01 Practice and Regulation of The Accountancy Profession

Page 1 of 18 | AUD Handout No.
01
THE ACCOUNTANCY PROFESSION

RAYMUND FRANCIS A. ESCALA, CPA, MBA
PRACTICE AND REGULATION OF THE

ACCOUNTANCY PROFESSION
RAYMUND FRANCIS A. ESCALA, CPA MBA
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SCOPE OF PRACTICE
The practice of accountancy shall include, but not limited to, the following:
1. Practice of Public Accountancy
Shall constitute in a person, be it his/her individual capacity, or as a partner or as a staff member in an accounting or
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auditing firm, 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
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• the audit or verification of financial transaction and accounting records;
• 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;
• the design, installation, and revision of accounting system;
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• the preparation of income tax returns when related to accounting procedures; or
• when he/she represents 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.
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2. Practice in Commerce and Industry
Shall constitute in a person involved in decision making requiring professional knowledge in the science of
accounting, or when such employment or position requires that the holder thereof must be a certified public
accountant.
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3. Practice in Education/Academe
Shall constitute in a person in an educational institution which involve teaching of accounting, auditing, management
advisory services, 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.
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4. Practice in the Government

Shall constitute in a person 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 where a civil
service eligibility as a certified public accountant is a prerequisite.
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Page 2 of 18 | AUD Handout No. 01

REGULATION OF THE ACCOUNTANCY PROFESSION

REPUBLIC ACT NO. 9298 (RA 9298) OR THE “PHILIPPINE ACCOUNTANCY ACT OF 2004”
RA 9298 is the regulatory act of the practice of accountancy in the Philippines. It supersedes Presidential Decree no. 692
(PD 692), otherwise known as the revised accountancy law.
Objectives
RA 9298 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.
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PROFESSIONAL REGULATORY BOARD OF ACCOUNTANCY (BOA)
Composition
• A chairman and six (6) members to be appointed by the President of the Philippines
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• A vice chairman shall be elected from among its members for a term one (1) year.
Qualifications of Members
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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.
c. Must be of good moral character and must not have been convicted of crimes involving moral turpitude; and
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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.
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e. Must not be a director or officer of the APO at the time of his appointment.
Term of Office
• The Chairman and members of the Board shall hold office for a term of three (3) years.
• No person who has served two (2) successive complete terms shall be eligible for reappointment until the lapse of
one (1) year.
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Powers and Functions of the Board

The Board 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;
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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
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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 seems 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;
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k. To issue a cease or desist order to any person, association, partnership or corporation engaged in violation of any
provision of this Act, 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
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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
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syllabi of the subjects for examinations as well as administer, correct and release the results of the 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 comply with the policies, standards and
requirements of the course prescribed by CHED or other authorized government offices in the areas of
curriculum, faculty, library and facilities; and
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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 this Act.
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Administrative Supervisions of the Board, Custodian of its Records, Secretariat and Support Services
The Board shall be under the administrative supervision of the Commission. All records of the Board, including
applications for examination, examination questions, answer sheets, and other records and documents pertaining to the
CPA licensure examination, and administrative and other investigative cases conducted by the Board shall be under the
custody of the Commission and shall provide the secretariat other support services to implement the provision of R.A. No.
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9298.
Annual Report
The Board shall, at the close of each calendar year, submit an annual report to the President of the Philippines through
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the Commission giving a detailed account of its proceedings and accomplishments during the year and making
recommendations for the adoption of measures that will upgrade and improve the conditions affecting the practice of
accountancy in the Philippines.
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
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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 CPA’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 accountants 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.


CERTIFIED PUBLIC ACCOUNTANT EXAMINATIONS

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.
Scope of Examination
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The licensure examination for certified public accountants shall cover, but are not limited to, the following subjects:
1. Advanced Financial Accounting and Reporting (AFAR)
2. Auditing (AUD)
3. Financial Accounting and Reporting (FAR)
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4. Management Advisory Services (MAS)
5. Taxation (TAX)
6. Regulatory Framework for Business Transactions (RFBT)
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Rating in the Licensure Examination
PASSED General average of at least seventy-five percent (75%), with no grades lower than sixty-five
percent (65%) in any given subject.
CONDITIONAL General average of less than 75%, has a grade of less than 65%, or both, but has obtained
REMOVAL
EXAMINATION
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75% and above in at least majority (4 out of 6) of the subjects covered in the licensure
examination.
A candidate shall take an examination in the remaining subjects within two years from the
preceding examination.
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Failing Candidates to Take Refresher Course
A candidate who fails in two (2) complete CPA 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 board exam.
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Report of Ratings
The Board shall submit to the Commission the ratings obtained by each candidate within ten (10) calendar days after the
examination, unless extended for just cause. Upon the release of the results of the examination, the Commission shall
send by mailing the rating received by each examinee at his/her given address using the mailing envelope submitted
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during the examination.
Oath
All successful candidates in the examination shall be required to take an oath of profession before any member of the
Board or before any government official authorized by the Commission or any person authorized by law to administer
oaths upon presentation of proof of his/her qualification, prior to entering upon the practice of the profession.
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Roster of Certified Public Accountants

A roster showing the names and place of business of all registered certified public accountants shall be prepared and
updated by the Board, and copies thereof shall be made available to any party as may be deemed necessary.


