AUDITING THEORY

I. PRACTICE AND REGULATION OF THE PROFESSION

1. Practice
 Academe
*teach business law and taxation: CPAs & Members of IBP (dean/dept chair = BSA/ACY; CPA only)
 Public Practice
- skilled in the knowledge science and practice of accounting;
- qualified to render professional services as a CPA
 Commerce and Industry/ Private
 Government
2. Regulation  Global - IFAC; Regional - ASEAN; Local - PRBOA (RA 9298), CHED, BIR, SEC, etc.
((DOLE  PRC  PRBOA))
3. PRBOA Reso. No. 27 Series of 2024 “Suppletory Guidelines on the Implementation of Board Reso. No. 53 (S.2022)
4. RA 9298 - The Philippine Accountancy Act of 2004
✓ BSA ✓ CPALE ✓ After CPALE
 regulation and standardization of accounting education and examination for CPAs
 within PH; aims to develop and nurture professional accountants
Objective 1: standardization & regulation of accounting education
 Education Technical Council (ETC)
ETC
When 60 days after
Composition 1 chairman (sr. practitioner in acad/educ)
6 members:
 PRBOA (1)
 PP (1)
 CI (1)
 A/E (2 - private, public)
 Govt (1)
Terms of Office 3 years, renewable for another term
 Philippine
Institute of Certified Public Accountants (PICPA)
- member of IFAC
- comply with the Statement of Membership Obligations (SMOs)
 CHED (one of the regulators)
- alignment of board exam syllabi & TOS vs. CMO 27 (compliant with SMO 2)
Objective 2: examination for registration of CPAs (PRBOA)
 Composition of PRBOA
(1) chairman; (2) vice-chairman; (5) members
 Qualifications:
 natural-born citizen and resident of PH
 duly-registered CPA, >10 years of work experience (any scope)
 good moral character; not convicted of moral turpitude
 no pecuniary interest (academic degree)
 not a director of officer of the AIPO (or PICPA)
 Powers and Functions of the Board
 Grounds for Suspension or Removal of Members of the Board
  Qualifications of Applicants of Examinations
 PH citizen
 good moral character
 BSA degree holder
 not convicted of moral turpitude
 Scope of Examination
PRBOA subject to approval of PRC = may revise/exclude any of the subjects and syllabi
every 3 years only
 Rating in the Licensure Examination
Requirement 1: > 75%
Requirement 2: Subject > 65%
Conditional:
 atleast (4) subjects > 75%
 (2) subjects < 75%
*ignore average
After Conditional:
 must meet R1 & R2
 Failing Candidates to Take Refresher Course
✓ 24 units = 2 fails
valid for 2 years
 Oath, Issuance of Cert of Registration, and Professional Identification Card
✓ Certificate of Registration = certificate under seal; for passing LECPA
✓ ID validity = 3 years
Objective 3: supervision, control, and regulation of practice of accountancy
 Auditing and Assurance Standard Council;
 Financial Reporting and Standards Council (FRSC);
 Quality Review Committee (QRC)
Quality Assurance is addressed at: ✓Engagement Level (e.g. Metrobank)
✓Firm Level (e.g. SGV)
✓Quality Assurance Review (QAR)
 CPE Council
5. Scope of Practice
RA 10912: Continuing Professional Development Act of 2016
 Intl Education Standard
CPD (IES 7):
 technical competence (IES 2)
 professional skills (IES 3)
 professional values, ethics, and attitudes (IES 4)
**IPD = BSA; CPD = CPA
Practical Experience (IES 5)
Assessment of Professional Competence (IES 6)
CPD Providers:
 Sole Proprietor
 Partnership
 Corporation
 Govt Institutions
 Foreign Entities
**members of PRBOA = NOT allowed to be CPD providers
*Application for CPD Program Accreditation = filed (45) days before offering the program
*CPD Monitor = submit monitoring report to PRC = within (15) working days after the program
 15 CPD = renewal of PRC ID (all sectors must comply)
 120 CPD = accreditation of CPAS in public practice & academe
*non-renewable; ✓reapply