Practice of Accountancy, Defined
Practice of accountancy shall constitute in a person, be it in his individual capacity, or as a partner or staff member in an accounting or auditing firm, holding out himself as one skilled in the knowledge, science, and practice of accounting, and as qualified to render professional services as a certified public accountant; or offering or rendering, or both, to more than one client on a fee basis or otherwise, services such as the audit or verification of financial transactions and accounting records; the preparation, signing, or certification for clients of reports of audit, balance sheets, and other financial accounting and related schedules, exhibits, statements, or reports which are to be used for publication or for credit purposes, or to be filed with a court or government agency, or to be used for any other purpose; the installation and revision of accounting system, the preparation of income tax returns when related to accounting procedures; or when he represents clients before government agencies on tax matters related to accounting or renders professional assistance in matters relating to accounting procedures and the recording and presentation of financial facts or data.
A Certified Public Accountant shall be considered in the practice of his profession, if the nature and character of his employment whether as an officer or employee in a private enterprise or educational institution involves decision-making requiring professional knowledge in the science of accounting or when he represents his private employer before any government agency on tax matters related to accounting, and such employment or position requires that the holder thereof must be a Certified Public Accountant; or if he holds or is appointed to a position in the accounting occupational group in the government or in government-owned or controlled corporations, including those performing proprietary functions, where a civil service eligibility as a Certified Public Accountant is a prerequisite.
Qualification of Board Members
No person shall be appointed a member of the Board of Accountancy unless he:
- Is a citizen of the Philippines;
- Is of good moral character;
- Is a duly registered Certified Public Accountant in the Philippines;
- Has been in the practice of accountancy for at least ten years; and
- Is not directly or indirectly connected with any school, college, or university granting degrees that may qualify graduates with such degrees for admission to the Certified Public Accountant examinations, or with Certified Public Accountant’s Review School or Institute, nor shall have any pecuniary interest in such school, college, university or Certified Public Accountant’s Review School or Institute.
Although accounting has been practiced in the Philippines since the Spanish period and possibly even before, the seeds of Philippine accountancy as a recognized profession were planted on March 17, 1928, when Act No. 3105 was approved by the Sixth Legislature. Entitled 'An Act Regulating the Practice of Public Accounting; Creating the Board of Accountancy; Providing for Examination, for the Granting of Certificates, and the Registration of Certified Public Accountants; for the Suspension or Revocation of Certificates; and for Other Purposes,' the law paved the way for local accountants to do the work which, up to that time was performed by foreign accountants in the country. Since then, both the profession and the body that directly regulates it have grown rapidly.
From 43 registered accountants in 1923, the number of CPAs has grown to over 100,689 by 1999. Many of these professionals have distinguished themselves not only in the field of accountancy itself but in many other areas of human endeavor. To the roster of Philippine CPAs belong such luminaries, past and present, as Jaime Hernandez and Paciano Dizon, the first and second Filipino Auditor Generals of the Commission on Audit; Manuel Villar, Speaker of the House of Representatives; Washington SyCip, past president of the International Federation of Accountants, the only Asian who has held the position and Founder and Chairman of SGV & Co., the leading accountancy firm in the country; Jose W. Diokno, former Senator of the Philippines and Secretary of Justice; Wenceslao Lagumbay and Alberto Romulo, former senators; and Andres Soriano, founder of one of the country’s leading conglomerates. Many others have been cabinet members, heads of government agencies, chairmen and members of corporations and institutions, heads and professors in the academe, and entrepreneurs.
Local accounting firms and partnerships have likewise entered the mainstream of international practice, establishing tie-ups with the Big Five of the accounting world, namely, Arthur Andersen, Price Waterhouse Coopers, Ernst & Young, KPMG, and Deloitte Tohmatsu International. The biggest of the local firms, SGV & Co., was the first to offer services outside the country and initiated the establishment of The SGV Group composed of leading national accounting firms in East and Southeast Asia.
