Module 2 : The Professional

Practice of Accounting
Prof. Mary Grace Dela Cruz, CPA
Regulation of the Accounting Profession
1. RA 9298 (Philippine Accountancy Act of 2004) –
approved May 13, 2004.
2. Financial Reporting Standards and Engagement
Standards as established by recognized standard-
setting bodies.
3. 2018 Code of Ethics for Professional Accountants in
the Philippines. (Based on the 2016 IFAC Code of
Ethics issued by International Ethics Standards
Board of Accountants (IESBA) – effective February
20, 2018.
4. 2016 CPD Law per RA 10912
 Sectors of Accounting Practice

1. Practice of Public Accountancy (Public Practice)

2. Practice in Commerce and Industry
3. Practice in Education or the Academe
4. Practice in Government
The Certified Public Accountant Examination

 All applicants for the registration for the practice of accountancy shall be
required to undergo a licensure examination to be given by the Board in such
places and dates as the Commission may designate subject to compliance with
the requirements prescribed by PRC in accordance with RA 8981.
 Scope of Examination
a. Taxation
b. Regulatory Framework for Business Transactions
c. Management Advisory Services
d. Auditing
e. Financial Accounting and Reporting I
f. Financial Accounting and Reporting II
Rating in the Licensure Examination

 To be qualified as having passed the CPA licensure examination, a

candidate must obtain a general average of seventy five percent
(75%), with no grades lower than sixty five percent (65%) in any
given subject.
 In the event a candidate obtains the rating of seventy five (75%) and
above in at least a majority of the subjects as provided in RA 9298,
the candidate shall receive a conditional credit for the subjects
passed, provided, that a candidate shall take the examination in the
remaining subjects within two (2) years from the preceding
examination , provided further, that if the candidate fails to obtain at
least a general average of seventy five (75%) and a rating of at least
sixty five (65%) in each of the subjects, the candidate shall be
considered failed in the entire examination.
 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
Issuance of Certificate of Registration and
Professional Identification Card
 A certificate of registration (COR) and professional identification card (PIC) shall
be issued to successful candidates.

 The Certificate of Registration shall bear the signature of the chairperson of the
Professional Regulations Commission and the chairman and members of the Board of
Accountancy stamped with official seal of the Commission and of the Board, 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
until withdrawn, suspended or revoked in accordance with RA 9298.

 The Professional Identification Card (PIC) bearing the registration number, date of
issuance, expiry date, duly signed by the chairperson of the Commission is renewable
for every three (3) years
Grounds for the Refusal to Issue COR and PIC

1. Conviction by a court of competent jurisdiction of a criminal offense involving

moral turpitude.
2. Guilty of immoral and dishonourable conduct.
3. Unsound mind.
4. Misrepresentation in the application for the CPA examination
Reinstatement, Reissuance and Replacement
of Revoked or Lost Certificates
BOA may, after the expiration of two (2) years from the date of revocation of COR
and upon application and for reasons deemed proper and sufficient, and after being
convinced of applicant’s remorse and rehabilitation, reinstate the validity of a revoked
COR and in doing so, may in its discretion, exempt the applicant from taking another
examination.
Meaningful Experience

1. Commerce and industry – significant involvement in general accounting, budgeting,

tax administration, internal auditing, liaison with external auditors, representing his/her
employer before government agencies on tax and other matters related to accounting or
any other related functions.
2. Academe/education – include teaching for at least three (3) trimesters or two (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 three (3)
school years.
3. Government – include significant involvement in general accounting, budgeting, tax
administration, internal auditing, and liaison with the COA or any other related functions.
4. Public practice – include at least one (1) year as audit assistant and at least two
(2) years as auditor in charge of audit engagement covering full audit functions of
significant clients.
Ownership of Working Papers

 All working papers, schedules and memoranda made by CPA and his staff in the
course of examination, including those prepared and submitted by client, incident
to or in the course of examination by such CPA, except reports submitted by CPA
to a client shall be treated as confidential and privileged and remain the
property of such CPA in the absence of written agreement between the CPA and
the client,
 to the contrary, unless such documents are required to be produced through
subpoena issued by any court, tribunal or government regulator or administrative
body in accordance with Philippine laws.
Seal and Use of Seal

 All registered CPAs shall obtain and use a seal of design prescribed by BOA
bearing the registrant’s name, registration number and date. The auditor’s
report shall be stamped with said seal, indicating therein, his/her current PTR
(Professional Tax Receipt) number, date/place of payment when filed with
government authorities or when used professionally.

 The seal of a CPA shall be circular in form with a smaller circle within and in the
upper portion of the space between the circles shall be engraved the name of
individual CPA, firm or partnership as the case maybe, the lower portion thereof
shall be engraved the CPA registration number of individual CPA, proprietor
of the firm and the signing partner of the partnership and in the middle of
the smaller circle shall be engraved the letters “CPA”. Affixing the CPA’s seal
and signature is an indication of compliance by the CPA of the requisite
accounting and auditing standards and rules.
Limitation of the Practice of Accountancy

 Single practitioners and partnerships for the practice of public accountancy shall be
registered certified public accountants in the Philippines.