CERTIFICATES OF REGISTRATION, PROFESSIONAL IDENTIFICATION CARD and TEMPORARY/SPECIAL

PERMITS
Issuance
A certificate of registration shall be issued to
a. examinees who pass the licensure examination
b. person admitted under reciprocity or other international agreements
The Certificate of Registration shall bear the following
a. full name and the assigned registration number of the registrant
b. signature of the chairperson of the Commission and the chairman and members of the Board
c. official seal of the Commission and of the Board,
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A Professional Identification Card bearing the registration number, date of issuance, expiry date, duly signed by the
chairperson of the Commission, shall likewise be issued to every registrant renewable every three (3) years.
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Special/temporary permit may be issued by the Board subject to the approval of the Commission and payment of the
fees the latter has prescribed and charged thereof to the following persons:
a. A foreign CPA called for consultation or for a specific purpose which, in the judgment of the Board, is essential for
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the development of the country: (Provided, that his/her practice shall be limited only for the particular work that
he/she is being engaged and that there is no Filipino CPA qualified for such consultation or specific purposes;
b. A foreign CPA engaged as professor, lecturer or critic in fields essential to accountancy education in the
Philippines and his/her engagement is confined to teaching only; and
c. A foreign CPA who is an internationally recognized expert or with specialization in any branch of accountancy and
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his/her service is essential for the advancement of accountancy in the Philippines.
Indication of Certificate of Registration, Identification Card and Professional Tax Receipt
The certified public accountant shall be required to indicate his/her certificate of registration number, and date of issuance,
the duration of validity, including the Professional Tax Receipt number on the documents he/she signs, uses or issues in
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connection with the practice of his/her profession.
Refusal to Issue
The Board shall not register and issue a certificate of registration and professional identification card to any successful
examinee
a. Convicted by a court of competent jurisdiction of a criminal offense involving moral turpitude
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b. Guilty of immoral and dishonorable conduct

c. Of unsound mind
Suspension and Revocation
The Board shall have the power, upon due notice and hearing, to suspend or revoke the practitioner’s certificate of
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registration and professional identification card or suspend him/her from the practice of his/her profession or cancel
his/her special permit for any of the causes or grounds
a. As mentioned in the grounds for refusal to issue; or
b. Any unprofessional or unethical conduct
c. Malpractice
d. violation of any of the provisions of RA 9298 and its IRR, the CPA‘s Code of Ethics and the technical and
professional standards of practice for certified public accountants.
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Reinstatement, Reissuance and Replacement of Revoked or Lost Certificates

The Board may, after the expiration of two (2) years from the date of revocation of a certificate of registration and upon
application and for reasons deemed proper and sufficient, reinstate the validity of a revoked certificate of registration and
in so doing, may, in its discretion, exempt the applicant from taking another examination.


PRACTICE OF ACCOUNTANCY
Prohibition in the Practice of Accountancy
No person shall practice accountancy in this country, or use the title “Certified Public Accountant”, or use the abbreviated
title “CPA” or display or use any title, sign, card, advertisement, or other device to indicate such person practices or offers
to practice accountancy, or is a certified public accountant, unless such person shall have received from the Board a
certificate of registration/ professional license and be issued a professional identification card or a valid temporary/special
permit duly issued to him/her by the Board and the Commission.
Limitation of the Practice of Public Accountancy

Single practitioners and partnerships for the practice of public accountancy shall be registered certified public accountants
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in the Philippines.
Accreditation to Practice Public Accountancy

A certificate of accreditation shall be issued to CPA in public practice only upon showing that such registrant has acquired
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a minimum of three (3) years meaningful experience in any of the areas of public practice including taxation.
Individual certified public accountants, firms and partnerships of certified public accountants, engaged in the practice of
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public accountancy, including partners and staff members thereof, shall register with the Commission and the Board, such
registration shall be renewed every three (3) years
Seal and Use of Seal

All licensed certified public accountants shall obtain and use a seal of a design prescribed by the Board bearing the
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registrant’s name, registration number and title. The auditor’s reports shall be stamped with said seal, indicating therein
his/her current Professional Tax Receipt (PTR) number, date/place of payment when filed with government authorities or
when used professionally.
Ownership of Working Papers

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As a rule, working papers are confidential, privileged and property of the CPA.
Foreign Reciprocity
Subjects or citizens of foreign countries may be allowed to practice Accountancy in the Philippines in accordance with the
provisions of existing laws, international treaty obligations including mutual recognition agreements entered into by the
Philippine government with other countries. A person who is not a citizen of the Philippines shall not be allowed to practice
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accountancy in the Philippines unless he/she can prove, in the manner provided by the rules of court that, by specific
provision of law, the country of which he/she is a citizen, subject or national admits citizens of the Philippines to the
practice of the same profession without restriction.
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Accredited Professional Organization (Philippine Institute of Certified Public Accountants)

All registered certified public accountants whose names appear in the roster of certified public accountants shall be united
and integrated through their membership in a one and only registered and accredited national professional organization of
registered and licensed certified public accountants, which shall be registered with the Securities and Exchange
Commission as a nonprofit corporation and recognized by the Board, subject to the approval by the Commission. The
members in the said integrated and accredited national professional organization shall receive benefits and privileges
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appurtenant thereto upon payment of required fees and dues. Membership in the integrated organization shall not be a
bar to membership in any other association of certified public accountants.
PENAL AND FINAL PROVISIONS

Penal Provision
Any person who shall violate any of the provisions of this Act or any of its implementing rules and regulations as
promulgated by the Board subject to the approval of the Commission, shall, upon conviction, be punished by a fine of not
less than fifty thousand pesos (P 50,000.00) or by imprisonment for a period not exceeding two (2) years or both.


