AUDITING AND ASSURANCE PRINCIPLES

AUDITING THEORY: INTRODUCTION TO ASSURANCE, NON-ASSURANCE, AND AUDITING Basic Comparison of Assurance and Non-Assurance
Auditing and Assurance Standards Council (AASC) Assurance Engagement Non-Assurance Engagement
- tasked to assist BOA to establish and promulgate auditing standards in the Philippines
recommendation on how to use the
Output assurance in the form of an opinion
IAASB information

provide comments, suggestions, or

Work Groups improve the quality or enhance
Designed to recommendations on how to use
credibility of the subject matter
Comments the information
Discussion Groups Exposure Draft Public Suggestions
Recommendations
Relationship Three-party contract Two-party contract
Final Draft BOA Approval

In Relation to Should be provided by

Independence is not required
Standards Promulgated by AASC Independence independent professional
Standards Related Practice Statements Application of Standards
Philippine Standards on Auditing Philippine Auditing Practice Audit of historical financial a. Audit a. Agreed-upon procedures
Common b. Review b. Compilation
(PSAs) Statements (PAPSs) information c. Examination of prospective financial c. Preparation of tax returns
Examples
information d. Management advisory services
Philippine Standards on Review Philippine Review Engagement Review of historical financial
Engagements (PSREs) Practice Statements (PREPSs) information
Elements of Assurance Engagement
Philippine Standards on Assurance engagements dealing
Philippine Assurance Engagement 1. Three-party Relationship
Assurance Engagements with subject matter other than
Practice Statements (PAEPSs)
(PSAEs) historical financial information
 Practitioner
Agreed-upon procedures - broader than the term auditor
Philippine Standards on Related Philippine Related Services information and other related - must be independent
Services (PSRSs) Practice Statements (PRSPSs) services engagements as - governed by ethical requirements (i.e. professional competence) regarding the conduct of
specified by AASC the engagements
- may use the work of experts
Philippine Standards on Quality All services falling under the
- responsible for determining the nature, timing or extent of procedures required by the
Control (PSQCs) AASCs Engagement Standards
engagement
Standards Governing Professional Services by CPAs  Responsible Party
In addition to the standards promulgated by AASC, practitioners are also governed by: - the person/s responsible to the subject matter, the subject matter information, or both
 Philippine Framework for Assurance Engagements - may or may not be the engaging party to the practitioner
 Code of Ethics for Professional Accountants in the Philippines - may or may not be from the same organization with the intended users of the
  engagements
Fundamentals of Assurance Services - may be one of the intended user
Governing standards: Philippine Framework for Assurance Engagements
 Intended Users
Assurance Engagement (or Services) - the person/s for whom the practitioner prepares the assurance report
- means an engagement in which a practitioner expresses a conclusion designed to enhance the - in case of broad range of interests by the readers of assurance report, intended user
degree of confidence of the intended users other than the responsible party about the outcome of may be limited to major stockholders with significant and common interests
the evaluation or measurement of a subject matter against criteria - may be identified by agreement between the practitioner and the responsible party or
engaging party, or by law
Assurance
- refers to the practitioner’s satisfaction as to the reliability of an assertion being made by one party 2. Appropriate Subject Matter
for use by another party - identifiable and capable of consistent evaluation/measurement against the identified criteria
- can be subjected to procedures for gathering sufficient appropriate evidence
Responsible Party Information Users Subject Matter Criteria Subject Matter
- the nature of the assertion the practitioner gathers sufficient evidence
Procedures
Practitioner Assurance Subject Matter Information
- pertains to the outcome of the evaluation or measurement of the subject matter
Evidence
- for which the practitioner gathers sufficient appropriate evidence to provide a
reasonable basis for expressing a conclusion in an assurance report
Opinion
 AUDITING AND ASSURANCE PRINCIPLES
b. Materiality
Subject Matter vs Subject Matter Information - relevant when the practitioner determines the nature, timing and extent of evidence
