Hey BSA 2 Students !

It’s 2021, do you know what it

takes to be an ACCOUNTANT
these days!
 ACAUD 2247
The Public Accounting Profession
Environment
Part 2

Join me in PRAYER
 The prayer
Lord, that I may think what
you want me to think
That I may love what you
want me to love
That I may speak what you
want me to speak
That I may act the way you
want me to act
This is my only ambition Lord.
St. Ignatius de Loyola – pray for us
St. Pedro Poveda – pray for us
(a) Advanced professional education pursued
at academic institutions or through programs
of professional bodies
(b) On-the-job training & experience programs

(c) On-the-job training

(d) Continuing professional education (CPE)

or Continuing professional development
(CPD) courses & activities.
Integrity Objectivity

Competence Commitment to
Excellence
Lifelong
Learning CORE Relevance in
VALUES the Global
Marketplace
Communication Skills
Leadership Skills

Critical-thinking & Problem-Solving Skills

Anticipating & Serving Evolving Needs

Synthesizing Intelligence to Insight

Integration & Collaboration
that Influence
the Profession
 Approved in Munich 1977
Membership in IFAC includes
membership in the International
Accounting Standards Board (IASB)

-  International Auditing Practices

-  Membership
-  Public Sector

- Education
- Ethics
- Information Technology
- Financial Management Accounting
.
Generally Accepted Audi0ng Standards (GAAS)
Sets the minimum standards of auditor’s performance

General Standards of Standards

Standards Fieldwork of Repor0ng
https://aasc.org.ph/about/about-aasc.php
Chairman (+17 members)
1
Board of Accountancy 1
Securities & Exchange Commission 1
Bangko Sentral ng Pilipinas 1
Commission on Audit 1
Associations of CPAs in Public Practice 1
PICPA in Public Practice 9
Commerce & Industry 1
Academe/Education 1
Government 1
17
Lawsuits against the AUDITORS:
1)  Improper or inadequate disclosure
2)  Inappropriate valuation
Lawsuits against the CPA Firms
involving claims that the auditor
1)  Did not discover an employee defalcation
(theft of assets) as result of negligence in
the conduct of the audit
2) Did not complete the audit on the agreed
date
3) Inappropriate withdrawal from the audit
 Ordinary Negligence
a.  Due professional care
b.  Sources of responsibility
c.  Degree of wrongdoing
d.  Lack of privileged
communication
e. Liability for acts of others
Gross Negligence
 Ordinary Negligence
a.  Due professional care
b.  Sources of responsibility
c.  Degree of wrongdoing
d.  Lack of privileged
communication
e. Liability for acts of others
Gross Negligence
Limitation on Auditor’s Responsibility
PSA 240 Auditor’s liability to
(a)  He believes fraud may exist clients
even if the potential effect on
the financial information would Auditor’s liability to
be immaterial third parties
(b) Fraud or significant error is
actually found to exist.
 AUDITOR’S DEFENSE AGAINST THIRD-
PARTY LAWSUITS
Non-negligent performance
Audited was conducted in accordance with PSAs

Privity of contract
means limitations of liability stated in the contract

Absence of Causal Connection

proof of close causal connection of breach of contract

Statute limitations on the action has expired.

MINIMIZING EXPOSURE TO LEGAL LIABILITY

1.  Compliance with standards

2.  Evaluate client’s integrity
3.  Avoid firms exposed to risk
of litigation 7. Professional skepticism
4.  Extreme care for clients in 8. Consult with experienced
auditors
financial difficulties
9. Maintain professional
5.  Establish appropriate quality
liability insurance
control in audit work 10. Seek legal counsel
6.  Use engagement letters
Addressing the issues on the expectation gap of
the CPA’s performance, public regulations…
Passing the CPA Licensure Exam is awarded to a select few –
those who really deserve it.
Yes, symbol of excellence, emblem of achievement & a shout
out: “My Child, I am with you all the way’.