Enforcement of the Act

It shall be the primary duty of the Commission and the Board to effectively enforce the provisions of this Act. All duly
constituted law enforcement agencies and officers of national, provincial, city or municipal government or of any political
subdivision thereof, shall, upon the call or request of the Commission or the Board, render assistance in enforcing the
provisions of this Act and to prosecute any person violating the provisions of the same. The Secretary of Justice or his
duly designated representative shall act as legal adviser to the Commission and the Board and shall render legal
assistance as may be necessary in carrying out the provisions of this Act.
Accreditation of Individual CPAs, Firms and Partnerships of CPAs engaged in the Public Practice of Accountancy
The registration shall be valid for a period of three (3) years and may be renewed every three (3) years on or before
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September 30 on the year of expiry upon compliance of the requirements.
CONTINUING PROFESSIONAL DEVELOPMENT
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Based on RA 10912 Continuing Professional Development (CPD) Act of 2016
RA 10912 is an act mandating and strengthening the continuing professional development program for all regulated
professions, creating the continuing professional development council, and appropriating funds therefor, and for other
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related purposes
Definition and Rationale

CPD refers to the inculcation of advanced knowledge, skills and ethical values in a post-licensure specialization or in an
inter- or multidisciplinary field of study, for assimilation into professional practice, self-directed research or lifelong
learning.
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Voluntary compliance with the CPD program is an effective and credible means of ensuring competence, integrity and
global competitiveness of professional in order to allow them to continue the practice of their profession.
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Required CPE Credit units
1. Renewal of PIC – fifteen (15) credit units.
Exemptions:
a. Professional working overseas (OFWs)
b. Newly licensed professionals for the first renewal cycle after obtaining their license
2. For accreditation (initial and renewal) – one hundred twenty (120) credit units
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Minimum units under required competency areas

A. Technical Competence 30 units
B. Professional Skills 5 units
C. Professional Values, Ethics, and Attitudes 5 units 40 units
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Flexible CPD units 80 units

Required number of CPD units 120 units
Note: The required minimum units earned from the previous year/s shall be 20 credit units.
How to earn CPD credit units?

1. Seminars/workshops (training offered by Accredited CPD Providers, Face to Face or Online)
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✓ As participant
✓ As resource speaker
✓ As panellist/reactor
✓ As facilitator/moderator
✓ As CPD monitor
✓ In-service training/On-the-job training
2. Academic Track (must be applied within 5 years after completion)
✓ Master’s Degree or equivalent
✓ Doctorate Degree or equivalent
✓ Bachelor of Laws


✓ Professional certifications (examples: CMA, CFA, CFE, CIA, and CISA)

✓ Foreign language certifications
✓ Professional chair
✓ Internship/Specialty/Sub-specialty program
✓ Fellowship grant
✓ Post-graduate diploma/certificate
3. Self-Directed and/or Lifelong Learning (Training offered by Non-Accredited Providers, Face to Face or Online)
Aside from activities similar with seminars/workshops, the following are also included in this category
✓ Technical paper
✓ Article published in refereed/peer reviewed professional journal
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✓ Pamphlet/book or monograph
✓ Magazine/newspaper articles relevant to the topics in the competence areas
✓ Study tours/visits
✓ Active committee membership in FRSC, AASC, PIC, CPD Committee
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4. Such Other Activities to be recommended by the CPD Council and Approved by the Board and the Commission.
ORGANIZATIONS DISCUSSED UNDER RA 9298
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Financial Reporting Standards Council (FRSC)
The FRSC shall be composed of sixteen (16) members. 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:
Board of Accountancy 1
Commission on Audit 1
Securities and Exchange Commission
Bangko Sentral ng Pilipinas
Bureau of Internal Revenue
Insurance Commission
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1
1
1
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A major organization composed of preparers
and users of financial statements (FINEX)* 1
Accredited National Professional Organization of CPAs:
Public Practice 2
Commerce and Industry 2
Academe/Education 2
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Government 2 8
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*Financial Executives Institute of the Philippines
*In March 2022, the Board unanimously agreed to increase the members of FRSC from fifteen (15) to sixteen (16).
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Auditing and Assurance Standards Council (AASC)

Per RA 9298, the AASC shall be composed of fifteen (15) members. A chairman, who had been or presently a senior
practitioner in public accountancy and fourteen (14) representatives from the following:
Securities and Exchange Commission 1
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Bangko Sentral ng Pilipinas 1

