1. What makes the banking industry a specialized industry?

Let's define the banking industry first. The banking industry is made up of

financial institutions that help people manage their money effectively. Individuals

also use banks to save money for investments in the future or for other purposes

that can generate interest payments. Alternatively, this industry assists

individuals in need by lending them money, which must be repaid in accordance

with the conditions and timetable established by the parties, when they need it for

an emergency or prospective occurrences. Finally, explain what a specialist

industry is. It has unique accounting and reporting procedures. Hence, having its

own accounting rules for how to record and account for transactions done in

banks makes the banking sector a specialized industry.

2. What is the main regulatory agency that regulates the banking industry in

the Philippines? Give at least one of the regulations of this agency.

The Bangko Sentral ng Pilipinas is the primary regulatory body in charge of

overseeing the Philippine banking sector. The Electronic Commerce Act of 2000,

Republic Act No. 8792, is one of the BSP's regulations. Its objectives are to facilitate

domestic and international dealings, transactions, arrangements, agreements,

contracts, exchanges, and information storage using electronic, optical, and similar

medium, mode, instrumentality, and technology, to recognize the authenticity and

reliability of electronic documents related to such activities, and to advance the

universal acceptance of electronic documents. Another is the REPUBLIC ACT NO.

 11127 AN ACT PROVIDING FOR THE REGULATION AND SUPERVISION OF

PAYMENT SYSTEMS, which states that the state shall encourage, through the

Bangko Sentral, the safe, secure, efficient, and reliable operation of payment

systems to control systemic risk and provide a setting that is favorable to the

economy's sustainable growth. This regulation was enacted by the Bangko Sentral

ng Pilipinas to uphold and improve the effectiveness of the laws pertaining to money

and to assist everyone in making financially responsible decisions.

3. Give at least three differences of thrift banks and rural banks/cooperative

banks.

First, their natures differ. For instance, thrift banks are designed for saving money and

are primarily concerned with saving. In addition to providing short-term operating

capital, medium-term financing, and long-term financing, thrift banks also collect and

invest the savings of its depositors. Rural and cooperative organizations, on the other

hand, focus more on providing financial services to their communities by purchasing

goods from farmers up until the commercialization of their production than on saving

money or investing deposit funds. The sole distinction between rural banks and

cooperative banks in terms of their operations is ownership rural banks are held by the

private sector, whereas cooperative banks were originally owned by cooperatives. At

thrift banks, the term is also longer when someone makes a deposit or a loan, in

contrast to rural and cooperative banks, which have shorter term options. Finally, co-

operative banks have members who are connected to one another. They assist those

who are unfamiliar with the process and mentor them to become knowledgeable, or, to
put it simply, there are others involved in transactions and the process rather than just

you.

4. What is AASC Alert No. 001 S. of 2021? What is its significance to external

auditors?

The SEC issued Memorandum Circular No. 32, Series of 2020 (hereinafter referred to

as "the Circular"), which outlines the adoption of an industry-specific framework for

Bangko Sentral ng Pilipinas (BSP) Regulated Financial Institutions (BSFIs), to be known

as the Philippine Financial Reporting Standards (PFRS), as modified by the application

of the financial reporting reliefs issued by the BSP and approved by the SEC.

Considering this, BSP’s have the choice to prepare their annual financial statements in

accordance with the specified industry-specific framework or in accordance with the

entire PFRS for the time period and conditions permitted by the BSP.

It is important for the external auditors since it enables them to follow a framework

created by the BSP specifically for their industry when applying financial reporting.

Because it is based on Philippine standards for auditing, which external auditors should

remember when they inspect other businesses. To ensure that they don't make errors

that can occasionally result in loss or damage, but with the aid of this AASC No. 001 it

becomes essential to become more effective and efficient external auditors whenever

judgments are made.