Phil. Accountancy Act of 2004

7/30/2019 Phil. Accountancy Act of 2004

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a. The standardization and regulation of accounting education;b. The examination for registration of CPAs; andc. The supervision, control, and regulation of the practice of accountancy in the Philippines.

Practice of accountancy shall include, both not limited to the following:

1. Practice of public accountancy shall constitute in a person, be it

his/her individual capacity, or as a partner 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; or offering orrendering, or both, to more than one client on a fee basis or otherwise, services such as:a. The audit or verification of financial transaction and accounting records

b. The preparation, signing, or certification for clients of reports of audit, balance sheet, and other

financial, accounting and related schedules, exhibits, statements or reports which are to be usedfor publication or for credit purposes, or to be filed with a court or government agency, or to beused for any other purpose

c. The design, installation, and revision of accounting systemd. The preparation of income tax returns when related to accounting procedurese. The representation of clients before government agencies on tax and other matters related to

accounting

f. Renders professional assistance in matters relating to accounting procedures and the recording

and presentation of financial facts or data

2. Practice in commerce and industry shall constitute in a

person:a. Involved in decision making requiring professional knowledge in the science of accounting, (as

well as the accounting aspects of finance and taxation); orb. When the CPA represents his employer before government agencies on tax and other matters

related to accountingc. When such employment or position requires that the holder thereof must be a CPA.

The IRR provides that business or company in the private sector should employ a duly registeredCPA if:

a. Paid-up capital is at least P5.0 million; and/orb. Annual revenue is at least P10.0 million

3. Practice in education or the academe 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 subjects.

A CPA is considered to be engaged in the practice of accountancy in education / academe ifhe/she is employed in educational institutions as teachers of accounting, auditing, MAS,(accounting aspects of) finance, business law, taxation and other technically related subjects.

Members of the Integrated Bar of the Philippines (IBP) may be allowed to teach business lawand taxation subjects.

The position of either the Dean or department chairman (or its equivalent) that supervisesthe BSA program of an educational institution is deemed to be in practice of accountancy in

the academic /education and therefore must be occupied only by a duly registered CPA.

4. Practice in the government shall constitute in a person who holds, or is

appointed to, a position in an accounting professional group in government or in a government-ownedand/or controlled corporation, including those performing proprietary functions, where decisionmaking requires professional knowledge in the science of accounting, or where a civil service eligibilityas a CPA is a prerequisite.

is the area of practice of accountancy namely public accountancy, commerce and industry,


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academe/education and government

Single practitioners (individual CPAs) and Partnership of CPAs shall be registered CPAs in thePhilippines.

The SEC shall not register any corporation organized for the practice of public accountancy. In otherwords, corporation form of CPA firm is not allowed.

Acertificate of accreditation issued only after showing that the registrant has acquired the minimum3 years meaningful experience in any of the areas of accountancy (whether in the publicaccountancy, commerce and industry, education/academe and government)

a certificate under seal, issued by the PRC upon therecommendation by the BOA, attesting that Individual CPAs, including the staff members thereof,firms including the sole proprietors and the staff members thereof and partnerships of CPAsincluding the partners and the staff members thereof, are duly accredited to practice public

accountancy in the Philippines.

Shall include:

At least 1 year as audit assistant and At least 2 years as auditor-in-charge of audit engagements covering

full audit functions of significant clients

Includes significant involvement in:

General accounting, budgeting and tax administration

Internal auditing and liaison officer

Representing his/her employer before government agencies on taxand matters related to accounting or any other related functions

Shall include:

Teaching for at least 3 trimesters or 2 semesters subjects in either

financial accounting, business law and tax, auditing problems,auditing theory, financial management and management services

Provided, that the accumulated teaching experience on these

subjects shall not be less than 3 school yearsIncludes significant involvement in:

General accounting

Budgeting

Tax administration

Internal auditing

Liaison with the COA

Any other related functions

Non-CPAs:

Are not allowed to practice accountancy in the Philippines

Cannot use the title Certified Public Accountant or CPA Should not indicate (thru display or use any title, sign, card, advertisement, or other device) that he

practices or offers to practice accountancy or that he is a CPANon-Filipino professional accountants/CPAs:

Are also not allowed to practice accountancy in the Philippines, unless:

a. Through foreign reciprocity (without restriction)

b. With valid temporary/special permit duly issued by the BOA and the PRC (limited to what waspermitted)

The BOA is the official government agency empowered to enforce RA 9298.