Form Subject Matter Subject Matter Information gathering procedures, and when assessing whether the subject matter information is
Recognition, measurement, free of misstatement
Historical or prospective financial - lower materiality level leads to obtaining more audit evidence
Financial Performance or presentation, and disclosure
position, financial performance,
Conditions and cash flows
represented in financial c. Assurance Engagement Risk
statements - the risk that the practitioner expresses an inappropriate conclusion when the subject
matter information is materially misstated
Nonfinancial Performance Key indicators of efficiency and - LOWER acceptable level of audit risks, MORE evidence must be obtained
Performance of an entity
or Conditions effectiveness
d. Cost-Benefit Consideration
Physical Characteristics Capacity of a facility Specifications document - considers the relationship between the cost and the usefulness of the information
obtained
An entity’s internal control or IT - “the benefits that will be derived from obtaining the evidence should exceed the cost of
Systems and Processes system
Assertion about effectiveness
obtaining it”
Corporate governance, e. Professional Skepticism
Statement of compliance or a - the practitioner plans and performs an assurance engagement with an attitude of
Behavior compliance with regulation,
statement of effectiveness
human resource practices professional skepticism recognizing that circumstances may exist that cause the
subject matter information to be materially misstated
3. Suitable Criteria - auditor makes a critical assessment with questioning mind of the validity of
evidence obtained
Criteria
- the benchmarks used to evaluate or measure the subject matter including, where Generalizations About Reliability of Information
relevant, benchmarks for presentation and disclosure  External > Internal
 Effective Internal Control > Ineffective Internal Control
Classification  Directly obtained > Indirectly obtained
 Formal  Written representations > Oral representations
 Less Formal  Original Documents > Reproduced copies
 Established
 Specifically developed 5. Written Assurance Report
- the practitioner provides a written report containing a conclusion or an opinion that conveys
Characteristics of Suitable Criteria the assurance obtained about the subject matter information
 Reliability
 Understandability Types of Opinion
 Neutrality Unmodified / Unqualified Present fairly, in all material respect
 Completeness Qualified Except for
 Adverse Do not present fairly, in all material respect
Relevance
Disclaimer of Opinion We do not express a conclusion
Communication to Intended Users
Levels and Forms of Assurance
 Publicly
 Through inclusion in a clear manner in the presentation of the subject matter The levels (high or moderate) and forms (positive or negative) of assurance provided by
information the practitioner are dependent on the type of assurance engagement being rendered.
 
 Through inclusion in a clear manner in the assurance report Types of Engagement as to Assurance Level
 By general understanding
Reasonable Assurance Engagement
4. Sufficient Appropriate Evidence - objective: a reduction in assurance engagement risk to an acceptably low level in the
- All information used by the practitioner in arriving at the conclusions on which the auditor’s circumstances of the engagement as the basis for a positive form of expression of the
opinion is based practitioner’s conclusion
- The practitioner performs the engagement with an attitude of professional skepticism to
Limited Assurance Engagement
obtain sufficient appropriate evidence about whether the subject matter information is free
- objective: a reduction in assurance engagement risk to a level that is acceptable in
from material misstatement.
circumstances of the engagement, but where the risk is greater than for a reasonable
Consideration when Planning and Performing the Engagement assurance engagement, as a basis for a negative form of expression of the
a. Quantity (Sufficiency) and Quality (Appropriateness) of Evidence practitioner’s conclusion
- higher the quality, the less evidence may be required Types of AE Levels Forms Examples
- obtaining more evidence, however, may not compensate for its poor quality
Reasonable AE Reasonable Positive Audit
* When is evidence considered sufficient and appropriate?  It is a matter of professional judgement
 AUDITING AND ASSURANCE PRINCIPLES
Limited AE Limited Negative Review
PRACTICE AND REGULATION OF THE ACCOUNTANCY PROFESSION
Types of Engagement as to Structure
Attestation Engagements Scope of Practice
