PROFESSIONAL

PRACTICE OF
ACCOUNTANCY
 ROLE OF THE PROFESSIONAL
ACCOUNTANT IN THE ECONOMY

Professional accountants in both commerce and industry and public

accounting sectors must understand how organizations are governed and
the key information that boards utilize to ensure that organizations are
managed properly.
ACCOUNTANCY AS A PROFESSION

ATTRIBUTES OF A PROFESSION (195)

ERNEST GREENWOOD
■ Systematic Theory
 Financial Accounting and Reporting standards and practices and
auditing standards
 College level education
■ Professional Authority
 Expertise in the systematic theory of accounting and auditing
■ Community Sanction
 CPA Licensure Board Examination
■ Regulations Code
 Rules of Professional Conduct or Code of Ethics have been
promulgated and made legally binding through the Accountancy Law.
■ A Culture
 Accounting has developed a professional culture as evidenced by
such factors as the formal norms of the code of ethics, the informal
rules that guide relationships among practitioners and the traditions
and myths that have arisen concerning the CPA Examination.
 WHO IS A PROFESSIONAL
ACCOUNTANT?
A professional accountant is an individual who holds a valid
certificate issued by the Board of Accountancy (i.e., Certified Public of
Accountant), whether he/she be in public practice, industry, commerce, the
public sector or education.
 SCOPE OF PRACTICE

a) Practice of Public Accountancy.

b) Practice in Commerce and Industry.
c) Practice in Education/Academe.
d) Practice in the Government.
Practice of Public Accountancy.
■ This shall constitute a person, be it his/her
individual capacity,
■ or as a staff member in an accounting or
auditing firm,
■ holding out himself/herself as one skilled in the
knowledge, science and practice of accounting,
■ and as a qualified person to render professional
services as a certified public accountant;
Practice of Public Accountancy.
■ or offering or rendering, or both or more than
one client on a fee basis or otherwise, services as
such as the audit or verification of financial
transaction and accounting records;
■ or the preparation, signing, or certification for
clients of reports of audit, balance sheet, and
other financial, accounting and related
schedules, exhibits, statement of reports which
are to be used for publication or for credit
purposes,
Practice of Public Accountancy.

■ or to be filed with a court or government agency,

■ or to be used for any other purposes; or to design,
installation, and revision of accounting system;
■ or the preparation of income tax returns when related
to accounting procedures;
■ or when he/she represent clients before government
agencies on tax and other matters relating to
accounting or render professional assistance in
matters relating to accounting procedures and the
recording and presentation of financial facts or data.
Practice in Commerce and Industry.

This shall constitute in a person involved in

decision making requiring professional
knowledge in the science of accounting, or when
such employment or position requires that the
holder thereof must be a certified public
accountant.
Practice in Commerce and Industry.

The Board of Accountancy (BoA) has signed Resolution

No. 03 of 2016 dated 19 January 2016 requiring the
submission of a Certificate by the responsible Certified
Public Accountant on the Compilation Services for the
preparation of the financial statements and notes to the
financial statements (the “Resolution”). This Resolution
is effective for financial statements pertaining to year
2015.
Practice in Commerce and Industry.

The Resolution reiterates the responsibilities of clients

and external auditors in the preparation of the financial
statements and notes to the financial statements
promulgated by the Code of Ethics for Certified Public
Accountants.
Practice in Commerce and Industry.

Based on the Resolution, the preparation and presentation of financial

information of an organization is a practice of accountancy in
commerce and industry, and therefore prepared by a CPA who is
either employed by an organization, or contracted by an organization
but not the same CPA rendering attest services to such organization.
Practice in Commerce and Industry.

Such CPA who prepares the financial statements and notes to

financial statements should be accredited by BoA after submitting the
necessary application requirements prescribed by existing rules and
regulations.
Practice in Education/Academe.

This shall constitute in a person in an educational

institution which involve teaching of accounting,
auditing, management advisory services, finance,
business law, taxation and other technically
related subject: Provided, That members of the
Integrated Bar of the Philippines may be allowed
to teach business law and taxation subjects.
Practice in the Government.

This shall constitute in a person who holds, or is appointed

to, a position in an accounting professional group in
government or in an government-owned and/or controlled
corporation, including those performing proprietary
functions, where decision making requires professional
knowledge in the science of accounting, or where a civil
service eligibility as a certified public accountant is a
prerequisite.
PRE-QUALIFICATION EDUCATION
REQUIREMENTS
 REQUIREMENTS TO ENTER THE
ACCOUNTANCY PROFESSION
a) Be a degree holder of Bachelor of Science in Accountancy (BSA)
i. Professional Accounting Education
ii. Professional Skills and General Education
iii. Professional Values, Ethics and Attitudes
b) Qualify as a professional accountant by passing the CPA Licensure
Board Examination
i. Qualification of Applicants for the Licensure Examinations
ii. Scope of Examination
iii. Rating in the Licensure Examination

