Introduction to the Accountancy Profession

• Accounting


  A service activity whose function is to provide quantitative information, primarily financial in nature, about economic entities that are intended to be useful in making economic decisions
• Accounting


  The art of recording, classifying, and summarizing in a significant manner and in terms of money, transactions, and events, which are in part at least of a financial character and in interpreting the results thereof
• Accounting


  The process of identifying, measuring, and communicating economic information to permit informed judgment and decision by users of information
• The overall objective of accounting is to provide quantitative financial information about an entity that is useful in making economic decisions
• Characteristics of accounting

  • User-based discipline
  • Quantitative
  • Subject to interpretation
• Accounting process


  1. Identifying

  2. Measuring

  3. Communicating
• Recording/Journalizing


  Systematically maintaining a record of all economic business transactions
• Classifying


  Sorting/grouping similar economic transactions by posting them to the ledger
• Summarizing


  Preparation of financial statements
• Types of events & transactions

  • External events
  • Internal events
• External events


  Transactions involving another entity, including exchange, non-reciprocal transfer, and other changes in resources & obligations
• Internal events


  Events that do not involve an outside party, including production and casualty
• Republic Act 9298, "Philippine Accountancy Act of 2004" regulates the practice of the accountancy profession in the Philippines
• Professional Regulatory Board of Accountancy (PR-BOA)


  Body authorized by RA 9298 to promulgate its rules & regulations, under the Professional Regulation Commission (PRC)
• Composition of the PR-BOA

  • Chairman
  • 6 members appointed by the President of the Philippines
  • Vice chairman elected annually from the members
• Qualifications of the members of the PR-BOA

  • Natural-born citizen & resident of the Philippines
  • Duly-registered CPA with at least ten years of work experience
  • Good moral character & not convicted of crimes involving moral turpitude
  • No pecuniary interest in any school, college, university, or institution at the time of appointment
  • Not a director/officer of the Accredited Professional Organization (APO) at the time of appointment
• Powers & functions of the PR-BOA

  • Prescribe & adopt rules & regulations
  • Supervise the registration, licensure, & practice of accountancy
  • Administer oaths
  • Issue, suspend, revoke, & reinstate the Certificate of Registration
  • Adopt an official seal
  • Prescribe/adopt a Code of Ethics
  • Monitor conditions affecting the practice of accountancy & adopt measures for enhancement & maintenance of standards
  • Conduct oversight into the quality of audits
• Sectors of accountancy practice

  • Practice in Public Accountancy
  • Practice in Commerce & Industry/Private Accounting
  • Practice in Education/Academe
  • Practice in the Government
• Practice in Public Accountancy


  Rendering accounting & auditing services on a fee basis, including external auditing, taxation service, and management advisory service
• Certificate of Accreditation for public practice

  Requires three years of meaningful experience & Continuing Professional Development (CPD) units, 120 units
• No corporation form is allowed to be registered for the practice of public accountancy
• Continuing Professional Development (CPD) is required for the renewal of the CPA license (15 units)
• The dean/department chairman of an educational institution must be a duly registered CPA
• Professional Identification Card


  Issued to every registrant, renewable every three years
• The CPA must indicate his/her COR, identification card, & professional tax receipt on the documents he/she signs in connection with the practice of his/her profession
• Powers of the Board

  • To adopt an official seal
  • To prescribe and/or adopt a Code of Ethics for the practice of accountancy
  • To monitor the conditions affecting the practice of accountancy & adopt measures for the enhancement & maintenance of high professional, ethical, accounting & auditing standards
  • To include international accounting & auditing standards, & generally accepted best practices in domestic accounting & auditing standards, rules & regulations
  • To conduct an oversight into the quality of audits through a review of the quality control measures instituted by auditors
  • To investigate violations of RA 9298 and issue summons, subpoena & subpoena ad testificandum & subpoena duces tecum
  • To delegate the fact-finding aspect of investigations to the accredited national professional organization of CPA
  • To adopt the findings of fact as may be seem fit
  • To investigate violations muto propio
  • To issue a cease or desist order
  • To punish for contempt of the Board
  • To prepare, adopt, issue, or amend the syllabi of the subjects for examinations
  • To ensure coordination with the Commission on Higher Education (CHED) or other authorized government offices
  • To exercise other powers granted to the Board to achieve the objectives & purposes of RA 9298
• The policies, resolution, rules, & regulations issued/promulgated by the Board shall be subject to review & approval of the Commission
• Grounds for supervision/removal of Board members

  • Neglect of Duty/Incompetence
  • Violation/Tolerance of any violation of RA 9298 & its implementation rules & regulations, Code of Ethics, & the technical & professional standards of practice for certified public accountant
  • Final judgment of crimes involving moral turpitude
  • Manipulation/Rigging of licensure examination results, disclosure of secret & confidential information in the examination questions prior to its conduct, or tampering with grades
• Only the President of the Philippines has the authority to suspend/remove members of PR-BOA
• Annual Report


  Submitted to the President of the Philippines through the Commission, giving a detailed account of its proceedings & accomplishments during the year & making recommendations
• Licensure Examination

  • General average of 75% with no grade lower than 65% in any given subject is required to pass
  • Candidates are required to take an oath of professional prior to entering upon the practice of the profession
• Conditional Credit


  If a candidate obtains a rating of 75% & above in at least the majority of subjects, he/she shall take an examination in the remaining subjects within two years from the preceding examination. Counted as one complete examination
• Results of the licensure examination are submitted to the Commission within ten days after the examination
• Any candidates who fail two complete CPA Board Examinations shall be disqualified from taking another set of examinations unless he/she submits evidence to the Board that he/she enrolled in & completed at least 24 units of the subject given in the licensure examination
• Qualifications of applicant for CPA Board Examination

  • Filipino citizen
  • Good moral character
  • Holder of the degree of Bachelor of Science in Accountancy
  • Has not been convicted of any criminal offense involving moral turpitude
• Scope of CPA Board Examination

  • Theory of Accounts
  • Business Law & Taxation
  • Management Services
  • Auditing Theory
  • Auditing Problems
  • Practical Accounting Problem I
  • Practical Accounting Problem II
• Coverage of Special Permits for Foreign CPAs

  • Foreign CPA called for consultation (provided that no Filipino CPA is qualified)
  • Foreign CPA engaged as a professor, lecturer, or critic
  • Foreign CPA who is an internationally recognized expert
• Penal Provisions

  Any person who violates any provisions of this act shall be punished by a fine of not less than 50,000 pesos, imprisonment for a period not exceeding two years, or both
• PICPA


  Philippine Institute of Certified Public Accountants, recognized by the Commission as the Accredited Professional Organization (APO) for CPAs on October 2, 1975, per Accreditation No. 15
• PICPA


  • Renews its Certificate of Accreditation once every three years
  • Cannot represent the accountancy profession during periods of suspension, cancelation, or non-renewal of certificate
  • Umbrella organization that collaborates with sectoral organizations
  • National Directors are elected in accordance with the provision of the Corporation Code of the Philippines, representing the sectors in the regions, and can only represent a sector in a region if he has been a member in good standing for at least two years at the time of his nomination
  • There should only be 15 National Directors unless there is a valid reason to have additional representation, apportioned according to the four geographic areas of the National Capital Region (NCR), Luzon, Visayas, & Mindanao, based on the ratio of the latest available number of members in good standing from those areas