USPF – School of Business and Accountancy

Topic: The Accountancy Profession

The following are excerpts from Republic Act 9298:

SECTION 1 - Short Title
This Rules and Regulations shall be known as THE RULES AND REGULATIONS IMPLEMENTING REPUBLIC ACT NO. 9298
otherwise known as the “PHILIPPINE ACCOUNTANCY ACT OF 2004”.

SECTION 3 - Objectives
This Act shall provide for and govern:

(a) The standardization and regulation of accounting education;

(b) The examination for registration of certified public accountants; and
(c) The supervision, control, and regulation of the practice of accountancy in the Philippines.

SECTION 4 - Scope of Practice

The practice of Accountancy shall include, but not limited, to the following:
(a) Practice of Public Accountancy - shall constitute in a person,
(i) be it his/her individual capacity, or as a partner or as a staff member in an accounting or auditing firm;
(ii) holding out himself/herself as one skilled in the knowledge, science and practice of accounting, and as a qualified person
to render professional services as a certified public accountant, or offering or rendering, or both, to more than one client
on a fee basis or otherwise, services such as:

• the audit or verification of financial transactions and accounting records; or

• the preparation, signing, or certification for clients of reports of audit, balance sheet, and other financial,
accounting and related schedules, exhibits, statements or reports which are to be used by stockholders or for
publication or for credit purposes, or to be filed with a court or government agency, or to be used for any other
purpose; or
• the design, installation, review and revision of accounting systems and controls ; or the preparation and/or review
of income tax returns when related to accounting and auditing procedures; or
• when he/she represents his/her clients before government agencies on tax and other matters related to
accounting; or
• renders professional assistance in matters relating to accounting procedures and the recording and
presentation of financial facts or data

(b) Practice in Commerce and Industry - shall constitute in a person,

(i) involved in decision making requiring professional knowledge in the science of accounting, as well as the accounting
aspects of finance and taxation, or
(ii) when he/she represents his/her employer before government agencies on tax and other matters related to accounting; or
(iii) when such employment or position requires that the holder thereof must be a certified public accountant.

In this connection, any position in any business or company in the private sector which requires supervising the recording
of financial transactions, preparation of financial statements, coordinating with the external auditors for the audit of such
financial statements and other related functions shall be occupied only by a duly registered CPA. Provided, That the
business or company where the above position exists has a paid -up capital of at least Five Million Pesos (P5,000,000.00)
and/or an annual revenue of at least Ten Million Pesos (P10,000,000.00). Provided Further, That this provision shall apply
only to persons to be employed after the effectivity of this Rules and Regulations, Provided, Finally, That this provision
shall not result to deprivation of the employment of incumbents to the position.

(c) Practice in Education/Academe - shall constitute in a person,

(i) in an educational institution which involve teaching of accounting, auditing, management advisory services, accounting
aspect of finance, business law, taxation, and other technically related subjects.

Provided, That members of the Integrated Bar of the Philippines may be allowed to teach business law and taxation
subjects; Provided, Further, That the position of either the dean or the department chairman or its equivalent that
supervises the Bachelors of Science in Accountancy program of an educational institution is deemed to be in practice of
accountancy in the academe / education and therefore must be occupied only by a duly registered CPA.

(d) Practice in the Government- shall constitute in a person,

(i) who holds, or is appointed to, a position in an accounting professional group in government or in a government-owned
and/or controlled corporation, including those performing proprietary functions, where decision making requires
professional knowledge in the science of accounting, or
(ii) where a civil service eligibility as a certified public accountant is a prerequisite.

SECTION 5 - The Professional Regulatory Board of Accountancy and its Composition

The Board shall be composed of a chairman and six (6) members to be appointed by the President of the Philippines from a list of
three (3) recommendees for each position and ranked by the Commission, from a list of five (5) nominees for each position
submitted by the APO. The Board shall elect a vice-chairman from among its members for a term of one (1) year. The chairman
shall preside in all meetings of the Board and in the event of a vacancy in the office of the chairman, the vice-chairman shall assume
such duties and responsibilities until such time as a chairman is appointed.

The four (4) sectors in the practice of accountancy shall as much as possible be equitably represented in the Board. The Commission in
consultation with the Board shall select three (3) nominees from those recommended by the APO and submit such list to the President
for consideration.

SECTION 5 (A) - Time of submission of nomination to the Board by the APO

The APO shall submit its nominations with complete documentation to the Commission not later than (60) days prior to the expiry of
the term of an incumbent chairman or member. There should be adequate documentation to show the qualification and primary
field of professional activity of the nominee to enable the Commission to determine the competence of the nominee and the sector
where he/she belongs. If the APO fails to submit its own nominee(s) to the Commission with the required documentations within the
period provided herein, the Commission in consultation with the Board shall submit to the President a list of three (3) nominees for each
vacant position.

