SECTORS OF ACCOUNTING PRACTICE

1.1 Definition of Professional Accountant


Those persons who hold a valid certificate issued by the
Board of Accountancy(i.e., Certified Public Accountants),
whether they be in public practice, (including a sole
proprietorship or partnership), industry, commerce, the
public sector or education. (Source: Code of Ethics for
Professional Accountants in the Philippines).

Certified Public Accountant (CPA) a person who holds a
valid Certificate of Registration and a valid Professional
Identification Card issued by the Commission upon
recommendation by the Board to those who have
satisfactorily complied with all the legal and procedural
requirements for such issuance, including in appropriate
cases, having passed the CPA licensure examination.
SECTORS OF ACCOUNTING PRACTICE
1.1 Definition of Professional Accountant

Those persons who hold a valid certificate issued by the
Board of Accountancy(i.e., Certified Public Accountants),
whether they be in public practice, (including a sole
proprietorship or partnership), industry, commerce, the
public sector or education. (Source: Code of Ethics for
Professional Accountants in the Philippines).

Certified Public Accountant (CPA) a person who holds a
valid Certificate of Registration and a valid Professional
Identification Card issued by the Commission upon
recommendation by the Board to those who have
satisfactorily complied with all the legal and procedural
requirements for such issuance, including in appropriate
cases, having passed the CPA licensure examination.
SECTORS OF ACCOUNTING PRACTICE
1.1 Definition of Professional Accountant

Those persons who hold a valid certificate issued by the
Board of Accountancy(i.e., Certified Public Accountants),
whether they be in public practice, (including a sole
proprietorship or partnership), industry, commerce, the
public sector or education. (Source: Code of Ethics for
Professional Accountants in the Philippines).

Certified Public Accountant (CPA) a person who holds a
valid Certificate of Registration and a valid Professional
Identification Card issued by the Commission upon
recommendation by the Board to those who have
satisfactorily complied with all the legal and procedural
requirements for such issuance, including in appropriate
cases, having passed the CPA licensure examination.
University of Eastern Philippines
College of Business Administration
Bachelor of Science in Accountancy
AUD1- Auditing and Assurance Principles
Practice of Public Accountancy

I. ACCOUNTANCY AS A PROFESSION
i. Scope of practice- The practice of accountancy shall include, but not limited to the
following:
1.Practice of Public Accountancy
a. be it his/her individual capacity, or as a partner or as a staff
member in an accounting or auditing firm,
b. 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
c. the audit or verification of financial transaction and accounting
records; or
d. 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
for publication or for credit purposes, or to be filed with a court or
government agency, or to be used for any other purpose;
e. or the design, installation, and revision of accounting system; or
the preparation of income tax returns when related to
accounting procedures;
f. or when he/she represents clients before government agencies
on tax and other matters related to accounting
g. or renders professional assistance in matters relating to
accounting procedures and the recording and presentation of
financial facts or data.

2.Practice in Commerce and Industry – shall constitute in a person

a. involved in decision making requiring professional knowledge in
the science of accounting,
b. or when such employment or position requires that the holder
thereof must be a certified public accountant.
3.Practice in Education/Academe – shall constitute in a person in an educational
institution which involve teaching of accounting, auditing, management advisory
services, finances, 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.
4.Practice in the Government – shall constitute in a person
a. 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 in accounting,
b. or where a civil service eligibility as a certified public accountant
is a prerequisite.

ii. Requirements to enter the accountancy profession

1.Be a holder of a degree of Bachelor of Science in Accountancy (BSA) conferred
by a school, college or institute duly recognized and/or accredited by the
Commission on Higher Education (CHED) or other authorized government office;
 2.Qualify as a professional accountant by passing the CPA Board Licensure
examination administered by the Professional Regulatory Board of Accountancy;
a. Definition of Professional Accountant
i. Those persons who hold a valid certificate issued by the
Board of Accountancy (i.e. Certified Public Accountants),
whether they be in public practice, (including a sole
proprietorship or partnership), industry, commerce, the
public sector or education (Source: Code of Ethics for
Professional Accountants in the Philippines)
ii. Certified Public Accountant (CPA) a person who holds
a valid certificate of Registration and a valid Professional
Identification Card issued by the Commission upon
recommendation by the Board to those who have
satisfactorily complied with all the legal and procedural
requirements for such issuance, including in appropriate
cases, having passed the CPA Licensure examination.
(Source: Section 4(d) of the Rules and Regulations
Implementing RA No. 9298 otherwise known as the
Philippine Accountancy Act of 2004)

3.Satisfy all other legal and regulatory requirements before the individual takes on
the role of a professional accountant.

iii. Continuing professional development for CPAs- All certified public accountants shall
abide by the requirements, rules and regulations on continuing professional education to
be promulgated by the Board, subject to the approval of the Commission, in coordination
with the accredited national professional organization of certified public accountants or
any duly accredited educational institutions For this purpose, a CPE Council is hereby
created to implement the CPE program. (Source: Section 32 of the Rules and
Regulations Implementing RA No. 9298 otherwise known as the Philippine
Accountancy Act of 2004)

