CHAPTER 1:

PROFESSIONAL
PRACTICE OF
ACCOUNTANCY
 “
Q: What is the Role of the
Professional Accountancy in
the Economy?
 CHAPTER 1
ACCOUNTANCY AS A PROFESSION
In our society, professionals are generally recognized as elite occupational
classifications. Earnest Greenwood in his article Attributes of a Profession
(1975) sets forth five major characteristics of a idea profession. These are:

• Systematic Theory
• Professional Authority
• Community Sanction
• Regulations Code
• Culture
 ACCOUNTANCY AS A PROFESSION

SYSTEMATIC THEORY

— The underlying theory of the public accounting

profession consists of accounting theory - financial
accounting and reporting standards and practices and
auditing standards - a science of validation.

— Science in systematic theory can be achieved best

through formal college-level education in an academic
environment.
 ACCOUNTANCY AS A PROFESSION

PROFESSIONAL AUTHORITY

— The basis for the professional accountant’s (CPA’s)

authority is his expertise in the systematic theory of
accounting and auditing.
 ACCOUNTANCY AS A PROFESSION

COMMUNITY SANCTION

— Admission to the public accounting profession is

controlled.
— government educational and experience requirements
— CPA Licensure Board Examinations
 ACCOUNTANCY AS A PROFESSION

REGULATIONS CODE

— The powers and privileges granted to the public

accounting profession by the community effectively
constitute a monopoly. To prevent abuse of this monopoly
and to discipline its members, the Rules of Professional
Conduct or Code of Ethics have been promulgated and
made legally binding through the Accountancy Law.
 ACCOUNTANCY AS A PROFESSION

A CULTURE

— Professional culture as evidenced by such factors as

the formal norms of the code of ethics, the informal rules
that guides relationships among practitioners and the
traditions and myths that have arisen concerning the CPA
examination.
 “
Q: Who is a Professional
Accountant?
 CHAPTER 1
PROFESSIONAL ACCOUNTANT
A professional accountant is an individual who holds a valide certificate
issued by the Boards of Accountancy (CPA), whether he/she be in public
practice, industry, commerce, the public sector or education. This
professional accountant may belong to any of the following sectors:
Professional Accountant in Public Practice
Professional Accountant in Business
— commerce and industry;
— education; and
— government
 “
Q: What is the Scope of the
Practice of Accountancy
Profession?
 CHAPTER 1
SCOPE OF PRACTICE
The Philippine Accountancy Act of 2004 (R.A. 9298) Article I, Section 4,
paragraphs (a) to (d) spell out the scope of the practice of accountancy as
follows:

(a) Practice of Public Accountancy

(b) Practice in Commerce and Industry
(c) Practice in Education/Academe
(d) Practice in the Government
 “
Q: What are the
Requirements to Enter the
Accountancy Profession?
 CHAPTER 1
REQUIREMENTS TO ENTER THE
ACCOUNTANCY PROFESSION
To be able to enter the professional accountancy profession in the
Philippines, an individual should be able to satisfy ALL of the following
requisites:
 REQUIREMENTS TO ENTER THE
ACCOUNTANCY PROFESSION

(a) Be a holder of a degree of Bachelor of Science in

Accountancy (BSA) conferred by a school, college or
institute duly recognized by the Commission on Higher
Education (CHED) or other authorized government office;
 REQUIREMENTS TO ENTER THE
ACCOUNTANCY PROFESSION

(b) Qualify as a professional accountant by passing the

CPA Licensure Board Examination administered by the
Professional Regulatory Board of Accountancy; and
 REQUIREMENTS TO ENTER THE
ACCOUNTANCY PROFESSION

(c) Satisfy all other legal and regulatory requirements

before the individual takes on the role of a professional
accountant.
 CHAPTER 1
A. PRE-QUALIFICATION EDUCATION
REQUIREMENTS
The BSA Program should cover the following:

— Professional Accounting Education

— Professional Skills and General Education
 REQUIREMENTS TO ENTER THE
ACCOUNTANCY PROFESSION