An association or organization of CPAs in
active public practice of accountancy 1
Public Practice 6
Academe/Education 1
Government 1 9
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However, per BOA Resolution No. 22 Series of 2020, the members of AASC from was increased from fifteen (15) to
eighteen (18). The increase shall include additional representatives from the small- and medium-sized practitioners, a
representative from the Insurance Commission and the removal of the representative from the government. With these,
the composition of the AASC will be as follows:
A chairman, who had been or presently a senior practitioner in public accountancy and seventeen (17) representatives
from the following:
Securities and Exchange Commission 1
Bangko Sentral ng Pilipinas 1
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An association or organization of CPAs in
active public practice of accountancy 1
Insurance Commission 1
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Public Practice 9
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Academe/Education 1 11
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Quality Review Committee (QRC)

The QRC shall be composed of seven (7) members. A chairman, who had been presently a senior accounting
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practitioner in the public accountancy and six representatives from the following:

Public Practice
Commerce and Industry
2
1
1
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Academe/Education 1
Government 1 5
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Functions of QRC:
• Conduct quality review on applicants for registration to practice public accountancy and render a report which
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shall be attached to the application for registration.

• Recommend to the Board the revocation of the certificate of registration and the professional identification card of
CPAs in public practice of accountancy.
Education Technical Council (ETC)

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The ETC shall be composed of seven (7) members with a Chairman, who had been presently a senior accounting
practitioner in the academe/education and six representatives from the following:
Public Practice 1
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Academe/Education 2*
Government 1 5
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*shall be equally distributed among the private and public schools
ETC was established to assist the Board in
a. carrying out its powers and functions provided in Rule II, Section 7 (n) of RA 9298
b. in attaining the objective of continuously upgrading the accountancy education in the Philippines to make the
Filipino CPAs globally competitive.


Term of Office
The chairman and members of the FRSC, AASC, QRC and ETC shall have a term of three (3) years renewable for
another term.
Philippine Institute of Certified Public Accountant (PICPA)

• The PICPA was recognized by the Commission as the APO on October 2, 1975 per Accreditation No. 15. It was
established for the benefit and welfare of the CPAs, the advancement of their profession, and the attainment of
other professional ends.
• Membership is open to all registered CPAs from all sectors namely public practice, commerce and industry,
academe/education and government.
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• PICPA shall have adequate chapters/regions in major areas in the Philippines to effectively attend to the needs of
its members
• There shall only be fifteen (15) national directors, unless there is a valid reason to have additional representation.
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• Renewal of certificate of accreditation once every three years.
• Cancellation of accreditation may be caused by any of the following grounds:
a. it has ceased to possess any of the qualifications for accreditation
b. it no longer serves the best interests of CPAs
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c. it did not achieve its plan within three years
d. it has committed acts inimical to its members and to the profession
e. Failure to renew its accreditation after a lapse of unreasonable period.
PRC CPE Council

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The Board, upon approval by the PRC, shall create this council which shall assist the Board in implementing its CPE
program.
Composition
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The PRC CPE Council shall be composed of a chairperson and two (2) members.
• The chairperson shall be chosen among the members of the Board
• The first member could either be the president or any officer chosen by the BOD of PICPA
• The second member could either be the president or any officer of the organizations of deans or department
heads of schools, colleges or universities offering BS Accountancy program.
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Term of office
Co-terminus with their respective incumbency in BOA, PICPA and organization
Powers and Functions

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The council shall, upon a majority vote, exercise powers and functions which shall include but shall not be limited to the
following:
• Accept, evaluate and approve applications for accreditation of CPE providers.
• Accept, evaluate and approve applications for accreditation of CPE programs, activities or sources as to their
relevance to the profession and determine the number of CPE credit units to be earned on the basis of the
contents of the programs, activity or source submitted by the CPE providers.
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• Accept, evaluate and approve applications for accreditation for exemptions from CPE requirements.
• Monitor implementation by the CPE providers of their programs, activities or sources.
• Assess periodically and upgrade criteria for accreditation of CPE providers and CPE programs, activities or
sources.
• Perform such other related functions that may be incidental to implementation of the CPE programs or policies.


PICPA CPE Council

If the need arises, the PRC CPE Council may delegate to the PICPA
• the processing of the application
• keeping of all records for CPE providers and their respective programs and credit units earned by each CPA who
avail of the CPE programs
• any other related functions
ORGANIZATIONS AFFECTING THE ACCOUNTANCY PROFESSION

I. Regulatory Government Agencies
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A. Professional Regulation Commission (PRC) - Agency that administers, implements and enforces the
regulatory policies of the government with respect to the regulation and licensing of the various professions under
its jurisdiction.
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B. Board of Accountancy – the only body that issues and may revoke CPA certificates and grant license to practice
C. Commission on Audit (COA) - the Philippines’ Supreme Audit Institution. This commission has the power,
authority and the duty to examine, audit, and settle all accounts pertaining to the revenue and receipts of, and
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expenditures or uses of funds and property, owned or held in trust by, or pertaining to, the government, or any of
its subdivisions, agencies, or instrumentalities, including government-owned or controlled corporations and
recommend measures to improve the efficiency and effectiveness of government operations. Its primary function
is to keep the general accounts of the government and for such period as may be provided by law, preserve the
vouchers pertaining thereto.
Reports on the:
1. Accountability of government funds
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a. When it examines all accounts pertaining to the revenue and receipts of, and expenditures or uses of
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funds and property owned or held in trust by, or pertaining to, the government.
b. When it sets accounting and auditing rules and regulations including those for the prevention and
disallowance of irregular, unnecessary, excessive, extravagant or unconscionable expenditures, or uses
of government funds and properties.
2. Financial condition and operation of the government to the President and the Congress.
3. Operational efficiency and effectiveness of the government and its agencies.
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4. Accountability of government records.

