CONFRAS – Notes 1

GENERALLY ACCEPTED ACCOUNTING PRINCIPLE (GAAP)

- Represent the rules, procedures, practice, and standard followed in the preparation and
presentation of financial statements

*The overall purpose of accounting standards is to identify proper accounting practices

for the preparation and presentation of financial statements

* A set of high-quality accounting standards is a necessity to ensure comparability and

uniformity in financial statements based on the same financial information

THE STANDARD-SETTING BODIES

International Accounting Standards Board (IASB)
- The International Accounting Standard-setting body that develops and approves
International Financial Reporting Standards (IFRS)
- Standard-setting process includes in the correct order research, discussion paper,
exposure draft, and accounting standard
- Was formed under the IFRS Foundation in 2001

Financial Reporting Standards Council (FRSC)

- Philippine counterpart of the IASB; sets and approves the Philippine Financial Reporting
Standards (PFRS)
- Successor of the Accounting Standards Council (ASC) as per RA 9298
- Constitute the highest hierarchy of generally accepted accounting principle in the
Philippines
- Approved statements of the FRSC are known as Philippine Accounting Standards (PAS)
and Philippine Financial Reporting Standards (PFRS)
- Composed of 15 members:
o A chairman who is a senior practitioner in any accounting sector
o BOA, SEC, BSP, BIR, FINEX, and COA representatives
o 2 representatives from each accredited national professional organization of CPAs
- All members are appointed by PRC upon recommendation of Board of Accountancy
(BOA) in coordination with the Accredited Professional Organization (APO), with a term
of 3 years

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Mishe Ghail M. Coz

Made by:
Anne Gwyneth S. Reyes
IFRS Interpretation Committee (IFRIC)
- Formerly Standard Interpretations Committee (SIC)
- The interpretative body of the IASB
- Addresses application issues and suggest official IFRS Interpretations

Philippine Interpretations Committee (PIC)

- Philippine counterpart of the IFRIC
- Prepare interpretations of PFRS for approval by the FRSC and to provide timely guidance
on financial reporting issues not specifically addressed in currents PFRS
- Formed in August 2006 to assist the FRSC in issuing implementation guidelines on
PFRS

International Accounting Standards Committee (IASC)

- An independent private sector body, with the objective of achieving uniformity in the
accounting principles which are used by business and other organizations for financial
reporting around the world
- Formed in June 1973
- Headquartered in London, United Kingdom
- Objectives:
o To formulate and publish in the accounting standards to be observed in the
presentation of financial statements and to promote their worldwide acceptance
and observance
o To work generally for the improvement and harmonization of regulations, and
accounting standards and procedures relating to the presentation of financial
statements

Philippine Financial Reporting Standards (PFRS)

- Correspond to International Financial Reporting Standards (IFRS) and International
Accounting Standards (IAS).
- Are numbered the same as their counterpart in International Financial Reporting
Standards (IFRS) and International Accounting Standards (IAS)

THE ACCOUNTING PROFESSION IN THE PHILIPPINES

Republic Act No. 9298 – Philippine Accountancy Act of 2004
- An act regulating the practice of accountancy in the Philippines, repealing Presidential
Decree no. 692 or the Revised Accountancy Law

Edited by:
Mishe Ghail M. Coz

Made by:
Anne Gwyneth S. Reyes
 - Objectives:
o The standardization and regulation of accounting education;
o The examination for registration of CPAs; and
o The supervision, control, and regulation of the practice of accountancy in the
Philippines

The Professional Regulatory Board of Accountancy (BOA)

- The Board which supervises accreditation, licensure, and practice of accountancy in the
Philippines
- Composed of chairman and 6 members to be appointed by the President of the Philippines
and shall hold office for a term of 3 years; a vice chairman shall be elected by the board
from among its members for a term of 1 year
- The Board shall be under the administrative supervision of the Commission and an
annual report shall also be submitted to the President of the Philippines through the
Commission

Powers and Functions of the Board:

a. To prescribe and adopt the rules and regulations necessary for RA 9298;
b. To supervise registration, licensure and practice of accountancy;
c. To administer oaths;
d. To issue, suspend, revoke, or reinstate the Certificate of Registration for accountancy;
e. To adopt the official seal of the Board;
f. To prescribe and/or adopt a Code of Ethics;
g. To monitor the conditions affecting the practice of accountancy and adopt such measures,
including promulgation 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...;
h. To oversee the quality of audits of financial statements through a review of 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 in this act
and for this purpose, to issue summons, subpoena and subpoena ad testificandum and
subpoena duces tecum to violators or witness thereof…
j. To make such investigations, motu propio (on his own impulse) in its discretion, to
determine whether any person has violated any provisions of this law, any accounting or

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Anne Gwyneth S. Reyes
 auditing standard or rules duly promulgated by the Board as part of the rules governing
the practice of accountancy;
k. To issue a cease or desist order to anyone engaged in violation of this Act;
l. To punish for contempt of the Board in accordance with the pertinent provisions of and
penalties prescribed by the Rules of Court;
m. To prepare, adopt, issue, or amend the syllabi of the subjects for examinations, determine
and prepare questions as well as administer, correct and release the results;
n. To ensure, in coordination with the CHED or other authorized government offices that all
higher educational institutions and offering of accountancy comply with the policies,
standards and requirements of the course prescribed by CHED...; and
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.