SECTION 6 - Qualifications of Members of the Professional Regulatory Board of Accountancy

A member of the Board shall, at the time of his/her appointment, possess the following qualifications:
(a) Must be a natural-born citizen and a resident of the Philippines;
(b) Must be a duly registered Certified Public Accountant with at least ten (10) years of work experience in any scope of practice of
accountancy. He/shall be nominated to represent a sector from which he/she has considerable and meaningful professional
experience.
(c) Must be of good moral character and must not have been convicted of crimes involving moral turpitude;
(d) 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 practice of accountancy or where review classes in preparation for the licensure examination are
being offered or conducted, nor shall he/she be a member of the faculty or administration thereof at the time of his/her appointment to
the Board;
(e) Must not be a Director or Officer of the APO at the time of his appointment;

Provided, That if the Chairman or any member of the Board is still in active practice of public accountancy or connected with any office
in commerce and industry or in the government, he/she must go on leave during the pendency of any case involving himself/herself, his
firm, partnership, company or government office, or inhibit himself/herself completely in all the stages of the proceedings thereof.

SECTION 7 - Term of Office

The Chairman and members of the Board shall hold office for a term of three (3) years. Any vacancy occurring within the term of a
member shall be filled up for the unexpired portion of the term only. No person who has served two successive complete terms as
chairman or member shall be eligible for reappointment as chairman or member until the lapse of one year. Appointment to fill up an
unexpired term is not to be considered as a complete term. Provided, That no person shall serve in the Board for more than twelve
(12) years.

SECTION 9 - Powers and Functions of the Board

The Board shall act as a collegial body and shall exercise the following specific powers, functions and responsibilities:
(a) To prescribe and adopt the rules and regulations necessary for carrying out the provisions of this Act;
(b) To supervise the registration, licensure and practice of accountancy in the Philippines;
(c) To administer oaths in connection with the administration of this Act;
(d) To issue, suspend, revoke, or reinstate the Certificate of Registration for the practice of the accountancy profession;
(e) To adopt an official seal of the Board;
(f) To prescribe and/or adopt a Code of Ethics for the practice of accountancy;
(g) To monitor the conditions affecting the practice of accountancy and adopt such measures, including promulgation of accounting and
auditing standards, rules and regulations and best practices as may be deemed proper for the enhancement and maintenance of high
professional, ethical, accounting and auditing standards; Provided, That domestic accounting and auditing standards, rules and
regulations shall include the international accounting and auditing standards, and generally accepted best practices;
(h) To conduct an oversight into the quality of audits of financial statements through a review of the quality control measures instituted
by auditors in order to ensure compliance with the accounting and auditing standards and practices;
(i) To investigate violations of this act and the rules and regulations promulgated hereunder and for this purpose, to issue summons,
subpoena and subpoena ad testificandum and subpoena duces tecum to violators or witness thereof and compel their attendance to
such investigation or hearings and the production of documents in connection therewith: Provided, That the Board upon approval of the
Commission may, subject to such rules and regulations that may be promulgated to implement this section, delegate the fact-finding
aspect of such investigations to the accredited national professional organization of certified public accountants; Provided Further, That
the Board and/or the Commission may adopt their findings of fact as it may deem fit;
(j) The Board may, motu propio in its discretion, make such investigations as it deems necessary to determine whether any person has
violated any provisions of this law, any accounting or auditing standard or rules duly promulgated by the Board as part of the rules
governing the practice of accountancy;
(k) To issue a cease or desist order to any person, association, partnership or corporation engaged in violation of any provision of RA
No. 9298, any accounting or auditing standards or rules duly promulgated by the Board as part of the rules governing the practice of
accountancy in the Philippines;
(l) To punish for contempt of the Board, both direct and indirect, in accordance with the pertinent provisions of and penalties prescribed
by the Rules of Court;
(m) To prepare, adopt, issue or amend the syllabi of the subjects for examinations in consultation with the academe, determine and
prepare questions for the licensure examination which shall strictly be within the scope of the syllabi of the subjects for examinations as
well as administer, correct and release the results of the licensure examinations; Provided, That the Board may, upon prior approval by
the Commission, engage the services of expert test writers, who shall propose test questions for the CPA Licensure Examinations.
Provided, Further, That the Board does not delegate its power and function to determine and prepare test questions for the CPA
Licensure Examinations, Provided, Finally, That the Board and the Commission shall institute adequate controls over the processing
and safekeeping of such test questions to ensure the full integrity of the CPA Licensure Examinations;
(n) To ensure, in coordination with the Commission on Higher Education (CHED) or other authorized government offices, that all higher
educational instruction and offering of accountancy, including accounting review centers and/or CPE providers offering accounting
seminars, comply with the policies, standards and requirements of the course prescribed by CHED or other authorized government
offices or CPE Council as the case may be in the areas of curriculum, faculty, library and facilities; Provided, That for the orderly
implementation of this provision, the Board and the Commission may enter into a Memorandum of Agreement with CHED;
(o) To exercise such other powers as may be provided by law as well as those which may be implied from, or which are necessary or
incidental to the carrying out of, the express powers granted to the Board to achieve the objectives and purposes of RA No. 9298.