5. Decisions to any case brought before it within 60 days.
D. Securities and Exchange Commission (SEC) - Agency that regulates the registration and operations of
corporations, partnerships and other forms of associations, as well as monitoring of compliance with the
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Corporation Code, Civil Code provisions on partnerships, Foreign Investment Act, and other related laws. It has
power to established rules for any CPAs associated with audited financial statements submitted to the
Commission and also has considerable influence in setting GAAP and disclosure requirements for financial
statements
The SEC Powers and functions relevant to the Accountancy Profession
1. Have the jurisdiction and supervision over all corporations, partnerships or associations who are the grantees
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of primary franchises and/ or a license or permit issued by the Government;

2. Approve, reject, suspend, revoke or require amendments to registration statements, and registration and
licensing applications;
3. Issue cease and desist orders to prevent fraud or injury to the investing public;
4. Impose sanctions for the violation of laws and the rules, regulations and orders issued pursuant thereto;
5. Punish for contempt of the Commission, both direct and indirect, in accordance with the pertinent provisions
of and penalties prescribed by the Rules of Court;


6. Issue subpoena duces tecum and summon witnesses to appear in any proceedings of the Commission and in
appropriate cases, order the examination, search and seizure of all documents, papers, files and records, tax
returns, and books of accounts of any entity or person under investigation as may be necessary for the proper
disposition of the cases before it, subject to the provisions of existing laws.
Objectives:
- to assist in providing investors with reliable information upon which to make investment decisions
E. Bureau of Internal Revenue (BIR) - Agency whose primary objective is to raise revenues for the government. It
also prescribes additional requirements for audited financial statements that accompany tax returns of various
entities.
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F. Bangko Sentral ng Pilipinas (BSP) - An agency whose primary objective is to maintain price stability conducive
to a balanced and sustainable economic growth. It also aims to promote and preserve monetary stability and the
convertibility of the peso.
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G. Insurance Commissions – prescribes additional requirements regarding audits of insurance companies
II. Professional Organizations
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A. Philippine Institute of Certified Public Accountants (PICPA) – the accredited national professional organization
B. Sectoral Organizations
1. Association of CPAs in Public Practice (ACPAPP)
2. Association of CPAs in Education (ACPAE)
3. Association of CPAs in Commerce and Industry (ACPACI)
4. Government Association of CPASs (GACPA)
III. Standard-Setting Bodies

1. Financial Reporting Standards Council
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PA
2. Auditing and Assurance Standards Council
ILLUSTRATIVE QUIZZERS – PART 1

1. Which of the following is not one of the specified objectives of the Accountancy Act of 2004?
A. The standardization and regulation of accounting education.
C
B. The examination for registration of certified public accountants.

C. Integration of the practice of accountancy
D. The supervision, control, and regulation of the practice of accountancy in the Philippines.
2. Which of the following is not among the scope of practice explicitly included in R.A. 9298?
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A. Public practice C. Academe or education

B. Private practice D. Government
3. Which of the following does not constitute a practice of accountancy?
A. A person holding out himself as one skilled in the knowledge, science and practice of accounting and as qualified
person to render professional services as a CPA to more than one client.
B. A person representing his/her employer before government agencies on tax and other accounting related matters.
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C. A person in educational institution teaching accounting, auditing, business law, taxation or other technically
related subjects.
D. A person is appointed as a marketing director of a government-owned and controlled corporation.


4. 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
(choose the incorrect one)
A. That the business or company where the above position exists has a paid-up capital of at least P5,000,000
and/or an annual revenue of at least P10,000,000.
B. The above provision shall apply only to persons to be employed after the effectivity of the Implementing
Rules and Regulations of RA 9298.
C. The above provision shall not result to deprivation of the employment of incumbents to the position.
D. That the business or company where the above position exists has an annual revenue of at least
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P5,000,000 and/or paid-up capital of at least P10,000,000.
5. The number of nominees for each position in the Board to be submitted by the APO is
A. One C. Five
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B. Three D. Seven
6. The following statements pertain to the qualifications a person should possess to qualify as member or chairman of
the board, except
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A. Must be a duly registered Certified Public Accountant with more than ten (10) years of work experience in any
scope of practice of accountancy.
B. Must be of good moral character and must not have been convicted of crimes involving moral turpitude.
C. 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
7.
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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.
D. Must not be a director or officer of the APO at the time of his appointment.
Which of the following is incorrect regarding term of office of chairman and members of the Board?
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A. No member shall serve for more than 12 years.
B. No person who has served two successive terms shall be eligible for reappointment until the lapse of one year.
C. Appointment to fill up an unexpired term is not to be considered as a complete term.
D. A vice-chairman shall be elected by the Board among themselves to serve a vice chairman for three years,
renewable.
C
8. All of the following are grounds for suspension or removal of members of the board, except
A. Neglect of duty or incompetence
B. Violation or tolerance of any violation of RA 9298 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
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accountants
C. Final judgment of crimes involving moral turpitude
D. Having a pecuniary interest, directly or indirectly, in any school, college or university
9. The Board shall, at the close of each calendar year, submit annual report that gives a detailed account of its
proceedings and accomplishments during the year to the
A. Secretary of Department of Justice
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B. Professional Regulation Commission

