Updates from the Board of Accountancy

1
Updates from the Board of Accountancy

• Hon. Ma. Elenita B. Cabrera

2
Resolutions issued in 2007 and 2008 relative to
Rules affecting the Practice of Accounting
Profession
3
Resolutions issued in 2007 and 2008 relative to
Rules affecting the Practice of Accounting
Profession
4
Resolutions issued in 2007 and 2008 relative to
Rules affecting the Practice of Accounting
Profession (contd)
5
Resolutions issued in 2007 and 2008 relative to
Rules affecting the Practice of Accounting
Profession (contd)
6
Resolutions issued in 2007 and 2008 relative to
Rules affecting the Practice of Accounting
Profession (contd)
Others
7
Resolutions issued in 2007 and 2008 relative to
Rules affecting the Practice of Accounting
Profession (contd)
Auditing
8
Pending BOA Approval

• PFRS 3 (revised 2008), Business Combination
• Effectivity On or after 7.1.09
• PAS 27 (revised 2008), Consolidated and Separate
  Financial Statements
• Effectivity On or after 7.1.09

9
Pending BOA Approval

• Amendment to PFRS 2, Share-based Payment
  Vesting Conditions and Cancellations
• Effectivity On or after 1.1.09
• Amendment to PAS 32, Financial Institutions and
  PAS 1 Presentation of Financial Statements
  (revised 2007) Puttable Financial Instruments
  and Obligations arising on Liquidation
• Effectivity On or after 1.1.09

10
Code of Ethics for Professional Accountants in
the Philippines

• Effective June 30, 2008
• Resolution No. 125, Series of 2008

11
The new provisions (modifications) in the Code of
Ethics follow

• Part A General Application of the Code
• Section 100 Introduction and Fundamental
  Principles
• Par(s) 100.1 100.2 100.3 100.4(c) 100.5
  100.9 (new)
• Section 150 Professional Behavior
• Par 150.1 (new)

12

• Part B Professional Accountants in Public
  Practice
• Section 200 Threats Safeguards
• Par(s) 200.1 200.2 (new)
• Section 210 Professional Appointment
• Par(s) 210.1 210.2 210.3 210.4 210.5 210.6
  210.11 (new)

13

• Part B Professional Accountants in Public
  Practice (contd)
• Section 240 Fees Other Types of Renewal
• Par 240.2 (new)
• Section 250 Marketing Professional Services
• Par(s) 250.1 250.2 (new)

14

• Part B Professional Accountants in Public
  Practice (contd)
• Section 290 Independence Assurance Engagements
• Par(s) 290.2 290.4 (modified)
• Section 290 Network and Network Firms
• Par(s) 290.14 - 290.26 (new) For reports dated
  on or after December 31, 2009

15

• Part B Professional Accountants in Public
  Practice (contd)
• Section 290 Loans and Guarantees
• Par 290.127 (modified)
• Par 290.154(a) (modified) The period of rotation
  of the engaged partner was changed from 7 to 5
  years.
• Par 290.168 (modified)
• Par 290.182 (modified)
• Interpretation 2005.1 (modified)

16
Part ASection 100
new
17
new
18
new
19
new
20
new
21
new
22
Part ASection 120 Integrity
23
Part ASection 130 Professional Competence and
Due Care
new
24
Part ASection 140 Confidentiality
25
Part ASection 150 Professional Behavior
new
26
Part BSection 200 Introduction
new
27
Part BSection 200 Introduction (contd)
new
28
Part BSection 200 Threats and Safeguards
29
Part BSection 210 Professional Appointment
new
30
new
31
new
32
new
33
new
new
34
Part BSection 210 Professional Appointment
35
new
36
Part BSection 240 Fees and Other Types of
Remuneration
new
37
Part BSection 290
new
38
Part BSection 290
new
39
Part BSection 290
new
40
Part BSection 290
new
41
Part BSection 290
new
42
Part BSection 290
new
43
Part BSection 290
new
44
Part BSection 290
45
Part CSection 300
new
46
new
47
new
48
new
49
new
50
new
51
new
52
new
53
new
54
new
55
new
56
new
57
new
58
new
59
new
60
new
61
(No Transcript)
62
(No Transcript)
63
new
64
Part CSection 310
65
Definitions

• Assurance engagement The second paragraph was
  modified to make reference to the Philippine
  Framework for Assurance Engagements issued by the
  Auditing and Assurance Standards Council,
  Philippine Standards on Auditing, Philippine
  Standards on Review Engagements and Philippine
  Standards on Assurance Engagements.
• Financial statement audit engagement The
  definition was modified to make reference to the
  Philippine Standards on Auditing.

