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THE PROFESSIONAL
STANDARDS

Arnel N. Moran

Organizations
Affecting the
Practice of
Accountancy

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Professional Regulation Commission (PRC) – administers,

implements and enforces the regulatory policies of the Philippine
Government under its jurisdiction.
Board of Accountancy (BOA) – The agency empowered to
administer the Philippine Accountancy Act of 2004.
Commission on Audit (COA) – The highest final authority is
state auditing.
Securities and Exchange Commission (SEC) – The
government agency that regulates the registration and
operations of corporations, partnerships, and other forms of
associations in the Philippines.
Bangko Sentral ng Pilipinas (BSP) – The primary objective of
this agency is to maintain price stability conducive to a balanced
and sustainable economic growth.
Bureau of Internal Revenue (BIR) – This organization aims to
raise revenues for the government through the effective and
efficient collection of taxes, provide quality service to taxpayers,
and enforce tax laws in an impartial and uniform manner.

FRSC AASC
Standards Accounting Standards Auditing Standards

Replaces Accounting Standards Council (ASC) Auditing Standards and Practices

Chairman must be a senior
accounting practitioner
Plus 14 Representatives from:
BOA
Council (ASPC)
From any scope of accounting From public practice only
1 1

SEC 1 1
BSP 1 1

BIR 1 -
A major organization composed
of preparers and users of FS 1 -
An association or organization of
CPAs in active public practice of - 1
accountancy

COA 1 1
APO (PICPA)
Public Practice 2 6
Commerce and Industry 2 1
Academe/Education 2 1
Government 2 1
Total 15 15

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Professional Regulatory Board of

Accountancy (BOA)
Empowered to enforce RA 9298
Composition:
1 chairman and six members
Terms: 3 years
No person who has served 2 successive
terms shall be eligible for reappointment
until the lapse of 1 year.

Qualifications of the member of the BOA

a. Natural born citizen and a resident of the

Philippines.
b. Duly registered CPA, with at least 10 years of
work experience (any scope)
c. Good moral character
d. No pecuniary interest, direct or indirect, in any
school, college, university or institution
conferring BS Accountancy or review classes
e. Not a director or officer of PICPA

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Philippine Institute of Certified Public

Accountants (PICPA) – This is the
accredited national professional organization
(APO) of certified public accountants in the
Philippines.

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Philippine Financial Reporting Standards

Philippine Financial Reporting Standards
(PFRS) are the standards that are applied
for financial accounting.
PFRS were formerly called Philippine
Accounting Standards (PAS)
The Philippine Accounting Standards
Board (PASB) has accounting standard
setting responsibilities for PFRS.

• The Auditing and Assurance Standards

Council (AASC) is the body authorized to
establish and promulgate generally
accepted auditing standards (GAAS) in the
Philippines.

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• The main objective of the AASC in

adopting IAASB standards and practice
statements is to attain uniformity of the
local GAAS with the IAASB
pronouncements. The AASC replaced
the Auditing Standards and Practices
Council (ASPC).

Advantages of Philippine Standards of

Auditing (PSA)
worldwide
increases confidence in non-domestic
investment
consistent
international investors comprehend
financial statements from different
countries
high quality
Non-national standards encourage better
quality, less political influence

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Auditing and Assurance Standards Board (AASB)

Issues:
• Philippine Standards on Auditing (PSAs) as the standards to
be applied by auditors in reporting on historical financial
information.
• Philippine Standards on Assurance Engagements (PSAEs)
as the standards to be applied by practitioners in assurance
engagements dealing with information other than historical
financial information
• Philippine Standards on Quality Control (PSQCs) as the
standards to be applied for all services falling under the
Standards of the AASB, and
• Philippine Standards on Related Services (PSRSs) as the
standards to be applied on related services, as it considers
appropriate
• Philippine Standards on Review Engagements (PSREs) as
the standards to be applied to the review of historical financial
information.