- an engagement in which a practitioner is engaged to issue, or does issue, a written  Public Accountancy
communication that expresses a conclusion about the reliability of a written assertion that is the  Commerce and Industry
responsibility of another party  Education / Academe
- may further be classified depending on the availability of the assertions made by the responsible  Government
party to intended users
Regulation of the Accountancy Profession
 Assertion-Based Engagements Republic Act No. 9298 (Philippine Accountancy Act of 2004)
- assurance engagements that the evaluation or measurement of the subject - regulatory act of the practice of accountancy in the Philippines
matter is performed by the responsible party, and the subject matter - supersedes Presidential Decree no. 692 (Revised Accountancy Law)
information is in the form of an assertion by the responsible party that is
made available to the intended users Objectives:
 The standardization and regulation of accounting education
 Direct Reporting Engagements  The examination for registration of certified public accountants
- assurance engagements that the practitioner either directly performs the  The supervision, control, and regulation of the practice of accountancy in the
evaluation or measurement of the subject matter, or obtains a representation Philippines
from the responsible party that has performed the evaluation or
measurement that is not available to the intended users in the assurance Professional Regulatory Board of Accountancy (BOA)
reports Composition:
 A chairman and six (6) members to be appointed by the President of the Philippines
Direct Engagements
 A vice chairman shall be elected from among its members for a term one (1) year
- a residual definition of assurance engagement as to structure
- when reporting is made to users, the practitioner classifies the engagement a direct reporting Qualification of Members:
engagement  Must be a natural-born citizen and a resident of the Philippines
 Must be a duly registered Certified Public Accountant with at least ten (10) years of work
Summary of Services Performed by Practitioners experience in any scope of practice of accountancy
Assurance Engagements Non-Assurance Engagements  Must be of good moral character and must not have been convicted of crimes involving
Agreed-upon Compilation moral turpitude
Audit Review
procedures engagement  Must not have any pecuniary interest, directly or indirectly, in any school, college,
university or institution conferring an academic degree necessary for admission to the
References PSAs and PAPS PSREs and PREPS PSRSs and PRSPS PSRSs and PRSPS
practice of accountancy or where review classes in preparation for the licensure
Express an opinion Express a conclusion Perform procedures examination are being offered or conducted, nor shall he/she be a member of the faculty
Use accounting or administration thereof at the time of his/her appointment to the Board
whether the FS are whether material as agreed upon with
expertise to collect,
Objective prepared in modifications are to the client and third  Must not be a director or officer of the APO at the time of his appointment
classify and
accordance with be made to the FS to parties and report on
summarize FS Term of Office:
PFRS conform with PFRS factual findings
 The Chairman and members of the Board shall hold office for a term of three (3) years
Independence plus Independence plus  No person who has served two (2) successive complete terms shall be eligible for
Ethical Fundamental ethical Fundamental ethical
fundamental ethical fundamental ethical reappointment until the lapse of one (1) year
Requirement principles principles
principles principles
Grounds for Suspension or Removal of Members of the Board:
Level of High but not absolute  Neglect of duty or incompetence
Moderate (limited) No assurance No assurance  Violation or tolerance of any violation of this Act and its implementing rules and
Assurance (reasonable)
regulations or the CPA’s Code of Ethics and the technical and professional standards of
Procedures are Exclusively by the Exclusively by the Agreed-upon by May or may not be practice for certified public accountants
determined by auditor auditor parties agreed by parties  Final judgment of crimes involving moral turpitude
 Manipulation or rigging of the certified public accountants licensure examination results,
Independent disclosure of secret and confidential information in the examination questions prior to the
Review Report Report on Factual
Report provided Auditor’s Report Compilation Report conduct of the said examination or tampering of grades.
