Santos, Donise Ronadel

Module 11 Section 9

1. Can accountancy be considered a profession? Explain your answer.

Accountancy can be considered a profession because it is a program
that accountants need to acquire professional licensure. To become
accountant, one should take a Bachelor of Science in Accountancy program
and once graduated, he/she must pass a CPA Board Exam to acquire CPA
license. Also, just like other professions, CPAs also have their own Code of
Ethics and oath taking which are mandatory for all members of the profession.

2. When is a CPA considered to be in:

 Public practice? – It is when a person can already provide accounting
services to the public or engaged in the practice of public accounting
as CPA. One must be licensed and register their professional
accounting practice. CPA’s services to the public, or practicing public
accounting, can be done on a full-time, part-time, subcontract or
consulting basis.
 Commerce and industry? – CPA in industry however , go and CPAs work
directly for a firm and manage their finances and their responsibilities include
budgeting , cost control , accounting systems , payroll management , portfolio
and investment advisories.
 Education or the academe? – when a CPA chooses to work at schools
or universities to teach accounting, auditing, management advisory
services, and other related subjects.
 Government? – when a CPA uses his/her profession in government or
in a government-owned and/or controlled corporation.

3. How is the Accountancy profession being regulated?

Accountancy profession is being regulated at a national level with professional

accountancy organizations playing an important role in working with governments to
ensure that such regulation is effective, efficient and in the public interest. The
following are some regulators of accountancy profession:

 Republic Act No. 9298 or The Philippine Accountancy Act of 2004

 Financial Reporting Standards and Engagement Standards established
by recognized standard-setting bodies
 Adoption of a Code of Ethics for CPAs in the Philippines
 Self-regulation through a system of quality control
 Sanctions/penalties against violators of the laws, rules and regulations
affecting the accounting profession.

4. Describe the major objectives of the following organizations:

  Professional Regulation Commission – administer , implement and enforce
the regulatory laws and policies of the Philippines with respect to the regulation
and licensing of the various profession and occupations under it's jurisdiction ,
including the enhancenent and maintenance of professional and occupational
standards and ethics and enforcement of the rules and regulations relativrelative
there to.
 Professional Regulatory Board of Accountancy – it is the
standardization and regulation of accounting education and the one
who manage the examination for registration of Certified Public
Accountant. They are also assigned in supervision, control and
regulation of practice of accountancy.
 Securities and Exchange Commission – they protect investors by
maintaining fair and efficient markets. They also facilitate capital
information.
 Commission on Audit – highest and final authority in state auditing that
prepares and publishes guidelines and other materials to be used in encouraging
the proper reporting and sound management of public debt.
 X Bangko Sentral ng Pilipinas – maintain price stability conducive
to a balanced and sustainable economic growth.
 Bureau of Internal Revenue – 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.
 Insurance Commission – regulate and supervise the insurance industry
for the promotion of the national interest.
5. Regarding the Board of Accountancy, provide the following information:
 Composition – composed of a chairman and six members to be
appointed by the President of the Philippines
 Nomination and appointment process
 the Accredited National Professional Organization (APO) of
CPAs shall submit its nominations with complete documentation
to the PRC not later than 60 days prior to the expiry of the term
of an incumbent chairman or member.
 Based on the list submitted by the APO, PRC shall, for each
position, select three nominees, rank them, and endorse the list
to the President of the Philippines.
 The President of the Philippines shall appoint the members of
the PRBOA from the list of qualified nominees submitted by the
PRC.
 Term (in years) – the chairman and members of the BOA shall hold
office for a term of three years. No person who has served two
successive complete terms shall be eligible for reappointment until the
lapse of one year.
 Qualifications of Board members –
  Must be a natural-born citizen and resident of the Philippines
 Must be a duly registered CPA with at least 10 years of work
experience in any scope of practice of accountancy.
 Must be of good moral character and must not have been
convicted of crimes involving moral turpitude;
 Must not have any peculiar interest in any school, college, or
institution conferring an academic degree necessary for
admission to the practice of accountancy.
 Must not be a director or officer of the APO at the time of his
appointment.
 Powers and functions (give at least five)
 To supervise the registration, licenses and practice of
accountancy in the Philippines;
 To prescribe and/or adopt a code of ethics for the practice of
accountancy.;
 To administer oaths in connection with administration of RA No.
9298;
 To issue, suspend, revoke, or reinstate the Certificate of
Registration for the practice of the accountancy profession; and
 To adopt an official seal of the Board
 Grounds for removal or suspension – concerned member are given an
opportunity to defend themselves in a proper administrative
investigation.
6. Regarding the Commission on Audit, provide the following information:
 Composition and Appointment – composed of a chairman and two
commissioners
 Term (in years) – term of 7 years without reappointment
 Qualifications of COA members
 Natural-born citizen of the Philippines
 At the time of their appointment, at least 35 years of age
 Certified Public Accountant with not less than 10 years of
auditing experience or members of the Philippine Bar who have
been engaged in the practice of law for at least 10 years
 Must not have been candidates for any elective position in the
elections immediately preceding their appointment
 Principal duties
 Examine, audit, and settle all accounts pertaining to the revenue
or receipts and expenditures or uses of government funds and
property
 Define the scope of its audit and examination
 Act as central accounting office of the government
 Promulgate accounting auditing rules and regulations
  Submit to the President annual financial report of the
government
 Perform such other duties and functions as may be prescribed
by law
7. What is the accredited national professional organization of CPA in the
Philippines? Identify the sectoral organization for each of four sectors of
accounting practice.

Philippine Institute of Certified Public Accountants (PICPA) is the accredited

national professional organization for accountancy in the country.