The increasing complexity of professional regulation and the developments in the practice of the profession have occasioned the expansion of the Board of Accountancy – from three members (president and two members) under Act No. 3105 in 1923, through six (chairman and five members) under Republic Act No. 5166 ('The Accountancy Act of 1967') in 1967, to seven (chairman and six members) under Presidential Decree No. 692 (The Revised Accountancy Law) in 1975. Under the stewardship of the PRC, the Board of Accountancy discharges its mandate of supervising, controlling and regulating the practice of accountancy with authority and distinction. But over and above its regular functions of standardizing and regulating accounting education, conducting examinations for registering CPAs, and maintaining the rules of the practice, the Board has taken the lead in raising the standards of the profession to a very high level of excellence, as evidenced by the following developments:
- Full computerization of the CPA licensure examinations. The accounting profession was the first among the professions to achieve this, paving the way for the current record two-day release of examination results.
- Upgrading of the quality of accounting education. With the PRC, the Board made representations with the DECS for the adoption of standards for the organization and operation of professional accounting programs leading to the prescription of a common baccalaureate degree – Bachelor of Science in Accountancy. The Board periodically reviews school curricula and syllabi to maintain their relevance, particularly in the area of information technology. It also initiated the continued monitoring of schools’ performance in the CPA examinations and the recommendation of corrective measures, as necessary.
- Regulation of CPA firms and partnerships. To assure compliance of their staff and partners with standards and regulations of the practice, the Board moved for the registration of firms or partnerships of CPAs with both the PRC and the Board of Accountancy.
- Requirement of CPAs in civil service. The Board made representations with the Civil Service Commission to require that only CPAs be appointed as accountants and auditors or to hold allied positions in government.
In 1975, with the accreditation by the PRC of the Philippine Institute of Certified Public Accountants (PICPA) as the bona fide professional organization representing CPAs in the country, the Board has coordinated with PICPA to further strengthen the profession. With PICPA, it has worked for the passage of The Accountancy Act of 1967; the issuance of the Code of Professional Ethics in 1978; the issuance of guidelines in 1987 for the mandatory continuing professional education (CPE) program for CPAs; the integration of the accounting profession completed in 1987; the biennial oathtaking of new CPAs; standards setting for the profession through membership in the Accounting Standards Council and the Auditing Standards Practices Council; and the declaration of the Accountancy Week.
As the global professional environment unfolds, with the onset of the 21st century, accountancy continues its trailblazing efforts. It is the first among the Philippine professions to be included under the World Trade Organization’s (WTO) policy of liberalization of services. This means that Philippine accountants will be freely competing with in the global playing field against accountants from other parts of the world and will be able to hold their own. This is due, in no small measure, to the long and distinguished careers of the country’s accountants, to the linkages that local firms have forged with the world’s biggest accounting firms, and to the integrity with which the Board of Accountancy and the Professional Regulation Commission are now administering a profession that has acquired a global perspective.
Philippine Institute of Certified Public Accountants (PICPA)
PICPA House, 700 Shaw Boulevard
Tel No. 723-5467 / 726-9456 / 723-0691 to 93 / 473-2908
Fax No. 723-6305 / 726-9452
Re-accredited: Res. No. 2008-448 dated May 19, 2008
On December 7, 1925, Act No. 3264 was enacted authorizing the Board of Accountancy to issue certificate of Public Accountants (PA) to those who have not qualified as CPAs under Act No. 3264. The certification gave the CPAs and the PAs the same privileges and prerogatives in the practice of the profession.
To distinguish the two, a group of eleven (11) Certified Public Accountants, all illustrious pioneers of the accounting profession, founded the Philippine Institute of Certified Public Accountants (PICPA), which opened membership only to CPAs.
The objectives of the Institute are:
- to promote and maintain high professional and ethical standards among accountants;
- advance the Science of Accountancy;
- develop and improve accountancy education;
- encourage cordial relations among accountants;
- and protect the Certificate of Certified Public Accountant granted by the Republic of the Philippines.
In 1937, the Institute’s official journal, “The Philippine Accountant’s Journal,” was first published.
Soon after the end of the Second World War, the Institute was incorporated and renamed “The Philippine Institute of Accountants.” It was able to get back its former members and attract a new fold of qualified CPAs. From then on, its membership snowballed tremendously through the years.
The Institute greatly contributed to elevating and upgrading the accountancy profession and education and vigorously pushed for enactment of several legislative measures that ensured the high standards of the profession.
On October 2, 1973, the PICPA was accredited by the PRC as the bona fide professional organization of CPAs, giving it the responsibility of initiating the integration of all CPAs in the country. On January 6, 1989, PRC Commissioner Julio B. Francia declared the completion of the integration of CPAs.