BOA is under the supervision and administrative control of the Professional Regulation Commission(PRC)

1.

BOA shall be composed of a chairman and 6 members (all of which are to be appointed by thePresident of the Philippines)

BOA shall elect a vice-chairman from among its members for a term of 1 year.

According to the IRR, the 4 sectors in the practice of accountancy shall as much as possiblebe equitably represented in the BOA.


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2. At the time of appointment, he/she must be:

a. Natural-born citizen and a resident of the Philippines;

b. Duly registered CPA with at least 10 years of work experience in any scope of practice of

accountancy

c. Of good moral character and must not have been convicted of crimes involving moral

turpitude

d. Not have any pecuniary interest, directly or indirectly, in any school, college, university orinstitution conferring an academic degree necessary for admission to the practice of accountancy

(those that offer BSA degree) or where review classes in preparation for the licensure examinationare being offered or conducted (such as RESA, PRTC and CPAR), nor shall he/she be a member ofthe faculty or administration thereof at the time of his/her appointment to the BOA, ande. Not be a director/officer of the APO (PICPA) at the time of his/her appointment this is an

additional requirement under the IRR

3.

The Chairman and the members of the BOA members shall hold office for a term of 3 years.

Any vacancy during the term of a member shall be filled up for the unexpired portion of theterm only. Appointment to fill up an unexpired term is not to be construed as a complete term.

No person who has served 2 successive complete terms shall be eligible for reappointmentuntil the lapse of 1 year.

No person shall serve in the BOA for more than 12 years. (addition under the IRR)

4. The BOA shall exercise the following specific powers,

functions and responsibilities:

a. To prescribe and adopt the rules and regulations necessary for carrying out the provisions of

this Act (RA 9298)b. To supervise the registration, licensure and practice of accountancy in the Philippines;

c. To administer oathsd. To issue, suspend, revoke, or reinstate the Certificate of Registration for the practice of the

accountancy professione. To adopt its own official seal

f. To prescribe and/or adopt a Code of Ethics for the practice of accountancyg. To monitor the conditions affecting the practice of accountancy and adopt such measures,

including promulgation of accounting and auditing standards, rules and regulations and bestpractices as may be deemed proper for the enhancement and maintenance of high professional,ethical, accounting and auditing standards

h. To conduct an oversight into the quality of audits of financial statements through a review of

the quality control measuresi. To investigate violations of this Act as IRR, to issue summons, subpoena and subpoena ad

testificandum and subpoena duces tecum to violators or witness thereof and compel theirattendance to such investigation or hearings and the production of documents in connectiontherewith

j. The Board may, motu propio in its discretion, make such investigations as it deems necessary to

determine whether any person has violated any provisions of this law, any accounting orauditing standard or rules duly promulgated by the BOA as part of the rules governing thepractice of accountancy

k. To issue a cease or desist order to any person, association, partnership or corporation engaged

in violation of any provision of this Act, any accounting or auditing standards or rules duly

promulgated by the BOA as part of the rules governing the practice of accountancy in thePhilippines

l. To punish for contempt of the BOA, both direct and indirect, in accordance with the pertinent

provisions of and penalties prescribed by the Rules of Courtm. To prepare, adopt, issue or amend the syllabi of the subjects for examinations in consultation

with the academe, determine and prepare questions for the licensure examination which shallstrictly be within the scope of the syllabi of the subjects for examinations as well as administer,correct and release the results of the licensure examinations

n. To ensure, in coordination with the Commission on Higher Education (CHED) or other authorizedgovernment offices that all higher educational instruction and offering of accountancy complywith the policies, standards and requirements of the course prescribed by CHED or otherauthorized government offices in the areas of curriculum, faculty, library and facilities; and

o. To exercise such other powers as may be provided by law as well as those which may be

implied from, or which are necessary or incidental to the carrying out of, the express powersgranted to the BOA to achieve the objectives and purposes of this Act.