Foreign CPAs

Special/temporary permits may be issued by the BOA subject to the approval of PRC for
the following:
1. A foreign CPA called for consultation or for a specific purpose which, in the
judgment of the BOA, is essential for the development of the country.
2. A foreign CPA engaged as professor, lecturer, critic in fields essential to
accountancy education in the Philippines and his/her engagement is confined to
teaching only.
3. A foreign CPA who is internationally recognized expert or with specialization in
any branch of accountancy and his/her service is essential for the advancement of
accountancy in the Philippines.
 Continuing Professional Development (CPD
Program)
 It refers to the inculcation, assimilation and acquisition of knowledge, skills, proficiency and ethical and
moral values, after the initial registration of a professional that raise and enhance the professional’s
technical skills and competence.

 One credit hour of CPD program activity or source shall be equivalent to one (1) credit unit.

 Temporary exemption – a CPA working or practicing or furthering his/her studies abroad provided that
he/she has been out of the country for at least two years immediately prior to the date of renewal.

Penal Provision

Any person who shall violate any of the provisions of RA9298 or any of its implementing rules and regulations
as promulgated by the Board of Accountancy subject to the approval of the Professional Regulations
Commission shall, upon conviction be punished by
a. Fine of not less than Fifty Thousand Pesos (P50,000) or
b. Imprisonment for a period not exceeding two (2) years or
c. Both
 REGULATORY FRAMEWORK
Governing Laws and Regulations
1. Revised Securities Act
2. Corporate Code
3. National Internal Revenue Code
4. Accountancy Law
5. CPD Law
6. Code of Ethics (BOA Resolution 18 Series of 2018)
7. Local Government Code and Provincial/Municipal Ordinance
8. CoA Rules and Regulations

Institutions and Primary Functions

1. Securities and Exchange Commission

2. Bureau of Internal Revenue
3. Board of Accountancy
4. Reports to the Professional Regulatory Commission
5. Other Agencies: BSP, IC, CDA, NEDA, PDIC, CoA
 Functions of Board of Accountancy

1. Issues STPs to foreign accountants to work in the Philippines.

2. Oversees the investigation of erring accountants.
3. Oversees the APO and the 4 sectoral organizations.
4. Reviews the Accountancy Program with CHED.
5. Conducts the search for the most outstanding CPA and APO.
6. Implements the ASEAN MRA (Mutual Recognition Arrangement) for Accountancy
Services
7. Provides oversight over government accounting matters.
8. Attends to PRC matters.
9. Attends to international accounting activities.
 HISTORY OF THE ACCOUNTANCY PROFESSION

1. Accountancy Act of 1923 – Created the Board of Accountancy

Issuance of CPA certificates
2. Accountancy Act of 1967- Standardization of accounting education
Stipulated the examination process for CPA registration Regulated the practice of
accountancy
3. Revised Accountancy Act of 1975 (Presidential Decree 692)
4. Philippine Accountancy Act of 2004 (Republic Act No. 9298)
 CONTINUING PROFESSIONAL DEVELOPMENT –
R.A. 10912
1. The gradual increase in the number of CPD units required to be completed for the three-
year period from 80 units of the period ended December 31, 2017, to 100 units for
the period ended December 31, 2018 and 120 units for the period ended December
31, 2019. (BOA Resolution 358 Series of 2016).

PRC Resolution 2019-1146 took effect March 1, 2019 - providing for a "transition period"
for all Philippine professionals. BoA needs to come up with new Operating Guidelines (OG)
on how PRC Res. 1146-2019 resolution will specifically apply to CPAs. In the interim,
while no new Operating Guidelines have been issued, CPAs are covered by the transition
period under which:

✅OFWs are not covered by the CPD requirement

✅ Newly licensed CPAs are not covered by the CPD requirement for their first renewal
cycle
✅All other CPAs renewing their Professional ID Card will need 15 CPD units of training -
(can be under any Competence Area)
✅CPAs getting BoA accreditation will need 120 units of CPD training
 CONTINUING PROFESSIONAL DEVELOPMENT –
R.A. 10912
2. Shift from the CPD learning categories of Thematic to Competence areas, to make it consistent with International Education Standards, with the
Competence areas to be categorized into:
Technical Competence, Professional Skills, and Professional Values, Ethics and Attitudes.
3. Minimum credit units
A. Technical Competence – 30 CUs
B. Professional Skills – 5 CUs
C. Professional Values, Ethics, Attitudes – 5 CUs
4. Flexible units
5. No exemptions for those 65 years and above;
6. CPD compliance mandatory for accreditations in public practice, education, commerce & industry
7. The CPD programs shall consist of activities that range from structured to non-structured activities which have learning processes and
outcomes.
These include, but are not limited to, the following:

a. Formal learning
b. Non-formal learning
c. Informal learning
d. Self-directed learning
e. Online learning activities; and
f. Professional work experience
Check this link website for more details: https://www.accelerapro.com/pages/cpd-law-and-boa-accreditation
 6-POINT EXPANDING HORIZON (BOARD OF
ACCOUNTANCY)
1. Institute quality and governance measures.
2. Effectively regulate the profession.
3. Enhance image and reputation of the accounting professional.
4. Enhance stakeholders’ involvement and cooperation.
5. Institute structural changes.
6. Provide communication and assistance mechanisms.
Q&A
Prof. Mary Grace Dela Cruz, CPA
Thank You
Prof. Mary Grace Dela Cruz, CPA