(negative form) Findings
(positive form)
Certified Public Accountant Examinations
Availability of Qualifications of Applicants for Examinations:
To all users To all users For limited use only To all users
Report  a Filipino citizen
 of good moral character
 a holder of the degree of Bachelor of Science in Accountancy conferred by a school, college,
academy or institute duly recognized and/or accredited by the CHED or other authorized government
offices
 AUDITING AND ASSURANCE PRINCIPLES
 has not been convicted of any criminal offense involving moral turpitude

Scope of Examination: Special / Temporary Permits

 Advanced Financial Accounting and Reporting (AFAR)
 Auditing (AUD) May be issued by the Board subject to the approval of the Commission and payment of
 Financial Accounting and Reporting (FAR) the fees the latter has prescribed and charged thereof to the following persons:
\

 Management Advisory Services (MAS)  A foreign CPA called for consultation or for a specific purpose which, in the judgment of
 Taxation (TAX) the Board, is essential for the development of the country: (Provided, that his/her practice
 Regulatory Framework for Business Transactions (RFBT) shall be limited only for the particular work that he/she is being engaged and that there is no Filipino
CPA qualified for such consultation or specific purposes)
Rating in the Licensure Examination  A foreign CPA engaged as professor, lecturer or critic in fields essential to accountancy
Passed: Gen. ave. of at least 75%, with no grades lower than 65% in any given subject education in the Philippines and his/her engagement is confined to teaching only
Conditional: Gen. ave. of less than 75%, has a grade of less than 65%, or both, but has  A foreign CPA who is an internationally recognized expert or with specialization in any
obtained 75% and above in at least majority (4 out of 6) of the subjects branch of accountancy and his/her service is essential for the advancement of
covered in the licensure examination accountancy in the Philippines
Removal Examination Indication of Certificate of Registration, Identification Card and Professional Tax Receipt
- candidate shall take an examination in the remaining subjects within two The certified public accountant shall be required to indicate his/her certificate of
years from the preceding examination registration number, and date of issuance, the duration of validity, including the Professional Tax
Failing Candidates to Take Refresher Course Receipt number on the documents he/she signs, uses or issues in connection with the practice of
his/her profession.
A candidate who fails in two (2) complete CPA Board Examinations shall be disqualified
from taking another set of examinations unless he/she submits evidence to the satisfaction of the Refusal to Issue
Board that he/she enrolled in and completed at least twenty-four (24) units of subject given in the The Board shall not register and issue a certificate of registration and professional
board exam. identification card to any successful examinee:
Report of Ratings  Convicted by a court of competent jurisdiction of a criminal offense involving moral
turpitude
The Board shall submit to the Commission the ratings obtained by each candidate within  Guilty of immoral and dishonorable conduct
ten (10) calendar days after the examination, unless extended for just cause. Upon the release of  Of unsound mind
the results of the examination, the Commission shall send by mailing the rating received by each
examinee at his/her given address using the mailing envelope submitted during the examination. Suspension and Revocation
Oath Grounds for Suspension:
 As mentioned in the grounds for refusal to issue
All successful candidates in the examination shall be required to take an oath of  Any unprofessional or unethical conduct
profession before any member of the Board or before any government official authorized by the  Malpractice
Commission or any person authorized by law to administer oaths upon presentation of proof of  Violation of any of the provisions of RA 9298 and its IRR, the CPA‘s Code of Ethics
his/her qualification, prior to entering upon the practice of the profession. and the technical and professional standards of practice for certified public
Roster of Certified Public Accountants accountants
A roster showing the names and place of business of all registered certified public Reinstatement, Reissuance and Replacement of Revoked or Lost Certificates
accountants shall be prepared and updated by the Board, and copies thereof shall be made The Board may, after the expiration of two (2) years from the date of revocation of a
available to any party as may be deemed necessary. certificate of registration and upon application and for reasons deemed proper and sufficient,
Certificates of Registration, Professional Identification Card and Temporary/Special Permits reinstate the validity of a revoked certificate of registration and in so doing, may, in its discretion,
exempt the applicant from taking another examination.
Issuance
BOA has the power to issue a new certificate of registration to replace lost, destroyed, or
A certificate of registration shall be issued to:
mutilated certificate/license subject to the rules promulgated by BOA and PRC and upon payment
 examinees who pass the licensure examination
of the required fees.
 person admitted under reciprocity or other international agreements
Practice of Accountancy
Certificate of Registration
Prohibition in the Practice of Accountancy
Shall bear the following:
 Full name and the assigned registration number of the registrant No person shall practice accountancy in this country, or use the title “Certified Public
 Signature of the chairperson of the Commission and the chairman and Accountant”, or use the abbreviated title “CPA” or display or use any title, sign, card,
members of the Board advertisement, or other device to indicate such person practices or offers to practice accountancy,
 Official seal of the Commission and of the Board or is a certified public accountant, unless such person shall have received from the Board a
certificate of registration/ professional license and be issued a professional identification card or a
Professional Identification Card valid temporary/special permit duly issued to him/her by the Board and the Commission.
- bearing the registration number, date of issuance, expiry date, duly signed by the chairperson of
the Commission, shall likewise be issued to every registrant renewable every three (3) years “If you are not a CPA, DON’T CLAIM TO BE ONE!”