5.


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The President of the Philippines, upon the recommendation of the PRC may suspend or removeany BOA member on the following grounds:

a. Neglect of duly or incompetence

b. Violation or tolerance of any violation of RA 9298 and its IRR or the CPA Code ofEthics and the technical and professional standards of practice for CPAsc. Final judgment of crimes involving moral turpitude

d. Manipulation or rigging of the CPA's licensure examination results, disclosure of secret

and confidential information in the examination questions prior to the conduct of the saidexamination or tampering of grades.

The Presidents power to appoint carries with it the power to suspend or removed a BOA

member based on the abovementioned grounds.

When a member of the BOA has been sued of crimes involving moral turpitude, it is not avalid ground for suspension or removal of BOA members.

(Refer to notes on public accounting profession)

Assists BOA in continuously upgrading accounting education in the Philippines

1.

Determine a minimum standard curriculum for the study of accountancy to be implemented in allschools offering accountancy as an undergraduate degree.

Established teaching standards, including the qualifications of members of the faculty of schoolsand colleges of accountancy.

Monitor the progress of the program on the study of accountancy and undertaking measures forthe attainment of a high quality of accountancy education in the country.

Evaluate periodically the performance of educational institution offering accountancy education.

2.

Chairman (had been or presently a senior accounting practitioner in the

academe/education)

1

BOA 1Accredited National Professional Organization of CPAs - PICPA:

Public

practice 1

Commerce and industry 1

Academe/Education 2*

Government 1 5

Total 7

*1 private school and 1 public school offering Bachelor of Science in Accountancy

The Chairman and members of the ETC shall be appointed by the PRC uponthe recommendation of the BOA in connection with the APO (PICPA).

The Chairman and the members of the ETC shall have a term of 3 years

renewable for another term.

All applicants for registration for the practice of accountancy shall be required to undergo a licensureexamination to be given by the BOA in such places and dates as the PRC may designate subject to compliance

with the requirements prescribed by the PRC in accordance with Republic Act No. 8981.

1.

a. Must be a Filipino citizen

b. Must be of good moral character

c. Must be a holder of the degree of BSA conferred by a school, college, academy or institute dulyrecognized and/or accredited by the CHED or other authorized government offices, and

d. Has not been convicted of any criminal offense involving moral turpitude

2.

The CPA examination shall cover, but are not limited to, the following subjects:1. Theory of Accounts (80 100 items)

2. Business Law and Taxation (50 70 items)

3. Management Services (50 70 items)

4. Auditing Theory (80 100 items)

5. Auditing Problems (40 50 items)


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6. Practical Accounting I (40 50 items)

7. Practical Accounting II (40 50 items)

Each subject has a corresponding syllabus.

The BOA, subject to the approval of the PRC, may revise or exclude any of the subjects

and their syllabi, and add new ones as the need arises.

3.

A candidate must obtain at least a general average of

75%, with no grades lower than 65% in any given subject.

If a candidate obtains a rating of 75% and above in at least a majority of

the subjects tested, he/she will be given conditional credits for the subjects passed.

4.

The candidates with conditional status shall take an examination in the remaining subjects within

2 years from the preceding examination.

If the candidate fails to obtain at least a general average of 75% and a rating of at least 65% ineach 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 exams shall be disqualified from taking another set ofexaminations unless he/she submits evidence to the satisfaction of the BOA that he/she enrolledin and completed a refresher course with at least 24 units of subjects given in the CPA exams.

The examination in which the candidate was conditioned together with the removalexamination on the subject in which he/she failed shall be counted as one completeexamination.

