Regulation of Accounting

Profession
Sectors of Accounting Profession
1. Public practice

A person holding out as one skilled in the practice of accountancy

Qualified person to render professional services as a CPA

Mas mabilis ang turnover or pagalis ng tao.

2. Commerce and industry

A person involved in decision-making requiring professional knowledge in

accountancy

3. Government Practice

A person who holds or is appointed to a position related to accounting in any

government or in a government-owned and/or controlled corporation

No need to take Civil service exam if you're already a CPA

4. Education and Academe

Those who will teach acct, business law, auditing, and taxation it may be
taught by a CPA or Lawyer or CPA Lawyer.

A person in an educational institution which involve teaching of acct.,

auditing, business law and taxation courses.

PUBLIC SECTOR

Is the prominent sector in the practice of accounting profession as most of the

CPAs engage in public practice after passing the exam.

in terms of human resources turnover or those who stay is very low or mabilis ang
pagpapalit ng mga tao kahit maraming pumapasok, marami rin ang lumalabas.

In assurance services, the CPAs are required to give an opinion.

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 COMMERCE AND INDUSTRY

also known as private practice

the cpa s part of the decision making of the organization; thinking of techniques
and methods to increase the value of the company.

You can practice in more than one sector

GOVERNMENT PRACTICE

A professional accountant is an accountant that holds or is appointed to a position

related to accounting to any government, government related or subsidiary, you
are in the government practice.

CPALE passed, equivalent to civil service exam

ACADEME

Teaching tax, accounting, audit and even business law

it is in the standards that those who will teach those subjects, must be a CPA or
lawyer for business law.

Republic Act 9298: Philippine Accountancy Act of 2004

Reference when you need legal advice on your profession; everything about the
legality of the profession is here. From your degree program to you becoming a
CPA.

The standardization and regulation of accounting education;

examination for registration of CPAs; and

The supervision, control, and regulation of the practice of accountancy in the

Philippines.

The primary agency that implements the standardization is CHED.

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 Financial Reporting standards and engagement
Standards

Philippines is a member of International Federation of Accountants (IFAC) we are

bound to follow whatever standard they will be implementing, crafting or making.

Under IFAC, there are four boards.

Under IFRS Foundation there is only one board. IFAC (International Federation of
Accountants; for profit) and IFRS(non-profit) are separate organizations but the IFRS
consults to IFAC.
IFRS creates a board who will craft International accounting standards to be used by
the member countries of the IFAC.

For accounting standards:

Under IFRS foundation is:

International Accounting standards board formerly known as International

Accounting standards Committee —> international accounting standards setter

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 crafting the international financial reporting standards to be used by the member
countries of IFAC.

Counterpart of IASB in the Philippines:

FRSC Financial Reporting Standards Council formerly known as Accounting

standards Council

🗯 must be in conformance with GAAP

For auditing standards:

Under IFAC is:

International Auditing and Assurance Standards Board (IAASB) formerly known as

Int'l Auditing Practices Committee (IAPC) directly under IFAC. —> they are the
primary int'l standard setter of auditing and assurance standards to be used and
implemented to the mmember countries of IFAC

Counterpart of IAASB:

AASC Auditing and assurance council formerly known as ASPC Auditing standards
and practices council

🗯 Must comply with GAAS

🗯 FRSC and AASC is under the Board of Accountancy and BOA is under PRC

The BOARD OF ACCOUNTANCY is the primary implementor of RA 9298.

International Federation of Accountants

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 an org that is primarily responsible for the development of auditing standards,
education, public sector, ethics standards that can be used by the member
countries of IFAC

has more than 175 members and associates in more than 130 countries
representing 3 million accountants employed in public practce, industry and
commerce, government, and academe.

supports four independent standard-setting boards.

INDEPENDENT STANDARDS SETTING BOARDS

—> IAASB - implement assurance and non assurance engagement standards.

—> IAESB International Accounting Education Standards Board - guidelines pertaining

to education which is implemented by CHED.