 AUDITING AND ASSURANCE PRINCIPLES
Secretary of Justice or his duly designated representative
- shall act as legal adviser to PRC and BOA and shall render legal assistance as may be
Limitation of the Practice of Public Accountancy necessary in carrying out the provisions of RA 9298.
Single practitioners and partnerships for the practice of public accountancy shall be Continuing Professional Development
registered certified public accountants in the Philippines.
RA 10912 – Continuing Professional Development (CPD) Act of 2016
Accreditation to Practice Public Accountancy - an act mandating and strengthening the continuing professional development program for all
 Individual certified public accountants, firms and partnerships of certified public regulated professions, creating the continuing professional development council, and
accountants, engaged in the practice of public accountancy, including partners and staff appropriating funds therefor, and for other related purposes
members thereof, shall register with the Commission and the Board. Definition and Rationale
 A certificate of accreditation shall be issued to CPA in public practice only upon showing
The inculcation of advanced knowledge, skills and ethical values in a post-licensure
that such registrant has acquired a minimum of three (3) years meaningful experience in
specialization or in an inter- or multidisciplinary field of study, for assimilation into professional
any of the areas of public practice including taxation.
practice, self-directed research or lifelong learning.
 The registration shall be valid for a period of three (3) years and may be renewed every
three (3) years on or before September 30 on the year of expiry upon compliance of the Voluntary compliance with the CPD program is an effective and credible means of
requirements. ensuring competence, integrity and global competitiveness of professional in order to allow them to
continue the practice of their profession.
Seal and Use of Seal
All licensed certified public accountants shall obtain and use a seal of a design Required CPE Credit Units
prescribed by the Board bearing the registrant’s name, registration number and title. The auditor’s Renewal of PIC – fifteen (15) credit units
reports shall be stamped with said seal, indicating therein his/her current Professional Tax Receipt Exemptions:
(PTR) number, date/place of payment when filed with government authorities or when used  Professional working overseas (OFWs)
professionally.  Newly licensed professionals for the first renewal cycle after obtaining their license
Ownership of Working Papers For accreditation (initial and renewal) – one hundred twenty (120) credit units
As a rule, working papers are confidential, privileged and property of the CPA. Minimum units under required competency areas:
Foreign Reciprocity Technical Competence 30 units
Professional Skills 5 units
Subjects or citizens of foreign countries may be allowed to practice Accountancy in the
Professional Values, Ethics, and Attitudes 5 units
Philippines in accordance with the provisions of existing laws, international treaty obligations
40 units
including mutual recognition agreements entered into by the Philippine government with other
Flexible CPD units 80 units
countries.
Required number of CPD units 120 units
A person who is not a citizen of the Philippines shall not be allowed to practice * The required minimum units earned from the previous year/s shall be 20 credit units.
accountancy in the Philippines unless he/she can prove, in the manner provided by the rules of
court that, by specific provision of law, the country of which he/she is a citizen, subject or national How to Earn CPD Credit Units?
