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A GLIMPSE AT the annals of business would show some of the biggest firms in the world fall because of accounting scandals, bringing their auditors down with them. In the Philippines, accounting and auditing firms are now being put under stiffer regulations. The sterner environment, however, is becoming one of the challenges that auditing fi rms like R.G. Manabat & Co. face today. The International Financial Reporting Standards ( IFRS), for instance, has come up with new guidelines that require more disclosures, but admittedly, the move “leads to more transparency,” R.G. Manabat & Co. Chairman and Chief Executive Officer (CEO) Roberto G. Manabat said in an interview with Business World. “It’s also a result of the fi nancial crisis and the scandals that have happened in the past, talking of cases like that of Enron. So it started with financial reporting standards. Now, new auditing standards have come up with rules which require disclosure of key audit matters where we spent most of our time,” Mr. Manabat said.

Punongbayan & Araullo Chair and CEO Maria Victoria C. Españo shared a similar insight. “Some would say that it’s more difficult to practice the profession now because the rules are continuously being updated,” she told Business World, citing the regular pronouncements from the Securities and Exchange Commission (SEC) and the Bureau of Internal Revenue ( BIR).

“Now, to excel in this profession, you have to continue on learning, understanding what’s new, and what’s coming so that you can prepare for it,” Ms. Españo said.

Keeping up with regulatory changes, she said, are not just paramount for them but for clients as well, so the auditing fi rms need to relay the message. “There is an increasing number of regulations

on companies and the profession itself. There are new regulations from the SEC, BIR, Bangko Sentral ng Pilipinas. Therefore, it is on us as auditors to understand what those regulations are so we could properly guide our clients as well in complying,” Ms. Españo added.

For his part, Navarro Amper & Co. Managing Partner & CEO Greg Navarro believes that regulatory bodies, aside from overseeing the practice of professions, should also assist in government efforts to facilitate transactions and promote the overall policy covering ease of doing business.

“The Board of Accountancy ( BOA) has required CPA firms to submit information that we believe are proprietary to the firms like list of clients, fees, and even man hours that auditors spend on clients,” Mr. Navarro told BusinessWorld.

“If quality assurance reviews will finally be implemented in accordance with BOA’s mandate, then the Board will have a chance to look at the specific engagements it will review, but not all, because that kind of unlimited access breaches certain confidentiality rules and agreements with clients,” he said. “If data mining is what they’re after, they have to be very clear on how the information will be used and on how they will safeguard the data submitted to them.”

Isla Lipana & Co. Chairman and Senior Partner Alex B. Cabrera agreed that although the tight regulations are intended to catch a few erring certified public accountants (CPAs), these are sought to be implemented in “such a burdensome way” that affect administrative operations of auditing firms.

“What we really want to do is to spend our quality time attending to clients and providing helpful service to the public instead of attending to burdensome administrative requirements that don’t add value,” he said in a separate interview with BusinessWorld.

PART OF A STRATEGIC PLAN

But for BOA Chairman Joel L. TanTorres, the added regulations in the profession are part of a strategic plan that is intended to meet developments in the global and regional environments.

“It’s a very dynamic profession so we should be conscious of what’s happening locally, in the region, and in the world,” Mr. Tan-Torres told BwusinessWorld.

The plan for the accounting profession includes over 90 measures that are in place or will be implemented. The regulatory aspect of the plan, he said, is among the most important measures that would be implemented. “In the area of governance and ethics, accountants should be very focused on this area. So there’s a lot of things also happening here,” he said. “We also have major plans about enhancing the image and reputation of the accounting profession,” he said.

Mr. Tan-Torres also noted that the BOA is planning to propose a revision of the Accountancy Law. “We are also targeting structural changes. Such that by April 20, 2016, we will convene a dialogue with our stakeholders to come up with comments and feedback on measures that should be put in the accountancy law revision that we are planning to submit to the new Congress come July,” Mr. Tan-Torres said.

Another priority of the group is the ASEAN (Association of Southeast Asian Nations) Mutual Recognition arrangement for accountancy services. “We also have to be aware of our local, regional, and global accounting community. There are so many stakeholders for our ASEAN accounting bodies that we need to regularly interact with,” he said. “The Philippine professional accountancy should not be left behind by changes in the global community.”

EDUCATION AND TECHNOLOGY

Mr. Tan-Torres also shared that the accountancy education in the Philippines needs improvement. He highlighted