Grounds for Suspension or Removal of Members by the President:

▪ Neglect of duty or incompetence;
▪ Violation or tolerance of any violation of RA 9298 and its IRR or the CPA’s Code of Ethics
and standards of practice for CPA’s
▪ Final judgement of crimes involving moral turpitude; and
▪ Manipulation or rigging of the CPALE results, disclosure of confidential information in the
exam questions or tampering of grades.

Philippine Institute of Certified Public Accountants (PICPA)

- The integrated national professional organization of CPAs in the Ph accredited by the
Board and the PRC and governed by National Board of Directors
- Also functions as the policy making body of the following sectoral accounting organizations
which functions as its implementing arms;
o ACPAPP- Association of CPAs in the Public Practice
o ACPACI- Association of CPAs in Commerce and Industry
o ACPAE- Association of CPAs in Education
o GACPA- Government Association of CPAs

Scope of Practice
● Practice in Public Accountancy
o Involves rendering of accounting and auditing services to one or more client on fee
basis

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Made by:
Anne Gwyneth S. Reyes
 o A person or staff member in an accounting or auditing firm who is qualified to
render professional services as a CPA; or offering clients on a fee basis of services
relating to accounting procedures and the recording and presentation of financial
data
o Common services rendered;
▪ Auditing or specifically external auditing - examination of financial
statements by independent CPA to express opinion as to the fairness with
which FS are prepared. Represents the attest function of CPAs
▪ Taxation service - preparation of annual income tax returns and
determination of tax consequences of certain proposed business
endeavors.
▪ Management advisory service - refers to services on matters of accounting,
finance, business policies, organization procedures, product costs,
distribution and other business conduct and operations.

● Practice in Commerce Industry

o Also knows as private accounting
o A person employed in private or not-for-profit organization; involved in decision
making requiring professional knowledge in accounting, or when such employment
requires that the person must be a CPA

● Practice in Education/Academe
o A person in an educational institution which involve teaching of accounting,
auditing, finance, MAS, business law and other related subjects

● Practice in the Government

o A person holding a position in an accounting professional group in government or
in a GOCC, which requires professional knowledge in accounting, or where a civil
service eligibility as a CPA is a prerequisite

Certified Public Accountant Examination

- Qualifications:
a. Is a Filipino Citizen;
b. Is of good moral character;
c. Is a holder of the degree of BS in Accountancy; and
d. Has not been convicted of any criminal offense involving moral turpitude

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Mishe Ghail M. Coz

Made by:
Anne Gwyneth S. Reyes
 - Scope
1. Financial Accounting and Reporting
2. Taxation
3. Regulatory Framework for Business Transactions
4. Advanced Financial Accounting and Reporting
5. Management Advisory Services
6. Auditing

- Rating
o Passed- – General average of at least 75%, with no grades lower than 65% in any
subject
o Conditional- obtained 75% and above in majority (4 out of 6) of the subjects
- eligible to take remaining subjects within two years from the
preceding examination (removal examination)
o Failed- fails to obtain a general average of at least 75% and a rating of at least
65% in each of the subjects reexamined

Certificate of Registration
- Issued to examinees who pass the licensure exam or person admitted under reciprocity
or other international agreements
- Contains: (1) full name and the assigned registration number of the registrant, (2)
signature of the Commission chairperson and the Board chairman and members, and (3)
official seal of the Commission and of the Board.

Professional Identification Card

- bears the registration number, date of issuance, expiry date and sign of the Commission
chairperson; renewable every 3 years

Refusal to Issue
The Board shall not issue a certificate of registration and professional ID to any successful
examinee who is:
a. convicted by a court of competent jurisdiction of a criminal offense involving moral
turpitude
b. guilty of immoral and dishonorable conduct
c. of unsound mind

Edited by:
Mishe Ghail M. Coz

Made by:
Anne Gwyneth S. Reyes
Suspension and Revocation
The Board shall have the power, upon due notice and hearing, to suspend or revoke the
practitioner’s certificate of registration and professional ID card or suspend him/her from the
practice of the profession or cancel hish/her special permit for any of these causes or grounds:
a. as mentioned in the grounds for refusal to issue;
b. any unprofessional or unethical conduct;
c. malpractice; or
d. violation of any RA 9298 provisions and its IRR, the CPA’s Code of Ethics and the
technical and professional standards of practice for CPAs.

Reinstatement, Reissuance and Replacement of Revoked or Lost Certificates

- 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, the Board
may reinstate the validity of a revoked certificate of registration and may exempt the
applicant from taking another examination.

Certificate of Accreditation
- Shall be issued to CPA in public practice who has acquired at least 3 years of meaningful
experience in any areas of public practice
- Individual CPAs, firms and partnerships of CPAs engaged in the practice of public
accountancy shall register with the Commission and the Board which shall be valid for 3
years and may be renewed on or before September 30 on the year of expiry

References:
Ballada, W., & Ballada, S. (2021). Basic Financial Accounting and Reporting. Manila,
Philippines: DomDane Publishers.
Republic Act. No. 9298. s. 2004. An Act Regulating the Practice of Accountancy in the
Philippines, Repealing for the Purpose Presidential Decree No. 692, Otherwise Known as
the Revised Accountancy Law, Appropriating Funds Thereof and for Other Purposes,
Otherwise Known as the “Philippine Accountancy Act of 2004”.
Valix, C., Peralta, J., & Valix C. (2020). Conceptual Framework and Accounting Standards.
Manila, Philippines: GIC Enterprises & Co. Inc.
Various review materials in Financial Accounting and Reporting

Edited by:
Mishe Ghail M. Coz

Made by:
Anne Gwyneth S. Reyes