admits citizens of the Philippines to the practice of the same profession without restriction.  Seminars / Workshops (training offered by Accredited CPD Providers, Face to Face or Online)
Penal and Final Provisions  As participant
 As resource speaker
Penal Provisions  As panelist / reactor
Any person who shall violate any of the provisions of this Act or any of its implementing  As facilitator / moderator
rules and regulations as promulgated by the Board subject to the approval of the Commission,  As CPD monitor
shall, upon conviction, be punished by a fine of not less than fifty thousand pesos (P 50,000.00) or  In-service training / On-the-job training
by imprisonment for a period not exceeding two (2) years or both.  Academic Track (must be applied within 5 years after completion)
 Master’s Degree or equivalent
Enforcement of the Act  Doctorate Degree or equivalent
Professional Regulation Commission (PRC)  Bachelor of Laws
 Professional certifications (ex: CMA, CFA, CFE, CIA, and CISA)
- primary duty to effectively enforce or implement the provisions of RA 9298
 Foreign language certifications
Professional Regulatory Board of Accountancy (BOA)  Professional chair
 Internship / Specialty / Sub-specialty program
- shall assist PRC in filing the appropriate charges for cases of illegal practice or
 Fellowship grant
violations of RA 9298 through the concerned prosecution office in accordance with law  Post-graduate diploma / certificate
and rules of court
 Self-Directed and/or Lifelong Learning (Training offered by Non-Accredited Providers, Face to Face or Online)
All duly constituted law enforcement agencies and officers of national, provincial,  Aside from activities similar with seminars / workshops, the following are also included in this
city or municipal government or of any political subdivision category
 Technical paper
- upon the call or request of the Commission or the Board, these organizations shall
 Article published in refereed/peer reviewed professional journal
render assistance in enforcing the provisions of this Act and to prosecute any person  Pamphlet/book or monograph
violating the provisions of the same  Magazine / newspaper articles relevant to the topics in the competence areas
 AUDITING AND ASSURANCE PRINCIPLES
 Study tours / visits Academe/Education (2) * shall be equally distributed among the private and public schools
 Active committee membership in FRSC, AASC, PIC, CPD Committee Government (1)
Total Composition 7
 Such Other Activities to be recommended by the CPD Council and Approved by the
Board and the Commission
Organizations Affecting the Accountancy Profession (discussed under RA 9298)
ETC was established to assist the Board in:
Financial Reporting Standards Council (FRSC)
 carrying out its powers and functions provided in Rule II, Section 7 (n) of RA 9298
Chairman, who had been or presently a senior practitioner in any scope of accounting practice 1
 in attaining the objective of continuously upgrading the accountancy education in the
Fourteen (14) representatives from the following:
Philippines to make the Filipino CPAs globally competitive
Board of Accountancy 1
Commission on Audit 1 Term of Office
Securities and Exchange Commission 1
The chairman and members of the FRSC, AASC, QRC and ETC shall have a term of
Bangko Sentral ng Pilipinas 1
three (3) years renewable for another term.
Bureau of Internal Revenue 1
A major organization composed of preparers and users of the financial statements Accredited Professional Organization (Philippine Institute of Certified Public Accountants)
1
FINEX (Financial Executives Institute of the Philippines)
Accredited National Professional Organization of CPAs: All registered certified public accountants whose names appear in the roster of certified
Public Practice (2) public accountants shall be united and integrated through their membership in a one and only
Commerce and Industry (2) 8 registered and accredited national professional organization of registered and licensed certified
Academe/Education (2)
Government (2)
public accountants, which shall be registered with the Securities and Exchange Commission as a
Total Composition 15 nonprofit corporation and recognized by the Board, subject to the approval by the Commission.
The members in the said integrated and accredited national professional organization
Auditing and Assurance Standards Council (AASC)
shall receive benefits and privileges appurtenant thereto upon payment of required fees and dues.
Chairman, who had been or presently a senior practitioner in public accountancy 1
Membership in the integrated organization shall not be a bar to membership in any other
Fourteen (14) representatives from the following:
association of certified public accountants.
Board of Accountancy 1
Commission on Audit 1 Philippine Institute of Certified Public Accountant (PICPA)
Securities and Exchange Commission 1
- recognized by the Commission as the APO on October 2, 1975 per Accreditation No. 15
Bangko Sentral ng Pilipinas 1
An Association of CPAs in active public practice of accountancy 1 Objectives / Purpose:
Accredited National Professional Organization of CPAs:  established for the benefit and welfare of the CPAs
Public Practice (6)  the advancement of their profession
Commerce and Industry (1) 9
Academe/Education (1)  the attainment of other professional ends
Government (1)
Total Composition 15 Membership: open to all registered CPAs from all sectors
Chapter / Regions: shall have adequate number in major areas in the Philippines to effectively
Quality Review Committee (QRC) attend to the needs of its members
Chairman, who had been or presently a senior accounting practitioner in public accountancy 1
National Directors: shall only be 15 unless there is a valid reason to have additional
Fourteen (14) representatives from the following:
representation
Board of Accountancy 1
Accredited National Professional Organization of CPAs: Renewal of certificate of accreditation: once every three years
Public Practice (2)
Commerce and Industry (1) 5 Cancellation of accreditation may be caused by any of the following grounds:
Academe/Education (1)
Government (1)
 has ceased to possess any of the qualifications for accreditation
Total Composition 7  no longer serves the best interests of CPAs
 did not achieve its plan within three years
Functions of QRC:  has committed acts inimical to its members and to the profession
 Conduct quality review on applicants for registration to practice public accountancy and  failure to renew its accreditation after a lapse of unreasonable period
render a report which shall be attached to the application for registration.
