mance 44 1 Auating ~ Assurance Principles, Professional Ethics and Good Gove Penal Provision (Sec. 36) Any person who tules and regulations i OF any of its Shall violate any of the provisions of this Act v7 Mem PON conviction, iP @s promulgated by the Board subject peo ae Coming , be punished by a fine of not less than bashes ( 500g, N risonment for a period not exceeding two (2) years, or both. Implementing Rules and Regulations (IRR) shall, uy OF by im inulin ninety (90) days atter the effectivity ofthis Act, with the approval ofthe Comm and in coordination with PICPA, the Board shall adopt and promulgate suc! rules andr lat, {0 carry out the provisions of this Act, The Implementing Rules and Regulations to Raj, % Shall be effective fitteen ( 15) days following its publication in the Official Gazette or in any me daily Newspaper of general circulation. (Sec. 37) Interpretation Of this Act Nothing in this Act shall be construed to effect or Prevent the practice of any other lg, Fecognized profession (Sec, 38) Enforcement of the Act (Sec. 39) The effective enforcement of the provisions of this Act shall be the primary duty of jy Commission and the Board. Upon the request of the Commission or the Board, all the 4, Constituted law enforcement agencies and Officers of the national, provincial, city, muni oF local governments shall Tender assistance in enforcing the provisions of this Act and: Prosecuting its violators. The Secretary of Justice or his representative shall act as legal advise and render legal assistance in carrying out the provisions of this Act. the Commission in filing appropriate charges with the prosecution office in accordance with ia and the rules of court. Funding Provision (Sec. 40) The Chairperson of the Professional Regulation Commission sh, the implementation of this Act in the programs of all immediately incut be included in th the Commission. The necessary funding sé 'e annual General Appropriations Act, Transitory Provisions (Sec. 41) The incumbent chairman and members of the Board No. 692 shall continue to serve i Effectivity (Sec. 44) The Philippine Accountancy Act of 2004 was approved by the President on May 13,20 The Act shall take effect after fifteen (15) days following its publication in the Official Gazette? in any major daily newspaper of general circulation, Other Regulatory Considerations in the Practice of Public Ac In conjunction with the Philippine Accountancy Act of 2004 or considerations in the practice of public accounting in the Philipp — regulation within the audit firm, - quality control (PSA 220); — peer regulation, and — core competencies required in the profession. ‘counting RA9298, the other regu! IN€S pertain to: co The Board shall asst as pe Et GuCHAPTER 3; 4 The Professional Practice of Accounting | 43 jitted by the client. We jocumentS submitted & lorking pay 7 a oc. are prvleged information to be roe oaerS, except tho report submitted by CPA fated with confi ; be produced in any court, tribunal, or government regulatory of edmrwcate tat eee : ‘Accredited professional Organization (Sec. 30) All registered CPAS in the roster of CPAs shall be united and i . integrated thi membership in & one a ee eoeete and accredited national prefoosiona! cfpanzanen metered withthe SEC and recognized by the Board, subjectto the approval the Commission. Accreditation to Practice Public Accountancy (Sec. 31) y CPAs, firms, and partnerships of CPAs, engaged in the practi including partners and staff members, shall register for acctodilh Win te iceman Regulation Commission and the Professional Regulatory Board of Accountancy. The registration for accreditation shall be renewed every three (3) years. The Board shall promulgate the rules and regulations for the implementation of the registration requirements including the fees. and penalties for violations thereof, subject to the approval of the Professional Regulation Commission. Continuing Professional Education (CPE) Program (Sec. 32) AContinuing Professional Education Council is created to implement the CPE program whereby all CPAs are required to abide by the rules and regulations on continuing professional ‘education to be promulgated by the Board, subject to the approval of the Commission, and in coordination with PICPA or any duly accredited educational institution. Seal and Use of Seal (Sec. 33) The auditor's report shall be stamped with the CPA's seal bearing his name, registration number and the title ‘CPA’, the design of which has been prescribed by the Board. The auditor's report shall also bear the CPA's current Professional Tax Receipt (PTR) number, and the date and place of payment thereof. Foreign Reciprocity (Sec. 34) ‘person who is not a citizen of the Philippines may be allowed to practice