 BoA issued its last operational guidelines to implement the CPD Law or
the "Continuing Professional Development Act of 2016 (R.A. 10912)" on
July 20, 2017. This is known as BoA Resolution 2017-254. This
resolution provides us with guidelines covering:
a. Self-directed and/or lifelong learning
b. Different CPD activities and their corresponding credit units
c. Competence Areas and minimum credits required per area
d. Required CPD units and the related compliance period
e. Requirements for CPA License renewal and BoA accreditation
 PRC Resolution 2019-1146- took effect March 1, 2019 - providing for a
"transition period" for all Philippine professionals. BoA needs to come up
with new Operating Guidelines (OG) on how PRC Res. 1146-2019
resolution will specifically apply to CPAs. In the interim, while no new
Operating Guidelines have been issued, CPAs are covered by the
transition period under which:
✅OFWs are not covered by the CPD requirement
✅ Newly licensed CPAs are not covered by the CPD requirement for their
first renewal cycle
✅All other CPAs renewing their Professional ID Card will need 15 CPD
units of training - (can be under any Competence Area)
 ✅CPAs getting BoA accreditation will need 120 units of CPD training

 CPAs seeking BoA accreditation still need to comply with the 120 CPD
units requirement of BoA Resolution 2017-254 . For those who still need
to comply, here are some of the highlights lifted from BoA Resolution
2017-254:
a. The minimum required credit units under the 3 major areas of
CPD activities are as follows:
i. Competence Area A (Technical Competence) - 30 CPD
Units
ii. Competence Area B (Professional Skills) - 5 CPD Units
iii. Competence Area C (Professional Values, Ethics and
Attitudes) - 5 CPD Units
b. Out of the 120 CPD units requirement, 80 CPD units are
"flexible" - meaning they can be under any competence area of
your choice.
c. For self-directed learning, CPAs can get a maximum of 48 CPD
units out of the 120 CPD units requirement. (Note though those
self-directed certificates require a P500 processing fee and
longer (60 days) processing time compared to certificates from
accredited programs).
d. Academic activities such as master's or doctorate degree,
bachelor of law's and international certifications, among others
can also be credited for CPD. However, the degree/certification
must be completed/received within the 3-year compliance period.
iv. Accreditation to Public Accountancy- Certified public accountants, firms and
partnerships of certified public accountants, engaged in the practice of public
accountancy, including partners and staff members thereof, shall register with the
Commission and the Board, such registration to be renewed every three (3) years:
Provided, That subject to the approval of the Commission, the Board shall promulgate
rules and regulations for the implementation of registration requirements including the
fees and penalties for violation thereof. (Source: Section 31 of the Rules and
Regulations Implementing RA No. 9298 otherwise known as the Philippine
Accountancy Act of 2004)

II. TYPES OF SERVICES OF A PROFESSIONAL ACCOUNTANT IN PUBLIC PRACTICE

1. Assurance Services
 Independent financial statements audit
 Reviews
 Other assurance services (e.g. CPA Web trust, Business Performance
Measurement Services)
2.Non-Assurance Services
 Agreed-upon procedures
 Compilation
 Tax
 Management consultancy/advisory services
 Accounting and data processing
 Other non-assurance services (e.g Information Technology System
Services)