c) Satisfy all 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
Qualification of Applicants for the L
icensure Examinations
Any person applying for examination shall establish the following
pre-requisites to the satisfaction of the Board that he/she:
a) Is a Filipino citizen;
b) Is of good moral character;
c) Is a holder of the degree of BSA conferred by a school,
college, academy or institute duly recognized and/or
accredited by the CHED or other authorized government
offices; and
d) Has not been convicted of any criminal offense involving
moral turpitude.
 Scope of Examination
As per PRC-BOA Resolution No. 262, Series of 2015, the licensure for
certified public accountants shall cover, but are not limited to, the
following six (6) subjects:
1) Financial Accounting and Reporting
2) Advanced Financial Accounting and Reporting
3) Management Advisory Services
4) Auditing
5) Taxation
6) Regulatory Framework for Business Transaction
Rating in the Board
Examination
■ A candidate must obtain a general average of 75%
■ With no grade lower than 65% in any given subject
■ In the event a candidate obtains a rating of 75% and above in at least a
majority of subject tested, he/she shall receive a conditional credit for
the subjects passed
■ Provided that such candidate shall take an examination in the
remaining subjects within two years from the preceding examination.
Rating in the Board
Examination
■ If the candidate fails to obtain at least a general average of 75% and a
rating of at least 65% in each of the subjects reexamined, he/she shall
be considered as failed in the entire examination.
■ The original exam and the removal exam are counted as one exam
only.
■ Any candidate who fails in 2 complete CPA Board shall be
disqualified from taking another set of examinations unless he/she
submits evidence to the satisfaction of the board that he/she enrolled in
and completed a refresher course composed of at least 24 units of
subjects given in the licensure examinations.
 DEVELOPING CAPABILITIES AND
COMPETENCE 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 programs of professional bodies;
b) On-the-job-training and experience programs;
c) Off-the-job-training; and
d) Continuing professional development (CPD) courses and activities.
 COMPETENCY REQUIREMENTS FOR
PROFESSIONAL ACCOUNTANTS IN PUBLIC
PRACTICE
A. Knowledge Content
 Within the education and development program for audit
professionals
 Audit of historical financial information
 Financial accounting and reporting
 Information technology
B. Practical Experience
 COMPETENCY REQUIREMENTS FOR
PROFESSIONAL ACCOUNTANTS IN BUSINESS

The five different areas that the professional accountant’s mindset needs to
embrace include:
1. Professionalism and Ethical Behavior
2. Professional Judgment
3. Organizational and Environmental Awareness
4. An Investor and Wider Stakeholder Focus
5. Change, Uncertainty and Complexity
 INCREASED IN GLOBALIZATION OF
ACCOUNTING AND AUDITING

■ Global Harmonization of Accounting Standards

■ Expanded Accountability
■ More Detailed Reporting
■ Increased in Risk Reporting
■ Global Audit Standards
 CPA HORIZONS 2025: A ROAD MAP
FOR THE FUTURE
A research project conducted by the AICPA in 2011 on what is on the
horizon for CPAs and the accounting profession – “CPA Horizons 2025”
was released and published in the Journal of Accountancy, December,
2011. Key findings includes:

■ CPAs overwhelmingly agreed that the profession’s core purpose,

“Making sense of a changing and complex world,” remains relevant
today and for the future.
■ The profession’s core values remained substantially unchanged
■ The profession’s core competencies evolved to reflect the 21st century.
■ The services provided by CPAs have become so varied and diverse that
the concept of core services is no longer representative of the profession.
 TEN (10) INSIGHTS AND
DIRECTIONS
1. Technology
 Understand and leverage relevant technology in conjunction with core
CPA competencies to deliver superior services.
2. Pre-certification and Lifelong Learning
 Evolve the educational framework to keep pace with the changing
dynamics of business, government and our profession.
3. Worldwide Profession
 Position the CPA as a premier designation of the accounting and
finance profession throughout the world.
4. Pride in the Profession
 Encourage pride among CPAs in the CPA profession and in the value
CPAs create throughout society.
5. Trusted Attester
 Preserve the role of the CPA as the trusted attester of financial and
other information.
6. Trusted Advisor
 Promote the CPA as the trusted advisor who, in addition to providing
core CPA services, develops solutions to complex problems by
integrating knowledge, expertise and resources from multiple
disciplines.
7. Market Permissions
 Leverage the strengths of the profession to expand market
permissions.
8. Marketplace
 Address continual changes in the marketplace, economy, businesses
and regulations.
9. Value Proposition
 Increase the visibility of the profession’s value proposition by
demonstrating the profession’s core values in multiple areas of
business and society.
10. Demographic Shifts
 Continue to offer opportunities that enhance the profession’s appeal
and be proactive in addressing both local and global demographic
shifts.
CORE VALUES AND COMPETENCIES

Core Values
 Core values of the CPA profession are the essential and
enduring beliefs that it upholds over time. Core values
enable CPAs to retain their unique character and value as
they embrace the changing dynamics of the global economy.
 Integrity
 Competence
 Lifelong Learning
 Objectivity
 Commitment to Excellence
 Relevance in the Global Marketplace
Core Competencies
 Core competencies are a unique combination of human skills,
knowledge and technology that provides value and results to
the user. Enhancing the profession’s core competencies is key
to sustaining a competitive and differential advantage in the
marketplace.
 Communication Skills
 Leadership Skills
 Critical-Thinking and Problem-Solving Skills
 Anticipating and Serving Evolving Needs
 Synthesizing Intelligence to Insight
 Integration and Collaboration
Professional Organization

■ PICPA
■ National Association of CPA’s in Education
(NACPAE)
MUTUAL RECOGNITION
ARRANGEMENT
(MRA) ON ACCOUNTANCY
SERVICES