C. President of the Philippines
D. Senate President and the Speaker of the House of Representatives
10. The powers and functions of the Board include the following, except
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 remove a member of the Board upon due investigation from the Commission


11. 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 provided that the change shall not be more often than once every
A. Two years C. Four years
B. Three years D. Five years
12. Which of the following statements is incorrect?
A. The Board shall be under the administrative supervision of the Commission.
B. The Board shall, at the close of each calendar year, submit an annual report to the President of the Philippines
through the Commission.
C. All records of the Board, including applications for examination, examination questions, answer sheets, and other
records and documents pertaining to the CPA licensure examination, and administrative and other investigative
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cases conducted by the Board shall be under the custody of the Commission.
D. The Accredited National Professional Organization of CPAs shall provide the secretariat and other support
services to implement the provision of R.A. No. 9298.
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13. 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 the compliance with the
requirements prescribed by the Commission in accordance with
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A. RA 9892 C. RA 8981
B. RA 9298 D. RA 8882
14. The following statements relate to CPA ratings. Which is incorrect?
A. To pass the LECPA, an examinee must obtain a general average of at least seventy-five percent (75%), with no
examination.
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grades lower than sixty-five percent (65%) in any given subject.
B. A conditional candidate shall take an examination in the remaining subjects within two years from the preceding
C. An examinee obtaining a general average of less than 75%, has a grade of less than 65%, or both, but has
obtained 75% and above in at least majority of the subjects covered in the licensure examination is considered
PA
failed.
D. A candidate who fails in two (2) complete CPA 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 board exam.
15. The following ratings were obtained by an examinee during the October 2021 examination:
C
Financial Accounting and Reporting 96 Auditing 92

Advanced Financial Accounting and Reporting 94 Taxation 64
Management Advisory Services 94 RFBT 74
Based on the above information, the examinee is considered
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A. Passed C. Conditional
B. Topnotcher D. Failed
16. Any candidate who fails in ________ complete CPA Board Examinations shall be disqualified from taking another set
of examinations unless he/she submits evidence to the satisfaction of the BOA that he/she enrolled in and completed
at least________ of subjects given in the licensure examination.
A. 3, 15 units per year for a total of 60 units C. 2, 24 units
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B. 2, 15 units/year, total of 30 units D. 3, 24 units

17. A certificate of registration shall be issued to
I. examinees who pass the licensure examination
II. person awarded by the President of the Philippines
III. person admitted under reciprocity or other international agreements
A. I and II C. I and III
B. II and III D. I, II and III


18. Which of the following statements is incorrect?

A. Professional identification card is a card with validity of three (3) years, bearing the registration number, date of
issuance with an expiry date, due for periodic renewal, duly signed by the Chairperson of the Commission issued
by the PRC to a registered CPA up on payment of the annual registration fees for three (3) years.
B. A certificate of registration is a certificate under seal with a validity of three (3) years, bearing a registration
number, issued to an individual, by the Commission, upon recommendation by the Board, signifying that the
individual has complied with all the legal and procedural requirements for such issuance including, in appropriate
cases, having successfully passed the CPA licensure examination.
C. Both certificate of registration and professional identification card shall be issued to a candidate who passes the
CPA Licensure examination.
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D. The Board has the power to issue, suspend, revoke and/or reinstate the certificate of registration.
19. The BOA shall not refuse the registration of any person who successfully passed the CPA examinations if
A. Convicted by a court of competent jurisdiction of a criminal offense involving moral turpitude
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B. Convicted for a political offense.
C. Guilty of immoral and dishonorable conduct
D. None of the above.
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20. A person whose CPA certificate has been revoked
A. Can no longer be reinstated as a CPA
B. Is automatically reinstated as a CPA after two years if the has acted in an exemplary manner
C. May be reinstated as a CPA by the Board of Accountancy after two years if he has acted in an exemplary
manner
ILLUSTRATIVE QUIZZERS – PART 2

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D. May be reinstated by the PRC after two years if he has acted in an exemplary manner
1. Which of the following are allowed to practice public accountancy?

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I. Single practitioners
II. Limited partnership
III. General partnership
IV. Corporation
A. I and III C. I, II and III
B. I and II D. I, II, III and IV
C
2. A CPA shall not practice under a firm name that includes or indicates the following, except
A. Fictitious name
B. Specialization
C. Misleading as to the type of organization
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D. Name(s) of past partner(s) in the firm name of successor partnership.