III. REGULATORY AND PROFESSIONAL BODIES INFLUENCING THE PROFESSION

i. Regulatory Government Agencies
1. Professional Regulations Commission (PRC)
 It operates under the Office of the President of the Philippines and its
mandate is to regulate and supervise the practice of all professionals.
 Administer examination, accreditation, inspection and monitoring, and
CPD procedures of all professional bodies
 Nurture Filipino professionals towards technical proficiency and civic
responsibility in the service of Filipino nation
2. Board of Accountancy (BOA)
 Republic Act (RA) 9298, Philippine Accountancy Act, as revised and
enacted in 2004, stipulates that the Professional Regulatory Board of
Accountancy, which operates under the supervision of the Professional
Regulation Commission
 The Board is composed of a chairman and six members to be
appointed by the President of the Philippines from a list of three (3)
recommended persons for each position and ranked by the
Commission, from a list of five (5) nominees for each position submitted
by the Accredited National Professional Organization of Certified Public
Accountant (APO). The four (4) sectors in the practice of accountancy
shall as much as possible be equitably represented in the Board
 Powers and functions of board of accountancy:
a. Supervising the registration, licensing, and practice of
accountancy in the Philippines
b. Maintaining a registry of registered and accredited CPAs
c. Issuing and renewing Certificate of Registration and
Accreditation
d. Adopting ethical, accounting and auditing standards, taking into
consideration international standards and generally accepted
best practices.
e. Conducting quality assurance (QA) reviews
f. Investigating violations of rules and regulations and issuing
sanctions
g. Preparing and issuing the syllabi of the subjects for examinations
in consultation with the academe, preparing questions for the
licensing examination; and administering and releasing the
results of the examination
3. Securities Exchange Commission (SEC)
 It regulates business operations specifically of partnerships,
corporations, entities granted license/franchise to operate, and foreign
companies doing business in the country.
 It reviews/registers securities issued by firms, evaluate financial position
and performance, supervises brokers, dealers, transfer agents,
investment houses, and capital market participants.
 It ensures that investors are provided with full and fair information about
public trade companies and protect them from manipulations and back
hand deals
4. Commission on Audit (COA)
 This is the agency that audits or determines whether government units
handle their funds according to existing laws and whether their programs
are being conducted efficiently and economically.
5.Bureau of Internal Revenue (BIR)
 Responsible for enforcement of the tax laws, rules and regulations. Its
agents conduct compliance audits of the income tax returns of the
 individuals and corporations to determine that income has been
computed and taxes paid as required by the National Internal Revenue
Code.
ii. Professional Organization
1.Philippine Institute of Certified Public Accountants (PICPA)
 It was founded in 1929 and is the accredited professional accountancy
organization by the Philippines Professional Regulation Commission
(PRC). The national professional organization of CPAs in the Philippines,
thus, membership of the institute is mandatory for all professional
accountants in the jurisdiction.
 In the absence of authoritative pronouncement by the Philippine
Financial Reporting Standards Council (PFRSC), it issues bulletins that
have a persuasive effect on the CPAs work.
 It is the umbrella of several accounting associations representing
different sectors in accounting such as:
a. Association of CPAs in Public Practice (ACPAPP)
b. Association of CPAs in Education (ACPAE)
c. Association of CPAs in Commerce and Industry (ACPACI)
d. Government Association of CPAs (GACPA)
 Objectives of PICPA
a. To promote and maintain high professional and ethical standards
among accountants
b. To advance the science of the accountancy
c. To develop and improve accountancy education
d. To encourage cordial relations among accountants
e. To protect the certified of Certified Public Accountants granted
by the Republic of the Philippines
 The membership of the PICPA is composed of 11 geographical chapters
across the state, each led by a chapter president and a slate of officers.
Members of the PICPA are automatically enrolled in a local chapter at no
additional cost. PICPA's chapters host hundreds of local educational and
social events each year.
iii. Standard-Setting Bodies- Please refer to SEC’s lecture note.

IV. RA 9298- CPA Licensure Examination

i. SEC. 13. The Certified Public Accountant Examinations. – All applicants for
registration for the practice of accountancy shall be required to undergo a licensure
examination to be given by the Board in such places and dates as the Commission may
designate subject to compliance with the requirements prescribed by the Commission in
accordance with Republic Act No. 8981.
ii. SEC. 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; and
d. has not been convicted of any criminal offense involving moral
turpitude.
iii. SEC. 15. Scope of Examination. – The licensure examination for certified public
accountants shall cover, but are not limited to, the following subjects:
a. Theory of Accounts
b. Business Law and Taxation
c. Management Services
d. Auditing Theory
e. Auditing Problems
f. Practical Accounting Problems I
g. Practical Accounting Problems II
 The Board, subject to the approval of the Commission, may revise or
exclude any of the subjects and their syllabi, and add new ones as the
need arises. The Professional Regulation Commission, together with the
Professional Regulatory Board of Accountancy, issued PRBOA
Resolution # 262, Series of 2015 entitled “Reduced the number of the
BLECPA subjects that are included in the scope of the Board Licensure
Examination for Certified Public Accountant from seven (7) to six (6)”
which effective on March 9, 2016, as follows:
a. Financial Reporting Accounting
b. Advanced Financial Accounting and Reporting
c. Management Advisory Services
d. Auditing
e. Taxation
f. Regulatory Framework for Business Transaction
iv. SEC. 16. Rating in the Licensure Examination. – To be qualified as having passed the
licensure examination for accountants, a candidate must obtain a general average of
seventy five percent (75%), with no grades lower than sixty-five percent (65%) in any
given subject. In the event a candidate obtains the rating of seventy-five percent (75%)
and above in at least a majority of subjects as provided for in this Act, he/she shall
receive a conditional credit for the subjects passed: Provided, That a candidate shall
take an examination in the remaining subjects within two years from the preceding
examination: Provided, further, That if the candidate fails to obtain at least a general
average of seventy-five percent (75%) and a rating of at least sixty five percent (65%) in
each of the subjects reexamined, he/she shall be considered as failed in the entire
examination.
v. SEC. 18. Failing Candidates to Take Refresher Course- Any candidate who fails in
two (2) complete Certified Public Accountant Board Examinations shall be disqualified
from taking another set of examinations unless he/she submits evidence to the
satisfaction of the Board that he/she enrolled in and completed at least twenty-four (24)
units of subject given in the licensure examination. For purposes of this Act, the
examination in which the candidate was conditioned together with the removal
examination on the subject in which he/she failed shall be counted as one complete
examination.