accountancy in the Philippines, only when he can prove in the manner provided by the rules of court that by specific provision of law, the country ‘of which he is a citizen, subject or national, also admits citizens of the Philippines to the practice of accountancy without restriction. Coverage of Temporary / Special Permits (Sec. 35) Upon the approval of the Commission and the payment of prescribed fees, a temporary ‘special permit may be issued by the Board, toa foreign Certified Public Accountant, who is: per y y a. called for consultation or for a specific purpose essential for the development of the country; b. engaged as a professor, lecturer, or critic in fields essential to the accountancy education in the Philippines; and c. in internationally recognized expert, oF with specialization in any branch of accountancy, and whose service is essential to the advancement of accountancy in the Philippines. The temporary / special permit shall be limited only to the practice of the perl e accountancy for particular work for which the foreign CPA is being engaged, and provided that there is no Filipino CPA who is qualified for such specific purpose and the count admis Fipino eset tote practice of accountancy without restriction fel eae CPA alsoa ¥ Good Governance 42 | Auditing - Assurance Principles, Professional Ethics and @. any unprofessional or unethical conduct; b. malpractice; and violation of the provisions of: RA 9298; IRR to RA 9298; the Code of Ethics for Professional Accountants; and the technical and professional standards of practice for CPAs, (Sec, » Reinstatement, Reissuance and Replacement of Revoked or Lost Certificates i lication, and for reasons deemed ears from date of revocation, upon appl a rm and pase ‘he Board may reinstate the validity of a revoked Certificate of registration, The Board may issue new certificate of registration to replace lost, destroyed or ‘Mutilateg certificates (Sec. 25). Practice of Accountancy (Article Iv) Only a Certified Public Accountant may practice accountanc use the title “Certified Public Accountant’, or use the abbreviated 4) who is practicing accountancy. A single practitioner or a Partnership formed for the Practice of accountancy shall be registered CPAs in the Philippines. (Sec, 28) Prohibition in the Practice of Accountancy No one shall practice accountancy in the Philippines and use the abbreviated title “CPA”, or use any sign to indicate he is practicing accountancy, unless he has a Certificate of registration and a professional identification card; or a Professional license or a valid temporary! Special permit duly issued to him by the Professional Regulatory Board of Accountancy and the Professional Regulation Commission. (Sec, 26) The Securities and Exchange Commission shall not register any Corporation for the practice of Public accountancy. (Sec. 28) Limitation in the Practice of Public Accountancy (Sec. 28) From the effectivity of this Act, certificate of accreditation shall be issued to CPAs in Public practice, in accordance with the rules and regulations Promulgated by the Board and approved by the Commission. The Certificate of registration is issued only when the registrant has shown that he has acquired a minimum of three (3) years meaningful experience in any areas of public practice, including taxation. In the field of Public practice, may be earned as audit assistant for at least one (1) year and as auditor in charge of an audit engagement for at least two (2) years. (IRR Sec, 28 A) Vested Rights of CPAs Already Registered When RA No. 9298 was Passed All CPAs who have already been registered when this Act takes effect, are automatically registered under this Act. The Certificate of registration or professional license held by CPAs of 900d standing when this Act takes effect shall have the same effect as though such certificate of registration was issued after the passage of this Act. (Sec. 27) Sole practitioners and Partnerships for the practice of Public accountancy, already granted a certificate of accreditation Prior to the effectivity of this Act, need not apply for accreditation under this Act. The certificate of accreditation already granted prior to this Act shall have the same effect as though such Certificate of accreditation was issued after the passage of this Act. (Sec. 28) Ownership of Working Papers (Sec. 29) All working papers made by a CPA in the course of an audit examination remain ie Property of the CPA, in the absence of a written agreement to the contrary between the Se cen the client. Working papers include analyses, schedules and memoranda prepared by the CPA, th Fil adCHAPTER 9: 1 he Protesional Practice of Aceounting | Issuance of Certificates of Registration ang p; ana bearing i