I. Professional Accounting Education

• Accounting Finance and Related Knowledge

• Organizational and Business Knowledge
• Information Technology, Knowledge and
Competencies
 REQUIREMENTS TO ENTER THE
ACCOUNTANCY PROFESSION

II. Professional Skills and General Education

 Intellectual Skills
• Intellectual Skills
• Technical and Functional Skills
• Personal Skills
• Interpersonal and Communication Skills
 REQUIREMENTS TO ENTER THE
ACCOUNTANCY PROFESSION

II. Professional Skills and General Education

 General Skills
• Knowledge of human behavior
• Understanding of ideas and events in history, the
different cultures in today’s world and an
international outlook
• Appreciation of art, literature, science issues and
contracting economic, political and social forces
in the world
• Experience in making value judgments
 REQUIREMENTS TO ENTER THE
ACCOUNTANCY PROFESSION

III. Professional Vales, Ethics and Attitudes

 Values and Attitudes
• Public interest and sensitivity to social
responsibilities
• Continual improvement and lifelong learning
• Reliability, responsibility, timeliness, courtesy
and respect
• Laws and regulations
 REQUIREMENTS TO ENTER THE
ACCOUNTANCY PROFESSION

III. Professional Vales, Ethics and Attitudes

 Professional Ethics
As a minimum. Programs should include:
• Nature of ethics
• Differences of detailed rules – based and
framework approaches to ethics, their advantages
and drawback
• Compliance with the fundamental ethical
principles of integrity, objectivity, commitment to
professional competence and due care and
confidentiality
 REQUIREMENTS TO ENTER THE
ACCOUNTANCY PROFESSION

III. Professional Vales, Ethics and Attitudes

 Professional Ethics
As a minimum. Programs should include:
• Professional behavior and compliance with
technical standards
• Concepts of independence, skepticism,
accountability and public expectations
• Ethics of the profession
• Ethics and law
• Ethics in relation to business and good governance
 REQUIREMENTS TO ENTER THE
ACCOUNTANCY PROFESSION

III. Professional Vales, Ethics and Attitudes

 Professional Ethics
As a minimum. Programs should include:
• Ethics and the individual professional accountant:
whistle-blowing, conflicts of interest, ethical
dilemmas and their resolutions
• Consequences of unethical behavior to the
individual, to the profession, to society at large.
 CHAPTER 1

B. CPA LICENSURE EXAMINATION

The Philippine Accountancy Act of 2004 (R.A. 9298) Article II, Sections
13 to 18 provides fr the requirements for the Examination, Registration and
Licensure for the Practice of Accountancy as follows.

— Qualification of Applicants for the Licensure Examination

— Scope of Examination
— Ratings in the Licensure Examination
 REQUIREMENTS TO ENTER THE
ACCOUNTANCY PROFESSION

I. Qualification of Applicants for the Licensure

Examination
Any person applying for examination shall establish
the following pre-requisites to the satisfaction of the Board
that he/she:
• Is a Filipino citizen;
• Is of good moral character
 REQUIREMENTS TO ENTER THE
ACCOUNTANCY PROFESSION

I. Qualification of Applicants for the Licensure

Examination
Any person applying for examination shall establish
the following pre-requisites to the satisfaction of the Board
that he/she:
• Is a holder of the degree of Bachelor of Science in
Accountancy conferred by a school, college or
institute duly recognized by the Commission on
Higher Education (CHED) or other authorized
government office; and
 REQUIREMENTS TO ENTER THE
ACCOUNTANCY PROFESSION

I. Qualification of Applicants for the Licensure

Examination
Any person applying for examination shall establish
the following pre-requisites to the satisfaction of the Board
that he/she:
• Has not been convicted of any criminal offense
involving moral turpitude.
 REQUIREMENTS TO ENTER THE
ACCOUNTANCY PROFESSION

II. Scope of Examination

The general topics included in the CPA Licensure

Exam (CPALE) are the following:
• Auditing
• Management Advisory Services
• Taxation
• Regulatory Framework for Business Transactions
 REQUIREMENTS TO ENTER THE
ACCOUNTANCY PROFESSION