3. Which of the following is not included in the seal used by a CPA?
A. Professional tax receipt number C. Registration number
B. Name of the CPA D. The title "CPA"
4. A certificate under seal, issued by the Commission upon the recommendation by the Board pursuant to this revised
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rules and regulation, attesting that Individual CPAs, including the staff members thereof, Firms, including the sole
proprietors and the staff members thereof and Partnerships of CPAs including the partners and the staff members
thereof, are duly accredited to practice public accountancy in the Philippines.
A. Business Permit C. Certificate of Accreditation
B. Certificate of Registration D. Professional Identification Card


5. Meaningful experience shall be considered as satisfactory compliance with the requirements of Section 28 of RA No.
9298 if it is earned in
A. Commerce and industry and shall include significant involvement in general accounting, budgeting, tax
administration, internal auditing, liaison with the Commission on Audit, representing his/her employer before
government agencies on tax and matters related to accounting or any other related functions.
B. Academe/education and shall include teaching for at least three (3) trimesters or two (2) semesters subjects
in either financial accounting, business law and tax, auditing problems, auditing theory, financial
management and management services and the accumulated teaching experience on these subjects shall
not be less than three (3) school years.
C. Government and shall include significant involvement in general accounting, budgeting, tax administration,
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internal auditing, liaison with external auditors or any other related functions
D. Public practice and shall include at least one year as auditor in charge and at least two years as audit
assistant of audit engagement covering full audit functions of significant clients.
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6. Evaluate the following statements related to penal and final provisions of R.A. 9298.
I. Any person who shall violate any of the provisions of R.A. 9298 or any of its implementing rules and regulations
as promulgated by the Board subject to the approval of the Commission, shall, upon conviction, be punished by a
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fine of not less than fifty thousand pesos or by imprisonment for a period exceeding two years or both.
II. It shall be the primary duty of the Commission and the Board to effectively enforce the provisions of R.A. 9298.
III. The Secretary of Justice or his duly designated representative shall act as legal adviser to the Commission and
the Board and shall render legal assistance as may be necessary in carrying out the provisions of R.A. 9298.
A. Only one statement is incorrect C. All statements are correct
7.
B. Only two statements are correct
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How many CPE credit units must be accumulated by a registered accounting professional within the 3-year period
starting 2019?
A. 60 credit units C. 100 credit units
PA
B. 80 credit units D. 120 credit units
8. As a participant, one credit hour of Continuing Professional Development program, activity or source shall be
equivalent to
A. 5 credit units C. 2 credit units
B. 3 credit units D. 1 credit unit
C
9. Which of the following describes masteral degree?

A. Shall refer to a graduate degree in accountancy, business or related field from a recognized school, college or
university.
B. Shall refer to a post graduate degree in accountancy, business or related field from a recognized school, college
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or university.
C. Shall mean training or specialization at the post graduate level for a minimum period of one (1) week.
D. None of the above
10. Which statement is correct regarding CPE (Continuing Professional Education) requirements for renewal of
professional license?
A. The total CPE credit units required for CPAs shall be sixty (60) units for three (3) years provided that a minimum
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of fifteen (15) credit units shall be earned in each year.

B. A registered professional shall be permanently exempted from CPE requirements upon reaching the age of 65
years old.
C. A registered professional who is working abroad shall be temporarily exempted from compliance with CPE
requirement during his/her stay abroad, provided that he/she has been out of the country for at least one (2) year
immediately prior to the date of renewal.
D. Senior citizens are not exempted from CPD requirements.


11. Unless otherwise exempted, registered CPAs in the practice of accountancy who have not completed the CPE
requirements shall
A. Be dropped from the roster of CPAs.
B. Not be allowed to renew their professional licenses.
C. Present evidence to the satisfaction of the Board that they have the necessary knowledge, skills and experience
to discharge their professional responsibility.
D. Submit a letter addressed to the Board indicating the reasons for not complying with the CPE requirements.
12. Which of the following statements is/are correct?
Statement 1: It shall be the primary duty of the Commission and the Board to effectively enforce the provisions of RA
9298 and its Implementing Rules and Regulations.
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Statement 2: Any person may bring before the Commission, Board, or the aforementioned officers of the law, cases
of illegal practice or violations of RA 9298 and its Implementing Rules and Regulations.
A. Only statement 1 is correct C. Both statements are correct
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B. Only statement 2 is correct D. Both statements are incorrect
13. The standard setting body created by the Board of Accountancy to promulgate auditing standards that will be
generally accepted in the Philippines is known as
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A. Financial Reporting Standards Council (FRSC) C. Auditing Standards and Practices Council (ASPC)
B. Accounting Standards Council (ASC) D. Auditing and Assurance Standards Council (AASC)
14. Which of the following is not represented in the AASC?
A. Bureau of Internal Revenue C. Insurance Commission
B. Commission on Audit
A. 18 members
B. 15 members
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D. Securities and Exchange Commission
15. The Financial Reporting Standards Council shall be composed of
C. 14 members
D. 8 members
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16. Which of the following is not represented in FRSC?
A. Commission on Audit C. Securities and Exchange Commission
B. Bureau of Internal Revenue D. National Association of CPAs in Education
17. Which of the following is not one of the functions of ETC?
A. Determine a minimum standard curriculum for the study of accountancy to be implemented in all schools
C
offering accountancy as an undergraduate degree.