ngnetires of The chais Sueoeneht @xaminee is given " ‘son ‘ 8 certifics members of the Board. The Certificate of Regitrann: jhe Commission ‘advo Chemens iS Commission and of the Board. The certificate of regiatretion the stamped official «3 uf the thereon is entitled to practice the accounting Protession andy indicates that the pers..n named This certificate shall remain in full force and effect, u ries to the privileges per irr yr Axt Upon registration, the CPA registrant is given a Professor amit Aecordanice wm ths the registration number, date of issuance, and expiry date. The I Identification Card con" ini 7 is duly signed by the Chairperson of the Commission; and is Professional identification card (Sec. 20) : renewable every three (3) years Roster of CPAs The Board shall prepare and update a roster showi all registered CPAs. Copies of the roster shall be raged the names and place of biineee of (Sec. 21). to any party, if deemed necessary The Board, upon the recommendation of the Commi regulations promulgated for the implementation of this Saas nay Goentin ey nee and twahe roster of Certified Public Accountants to the PIGPA: Posting the roster inthe internets deemed compliance with this requirement. (IRR Sec. 21) aa Indications of Certificate, ID Card and PTR in Documents Signed by the CPA oa Aakash eae ee by the CPA in connection with his practice of accountancy, the - Certificate of Registration number, - Date of issuance, and — Duration of validity; including his ~ Professional Tax Receipt Number. (Sec. 22) Refusal to Issue Certificate of Registration and Professional Identification Card The Board shall not register a successful CPA examinee nor issue to him a Professional identification Card, if he: a. has been convicted of a criminal offense involving moral turpitude by a cot competent jurisdiction; or b. _ is guilty of immoral and dishonorable conduct; or ¢. _ is of unsound mind (Sec. 23); or d. has falsely sworn or misrepresented himself in his application for examination. ‘The Board shall give the applicant a written notice to inform him of the reasons for the refusal. This notice shall be included among the records of the Board, The Board shall state the period for the deferment of the registration (IRR Sec. 23) Suspension and Revocation of Certificate of Registration and Professional Identification Card and Cancellation of Special Permit The Board has the power to suspend or revoke the practitioner's certificate of registration and professional identification card, OF suspend him from the practice of the profession, or Cancel his special permit upon due notice and hearing for the just causes or valid grounds Stated in Sec. 23; and for wurt of.d Good Governance Professional Ethics an 40 | Auditing — Assurance Principles, duly accredited by the CHED; and an educational inttuon duly (Sec. 14). Holders of the degren? CCoUr degree from oe eo rime involving mora) Wr re allowed to take the CPA icy not been convicted of any ct in ACCOU Bachelor of Science in Corry period of the Act, that Is, until the year 2006. (Sec. 41) examination during f . 15) ‘Scope of the Examination (Sec. : ue ot Accountancy, with the approval of the Profession The Professional Regulator oor, exclude, or add new subjects and their sylaby, i Regulation Commission. Mat 2A licensure examination. The subjects in the Certified Pubh the subjects coverod By Mminaion are: Theory of Accounts; Business Law and Taxatog aaa it Services; Auditing Theory; Auditing Problems; and Practical Accounting Problem, Vand Il. Rating in the CPA Licensure Examination (Sec. 16) The ratings a candidate may obtain in the CPA examination, are: PASSED: the candidate obtains a general average of at least seventy-five per cent (75%) with no rating lower than sixty-five per cent (65%) in any given subject. the candidate obtains a rating of at least seventy-five per cent (75%) in at least a majority of the subjects, that is, four (4) out of seven a subjects. FAILED: the candidate fails to obtain a general average of at least seventy. five per cent (75%) with ratings below sixty-five per cent (65%) in the majority of the subjects. Re-examination for ‘Conditioned’ Candidates Aconditioned candidate shall take an examination in the ‘Subjects not passed, within two 2) years. he obtains a general average of at least seventy-five per cent (75%) with a rating of at least sixty-five per cent (65%) in each subject re-examined, he shall be considered PASSED, otherwise, he is deemed failed in one (1) complete examination. (Sec. 16) Failing Candidate to Take Refresher Course (Sec. 18) A candidate who has failed in two (2) complete CPA licensure examinations, is disqualified from taking the examination again, unless he can submit to the satisfaction of the