66
Definitions (contd)

• Firm The word corporation was deleted from the
  definition because a corporate form for the
  professional practice of accountancy is not
  allowed in the Philippines.
• Professional accountant The definition was
  changed to, An individual who holds a valid
  certificate issued by the Board of Accountancy
  (i.e., Certified Public Accountant), whether
  he/she be in public practice, industry, commerce,
  the public sector or education.

67
Advertising
68
Rules and Regulations in Marketing and Promotion
for the Practice of Accountancy in the
Philippines

• 2. Professional Behavior
• 150.1 The principle of professional behavior
  imposes an obligation on professional accountants
  to comply with relevant laws and regulations and
  avoid any action that may bring discredit to the
  profession. This includes actions which a
  reasonable and informed third party, having
  knowledge of all relevant information, would
  conclude negatively, affects the good reputation
  of the profession.

69
Rules and Regulations in Marketing and Promotion
for the Practice of Accountancy in the
Philippines

• 150.2 In marketing and promoting themselves and
  their work, professional accountants should not
  bring the profession into disrepute.
  Professional accountants should be honest and
  truthful and should not
• Make exaggerated claims for the services they are
  able to offer, the qualifications they possess,
  or experience they have gained or
• Make disparaging references or unsubstantiated
  comparisons to the work of others.

70
Resolution No. 126, Series of 2008

• Generally, advertising and publicity in any
  medium are acceptable provided
• It has as its objective the notification to the
  public or such sectors of the public as are
  concerned, of matters of fact (e.g., name,
  address, contact numbers, services offered) in a
  manner that is not false, misleading or
  deceptive
• It is in good taste
• It is professionally dignified and
• It avoids frequent repetition of, and any undue
  prominence being given to the name of the firm or
  professional accountant in public practice.

71
Rules and Regulations on Advertising and
Promotion for the Practice of Accountancy in the
Philippines (contd)

• The following however shall not be allowed
• Self-laudatory statements
• Discrediting, disparaging, or attacking other
  firms or CPA practitioners
• Referring to, using or citing actual or purported
  testimonials by third parties
• Publishing and comparing fees with other CPAs or
  CPA firms or comparing those services with those
  provided by another firm or CPA practitioner
• Giving too much emphasis on competitive
  differences
• Using words or phrases which are hard to define
  and even more difficult to substantiate
  objectively
• Publishing services in billboard (e.g.,
  tarpaulin, streamers, etc.) advertisements

72
Rules and Regulations on Advertising and
Promotion for the Practice of Accountancy in the
Philippines (contd)

• The use of the name of an international
  accounting firm affiliation/correspondence other
  than a notation that it is a member/correspondent
  firm of that foreign firm shall not be allowed
  so as to imply that the foreign firm is
  practicing in the Philippines.

73
Rules and Regulations on Advertising and
Promotion for the Practice of Accountancy in the
Philippines (contd)

• Under IRR of RA 9298, Annex B, paragraph I-C, an
  individual CPA, Firm or Partnership shall do
  business under their registered name, firm name
  or partnership name with the Board of Accountancy
  and Professional Regulation Commission and
  Securities and Exchange Commission.
• Local professional firms therefore should not
  represent itself directly under the name of its
  international affiliate (e.g., using the name of
  the international firm as part of its partnership
  name). Doing so, I believe is violative of the
  rules of Ethics as this is tantamount to
  misleading advertising or misrepresentation.

