Claire Ann M.

Lagcao
A-331 Internal Auditing (Auditing and Assurance Principles)

1. What does an accountant need to fulfill to be eligible to practice public accounting in

the Philippines?

 Must be a natural-born Filipino citizen and resident;

 Must be a validly registered Certified Public Accountant having at least ten
(10) years of experience in any field of accounting practice.
 Must be of excellent moral character and have never been convicted of moral
turpitude; and (d) He or she must not have a financial interest, either directly
or indirectly, in any school, college, university, or institution conferring an
academic degree required for admission to the practice of accountancy, or
where review classes in preparation for the licensure examination are offered
or conducted, nor shall he or she be a member of the faculty or administration
thereof at the time of his or her appointment.

2. What are the requirements to maintain accreditation to practice public accounting?

A recognized certification certificate from the Board of Accountancy is

required for everyone who wishes to engage in the practice of public accounting,
including staff members and partner organizations as well as individual practitioners,
business owners, or partnership members. This certificate must be presented
following the completion of at least three years of professional experience in any
area of public practice in the accounting business, which includes taxation, and after
the registrant has complied with all rules and regulations. This accreditation must be
updated every three years to ensure that their knowledge and experience keep up
with the changes and revisions in laws and rules. The applicant will be able to renew
this accreditation certificate only if he or she is a registered individual as defined by
Philippine law, has used good governance and internal quality control, including
strict adherence to ethical standards, has not filed any illegal cases against the
courts, and, most importantly, has complied with Continuing Professional
Development requirements.

3. Why are public accountants regulated as to promotions that they can do?

Excessive competition between and among practitioners might result from

advertising, causing a decline in service quality. A practitioner, for example, may
charge a lesser fee to a consumer than another practitioner, but the quality of his or
her services may deteriorate as a result. He or she may not perform well on the
exam. Advertising would foster a more commercial approach inside the profession,
reducing client trust in CPAs and increasing the risk that CPAs would fail to meet
their ethical commitments. Practitioners may exaggerate their abilities to clients in
order to appear more appealing, as well as comparing themselves to other
Claire Ann M. Lagcao
A-331 Internal Auditing (Auditing and Assurance Principles)

practitioners of the work they have done, even if they are unable of carrying out their
tasks.

4. What are the allowable ways of advertising and promotion in the profession?

The Code of Ethics prohibits CPAs from soliciting clients, therefore according
to Cabrera and Cabrera (2020), these clients are frequently acquired through
referrals, such as from business owners who actively participate in local and
community relations. It might also be customer testimonials if he maintains his
services with sincerity and integrity, as well as giving prompt and exceptional
customer service to them. Maintaining high standards can lead to referrals from
financial and government entities, active engagement in various professional
organizations can lead to recommendations from other public accounting
companies, and references from legal and other professional enterprises can be
obtained. Moreover, by making an amazing website. It should be easy to use and
provide information about the accounting firm, such as the kinds of accounting
services it offers and the kinds of clients it works with. It is important to list
professional affiliations and firm accomplishments. Mention the credentials of your
staff members, such as their specialized training and professional certifications that
may be of interest to a potential client. Remember to provide your contact
information as well as directions.

5. What are the acceptable means of determining professional fees and methods of
billing clients?

Contingency fees are widely used for certain types of non-assurance. In

certain cases, a professional accountant in public practice may get a referral fee or
commission relating to a customer. In the event that a professional accountant in
public practice is unable to provide the requested service, for example, a charge
may be paid for referring a steadfast customer to another professional accountant in
public practice or another expert.
A professional accountant in public practice may get a commission from a third party
(for example, a software vendor) in connection with the sale of goods or services to
a client. Accepting a referral fee or commission jeopardizes neutrality, professional
competence, and due care.
Moreover, these are the methods of Billing Clients:
Claire Ann M. Lagcao
A-331 Internal Auditing (Auditing and Assurance Principles)

 Hourly Billing – The hourly billing method does exactly what it says: it charges
the client an hourly cost based on the amount of time it takes to complete the
service or project. This method is subject to the client's limited control and carries
the majority of the risk. It almost seems as if the client and the accounting firm
are at odds.
 Flat-Fee Billing – Under flat-fee billing, the accounting firm predicts the number of
hours it will take to complete a project and multiplies it by the hourly rate. Both
sides agree in advance on the project's cost and the charge is fixed. The risk is
assumed by the corporation in this situation.
 Retainer-Based Billing – You might not be accustomed to retainer-based billing.
Traditional retainer-based billing comprises collecting a deposit in advance and
billing against it. After you've exhausted the deposit, you'll request another
retainer from the client. Retainer-based charging is a billing strategy used by
digital agencies.
 Value-Based Billing – The value-based billing technique is distinct from all others
in that it does not require the usage of hours. It is based on the value notion. In
particular, focus on the overall value you provide to the client regardless of the
number of hours the task takes.
Claire Ann M. Lagcao
A-331 Internal Auditing (Auditing and Assurance Principles)

Sources:

Cabrera, M. & Cabrera G. (2020). Principles of Auditing and Assurance Services.

Recto Avenue, Sampaloc Manila, Philippines. Gic Enterprises & Co., INC.

Curated content. (2019. Nov 7). 4 Ways to Bill Clients

https://accountingweekly.com/4-ways-to-bill-clients/
Otis, M. How to Advertise an Accounting Firm
https://smallbusiness.chron.com/accounting-firm-promotion-strategy
21230.html
PICPA. SEC. 6. Qualifications of Members of the Professional Regulatory Board
http://www.picpa.com.ph/attachment/6920169527387.pdf PICPA. Sec 240
Fees and Other Types of Remuneration
http://picpa.com.ph/attachment/21720171215650.pdf
Scribd. Rules and Regulations on advertising for the Philippines accountancy
profession.https://www.scribd.com/document/169293800/Advertising-for-
CPApractitioners#:~:text=RULES%20AND%20REGULATIONS%20ON%2
0ADVERTISING,unethical%20in%20the%20Accountancy%20Profession