PRACTICE AND REGULATION OF THE ACCOUNTANCY PROFESSION

The Short Title of RA 9298 shall be known as

Philippine Accountancy Act of 2004

RA 9298 is a consolidation of

Senate Bill No. 2748 and House Bill No. 6678 was finally passed by the Senate and the House of Representatives on February 6, 2004 and February 7, 2004, respectively

The APO shall submit its nominations with complete documentation to the Commission not later than _____ prior to the expiry of the term of an incumbent chairman or member

60 days

Penalties that can be imposed by the Board of Accountancy

• Injunction. A court order to do or not to do

• Payment of damages

• Permanent or temporary loss of license. Violating CPA’s certificate/license may be suspended or revoked

Within ____ days after the effectivity of RA 9298, the Board, subject to the approval of the Commission and in coordination with the APO, shall adopt and promulgate such rules and regulations to carry out the provisions of RA 9298 and which shall be effective _____ days following their publication in the Official Gazette or in any major daily newspaper of general circulation

90; 15

The primary duty to enforce the provisions of RA 9298 and its IRR rests with

PRC and BOA

Any person who shall violate any of the provisions of RA 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 (penal provision)

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

They act as legal adviser to the PRC and the BOA and shall render legal assistance as maybe necessary in carrying out the provisions of the Philippine Accountancy Act

Secretary of Justice or his duly designated representative

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

President of the Philippines through the Commission

Who suspend or remove the members of the Board?

The President of the Philippines, upon the recommendation of the Commission

Sec 8 Compensation and Allowances of the Board states that, the chairman and the members of the Board shall receive compensation and allowances comparable to that being received by the chairman and members of existing regulatory boards under the Commission as provided in the

General Appropriations Act

The Board shall submit to the Commission the ratings obtained by each candidate (examinees) within

ten (10) calendar days after the examination, unless extended for just cause.

Documents showing the outline embodying topics and concepts of major subjects prescribed in specific course of study to serve as the basis for test questions in the CPA licensure examinations

Syllabi

Qualifications for the licensure examinations for CPAs.

1. is a Filipino citizen;

2. is of good moral character;

3. 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

4. has not been convicted of any criminal offense involving moral turpitude.

The maximum number of times a failing CPA candidate sits for the CPA board exams before he is required to attend a refresher course

4

A candidate may obtain the following ratings:

• First exam: Conditional

• Second exam: Failed (after taking the removal examination)

• Third exam: Conditional

• Fourth exam: Failed (after taking the removal examination)

In the event a candidate obtains a rating of 75% and above in at least a majority of the subjects, he/she shall receive conditional credit for the subjects failed (T/F)

False (passed)

Any candidate who fails in 2 complete CPA Board Exams shall be disqualified from taking another set of examination unless he or she submits evidence to the satisfaction of the Board he/she enrolled in and completed at least 24 units of subjects given in the licensure examination within two years from the last examination taken (T/F)

False (There is no two-year period requirement for obtaining the refresher course certificate)

Documents required for the licensure examinations for CPAs.

Certificate of Live Birth authenticated by Philippine Statistics Authority (PSA), formerly known as National Statistics Office

Valid NBI Clearance

Transcript of Records with scanned picture and Remarks "For Board Examination Purposes"

Marriage contract in PSA security paper for married female applicants

Other documents that may be required by PRC

Grounds for proceedings against a CPA:

1. convicted by court of competent jurisdiction of a criminal offense involving moral turpitude

2. guilty of immoral and dishonorable conduct

3. of unsound mind

4. any unprofessional or unethical conduct;

5. malpractice; or

6. violation of any of the following:

   • any of the provisions of RA 9298 and its IRR

   • the CPA‘s Code of Ethics

   • the technical and professional standards of practice for CPAs

A Professional Identification Card bearing the registration number, date of issuance, expiry date, duly signed by the chairperson of the Commission, shall be issued to every registrant renewable every

3 years

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

For a foreign CPAs to be issued with special or temporary permit, the following shall be met:

1. There is foreign reciprocity between the Philippines and the foreign country. The burden of proving the existence of foreign reciprocity rests with the foreign CPA

2. The foreign CPA’s practice will have an essential contribution to the development of the accountancy profession in the Philippines

A CPA certificate is evidence of

Basic competence at the time of certification

The certified public accountant shall be required to indicate these numbers on the documents he/she signs, uses or issues in connection with the practice of his/her profession

I. His/her Certificate of Registration
II. Professional Identification Card
III. Professional Tax Receipt

A CPA employed by an Individual CPA, Firm or Partnership engaged in the practice of public accountancy below the rank of the Individual CPA, sole proprietor or partner as the case maybe

Staff member

An organization engaged in the practice of public accountancy, consisting of a sole proprietor, either alone or with one or more staff member(s)

Firm

The death or disability of an individual CPA and/or the dissolution and liquidation of a firm or partnership of CPAs shall be reported to the BOA not later than ____ days from the date of such death, dissolution or liquidation

30

How many years can a surviving partner of the partnership may continue the practice under the Partnership name?