PSAs
100-999 Philippine Standards on Auditing (PSAs)
100-199 Introductory Matters
• 120 Framework of International Standards on
Auditing
200-299 General Principles And
Responsibilities
• 200 Objective and General Principles Governing
an Audit of Financial Statements
• 210 Terms of Audit Engagements
• 220 Quality Control for Audit Work
• 230 Documentation (ED)

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• 240 The Auditor’s Responsibility to Consider Fraud and Error

in an Audit of Financial Statements
• 250 Consideration of Laws and Regulations in an Audit of
Financial Statements
• 260 The Auditor’s Communication with Those Charged with
Governance
300-499 Risk Assessment And Response To Assessed
Risks
• 300 Planning
• 310 Knowledge of the Business
• 315 Understanding the Entity and Its Environment and
Assessing the Risks of Material Misstatement
• 320 Materiality in the Identification and Evaluation of
Misstatements
• 330 The Auditor’s Procedures in Response to Assessed
Risks

• 400 Risk Assessments and Internal Control

• 401 Auditing in a Computer Information Systems
Environment
• 402 Audit Considerations Relating to Entities
Using Service Organizations
500-599 Audit Evidence
• 500 Audit Evidence
• 500R Audit Evidence
• 501 Audit Evidence—Additional Considerations
for Specific Items
• 505 External Confirmations

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• 510 Initial Engagements—Opening Balances

• 520 Analytical Procedures
• 530 Audit Sampling and Other Selective Testing
Procedures
• 540 Auditing Accounting Estimates and Related
Disclosures (Other than Those Involving Fair
Value Measurements and Disclosures)
• 545 Auditing Fair Value Measurements and
Disclosures
• 550 Related Parties
• 560 Subsequent Events
• 570 Going Concern
• 580 Management Representations

600-699 Using Work Of Others

• 600 The Audit of Group Financial Statements
• 610 Considering the Work of Internal Auditing
• 620 Using the Work of an Expert
700-799 Audit Conclusions And Reporting
• 700 The Auditor’s Report on Financial Statements
• 701 The Independent Auditor’s Report on Other
Historical Financial Information
• 705 Modifications to the Opinion in the Independent
Auditor’s Report
• 706 Emphasis of Matter Paragraphs and Other
Matters Paragraphs in the Independent Auditor’s
Report

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• 710 Comparatives
• 720 Other Information in Documents Containing
Audited Financial Statements
800-899 Specialized Areas
• 800 The Independent Auditor’s Report on Summary
Audited Financial Statements
2000-2699 Philippine Standards on Review
Engagements (PSREs)
• 2400 Engagements to Review Financial Statements
(Previously PSA 910)
• 2410 Review of Interim Financial Information
Performed by the Independent Auditor of the Entity

3000-3699 Philippine Standards on Assurance

Engagements (PSAEs)
• 3000 Assurance Engagements (Previously PSAE 100)
• 3000R Assurance Engagements Other Than Audits or
Reviews of Historical Financial Information
• 3400 The Examination of Prospective Financial
Information (Previously PSA 810)
4000-4699 Philippine Standards on Related Services
(PSRSs)
• 4400 Engagements to Perform Agreed-upon
Procedures Regarding Financial Information
(Previously PSA 920)
• 4410 Engagements to Compile Financial  Information
(Previously PSA 930)

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System of Quality
Control and Role of
Engagement Teams
(PSA 220)

Quality control systems, policies and procedures

are the responsibility of the audit firm. Under
PSQC 1 (Redrafted), the firm has an obligation
to establish and maintain a system of quality
control to provide it with reasonable assurance
that:
(a) The firm and its personnel comply with
professional standards and regulatory and
legal requirements; and
(b) The reports issued by the firm or
engagement partners are appropriate in
the circumstances.

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• Leadership Responsibilities for Quality on

Audits
• Relevant Ethical Requirements
• Threats to Independence
• Acceptance and Continuance of Client
Relationships and Audit Engagements
• Assignment of Engagement Teams
• Engagement Performance
• Monitoring

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