By: Tax and Accounting Center Philippines
Under the present rules applicable to registered and licensed certified public accountants in the Philippines, not all of them can just conduct an audit and sign in the audited financial statements. Before one could conduct an audit of the financial statements in the Philippines , the independent CPA must be qualified and must duly accredited.
Here are some of the registrations and/or accreditations a certified public accountant in the Philippines normally required prior to the conduct of an audit on the financial statements for filing with the Securities and Exchange Commission (SEC), Bureau of Internal Revenue (BIR), and other government agencies:
1. Board of Accountancy (BOA) Accreditation of CPAs Philippines
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.
2. Bureau of Internal Revenue (BIR) Accreditation of CPAs 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.
3. Securities and Exchange Commission (SEC) Accreditation of CPAs 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.
4. Bangko Sentral ng Pilipinas (BSP) Accreditation of CPAs 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.
5. 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.
6. 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 insurance companies, and other insurance companies in the Philippines.
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, in the minimum, except sole proprietorship required to submit audited financial statements which only requires BIR-accredited CPA. Specific entities would require other accreditation based on the supervising and administering government agency over the business or industry. 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.
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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