—> IESBA International Ethics Standards Board for Accountants- Walang counterpart
but is generally implemented by BOA
—> IPSASB International Public Sector Accounting Standards Board - government
accounting

Auditing and Assurance Standards Council

formerly known as ASPC

was created by the PRC through the recommendation of BOA to assist them in the
promulgation and establishment of auditing standards in the Philippines.
Promulgation lang kasi we only adopt the international standards.

Composition of AASC
Mimimum membership is 15 but now, we have 18 regular members in AASC with a
term of 3 years renewable for another term.

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 from the website of AASC but under the law, it must have a minimum number of
membership is 15 depending on the recommendation of AASC to PRC.

Members:

1 chairman
1 boa

1 sec

1 Bsp

10 PICPA

7 members from public practice

1 from commerce and industry

1 government

1 Academe/educaton

Current chairman - JUN Cuaresma of Punongbayan and Araullo Grant Thorton

Managing partner and Chief operating Officer his term started on July 1. The term for
AASC chairman is 3 years and is renewable for another term.

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 Under IFRS Foundation

IASB

→ Maximum of 16 members

→ they set technical agenda; approve standards, exposure drafts and

interpretations.

→ Reports directly to IFRS Foundation

IFRS Interpretations Committee

→ IFRS committee reports directly to IASB

International Financial Reporting Standards

Foundation
Is a not-for-profit int'l organization responsible for developing a single set of high
quality, global accounting standards.

IFRS Foundation creates an independent body that will implement and create
accounting standard to its country members. It is composed of the monitoring board,
they set the tone from which the foundation should go and set the direction from which
the foundation should focus.

International Accounting Standards Board

composed of 16 members primarily the creators and interpreters of

international reporting standards.

Directly reports to the IFRS foundation; an independent body

IFRS Interpretations Committee

composed of 14 members

develop minor amendments to an existing IFRS or IAS and how they should be
applied. The interpretations made are subject to the approval of IASB as it

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 reports to IASB.; a committee of the IASB

Advisory Groups

IFRS Advisory Council - approximately 40 members; Advise on agenda and

priorities

Accounting Standards Advisory Forum - provide standard setter technical projects

Working groups - for major agenda projects

Monitoring Board
This is the authority that provides formal link between the Trustees and public
authorities, World bank and other external parties that influences the accounting
standards.

Trustees of the IFRS Foundation

responsible for the governance and oversight of the IASB

IFRS Advisory Council

provides advice and counsel to the trustees and the Board, whilst the board also
consults extensively with a range of other standing advisory bodies.

Accounting Standards Advisory Forum (ASAF)

Provides an advisory forum in which members can constructively contribute
towards the achievement of the IASB's goals

IFRS Interpretations Committee

is the interpretative body of the International Accounting Standards Board which
reviews implementation issues.

Financial Reporting Standards Council

was established by the PRC because under the RA 9298 mandates the creation of
the FRSC but it is under the BOA

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 its main function is to: Establish and implement generally accepted accounting
principles in the Philippines.

Formerly known as ASC or Accounting Standards Council which was created by

PICPA in nov 1981 and PICPA was the only accredited professional organization of
CPAs in the Philippines as they play a vital role primarily in the gov organizations
that supervises and regulates accounting profession here in the Philippines.

Composed of 15 members including its chairman

1 chairman

5 representatives 1 each from BOA, SEC, BSP, COA and BIR

1 from FINEX

8 reps from PICPA 2 from each sector.

Monitors the IASB and the accounting standards being crafted so that the
Philippines could give a comment or suggestion which is made through PICPA.

🗯 Present chairman of FRSC is Josephine Adrienne Abarca from SGV

Philippine Interpretations Committee

subcommittee of FRSC

The ones who interprets how the international accounting pronouncements and
standards issued by IASB be applied in the PH.

To give guidance on how to apply the standards.

Committee of the Financial Reporting Standards composed of:

15 representatives

9 Auditing and Accounting firms

1 from FINEX

1 from academe

1 from SEC

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 1 from BSP

1 from Insurance Commission

1 from BOA

the term is 3 years and can be reappointed and is appointed by the FRSC

Philippine Institute of Certified Public Accountants

(PICPA)
Is the only accredited professional organization of CPAs in the Philippines. You are
required to be a CPA to be a member of PICPA.