74
Rules and Regulations on Advertising and
Promotion for the Practice of Accountancy in the
Philippines (contd)

• Unlike global manufactured products which could
  be produced following standard manufacturing
  operations, professional services are personal in
  nature, and will be characterized by the personal
  qualifications and competencies of the
  professional involved, via -- 
• 1. Formal training
• 2. Qualifying licensure examinations
• 3. Work experience
• 4. Available support resources (e.g., research
  and affiliation with firms of international
  repute)
•  
• Hence it is the direct competencies of the
  professionals involved and not its international
  affiliation that will be available to local
  clients.

75
Rules and Regulations on Advertising and
Promotion for the Practice of Accountancy in the
Philippines (contd)

• No firm or CPA practitioner shall identify the
  name of a client or items of a clients business
  in advertising, public relations or marketing
  material produced to promote his practice
  provided that the client gives its written
  consent.

76
Rules and Regulations on Advertising and
Promotion for the Practice of Accountancy in the
Philippines (contd)

• No firm or CPA practitioner shall use the term
  Accredited or any similar words or phrases
  calculated to convey the same meaning if the
  claimed accreditation (BOA, SEC, BSP or IC) has
  expired.

77
Rules and Regulations on Advertising and
Promotion for the Practice of Accountancy in the
Philippines (contd)

• All advertisements must have prior review and
  approval in writing by the Risk Management
  Partner and Managing Partner or their
  equivalents.

78
Rules and Regulations on Advertising and
Promotion for the Practice of Accountancy in the
Philippines (contd)

• The following examples are illustrative of
  circumstances in which publicity is acceptable
  and the matters to be considered in connection
  therewith subject always to the overriding
  requirements mentioned in the preceding rules.

79
Rules and Regulations on Advertising and
Promotion for the Practice of Accountancy in the
Philippines (contd)

• Awards
• It is in the interests of the public and the
  accountancy profession that any appointment or
  other activity of a professional accountant in a
  matter of national or local importance, or the
  award of any distinction to a professional
  accountant, should receive publicity and that
  membership of the professional body should be
  mentioned.  However, the professional accountant
  should not make use of any of the aforementioned
  appointments or activities for personal
  professional advantage.

80
Rules and Regulations on Advertising and
Promotion for the Practice of Accountancy in the
Philippines (contd)

• Professional Accountants Seeking Employment or
  Professional Business
• A professional accountant may inform interested
  parties through any medium that a partnership or
  salaried employment of an accountancy nature is
  being sought.  The professional accountant should
  not, however, publicize for subcontract work in a
  manner which could be interpreted as seeking to
  procure professional business.  Publicity seeking
  subcontract work may be acceptable if placed only
  in the professional press and provided that
  neither the accountants name, address or
  telephone number appears in the publicity.  A
  professional accountant may write a letter or
  make a direct approach to another professional
  accountant when seeking employment or
  professional business.

81
Rules and Regulations on Advertising and
Promotion for the Practice of Accountancy in the
Philippines (contd)

• Directories
•       A professional accountant may be listed in
  a directory.  Entries may include name, address,
  telephone number, professional description,
  services offered and any other information
  necessary to enable the user of the directory to
  make contact with the person or organization to
  which the entry relates.

82
Rules and Regulations on Advertising and
Promotion for the Practice of Accountancy in the
Philippines (contd)

• Books, Articles, Interviews, Lectures, Radio and
  Television Appearances
•       Professional accountants who author books
  or articles on professional subjects, may state
  their name and professional qualifications and
  give the name of their organization but shall not
  give any information as to the services that firm
  provides.  Similar provisions are applicable to
  participation by a professional accountant in a
  lecture, interview or a radio or television
  program on a professional subject.  What
  professional accountants write or say, however,
  should not be promotional of themselves or their
  firm but should be an objective professional view
  of the topic under consideration.  Professional
  accountants are responsible for using their best
  endeavors to ensure that what ultimately goes
  before the public complies with these
  requirements.

