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Accreditations of Independent CPA Auditors in the Philippines

An accountant who had just passed the CPA Licensure Examination must have meet the minimum requirements and  must be duly accredited before he can perform public practice, do audits and sign client's audited financial statements. Under the present rules applicable to registered and licensed certified public accountants, single practitioners and partnerships practicing public accountancy shall be registered CPA's in the Philippines. A certificate of accreditation shall be issued to a certified public accountant in public practice only upon showing that such registrant has acquired a minimum of three (3) years meaningful experience in any areas of public practice including taxation. Under the law, only single practitioners and partnerships are allowed in the Philippines; corporations organized for the practice of public accountancy are prohibited.

The Board of Accountancy (BOA) is the professional board of Certified Public Accountants in the Philippines under Professional Regulation Commission (PRC), a government agency administered to register and regulate professionals in the Philippines. BOA accreditation is required for all CPAs in the Philippines conducting audit and signing on audited financial statements. BOA accreditation could either be for sole practitioner CPA or for the professional auditing firm in the Philippines. Bookkeepers and tax preparers are not required BOA accreditation.

The following are the requirements for the registration of Individual Practitioners or Accounting Firms to the Board of Accountancy (BOA Accreditation) as listed on the PRC website. For more updated information, please visit www.prc.gov.ph:
  1. BACC Form No. 02 duly accomplished in three (3) copies and properly notarized with the required documentary stamp.

  2. Short brown envelop for the Certificate of Registration.

  3. Documentary stamp worth fifteen (P15) to be affixed to the Certificate of Registration.

  4. Xerox copy of the CPA Certificates and current professional identification card(s) of individual CPA, sole proprietor, partners and staff members.

  5. Certified copy of the Code of Good Governance of the individual CPA, firm or partnerships.

  6. Sworn statement by the Individual CPA, sole proprietor of the Firm and managing partner fo the Partnership stating that the Individual CPA and staff member(s), the sole proprietor and staff member(s) fo the Firm, and all the partners and staff member(s) of the Partnership, as the case maybe,:

    1. a. had a meaningful participation of their respective internal quality review process, and
      b. had undergone adequate and effective training (from organizations duly accredited by the Board or by its duly authorized representatives) on all he current accounting and auditing standards, code of ethics, laws and their implementing rules and regulations, circulars, memoranda, their respective codes of good governance and other related documents that are required in the practice of public accountancy to ensure professional , ethical and technical standards, supported with the certified copies of the certificate(s) of attendance or any proof of meaningful participation in, and proof of adequacy and effectiveness of such training.

  7. For first-time applicant:

    1. a. Sworn statement of at least three (3) years of meaningful experience in the scope of work covered in the practice of public accountancy.
      b. Detailed description of such work experience of the individual CPA, sole proprietorship of the firm and all the partners of the Partnership to be attached to the sworn statement.

  8. Sworn Statement by the Individual CPA, sole proprietorship of the Firm and managing partner of the Partnership stating that the Individual CPA and all his/her staff member(s), sole proprietorship and all the staff member(s) of the Firm, and all partners and staff member(s) of the Partnership:

    1. a. are all of good moral character
      b. he/she or they had not been found guilty by a competent court and /or administrative body of any case involving moral turpitude and /or unethical practices and that neither any of them is a defendant in any case of similar nature pending before any competent court and /or administrative agencies supported by a certificate of clearance issued by the proper court, administrative agencies.

  9. Copy of internal quality review procedures being implemented to ensure compliance with the professional ethical and technical standards required of the practice of public accountancy.

  10. Certified copies of all business permits issued by the local and/or national government.

  11. Additional Requirements:

    1. A. For Partnership
        1. Certified copy of the Certificate of Registration issued by the SEC
        2. Certified copy of current Articles of Partnership
        3. Certified copy of the documents showing the correspondent relationship, membership or business dealings with foreign CPA firm(s) including complete address and poster address, telephone number and facsimile numbers, email address and website.
        4. Sworn statement stating that:
          a. the copy of the document showing the correspondent relationship membership, or business dealings with the foreign CPA is the faithful reproduction of its original copy
          b. the foreign CPA is not directly or indirectly ( through the Filipino CPA) engaged in the practice of public accountancy in the Philippines, except the authorized foreign CPAs under the foreign reciprocity provision of the Section23, Article III of P.D. No. 692 and
          c. the rights and obligation of the parties in specific terms.
      B. For Sole Proprietor
        1. Certified copy of the certificate of registration of Firm name Department of Trade and Industry ( DTI) ( if the applicant prefer to use business name other than his registered name with PRC)

In order to perform additional services, CPA's must also be accredited to other government agencies. In minimum,  a Certified Public Accountant (CPA) conducting an audit on the financial statements of companies and business entities are required to be accredited by BOA and BIR except sole proprietorship required to submit audited financial statements which only requires BIR-accredited CPA. Accreditation to other government agencies are mandatory depending on the business or industry the CPA is providing services. Failure to comply with such required accreditation is at risk for being imposed penalties. Signing CPA’s could be subject to administrative penalties while the business entity could be subject to monetary penalties. Extra care and caution should be exerted by business entities in choosing accredited certified public accountants in the Philippines who would conduct the financial statement audit and sign on the audited financial statements.

Here are some of the registrations and/or accreditations a certified public accountant in the Philippines normally required apart from BOA accreditation:

1. Bureau of Internal Revenue (BIR) Accreditation of CPAs in the Philippines

BIR accreditation as tax agent is applicable to those who sign on the audited financial statements for sole proprietorship, partnerships, corporations and associations. It also applies to tax practitioners who sign on tax returns and communications, and represent themselves in behalf of taxpayer-clients. Without BIR accreditation, the BIR could deny acceptance of tax returns and communications, and could not entertain non-BIR accredited agents of taxpayers. A taxpayer could be penalized if its audited financial statements are signed by a non-BIR accredited CPA auditor. For a list of accredited tax practitioners in the Philippines, please click here for more details.

2. Securities and Exchange Commission (SEC) Accreditation of CPAs in the Philippines

A BOA-accredited and BIR-accredited could already sign on the audited financial statements. However, some SEC regulated entities are required to be audited and signed by an SEC-accredited independent certified public accountant in the Philippines. SEC-accreditation comes in groups depending on the entity – Group A, B, C, and D. If said entities are audited by an auditor not accredited by SEC, then, penalties are likewise imposed. For a list of accredited external auditors and auditing firms in the Philippines, please click here for more details.

3. Bangko Sentral ng Pilipinas (BSP) Accreditation of CPAs in the Philippines

BSP Accreditation is applicable to entities regulated by BSP or Central Bank of the Philippines such as banks and non-bank financial intermediaries. This is in addition to the BOA, and BIR, or even on top of SEC accreditation in some instances.

4. Cooperative Development Authority (CDA) Accreditation of CPAs Philippines

CDA accreditation is on top of BOA and BIR and is required for cooperatives registered with the Cooperative Development Authority. To qualify for CDA accreditation, a CDA accredited seminar is required to be attended and Philippine Institute of Certified Public Accountant (PICPA) offers the same at least once a month.

5. Insurance Commission (IC) Accreditation of CPAs Philippines

IC accredited auditor is likewise on top of BOA and BIR accreditations. This is mostly applicable to entities and corporations registered and under supervision of the Insurance Commission such as insurance brokers, insurance adjusters, life insurance companies, non-life insurance companies, and other insurance companies in the Philippines.

Disclaimer: This article is for general conceptual guidance only and is not a substitute for an expert opinion. Please consult your preferred tax and/or legal consultant for the specific details applicable to your circumstances.

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