PICPA represents Philippine membership with IFAC

Main objective of PICPA:

promote and maintain high professional and ethical standards among accountants

to advance the science of accounting

to develop and improve accountancy education

to encourage cordial relations among accountants, and

to protect the Certificate of Certified Public Accountant granted by the Republic of

the Philippines.

Sectors under PICPA

Sector Organization
Public Practice Association of CPAs in Public Practice (ACPAPP)
Commerce and Industry Association of CPAs in Commerce and Industry (ACPAPI)

Education National Association of CPAs in Education (nACPAE)

Government Government Association of CPAs (GACPA)

A professional accountant can practice in 2 sectors but cannot be a member of 2

sectors. You only have to choose 1 where you are practicing in full time.

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 Government Agencies that Affect Accountancy
Professional Regulation Commission (PRC)
Agency that administers, implements and enforces the regulatory policies of the
Philippine government with respect to the regulation and licensing of various
professions under its jurisdiction.

Commission is headed by a Chairman, and 2 full time commissioners to be

appointed by the President for a term of 7 years without reappointment to start
from the time the assume office. If there's vacancy for example, he only served for 2
years, the person that is appointed to continue his office shall only serve for the
unexpired term which is 5 years for this example.

Professional Regulatory Board of Accountancy

helps PRC to implement and administer RA 9298 involved in registration of CPAs

Composition

Chairman

6 members to be appointed by the President from a list of 3 recommendees

each position ranked by the comission

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 PICPA's submission of nominations must not be later than 60 days before the
expiration of the term of the concerned position

if di nakapagsubmit ang PICPA, proceed sa 2nd step, PRC will be the one to
choose.

From the 3 recommendees, the President will select and appoint from PRC list.

Current members of BOA:

Chairman - Dr. Noe Quinanola

Vice Chairman- Thelma Ciudadano

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 Councils Formed to assist the BOA
Educational Technical Council
Assist the BOA in continuously upgrading accounting education in the Philippines

Composition:
7 members: A chairman

1 Board of Accountancy

Accredited National Professional Organization of CPAs:

→ Public Practice (2)

→ Academe (1)
→ Commerce (1)
→ Government (1)
=6

Quality Review Committee

Conduct an oversight into the quality of the audits of financial statements through
a review of quality control measures instituted by Individual CPAs, firms or

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 partnerships.

Composition:
7 members: A chairman

1 Board of Accountancy

Accredited National Professional Organization of CPAs:

→ Public Practice (2)

→ Academe (1)
→ Commerce (1)
→ Government (1)
=6

PRC CPD Council

Assist the BOA in implementing its Continuing Professional Development (CPD)
programs.

Composition:

A chairman

2 members

Government Agencies that Affect Accountancy

Commission on Audit (COA)
shall have the power, authority, and duty to examine,audit, and settle all accounts
pertaining to the revenue and receipts of, and expenditure or uses of funds and
property, owned or held in trust by, or pertaining to the Government.

Supreme audit institution of the Philippines

Composition:

Chairman - 7 years

one commissioner- 5 years

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 other commissioners- 3 years

Without reappointment

🗯 Michael G Aguinaldo - Chairperson

Jose Fabia - commissioner
Roland Pondoc - Commissioner

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 Bureau of Internal Revenue (BIR)
• This agency aims to raise revenues for the government through effective and efficient
collection of taxes, provide quality service to taxpayers and enforce tax laws in an
impartial and uniform manner.
• Composition:
• The Bureau of Internal Revenue, which shall be headed by and subject to the
supervision and control of the Commissioner of Internal Revenue
• Deputy Commissioners.—The Commissioner shall be assisted by two (2) Deputy
Commissioners (now assisted by four)
Securities and Exchange Commission (SEC)
• This agency aims to raise revenues for the government through effective and efficient
collection of taxes, provide quality service to taxpayers and enforce tax laws in an
impartial and uniform manner.
• Composition:

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 • The Bureau of Internal Revenue, which shall be headed by and subject to the
supervision and control of the Commissioner of Internal Revenue
• Deputy Commissioners.—The Commissioner shall be assisted by two (2) Deputy
Commissioners.

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