 Recommend to the Board the revocation of the certificate of registration and the PRC CPE Council
professional identification card of CPAs in public practice of accountancy. - the Board, upon approval by the PRC, shall create this council which shall assist the Board in
implementing its CPE program
Education Technical Council (ETC)
Chairman, who had been or presently a senior accounting practitioner in the academe / education 1 Composition
Fourteen (14) representatives from the following: The PRC CPE Council shall be composed of a chairperson and two (2) members.
Board of Accountancy 1  The chairperson shall be chosen among the members of the Board
Accredited National Professional Organization of CPAs: 5  The first member could either be the president or any officer chosen by the BOD of
Public Practice (1) PICPA
Commerce and Industry (1)
 AUDITING AND ASSURANCE PRINCIPLES
 The second member could either be the president or any officer of the - supervises operations of banks and exercise regulatory powers over non-bank financial
organizations of deans or department heads of schools, colleges or universities institutions
offering BS Accountancy program. with quasi-banking functions
- has the primary objective of maintaining price stability conducive to a balanced and sustainable
Term of Office economic growth
Co-terminus with their respective incumbency in BOA, PICPA and organization - also aims to promote and preserve monetary stability and the convertibility of the Philippine peso
Insurance Commissions
Powers and Functions - promulgates and implements policies, rules and regulations governing the operations of entities
The council shall, upon a majority vote, exercise powers and functions which shall engaged in insurance and pre-need activities
include but shall not be limited to the following: - prescribes additional requirements regarding audits of its regulated entities
 Accept, evaluate and approve applications for accreditation of CPE providers.
 Accept, evaluate and approve applications for accreditation of CPE programs,
activities or sources as to their relevance to the profession and determine the
number of CPE credit units to be earned on the basis of the contents of the Professional Organizations
programs, activity or source submitted by the CPE providers. Philippine Institute of Certified Public Accountants (PICPA)
 Accept, evaluate and approve applications for accreditation for exemptions from - the accredited national professional organization
CPE requirements.
 Monitor implementation by the CPE providers of their programs, activities or Sectoral Organizations
sources. 1. Association of CPAs in Public Practice (ACPAPP)
 Assess periodically and upgrade criteria for accreditation of CPE providers and 2. Association of CPAs in Education (ACPAE)
CPE programs, activities or sources. 3. Association of CPAs in Commerce and Industry (ACPACI)
 Perform such other related functions that may be incidental to implementation of 4. Government Association of CPASs (GACPA)
the CPE programs or policies. Standard-Setting Bodies
If the need arises, the PRC CPE Council may delegate to the PICPA:  Financial Reporting Standards Council
 the processing of the application  Auditing and Assurance Standards Council
 keeping of all records for CPE providers and their respective programs and credit units
earned by each CPA who avail of the CPE programs
 any other related functions
Regulatory Government Agencies
In addition to BOA, the following government agencies affect the accountancy profession.:
Professional Regulation Commission (PRC)
- the agency that administers, implements and enforces the regulatory policies of the government
with respect to the regulation and licensing of the various professions under its jurisdiction
Commission on Audit (COA)
- considered as the Philippines’ Supreme Audit Institution
- its mission is to ensure accountability for public resources, promote transparency, and help
improve
government operations in partnership with stakeholders for the benefit of the Filipino people
- its primary function is to keep the general accounts of the government and for such period as
may
be provided by law, preserve the vouchers pertaining thereto.
Securities and Exchange Commission (SEC)
- the regulatory agency charged with supervision over the corporate sector, the capital market,
participants, and the securities and investment instruments market, and the protection of the
investing public
Bureau of Internal Revenue (BIR)
- has the primary objective of raising revenues for the government
- also prescribes additional requirements for audited financial statements that accompany tax
returns
of various entities
Bangko Sentral ng Pilipinas (BSP)
- provides policy directions in the areas of money, banking and credit