83
Rules and Regulations on Advertising and
Promotion for the Practice of Accountancy in the
Philippines (contd)

• Training Courses, Seminars, etc.
•       A professional accountant may invite
  clients, staff or other professional accountants
  to attend training courses or seminars conducted
  for the assistance of staff.  Other persons
  should not be invited to attend such training
  courses or seminars except in response to an
  unsolicited request.  The requirement should in
  no way prevent professional accountants from
  providing training services to other professional
  bodies, associations or educational institutions
  which run courses for their members or the
  public.  However, undue prominence should not be
  given to the name of a professional accountant in
  any booklets or documents issued in connection
  therewith.

84
Rules and Regulations on Advertising and
Promotion for the Practice of Accountancy in the
Philippines (contd)

• Booklets and Documents Containing Technical
  Information
•       Booklets and other documents bearing the
  name of a professional accountant and giving
  technical information for the assistance of staff
  or clients may be issued to such persons, other
  professional accountants or other interested
  parties.

85
Rules and Regulations on Advertising and
Promotion for the Practice of Accountancy in the
Philippines (contd)

• Staff Recruitment
•       Genuine vacancies for staff may be
  communicated to the public through any medium in
  which comparable staff vacancies normally
  appear.  The fact that a job specification
  necessarily gives some detail as to one or more
  of the services provided to clients by the
  professional accountant in public practice is
  acceptable but it should not contain any
  promotional element.  There should not be any
  suggestion that the services offered are superior
  to those offered by other professional
  accountants in public practice as a consequence
  of size, associations, or for any other reason.

86
Rules and Regulations on Advertising and
Promotion for the Practice of Accountancy in the
Philippines (contd)

• In publications such as those specifically
  directed to schools and other places of education
  to inform students and graduates of career
  opportunities in the profession, services offered
  to the public may be described in a business
  likeway.
•     More latitude may also be permissible in a
  section of a newspaper devoted to staff vacancies
  than would be allowed if the vacancy appeared in
  a prominent position elsewhere in a newspaper on
  the grounds that it would be most unlikely that a
  potential client would use such media to select a
  professional adviser.

87
Rules and Regulations on Advertising and
Promotion for the Practice of Accountancy in the
Philippines (contd)

• Publicity on Behalf of Clients
• A professional accountant in public practice may
  publicize on behalf of clients, primarily for
  staff.  However, the professional accountant in
  public practice should ensure that the emphasis
  in the publicity is directed towards the
  objectives to be achieved for the client.

88
Rules and Regulations on Advertising and
Promotion for the Practice of Accountancy in the
Philippines (contd)

• Brochures and Firm Directories
•       A professional accountant in public
  practice may issue to clients or, in response to
  an unsolicited request, to a non-client
• A factual and objectively worded of the services
  provided and
• A directory setting out names of partners, office
  addresses and names and address of associated
  firms and correspondents.

89
Rules and Regulations on Advertising and
Promotion for the Practice of Accountancy in the
Philippines (contd)

• Stationery and Nameplates
• Stationery of professional accountants in public
  practice should be of an acceptable professional
  standard and comply with the requirements of the
  law and of the member body concerned as to names
  of partners, principals and others who
  participate in the practice, use of professional
  descriptions and designatory letters, cities or
  countries where the practice is represented,
  logotypes, etc.  The designation of any services
  provided by the practice as being specialist
  nature should not be permitted.  Similar
  provisions, where applicable, should apply to
  nameplates.

90
Rules and Regulations on Advertising and
Promotion for the Practice of Accountancy in the
Philippines (contd)

• Announcements
• Appropriate newspapers or magazines may be used
  to inform the public of the establishment of a
  new practice, of changes in the composition of a
  partnership of professional accountants in public
  practice, or of any alteration in the address of
  a practice.  Such announcements should be limited
  to a bare statement of facts and consideration
  given to the appropriateness of the area of
  distribution of the newspaper or magazine and
  number of insertions.