The IRR provides that the required refresher course (whether regular or special refreshercourse) shall be offered only by an educational institution granting a degree of BSA.

All successful candidates in the CPA examination, prior to entering upon the practice of the profession,shall be required to take an oath of profession before:

a. Any member of the BOA; orb. Any government official authorized by the PRC; orc. Any person authorized by law to administer oaths

a certificate under seal bearing a registration number, issued to anindividual, by the PRC, upon recommendation by the BOA, signifying that the individual has compliedwith all the legal and procedural requirements for such issuance including, in appropriate cases,having successfully passed the CPA licensure examination

A certificate of registration shall be issued to examinees who passed the CPA licensure

examination subject to payment of fees prescribed by the PRC. The Certificate of Registration shall bear the signature of the chairperson of the PRC and the

chairman and members of the BOA, stamped with the official seal of the PRC and of the BOA,indicating that the person named therein is entitled to the practice of the profession with all the

privileges appurtenant thereto. The said certificate shall remain in full force and effect untilwithdrawn, suspended or revoked.

a card with validity of 3 years bearing the registration number,date of issuance with an expiry date, due for periodic renewal, duly signed by the Chairperson of thePRC issued by the PRC to a registered CPA upon payment of the annual registration fees for 3 years

Certificate of Registration has no expiry; shall remain in full force until/unless withdrawn,suspended or revoked

Professional Identification Card subject to expiry; renewable every 3 years

The BOA shall not register and issue a certificate of registration and professional identification card to any

successful examinee due to the following grounds:a. Convicted by a court of competent jurisdiction of a criminal offense involving moral turpitude or

b. Guilty of immoral and dishonorable conduct or

c. Of unsound mind


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The BOA shall not register either, any person who has falsely sworn, or misrepresentedhimself/herself in his/her application for examination.

Registration shall not be refused and a name shall not be removed from the roster of CPAson conviction for a political offense (or for an offense, in the opinion of the BOA, that does notdisqualify a person from practicing accountancy)

The BOA shall have the power, upon due notice and hearing, to:a. Suspend or revoke the practitioners certificate of registration and professional identification card

b. Suspend him/her from the practice of his/her profession

c. Cancel his/her special permit

Causes or Grounds for Suspension/Revocation/Cancellation:a. Convicted by a court of competent jurisdiction of a criminal offense involving moral turpitude or

b. Guilty of immoral and dishonorable conduct or

c. Of unsound mind

d. Any unprofessional or unethical conduct

e. Malpracticef. Violation of any of the provisions of this Act and its IRR

g. Violation of the CPAs Code of Ethics and the technical and professional standards of practice for CPAs

:

The BOA may, after the expiration of 2 years from the date of revocation of a certificate of registrationand upon application and for reasons deemed proper and sufficient, reinstate the validity of a revokedcertificate of registration and in so doing, may, in its discretion, exempt the applicant from taking anotherexamination.

All working papers, schedules and memoranda made by a CPA and his staff in the course of anexamination, including those prepared and submitted by the client, incident to or in the course of an

examination, by such CPA, except reports submitted by a CPA to a client shall be treated confidential andprivileged and remain the property of such CPA in the absence of a written agreement between the CPA andthe client, to the contrary, unless such documents are required to be produced through subpoena issued byany court, tribunal, or government regulatory or administrative body.

Working papers owned/property of the CPA/Practitioner

Practitioner must observe the rule on confidentiality (subject to certain exceptions such asproduction of documents through subpoena issued by any court, tribunal, or governmentregulatory or administrative body).

All registered CPAs whose names appear in the roster of CPAs shall be united and integrated through theirmembership in a one and only registered and accredited national professional organization of registered and

licensed CPAs, which shall be registered with the SEC as a nonprofit corporation and recognized by the BOA,subject to the approval by the PRC.

The members in the said integrated and accredited national professional organization shall receive benefitsand privileges appurtenant thereto upon payment of required fees and dues. Membership in the integratedorganization shall not be a bar to membership in any other association of CPA.