The policies, resolution, rules and regulations, issued or promulgated by the Board shall be subject to review and approval of the
Commission. However,the Board ’s decisions, resolutions or orders rendered in administrative cases shall be subject to review only if
on appeal.

SECTION 9 (A) - Accounting and Auditing Standard Setting Council

The Commission upon the recommendation of the Board shall within ninety (90) days from the effectivity of this IRR, create an
accounting standard setting body to be known as the Financial Reporting Standards Council (FRSC) and an auditing standard
setting body to 8 be known as the Auditing and Assurance Standards Council (AASC) to assist the Board in carrying out its powers
and functions provided in Rule II, Section 7 (g) hereof;

The FRSC shall be composed of fifteen (15) members with a Chairman, who had been or presently a senior accounting practitioner
in any of the scope of accounting practice and fourteen (14) representatives from the following:
 (a) Board of Accountancy 1
(b) Securities and Exchange Commission 1
(c) Bangko Sentral ng Pilipinas 1
(d) Bureau of Internal Revenue 1
(e) A major organization composed of preparers and users of financial statements 1
(f) Commission on Audit 1
(g) Accredited National Professional Organization of CPAs
Public Practice 2
Commerce and Industry 2
Academe/Education 2
Government 2
8

TOTAL 14

The AASC shall be composed of fifteen (15) members with a Chairman, who had been or presently a senior practitioner in public
accountancy and fourteen (14) representatives from the following:

(a) Board of Accountancy 1

(b) Securities and Exchange Commission 1
(c) Bangko Sentral ng Pilipinas 1
(d) Commission on Audit 1
(e) An association or organization of CPAs in active public practice of accountancy 1
(f) Accredited National Professional Organization of CPAs
Public Practice 6
Commerce and Industry 1
Academe/Education 1
Government 1
9

TOTAL 14

The APO shall equitably distribute the representation of the Public Practice sector in the AASC among the big, medium and small
practitioners.

The Chairman and members of the FRSC and AASC shall be appointed by the Commission upon the recommendation of the Board in
coordination with the APO. The FRSC and the AASC shall make an annual review of the composition of their respective councils and
may recommend to the Board and the Commission a more suitable representation thereto as they may deem fit. The Chairman and the
members of the FRSC and AASC shall have a term of three (3) years renewable for another term. Provided, That any existing
accounting and auditing standards setting council shall continue to function as such until the creation of the FRSC and the AASC as
provided herein. Provided, Further, That any member of any existing accounting and auditing standard setting council shall not be
disqualified from being appointed to the FRSC or AASC as the case maybe for the terms provided herein.

SECTION 11 - Grounds for Suspension or Removal of Members of the Board

The President of the Philippines, upon the recommendation of the Commission, after giving the concerned member an opportunity to
defend himself in a proper administrative investigation to be conducted by the Commission, may suspend or remove any member
on the following grounds:

(a) Neglect of duty or incompetence;

(b) Violation or tolerance of any violation of this Act and its implementing rules and regulations or the Certified Public Accountant ’s
Code of Ethics and the technical and professional standards of practice for certified public accountants;
(c) Final judgment of crimes involving moral turpitude; and
(d) Manipulation or rigging of the certified public accountant ’s licensure examination results, disclosure of secret and confidential
information in the examination questions prior to the conduct of the said examination or tampering of grades.

The Commission in the conduct of the investigation shall be guided by the provisions of Republic Act No. 8981, otherwise known as the
PRC Modernization Act of 2000, its implementing rules and regulations and their respective amendments.

SECTION 14 - Qualifications of Applicants for Examinations

Any person applying for examination shall establish the following requisites to the satisfaction of the Board that he/she:
(a) is a Filipino citizen;
(b) is of good moral character;
(c) is 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;
(d) has not been convicted of any criminal offense involving moral turpitude.

The following documents shall be submitted in support of the above requirements:

(a) Certificate of Live Birth in National Statistics Office (NSO) Security Paper;
(b) Marriage Contract in NSO Security Paper for married female applicants;
(c) College diploma with indication therein of date of graduation and Special Order Number unless it is not required;
(d) Baccalaureate Transcript of Records with indication therein of date of graduation and Special Order Number unless it is not
required;
(e) National Bureau of Investigation (NBI) Clearance;
(f) Other documents that the Board may require.

The Board shall not renew a Professional Identification Card, or shall suspend, or revoke, any Certificate of Registration obtained by
false swearing or by any misrepresentation made in applying for registration or examination and shall not renew nor grant registration to
any applicant whose application contains such false evidence or information.