UPDATES on Auditing and Accounting Standards

I. Introduction

Being a Certified Public Accountant (CPA) is one of the most sought-after professions in

the Philippines. This line of work awaits a dynamic career that will thrive in any sector of the

economy. According to the Department of Labor and Employment, the demand for CPAs has been

significantly and simultaneously increasing with economic growth since the number of business

establishments is expected to increase as the economy grows. However, one should undergo a

comprehensive examination conducted by the governing body, Philippine Regulatory Commission

(PRC), prior to becoming eligible to practice the profession.

It was the early 1900’s when the accounting profession realized the need for quality

education and accounting work experience. A uniform CPA exam was then developed as an

admission requirement. PRC adopted it in the form of Certified Public Accountant Licensure

Examination (CPALE). Under the RA 9228, section 15, it covers the six subjects namely: Financial

Accounting and Reporting, Advanced Financial Accounting and Reporting, Management

Accounting Services, Auditing, Taxation, and Regulatory Framework for Business Transactions.

Abrugar (2009) even stated that it is one of the most difficult professional board examinations in

the country. This manifests in the relatively low passing rates for both the national and institutional

levels in the recent years.

On the other hand, auditing is the assessment of data by a third party other than the preparer

or client with the aim of setting up its reliability, and the announcing of the aftereffects of this

assessment with the desire for expanding the convenience of the data to the client. The Commission

on Audit (COA) is the protected commission commanded to be the preeminent review organization
of the administration. The Commission has extremely strict standards for its auditors and policies

to its own activities that is important to accomplish and review results that are liberated from

control and outer influences. Taking into genuine thought of these audit findings, will help the

government to investigate for issues and address it if any.

II. Discussions

The Philippine accounting and auditing system are legitimately impacted by US and more

as of late, worldwide courses of action and practices. The Accountancy Act 1923 made the Board

of Accountancy (BOA) and gave it the position to give CPA declarations. After six years, the

Philippine Institute of Certified Public Accountants (PICPA) was built up inside the private

division to speak to proficient interests. A significant number of the bigger Philippine

organizations were auxiliaries or branches of American organizations and their accounting

reflected US practices. The key administrative boards of the Philippine accounting and auditing

framework are the Revised Accountancy Law (No. 692) 1975, the Corporation Code, the Revised

Securities Act 2000, and the National Internal Revenue Code 1999. The Revised Accountancy

Law 1975 oversees the normalization of accounting training, specifies the assessment cycle for

CPA enrollment, and manages the act of accountancy. The Professional Regulation Commission

(PRC), through the BOA, regulates the law. The SEC implements the Corporation Code, which

administers the creation and tasks of restricted risk companies. The SEC likewise oversees the

Amended Securities Act 2000, which applies to organizations recorded on the Philippine Stock

Exchange. In addition to other things, the National Internal Revenue Code 1999 necessitates that

charge operators (counting CPAs) be authorize by the Authority of Internal Revenue (BIR).
 From 1997 to 2000, the ASC created accounting standards that were at that point dependent

on IAS. However, it is in the year 2001 that broad updates of Philippine accounting standards are

made in congruity with their partner in the IAS. The ASC set the year 2005 for the full reception

of the International Accounting guidelines in the Philippines. Notwithstanding, even before the

Philippines had made full reception of the International bookkeeping Standards, improved and

amended IAS and IFRS have been created and proclaimed. To screen the updates and redrafting

of the IFRS and to guarantee that enhancements in the IFRS are being made successful in the

Philippines, the Financial Reporting Standards Council (FRSC) was built up in 2006. It succeeded

the ASC in its primary capacity of setting up sound accounting standards in the Philippines had

been changed and dependent on IASC Accounting Standards. The International Accounting

Standards Committee or IASC is an autonomous private segment which sets up the consistency of

the accounting standards in business associations around the globe. In the wake of changing into

IASC bookkeeping norms, a choice was made to move absolutely to International Accounting

Standards (IAS) in 1997. The goal of the ASC in the Philippine Accounting Standards is to build

up a reasonable and enforceable accounting standard that require high caliber, straightforward and

similar data in the Financial Statements.

The Professional Regulatory Board of Accountancy (BOA) made the Auditing and

Assurance Standards Council (AASC) in 2006 to receive and spread pertinent examining

principles in the Philippines. The AASC has received the Philippine Standards on Auditing (PSA)

which fuse the ISA and proclamations gave by the IAASB and incorporate extra nation explicit

norms to address issues not secured by IAASB professions. All together for the new and updated

PSA to get viable, the norms must be endorsed by AASC, the BOA, Professional Regulation

Commission, and be distributed in the official newspaper. At the hour of the appraisal, the
Philippine Institute of Certified Public Accountants reports that the 2016 ISA have been embraced

as PSAs and are pertinent in the purview. At last, the AASC has additionally received Philippine

Standards on Review Engagements, Philippine Standards on Assurance Engagements, Philippine

Standards on Related Services, and Philippine Standards on Quality Control which are completely

founded on the IAASB norms.

III. Conclusion

The Philippine progress to worldwide accounting standards has been challenging to

authoritative regulatory bodies, professionals, and business entities. The reception of the new

Philippine GAAP zeroed in on "when" the execution will occur and didn't stress "how" the change

and usage will be done. The Philippines chose to execute the new GAAP to join different nations

having a similar progress date not just due to the thought of "not being abandoned" yet with the

principle objective of accomplishing equivalence and straightforwardness of budgetary reports that

will help with delivering educated monetary choices in the worldwide money related condition.

However, it took some time for the key players to comprehend the complexities and materialness

of the new accounting standards. Thus, memoranda, booklets, goals, and guidelines were not given

on a convenient premise coming about to disarray and squandered assets. Plainly, there is a

requirement for the standard setting body, regulatory bodies, various professional organizations,

and the academe to work by and large in figuring the cycle of a methodical and consistent change

and usage of the Philippine financial accounting standards.

IV. References

Abrugar, V. (2009).The Accountancy Profession in the Philippines and the Philippines Institute of
Certified Public Accountants (PICPA). Accountants’ Journal. 2009, Vol. 44 : 12-17.

Accountancy: Professional Regulation Commission. (n.d.). Retrieved from

https://www.prc.gov.ph/accountancy

SGV & Co., & Ernst & Young. (2008). Conversion to International Financial Reporting
Standards. Issues & Perspective. Retrieved: July 17, 2008 from:
http://www.ey.com/global/content.nsf/Philippines/Issues_&_Perspectives

State Auditing. (2017, Mar 01). Retrieved from

https://phdessay.com/state-auditing/

PICPA. (2008). Financial Reporting Standards. Philippine Institute of Certified Public

Accountants. Retrieved on June 27, 2008 at http://www.picpa.com.ph/adb/acc_str1.htm

Reid, B. (2002). Diagnostic Study of Accounting and Auditing Practices in the Philippines. Asian
Development Bank.

Securities and Exchange Commission (2007). Retrieved: June 27, 2008 at:
http://www.iasplus.com/country/philippi.htm#0704.

SGV & Co., & Ernst & Young. (2008). Conversion to International Financial Reporting Standards.
Issues & Perspective. Retrieved: July 17, 2008 from:

http://www.ey.com/global/content.nsf/Philippines/Issues_&_Perspectives