ACCOUNTING STANDARDS

IN THE PHILIPPINES
 THE ACCOUNTANCY
PROFESSION
 Republic Act No. 9298 – Philippine
Accountancy Act of 2004

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CHARACTERISTICS OF THE
ACCOUNTANCY PROFESSION

• All members of the accountancy

profession are CPAs
• CPAs have their own body of language
• CPAs adhere to a code of ethics
• CPAs are members of a national
organization
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Scope of Practice

Republic Act 9298, known as the Philippine

Accountancy Act of 2004 provides that the
practice of accountancy shall include:

1. Practice in Public Accountancy

2. Practice in Commerce and Industry
3. Practice in Education/Academe
4. Practice in Government

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 Public Practice

-individual practitioners, small accounting firms

and large multinational organizations that
render independent and expert financial
services to the public
Services offered:
1. Auditing
2. Taxation
3. Management advisory services

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 Commerce and Industry

-CPAs employed in business entities in various

capacity as accounting staff, chief accountant,
internal auditor and controller.

-major objective is to assist management in

planning and controlling the entity’s
operations

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 Education/Academe

- CPAs employed in educational institutions to

teach finance, auditing, management advisory
services, taxation, business law and other
technically related subjects.

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Government Accounting
-encompasses the process of analyzing, classifying, summarizing and
communicating all transactions involving the receipt and disposition
of government funds and property and interpreting the results
thereof.
-focus is on the custody and administration of public funds

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Code of Ethics

Professional Accountant – an individual who

holds a valid certificate issued by the Board of
Accountancy (i.e., Certified Public Accountant).

A professional Accountant’s responsibility is to

act in the public interest. He/she should comply
with the ethical requirements of the Code.

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Code of Ethics
Ethics – concerned with right and wrong and how
conduct should be judged to be good or bad. It is about
how we should live our lives and, in particular, how we
should behave towards other people. It is therefore
relevant to all forms of human activity.

Business Ethics – tells what is right or wrong in a

business situation.

Professional Ethics – tells what is right or wrong

regarding a profession.

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Code of Ethics
Fundamental Principles:
1. Integrity – straightforward and honest
2. Objectivity – not biased
3. Professional Competence and Due Care
4. Confidentiality
5. Professional Behavior – comply with
relevant laws and avoid any action that
discredits the profession.

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Accounting Standards
in the Philippines
Accounting Standards – authoritative
statements of how particular types of
transaction and other events should be
reflected in financial statements.

Financial Reporting Standards Council –

establish and improve accounting standards
that will be generally accepted in the
Philippines. Previously known as Accounting
Standards Council.
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 Generally Accepted
Accounting Principles
- rules, procedures, practice and standards followed
for the preparation and presentation of financial
statements
- conventional, meaning, they become generally
accepted by agreement, rather than by formal
derivation from a set of postulates and basic
concepts.
- These have been developed on the basis of
experience, reason, custom, usage and practical
necessity

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 FRSC
Financial Reporting Standards Council
- Replaces the Accounting Standards Council
(ASC)

ASC – created to formalize initally the

development of generally accepted
accounting principles in the Philippines

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 FRSC
Financial Reporting Standards Council
- Created by PRC upon recommendation of
BOA
- Main function is to establish and improve
accounting standards that will be generally
accepted in the Philippines
- Approved statements of FRSC: PAS and PFRS

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 FRSC
Financial Reporting Standards Council
- Composed on 15 members with a chairman
- Chairman and members shall have a term of
3 years renewable for another term
- Any member of the ASC shall not be
disqualified from being appointed to the
FRSC

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 PIC
Philippines Interpretations Comittee
- Formed by the FRSC in August 2006 and
replaced IC formed by the ASC in May 2000
- Role is to prepare interpretations of PRFS
and to provide timely guidance on financial
reporting issues not specifically addressed in
current PFRS
- Intended to give authoritative guidance
- Counterpart in UK - IFRIC

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 IASC
International Accounting Standards Comittee
- 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
- Published standards called International
Accounting Standards (IAS)

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 IASB
International Accounting Standards Board
- Replaces the IASC
- Publishes its standards in a series of
pronouncements called International
Financial Reporting Standards (IFRS)

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 IFRS
International Financial Reporting Standards
- Global phenomenon intended to bring about
greater transparency and a higher degree of
comparability in financial reporting

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 PFRS
Philippine Financial Reporting Standards
- Collectively include all of the following:
1. PFRS
2. PAS
3. Philippine Interpretations

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