Board, evidence that he has enrolled in an accredited educational institution and completed at least twenty-four (24) units of subjects given in the CPA examination Report of Ratings (Sec. 17) Within ten (10) days after the examination, unless extended for just cause, the Board shall submit to the Commission the ratings obtained by each candidate. The Board then uses the mailing envelope submitted by the candidate during the examination and mails to each candidate, the ratings he has received in the CPA examination. CONDITIONED: Oath of Profession (Sec. 19) Before starting the practice of accountancy, all successful examinees are required to take the oath of profession, upon presentation of proof of his qualification; usually the ratings received from the Board. The oath of profession may be administered by any member of the Board, or any government official authorized by the Commission; or the Successful examinee may take the oath of profession before any person authorized by la” to administer oaths.CHAPTER, 3: Th '© Professional Practice of ‘Accounting | ing | 3¢ The Board shall coordinate with the c| ; ( HED to e Se nc pene ar with the standards on cumieuine, ot educational institut facilities. The Board shal supervise the registration, lice, ticulum, faculty, libra \stitutions the country; and.is in charge of administering oaths and i and practice of a ry and other t! iccountancy in i the Certificate istrati le is: or reinstatement of the ate of Registration for the p suance, suspension, revocation ‘1 ractice of __ The Board shall prescribe and adopt rules and regulati f accountancy this Act, and conduct investigations on violations of this lons to carry out the provisions of i i Act, i desist order to violators. The Board shall prescribe penalties for oo summons, and cease or ntempt or other violati ions according to the ; Rules of Court. The rules and regulations subject to the review and approval of the Commission. The Bopagated by the Board are cases shall be subject to review only if on appeal. ard's decision on administrative Administrative Supervision of the Commission (Sec. 10) The Commission shall designate a secretai ; ry for the : secretarial and other support services to implement the ARO Fee Board including applications for examination and administrative and ea ene of the be under the custody of the Commission. PRC exercises administrative superision over 4 Board. Grounds for Suspension or Removal of Members of the Board (Sec. 11) Amember of the Board is given an opportunity to defend himself i ir i ee in a proper administrative investigation conducted by the Commission, and upon the recommendation of the Commission, lent of the Philippines may suspend or remove any member of the Board. the Presid Among the grounds for suspension or removal are: neglect of duty or incompetence; violation or tolerance of violations of this ‘Act and its IRR, or of the Code of Ethics for Professional Accountants, and of the technical and professional standards of accountancy practice; manipulation or rigging ofthe results of, or tampering of the grades in the CPA licensure examination; disclosure of secret and confidential information on the questions in the CPA examination, prior to the conduct of the said examination; and final judgment of crimes involving moral turpitude. Annual Report (Sec. 12) At the close of each calendar through the Commission. The repor accomplishments of the Board during the year. The annual repo! of the Board for the adoption of measures that will upgrade and improve the the practice of public accounting in the Philippines. its an annual report to the President, led account of the proceedings and rt shall include recommendations e conditions affecting year, the Board submit rt shall contain a detail ic Accountant Examination untancy in the Philippines must to the practice of public acco\ i ied ie fant licensure examination that is conducted Commission. The CPA fessional Regulation The Certified Publi All applicants for regi successtully undergo the by the Board, under the sul ervision 0 : i era examination is ‘iver in places and dates designated by the Commission, pursuant to RA 8981 (Sec. 13). The CPA licensure examination is ‘scheduled two (2) times during the year, in May and ‘October; in the ci ila, Baguio, Cebu, Davao, lloilo, Legaspi, and Cagayan ities of Mani de Oro. Qualifications of Applicants for Exal PA licensu! enship mination re examination good moral should establish to the satisfaction of licant for the CI An appli | character; a Bachelor of Science in the Board that he has Filipino citiz38 | Auditing - Assurance Principles, Professional Ethics and Good Governance - coordinating with external auditors in the audit of financial statements; (IRR Sec. 