2 years after becoming a sole proprietor

Requirement for a partnership for public accountancy practice

All partners must be CPAs

It is a study, appraisal, or review by the Board or its duly authorized representatives, of the quality of audit of financial statements through a review of the quality control measures instituted by an Individual CPA, Firm or Partnership of CPAs engaged in the practice of public accountancy to ascertain his/her/its compliance with prescribed professional, ethical and technical standards of public practice

Quality Review

A certified public accountant engaged in the practice of public accountancy under his/her name, by himself/herself only or with one or more staff member(s)

Individual CPA

Validity of certificate of accreditation

3 years, renewable on or before the expiration of the validity date

The reckoning date of validity of certificate of accreditation for accounting firms and partnerships

The month of their SEC registration date

The number of continuous years from initial registration, or from last renewal date registered accountants should fail to renew their professional licenses before they are declared delinquent and shall, after due notice, through the website and publication in the newsletters of PICPA or any newspaper of general circulation, be dropped from the roster of CPAs

5 years

The number of additional credit units earned upon completion of a doctorate degree is

30

What can be seen on the upper part of the CPA seal between the circles?

Name of the individual CPA, firm or partnership

What can be seen on the lower part of the CPA seal between the circles?

CPA registration number of the individual CPA, proprietor of the firm and the signing partner of the partnership

What can be seen on the middle of the smaller circle of the CPA seal?

The letters “CPA”

It refers to the gathering of professionals which shall include, among others, workshops, technical lectures or subject matter meetings, non-degree training courses and scientific meetings

Seminar

It refers to a gathering of professionals which shall include, among others, conferences, symposia or assemblies for round table discussions

Convention

It refers to the ownership of intellectual property which includes technical or professional books, instructional materials and the like

Authorship

As defined in Annex “C” of the IRR of RA 9298, this refers to the inculcation, assimilation and acquisition of knowledge, skills, proficiency and ethical and moral values, after the initial registration of a professional that raise and enhance the professional’s technical skills and competence

Continuing Professional Education

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:

Board of Accountancy		1
Commission on Audit		1
Securities and Exchange Commission		1
Bangko Sentral ng Pilipinas		1
An association or organization of CPAs in active public practice of accountancy		1
Accredited National Professional Organization of CPAs:
Public Practice	6*
Commerce and Industry	1
Academe/Education	1
Government	1	9
		14

Who established the PRC-CPE Council?

BOA

A CPA firm may not designate itself as “members of the PICPA” unless

All of its partners are members of the PICPA

The Supreme audit institution

Commission on Audit

The Commission Proper of Commission on Audit (COA) is appointed by the President of the Philippines for a term of

7 years

Qualifications of the SEC Commissioners

• Must be natural-born Filipino

• Must be of good moral character, of unquestionable integrity, of known probity, and patriotism, and with recognized competence in social and economic disciplines

  • The majority of the commissioners, including the Chairperson shall be members of the Philippine Bar

  • The Chairperson must be at least forty (40) years of age. The other commissioners must be at least thirty-five (35) years of age

The BSP Monetary Board is composed of seven (7) members appointed by the President of the Philippines for a term of

6 years

The Board may reinstate the validity of a revoked certificate of registration after how many years?

2 years

It is the required CPD units earned from the previous year

20 credit units

From how many years does the completion of academic track must be applied?

5 years after completion

Composition of PRC CPE

Chairperson and 2 members

Chairperson of the PRC CPE

Chosen among the members of the Board

First member of the PRC CPE

Either president or any officer chosen by the BOD of PICPA

Second member of PRC CPE

Either be the president or any officer of the organizations of deans or department heads of schools, colleges, or universities offering the BSA program

Powers and Functions of PRC CPE

• Accept CPE providers

• Accept which CPE programs and determine the number of CPE credit units to be earned

• Accept accreditation for exemptions from CPE requirements

• Monitor implementation by CPE providers

• Assess periodically and upgrade criteria for accreditation

• Perform such other related functions

Certified public accountants registered at the time RA9298 took effect shall

Automatically be registered as CPAs

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

3 years

Which of the following is correct regarding the Quality Review Committee?

I. Conduct quality review on applicants for registration to practice private accountancy
II. Recommend the revocation of the certificate of registration and PIC of applicants who has not observed the quality control measures
III. BOA may conduct the required quality review.

II and III

An immaterial loan from the CPA to an officer of a client impairs the independence of the CPA (T/F)

True

A professional accountant in business is facing pressure from management to manipulate financial results. Which of the following is most likely the appropriate thing to do?

Seek guidance from an ethics committee or professional body

Which fundamental principle is most critical for an assurance engagement?

Objective

For an entity's financial statements to be presented fairly in conformity with PFRS, the principles selected should

Reflect transactions in a manner that presents the financial statements within a range of acceptable limits

The concept of reasonable assurance indicates that the auditor is

not an insurer of the correctness of the financial statements

It is the gap between what auditors are required to do and what users expect

Audit Expectation Gap