Voluntary compliance with the CPE program is an effective and credible means of ensuringcompetence, integrity and global competitiveness of professional in order to allow them to continuethe practice of their profession.

a. To provide and ensure the continuous education of a registered professional with the latest trendsin the profession brought about by modernization and scientific and technological advancements;

b. To raise and maintain the professional's capability for delivering professional services;

c. To attain and maintain the highest standards and quality in the practice of his profession;d. To make the profession globally competitive; ande. To promote the general welfare of the public.

refers to the inculcation assimilation and acquisition of


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knowledge, skills, proficiency and ethical and moral values, after the initial registration of aprofessional that raise and enhance the professional's technical skills and competence

consists of properly planned and structured activities, the implementation of whichrequires the participation of a determinant group of professionals to meet the requirements ofvoluntarily maintaining and improving the professional standards and ethics of the profession

All CPAs shall comply with the rules and regulations on CPE.

The PRC CPE Council was created to assist BOA in implementing the CPE program.

1.

a. 1 Chairperson (the chairperson shall be chosen from among the members of BOA by the BOA

members themselves) andb. 2 members

(1) First member the president or, in his absence or incapacity, any officer chosen by the Boardof Directors of PICPA

(2) Second member the president, or in his absence or incapacity, any officer of the

organization of deans or department heads of schools, colleges or universities, offering thedegree requiring licensure examination (BSA); or shall be appointed by the PRC from 3

recommendees of the BOA concerned. Such recommendees shall be well-knownacademicians.

a. Chairperson co-terminus with his/her incumbency in the PRCb. First member co-terminus with his/her incumbency as officer of the PICPA

c. Second member co-terminus with his/her incumbency as officer of the organization of deans ordepartment heads of colleges or universities offering BSA degree

a. Seminarsb. Conventionsc. Masteral degree and doctoral degree

d. Authorshipe. Self-directed learning packagef. Post-graduate/in-house trainingg. Resource speaker

h. Peer revieweri. CPE providerj. CPE program, activities or sources

60 credit units for 3 years

Minimum of 15 credit units shall be earned in each year.

1. Upon reaching the age of 65 years old

2. If the following conditions are met:

a. During their stay abroad for at least 2 years immediately prior to the date of renewal; andb. Working or practicing his/her profession or furthering his/her studies abroad

All licensed CPAs shall obtain and use a seal of a design prescribed by the BOA bearing the registrantsname, registration number and title.

The auditors reports shall be stamped with said seal, indicating therein his/her current Professional

Tax Receipt (PTR) number, date/place of payment when filed with government authorities or whenused professionally.

A person not a citizen of the Philippines may be allowed to practice accountancy in the Philippines:

Where there is foreign reciprocity (in accordance with provisions of existing laws, international treaty

obligations including mutual recognition agreements entered into by the Philippine government withother countries)


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Upon presentation of proof that his country admits citizens of the Philippines to the practice ofaccountancy without restriction

Special / temporary permit may be issued by the BOA subject to the approval of the PRC and payment ofthe fees the latter has prescribed and charged thereof to the following Foreign CPAs:

a. A foreign CPA called for consultation or for a specific purpose which, in the judgment of the BOA, isessential for the development of the country: Provided, That his/her practice shall be limited only forthe particular work that he/she is being engaged: Provided, further, That there is no Filipino CPAqualified for such consultation or specific purposes;

b. A foreign CPA engaged as professor, lecturer or critic in fields essential to accountancy education inthe Philippines and his/her engagement is confined to teaching only; and

c. A foreign CPA who is an internationally recognized expert or with specialization in any branch ofaccountancy and his/her service is essential for the advancement of accountancy in the Philippines.

Any person who shall violate any of the provisions of this Act or any of its IRR shall, upon conviction, bepunished by:

Fine not less than P 50,000.00, or

Imprisonment for a period not exceeding 2 years, or

Both

Documents

Phil. Accountancy Act of 2004