP.

Support the Adoption and Implementation of IFRS
47. September
2013

Assist FRSC in the exposure to CPAs and other stakeholders of
drafts and proposed amendments to IFRS (EDs), including the
formation of focus groups to discuss issues arising from EDs, and
collate comments for the timely submission to FRSC
Ongoing Technical Director PICPA Committee on
Website PICPA
members in public
practice, ACPAPP,
Technical Division
48. September
2013
Coordinate with FRSC for timely submission of the approved
IFRS to PRC BOA for final adoption.
Ongoing PICPA Board VP for Public Practice,
ACPAPP, PRC, BOA
49. September
2013
Assist FRSC in the exposure and distribution of exposure newly
adopted IFRS and amendments to these, to stakeholders and
users of financial information.
Ongoing PICPA President,
Technical Director
PICPA Committee on
Website PICPA
members in public
practice, ACPAPP
50. September
2013

Conduct seminars on the content and applications of updates on
IFRS.
Ongoing Training Director Training Division,
Chapter presidents,
ACPAE, ACPAPP,
ACPACI
51. September
2013
Coordinate with the officers ACPAPP and ACPACI in the
nationwide dissemination and information campaign for newly
adopted IFRS and amendments.
Ongoing Training Division Chapter presidents,
ACPAPP, ACPACI
52. September
2013
Coordinate with the officers ACPAE in the nationwide
dissemination and information campaign for newly adopted IFRS
and amendments.
Ongoing Training Division ACPAE, PICPA
members in the
academe
53. September
2013
Form discussion groups to tackle issues arising from IFRS and
amendments.
Ongoing Technical Division Committee on
Professional
Development
Status as of Date of Publication Page 19 of 20
Action Plan Developed by
Philippine Institute of Certified Public Accountants (PICPA)

# Start Date Actions Completion
Date
Responsibility Resource
54. October 2012

Perform periodic review of PICPAs response to the IFAC
Compliance Self-Assessment questionnaires and update
sections relevant to SMO 7 as necessary.
Quarterly
Ongoing
PICPA Executive
Director
FRSC, PICPA
Committee on
Professional
Development


Status as of Date of Publication Page 20 of 20