II. Scope of Examination

The general topics included in the CPA Licensure

Exam (CPALE) are the following:
• Financial Accounting and Reporting
• Advanced Financial Accounting and Reporting
(AFAR)

Note: The Board, subject to the approval of the Commission, may revise
or exclude any of the subjects and their syllabi, and add new ones as the
need arises.
 REQUIREMENTS TO ENTER THE
ACCOUNTANCY PROFESSION
II. Scope of Examination
“Section 16.  Rating in the Licensure Examination. To be qualified as having
passed the licensure examination for accountants, a candidate must obtain a
general average of seventy five percent (75%), with no grade lower than sixty-
five percent (65%) in any given subject. In the event a candidate obtains the
rating of seventy-five percent (75%) and above in at least a majority of subjects
as provided for in this Act, he/she shall receive a conditional credit for the
subjects passed: Provided, That a candidate shall take an examination in the
remaining subjects within two (2) years from preceding examination: Provided,
further, That if the candidate fails to obtain at least a general average of seventy-
five percent (75%) and a rating of at least sixty-five percent (65%) in each of the
subjects reexamined, he/she shall be considered as failed in the entire
examination.”
 REQUIREMENTS TO ENTER THE
ACCOUNTANCY PROFESSION
II. Scope of Examination

Based on the above provision, we can identify different types of candidates:

• Passed
• Failed
• Conditioned

PASSED
A candidate is considered to have passed the examination if he/she obtained a
general average of 75% or more with no grade lower than 65% in any given
subject.
 REQUIREMENTS TO ENTER THE
ACCOUNTANCY PROFESSION
II. Scope of Examination

FAILED
A candidate is considered to have failed the examination if he/she obtained a
general average of less than 75% even if he/she has no grade lower than 65%.

CONDITIONED
A candidate is considered to have been conditioned in the examination if he/she
obtained the following:
• A general average of 75% or above; 
• A majority of his/her subjects has a rating of 75% or above; and
• The remaining subjects obtained a rating of 65% or less  
 CHAPTER 1
C. OTHER LEGAL AND REGULATORY
REQUIREMENTS
I. Oath
II. Issuance of Certificates of Registration and Professional
Identification Card
III. Indication of Certificate of Registration, Identification Card and
Professional Tax Receipt
 CHAPTER 1
DEVELOPING CAPABILITIES AND
COMPETENCIES AFTER ADMISSION
TO THE PROFESSION
Education and development for acquiring and maintaining the
capabilities of professional accountants can include:

(a) Advanced professional education pursued at academic institutions

or through the programs of professional bodies;
(b) On-the-job-training and experience program
 CHAPTER 1
DEVELOPING CAPABILITIES AND
COMPETENCIES AFTER ADMISSION
TO THE PROFESSION
Education and development for acquiring and maintaining the
capabilities of professional accountants can include:

(c) Off-the-job training; and

(d) Continuing professional development (CPD) courses and activities.
 CHAPTER 1
COMPETENCY REQUIREMENTS FOR
PROFESSIONAL ACCOUNTANTS IN PUBLIC
PRACTICE
Education and development for acquiring and maintaining the
capabilities of professional accountants can include:

(c) Off-the-job training; and

(d) Continuing professional development (CPD) courses and activities.
 “
Q: What are the Competency
Requirements for
professional Accountants in
Public Practice?
 “
Q: What are the Competency
Requirements for
professional Accountants in
Business?
 CHAPTER 1

INCREASED GLOBALIZATION OF
ACCOUNTING AND AUDITING
• Global Harmonization of Accounting Standards
• Expanded Accountability
• More Detailed Reporting
• Increased Risk Reporting
• Global Audit Standards
 “
Q: What are the Core Values
and Competencies?
 CHAPTER 1

CORE VALUES AND COMPTENCIES

• Global Harmonization of Accounting Standards
• Expanded Accountability
• More Detailed Reporting
• Increased Risk Reporting
• Global Audit Standards
 THANKS!

Any questions?