4) - budgeting; — tax administration, and — internal auditing. (IRR Sec. 28(A) An individual is considered as practicing accounting in the academe, when is betralad Fundamentals of Accounting, Financial Accounting, Auditing Theory, Auditing J "0 lems, Financial Management, Management Advisory Services, Finance, Business Law and Taxation, and other technically-related subjects. An individual is deemed to be in the practice of accounting in the government when he: an accounting professional group in the a. holds is sition in Is or is appointed to a posit .d or government - controlled corporation; government, or in the government-ownet L b. . performs proprietary functions or is involved in decision-making requiring professional knowledge in accounting; ¢. holds a position requiring a civil service eligibility as a CPA. Professional Regulatory Board of Accountancy (Article Il) The Professional Regulatory Board of Accountancy, referred to as the Board or BOA, is under the supervision of the Professional Regulation Commission. The Board is composed of a chairman and six members appointed by the President of the Philippines. (Sec.5) A member of the Board must be a natural-born citizen and resident of the Philippines. He must be a duly registered CPA with at least ten (10) years experience in any scope of the practice of accountancy. He must be of good moral character and have not been convicted of crimes involving moral turpitude. He must not have pecuniary interest or be connected, directly or indirectly, with any educational institution offering the academic degree or review classes in preparation for the CPA licensure examination. (Sec. 6) The term of office of the chairman and members of the Board is three (3) years, which shall not exceed two terms; with eligibility for reappointment after a lapse of one year. (Sec. 7) The compensation and allowances given the Chairman and members of the Board shall be comparable to amounts received by the Chairman and members of other existing regulatory boards under the supervision of the Commission, as provided for in the General Appropriations Act. (Sec. 8) Powers and Functions of the Board (Sec. 9) The Board shall adopt an official seal. The Board shall prescribe and adopt a Code of Ethics for the practice of accountancy. The Board shall monitor the conditions that affect accounting practice, including the promulgation of standards, rules and regulations, and best practices deemed proper for the enhancement and maintenance of high professional, ethical, accounting and auditing standards. The Board shall conduct an oversight into the quality of audits of financial statements through a review of the quality control measures instituted by auditors, in order to ensure compliance with accounting and auditing standards and practices. The Board shalll prepare, adopt, issue or amend he syllabi of the subjects for examination in consultation with the academe; and determine and prepare questions for the licensure examination which shall strictly be within the scope of the syllabi of the subjects for examinations, as well as administer, correct and release the results of the licensure examination.Scope of the practice of accountancy (5€C. 4) ACPA may be engaged in the public practice of accounting; or in the practice of accounting in commerce and industry; in the academe or in the government. ACPA may engage in public accounting in one or more sectors of the practice. An individual is deemed to be engaged in the public practice of accounting when he: a. holds himself as skilled in the knowledge, science and practice of accounting whether in his individual capacity or as partner or staff member in an accounting or auditing firm; and holds himself as qualified to render professional services as a Certified Public Accountant, offering or rendering any or all of these services for a fee: auditing or the verification of financial transactions and accounting records; preparation, signing or certification of financial reports for credit or other purposes; design, installation and revision of accounting system; — preparation of income tax returns; representation of clients in tax or other accounting-related matters; and professional assistance on accounting procedures, recording and presentation of financial information. An individual is deemed as practicing accounting in commerce and industry, when he: a. is involved in decision-making requiring knowledge in accounting, finance and taxation; represents his employer before government agencies on tax and other matters related to accounting (IRR Sec. 4); and holds a position, the holder of which should be a CPA, where such position may involve: — recording financial transactions; — preparation of financial statements;