B. Establish teaching standards, including the qualifications of members of the faculty of schools and colleges
of accountancy.
C. Monitor the progress of the program on the study of accountancy and undertaking measures for the
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attainment of a high quality of accountancy education in the country.

D. Recommend to the Board the revocation of the Certificate of Registration and the professional identification
card of an individual CPA or firm including any of their staff members who has not observed the quality
control measures and who has not complied with the standards of quality prescribed for the practice of
public accountancy.
18. Which of the following organizations are created by the Commission thru the powers granted by R.A. 9298?
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I. Auditing and Assurance Standards Council (AASC)

II. Quality Review Committee (QRC)
III. Education Technical Council (ETC)
IV. PRC CPE Council
V. Philippine Institute of Certified Public Accountant (PICPA)
A. I, II and III C. I, II, III and IV
B. II, III and IV D. II, III, IV and V


19. Who appoints the members of the COA?

A. The commissioner of the Professional Regulatory Commission
B. The Chairman of the Professional Board of Accountancy
C. The President, with the concurrence of the Commission on Appointments
D. The Chairman of the Auditing and Assurance Standards Council
20. Which of the following statements is (are) correct?
I. Within two (2) years, subject to certain conditions, the Board may order the reinstatement of a CPA whose
certificate of registration has been revoked.
II. Punishment for any violations of the Philippine Accountancy Act of 2004 is a fine of at least P50,000 or
imprisonment of at least two (2) years, or both.
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A. I only C. Both I and II
B. II only D. Neither I nor II
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"Believe you can and you're halfway there."
THEODORE ROOSEVELT
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01 Practice and Regulation of The Accountancy Profession

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Page 1 of 18 | AUD Handout No.

THE ACCOUNTANCY PROFESSION

PRACTICE AND REGULATION OF THE

4. Practice in the Government

REO CPA REVIEW PHILIPPINES Effectiveness. Efficiency. Convenience

RAYMUND FRANCIS A. ESCALA, CPA MBA

REGULATION OF THE ACCOUNTANCY PROFESSION

Powers and Functions of the Board

b. To supervise the registration, licensure and practice of accountancy in the Philippines;

REO CPA REVIEW PHILIPPINES Effectiveness. Efficiency. Convenience

RAYMUND FRANCIS A. ESCALA, CPA MBA

Grounds for Suspension or Removal of Members of the Board

or remove any member on the following grounds:

REO CPA REVIEW PHILIPPINES Effectiveness. Efficiency. Convenience

RAYMUND FRANCIS A. ESCALA, CPA MBA

CERTIFIED PUBLIC ACCOUNTANT EXAMINATIONS

during the examination.

Roster of Certified Public Accountants

REO CPA REVIEW PHILIPPINES Effectiveness. Efficiency. Convenience

RAYMUND FRANCIS A. ESCALA, CPA MBA

CERTIFICATES OF REGISTRATION, PROFESSIONAL IDENTIFICATION CARD and TEMPORARY/SPECIAL

b. Guilty of immoral and dishonorable conduct

Reinstatement, Reissuance and Replacement of Revoked or Lost Certificates

REO CPA REVIEW PHILIPPINES Effectiveness. Efficiency. Convenience

RAYMUND FRANCIS A. ESCALA, CPA MBA

Limitation of the Practice of Public Accountancy

Accreditation to Practice Public Accountancy

Seal and Use of Seal

Ownership of Working Papers

Accredited Professional Organization (Philippine Institute of Certified Public Accountants)

PENAL AND FINAL PROVISIONS

REO CPA REVIEW PHILIPPINES Effectiveness. Efficiency. Convenience

RAYMUND FRANCIS A. ESCALA, CPA MBA

Enforcement of the Act

CONTINUING PROFESSIONAL DEVELOPMENT

Definition and Rationale

Minimum units under required competency areas

Flexible CPD units 80 units

How to earn CPD credit units?

REO CPA REVIEW PHILIPPINES Effectiveness. Efficiency. Convenience

RAYMUND FRANCIS A. ESCALA, CPA MBA

✓ Professional certifications (examples: CMA, CFA, CFE, CIA, and CISA)

ORGANIZATIONS DISCUSSED UNDER RA 9298

Auditing and Assurance Standards Council (AASC)

Bangko Sentral ng Pilipinas 1

REO CPA REVIEW PHILIPPINES Effectiveness. Efficiency. Convenience

RAYMUND FRANCIS A. ESCALA, CPA MBA

Quality Review Committee (QRC)

Accredited National Professional Organization of CPAs:

shall be attached to the application for registration.

Education Technical Council (ETC)

REO CPA REVIEW PHILIPPINES Effectiveness. Efficiency. Convenience

RAYMUND FRANCIS A. ESCALA, CPA MBA

Philippine Institute of Certified Public Accountant (PICPA)

PRC CPE Council

Powers and Functions

REO CPA REVIEW PHILIPPINES Effectiveness. Efficiency. Convenience

RAYMUND FRANCIS A. ESCALA, CPA MBA

PICPA CPE Council

ORGANIZATIONS AFFECTING THE ACCOUNTANCY PROFESSION

4. Accountability of government records.

of primary franchises and/ or a license or permit issued by the Government;