Public Practice – Association of CPAs in Public Practice

(ACPAPP)
 Commerce and Industry - Association of CPAs in Commerce
and Industry (ACPACI)
 Education/Academe – National Association of CPAs in
Education (NACPAE)
 Government – Government Association of CPAs (GACPA)
8. What is FRSC? What is AASC? Provide the following information for the
FRSC and AASC, respectively:

FRSC – Financial Reporting Standards Council

AASC – Auditing and Assurance Standards Council

 a. Type of standards being issued – accounting standards; auditing

standards
 b. Composition – both has 1 chairman and 14 representatives
 c. Term (in years) – Both of its chairman and members shall have 3
years renewable for another term
 d. International/foreign counterpart – International Accounting
Standards Board (IASB); International Auditing and Assurance
Standards Board (IAASB)
9. May a foreign CPA practice accountancy in the Philippines? What are the
qualification requirements?

A foreign CPA cannot practice accountancy in the Philippines unless they can
prove that the country of which they are a citizen, admits that citizens of the
Philippines practices the same profession without restriction.

 Present/submit a letter or any document signed and under official seal

by the appropriate official of his country requesting the Chairman of the
BOA to allow the foreign applicant to practice accountancy in the
Philippines
  File an application and documents mentioned in Section 34 of the IRR
 Apply for accreditation
10. What is continuing professional development? How many CPD credit units
must be earned in three years? What would happen if the CPA does not meet
CPD requirements?

Continuing professional development refers to the inculcation of advanced

knowledge, skills, and ethical values in a post-licensure specialization or in an
inter-or multidisciplinary filed of study, for assimilation into professional
practice, self-directed research and/or lifelong learning.120 CPD credit units
must be earned in three years and if the CPA does not meet the requirement,
they shall not be allowed to renew their license.

11. How can a Professional Accountant become an ASEAN Chartered

Professional Accountant?

A professional accountant can become an ASEAN Chartered Professional

Accountant by filing an application to the monitoring committee of their origin
of country which shall submit the application on their behalf to the ASEAN
Charted Professional Accountant Coordinating Committee (ACPACC)

12. What are the allowable forms of organization for the practice of public
accountancy in the Philippines?

RA No. 9298 allows single proprietorships and partnerships to be

formed for the practice of public accountancy in the Philippines.

13. Why are corporations not allowed as a legal form of organization for the
practice of accountancy?

Corporations are not allowed as a legal form of organization for the practice of
accountancy because personal qualifications for such practice cannot be
possessed by a corporation.

14. Give at least three duties and responsibilities performed by the following:
 Associate

a. Checking footings and computations

b. Checking short and long extensions
c. Tracing postings to the ledger

 Senior associate

a. Usually draft and finalize the audit program

b. Supervise associates and performs review procedures on work performed by
associates
c. Address minor accounting and auditing issues with clients and audit
associates

 Manager

a. Prepare the overall audit plan

b. Settle major accounting or auditing issues
c. Perform administrative work for several concurrent engagements

 Partner

a. Obtain and maintain relationship with clients

b. Discuss with clients the objective and scope of the audit
c. Assume overall responsibility for each engagement

15. What is a certificate of accreditation?

Certificate of accreditation is a certificate under seal, issued by the PRC upon

recommendation by the Professional Regulatory Board of Accountancy
(PRBOA) pursuant to the IRR< attesting that individual CPAs, firms are duly
accredited to practice public accountancy in the Philippines.

16. What are the ethical principles involved in choosing the name for a CPA firm?

CPA firms shall do business under their respective duly registered and
authorized firm name appearing in the registration documents issued by the
Department of Trade and Industry or any other proper government office and
such firm name shall include the real name of the sole proprietor as printed in
their CPA certificate.

17. Explain the different considerations in setting up and maintaining an

accounting practice:
 Compliance with government and legal requirements – have all
application for registration authenticated and accredited.
 Location and work environment – CPA will have a business advantage
in maintain an office in centers of Philippine business and the major
factor in deciding on the location is convenience.
 Technology - investing on information technology will help the CPA
gain an advantage over its competitors, particularly in the areas of
efficiency, effectiveness and risk management.
 Human resources – the firm has to have a good policy on hiring,
professional development, and advancement of its employees.
18. Is advertising allowed in the Philippines?

Traditionally, advertising is not allowed as a means for procuring clients.

However, BOA has issued a resolution which now allows several forms of
advertising.

19. What are the different forms of acceptable publicity according to the Board of
Accountancy?

The following are the different forms of acceptable publicity according to BOA:

 Awards
 Professional accountants seeking employment or professional
business
 Directories
 Books, articles, interviews, lectures, radio and television appearances
 Training courses, seminars
 Booklets and documents containing technical information
 Staff requirement
 Publicity on behalf of its clients
 Brochures and firm directories
 Stationery and nameplates
 Announcements
 Inclusion of the name of the CPA in public practice in a document
issued by a client
 Anniversaries
 Websites

20. What are the factors considered in determining fees? How are they billed to
clients?
 Flat or fixed fee basis – the client is billed a flat but all-inclusive pre-
arranged amount for the entire engagement
 Actual time charges basis – basis of actual time spent by the staff
multiplied by the hourly rates agreed upon
 Maximum fee basis – client is charged on a per diem basis, with the
agreement that the total charges will not exceed a certain agreed
maximum amount
 Retainer fee basis – paid a fixed pre-determined fee for all services
rendered during a designated period of time either on a monthly, semi-
annual or annual basis.
21. A partner dies, causing the dissolution of the partnership where he serves as
managing partner. What are the reporting responsibilities of the partnership to
the BOA?

The death of the managing partner shall be reported to the BOA by any
designated staff member of the individual CPA, not later than 30 days from
the date of such death.