91
Rules and Regulations on Advertising and
Promotion for the Practice of Accountancy in the
Philippines (contd)

• Inclusion of the Name of the Professional
  Accountant in Public Practice in a Document
  Issued by a Client
• When a client proposes to publish a report by a
  professional accountant in public practice
  dealing with the clients existing business
  affairs or in connection with the establishment
  of a new business venture, the professional
  accountant in public practice should take steps
  to ensure that the context in which the report is
  published is not such as might result in the
  public being misled as to the nature and meaning
  of the report.  In these circumstances, the
  professional accountant in public practice should
  advise the client that permission should first be
  obtained before publication of the document.

92
Rules and Regulations on Advertising and
Promotion for the Practice of Accountancy in the
Philippines (contd)

• Similar consideration should be given to other
  documents proposed to be issued by a client
  containing the name of a professional accountant
  in public practice acting in an independent
  professional capacity.  This does not preclude
  the inclusion of the name of a professional
  accountant in public practice in the annual
  report of a client.
• When professional accountants in their private
  capacity are associated with, or hold in, an
  organization, the organization may use their name
  and professional status on stationery and other
  documents.  The professional accountant in public
  practice should ensure that this information is
  not used in such a way as might lead the public
  to believe that there is a connection with
  organization in an independent professional
  capacity.

93
Rules and Regulations on Advertising and
Promotion for the Practice of Accountancy in the
Philippines (contd)

• Anniversaries
• A professional accountants press and other
  media releases or announcements or newspaper
  supplements, or other similar publications, or
  other commemorative media, or the holding of
  media covered events undertaken only to
  commemorate their anniversaries in public
  practice by informing the public of their
  achievements or accomplishments in contributing
  towards nation building and in international
  understanding, goodwill, or relationship or
  enhancing the image or standards of the
  accounting profession do not violate the rules on
  advertising and solicitation provided that such
  announcements or undertakings contains only
  factual matters without detailed listing of
  services.  Such undertaking should be done only
  every five years of celebration.

94
Rules and Regulations on Advertising and
Promotion for the Practice of Accountancy in the
Philippines (contd)

• Websites
• A professional accountant may develop and
  maintain a website in the Internet in such
  suitable length and style which may also include
  announcements, press releases, publications and
  such other necessary and factual information like
  firms name, partners/principals name and brief
  description of their educational attainment,
  brief listing of services, postal address,
  telephone, fax and e-mail addresses.  Such
  website should adhere to the rules mentioned
  above.

95
Academe
96
Requirements for the Accreditation of Accounting
Teachers

• Possession of relevant Master's degree. Any
  post-graduate degree program in business,
  accounting, taxation, law, education and related
  fields earned from any graduate school duly
  recognized by the Commission on Higher Education
  (CHED) will qualify for this requirement.

97
Requirements for the Accreditation of Accounting
Teachers (contd)

• Completion of 12 units of relevant education
  subjects from the CHED recognized schools.

98
Requirements for the Accreditation of Accounting
Teachers (contd)

• A total of three years meaningful experience in
  actual accounting work either in the Public
  Practice, Commerce and Industry or Government
  sector.

99
Requirements for the Accreditation of Accounting
Teachers (contd)

• Proof that the CPA has undergone Continuing
  Professional Education (CPE).

100
Government
101

• The COA is in the process of complying with the
  24 IPSAS currently issued by IFAC.  The
  compliance is through the Philippine Government
  Accounting Standards (PGAS).  However, there are
  a lot of realignments being made.  The GAFMIS has
  already come up with a comparison of the IPSAS
  and the PGAS.

102

• The current accounting standards setting body in
  the Philippines is the COA with representatives
  from different offices under it.  We have
  discussed the possibility of coming up with a
  body or council where BOA is represented.

103

• COA agreed to help in the renewal of PRC licenses
  of CPAs in the government by issuing a
  memorandum.  It is clear that as preparers of
  financial statements, the CPAs in government are
  also engaged in the practice of accountancy.  COA
  employees will also be mandated to renew their
  licenses.

104

• There is a need to benchmark our practices and
  standards in government accounting with other
  countries especially the developed ones.  A
  comparison of the financial statements from a
  developed country would be very interesting.
  Hence, COA and BOA can look into this
  benchmarking as future project.

105
Commerce Industry
106
Conclusion