The PICPA is an active participant in the world’s major accounting bodies such as the International Federation of Accountants (IFAC), International Accounting Standards Committee (IASC), Confederation of Asian and Pacific Accountants (CAPA), and the ASEAN Federation of Accountants (AFA).
- Board Resolution 21 (s. 2020) - Philippine Standard on Auditing 540 (Revised) Auditing Accounting Estimates and Related Disclosures and Conforming and Consequential Amendments to Other Philippine Standards Arising from PSA 540
- Board Resolution 20 (s. 2020) - Philippine Standard on Auditing 250 (Revised) Consideration of Laws and Regulations in an Audit of Financial Statements including Related Conforming Amendments to Other Philippine Standards
- Board Resolution 19 (s. 2020) - Granting the Extension of the Validity of Certificate of Accreditation of Individual Certified Public Accountants and Partnerships/ Firms Engaged in Public Accountancy Practice
- Resolution No. 185 Series of 2017 - Amendments and Clarifications on Certain Rules Governing the Accreditation of Certified Public Accountants (CPA) in Commerce and Industry Practice
- Resolution No. 163 Series of 2017 - Deferment of the Implementation of Paragraphs 13 and 14 (4) of Resolution no. 2016-68, in Relation to Resolution no. 2016-03, as Amended, in the Requirement for External Auditors to Notify the Board of Accountancy of any Omission or Non-compliance with the Provisions therein, and Providing for Stakeholders Consultation and Dialogue for such Purpose
- Resolution No. 37 Series of 2017 - Grant of Provisional Accreditation and Extension of Accreditation to Individual Certified Public Accountants and Partnerships/Firms Engaged in Public Accountancy Practice
- Resolution No. 36 Series of 2017 - New Procedure in the Conduct of the Office Visitation, Amending for the Purpose Board Resolution No. 05, Series of 2016
- Resolution No. 05 Series of 2017 - Instituting a Special Docketing for the Resolutions of the Professional Regulatory Board of Accountancy
- Resolution No. 01 Series of 2016- Imposition of a Moratorium on the Implementation of the Continuing Professional Development (CPD) requirement for the Accreditation of Accounting Teachers until July 13, 2016
- Resolution No. 03 Series of 2016- Requiring the submission of certificate by the responsible Certified Public Accounts on the compilation services for the preparation of financial statements and notes thereto
- Resolution No. 68 Series of 2016- Amending Resolution No. 03, Series of 2016, Entitled "Requirement for the Submission of Certificate by the Responsible Certified Public Accountants on the Compilation Services for the preparation of Financial Statements and Notes thereto", mandating external auditors to monitor compliance thereto, and for other purposes.
- Resolution No. 114 Series of 2016- Amendments to Resolution Nos. 2015-274 and 2015-275 on the Syllabi and Tables of Specifications (TOS) of the subjects in the Board Licensure Examination for Certified Public Accountants (BLECPA)
- Resolution No. 115 Series of 2016- Extending the deadline in the filing of applications for Accreditation of Certified Public Accountants (CPAS) in Commerce and Industry practice and the covered period of the Financial Statements subject to the Certificate on the compilation services requirement, and providing for the review of the ten million peso (P 10,000,000.00) thresholds as set under Resolution No. 2016-03 and 2016-68
- Resolution No. 244 Series of 2015- Adoption of the revised Rules and Regulations for the conduct by the Professional Regulatory Board of Accountancy of oversight into the Quality Audits of Financial Statements and Operations of CPA practitioners
- Resolution No. 262 Series of 2015- Revisions in the subjects of the Board Licensure Examination for Certified Public Accountants (BLECPA)
- Resolution No. 263 Series of 2015- Adoption of the IFAC 2013 Code of Ethics for Professional Accountants as "The Code of Ethics for Professional Accountants in the Philippines", and prescribing amendments therefor
- Resolution No. 274 Series of 2015- Issuance and Promulgation of the New Syllabi of the Subjects in the Board Licensure Examination for Certified Public Accountants (BLECPA)
- Resolution No. 275 Series of 2015- Issuance and Promulgation of the New Tables of Specifications (TOS) of the Subjects in the Board Licensure Examination for Certified Public Accountants (BLECPA)