Musings on the amendments of the Accountancy Law

Sixth part of a series

The Professional Regulatory Board of accountancy has the right intention with its proposed revision of Section 9 of the accountancy act of 2004 (Republic act 9298) pertaining to the powers of the BOA. as proposed, the section shall specify that the BOA shall have “exclusive oversight and supervision over the licensure, registration, accreditation and practice of accountancy in the Philippines,” with particular emphasis on “exclusive.”

The certified Public Accountants in the Philippines are apparently the most heavily regulated among the professionals in the Philippines, maybe even in the world. There are at least seven government agencies requiring accreditation of these cpas who are the external auditors of the companies dealing with said government offices. These government units requiring accreditation of CPA external auditors are the Bureau of internal Revenue, securities Exchange commission (sec), Bangko sentral ng Pilipinas, cooperative Development Authority, national Electrification Administration, and the insurance commission. in my talks as BOA chairman several years ago, i oftentimes joke, but with some element of seriousness, that aside from the seven government offices requiring accreditation from cpas, it will not be too long when even the barangays may require registration from the cpas to hold office in the locality.

it is high time that the BOA, being the government functionary tasked to regulate the CPA, should discharge its mandate without the unnecessary interference of other government offices. such interventions from several government units are undermining the regulatory authority of the BOA and causing undue burden on cpas complying with the various regulatory requirements of these agencies. With this proposed amendment of “exclusive” authority incorporated in the Accountancy law, some order may now prevail in the accountancy profession. Thereafter, it shall be the role of the BOA to respond to the regulatory demands of the other government regulators and take the appropriate action to incorporate in its regulatory work the relevant needs of the other government offices. i surmise, however, that this proposal may meet some opposition from the “competing” government regulators. it will be wise for the BOA to initiate early talks with the other agencies on this proposed amendment to appease their concerns and possible objections.

Another point of overlap or intervention of a separate government agency in the function of the BOA is in the area of quality assurance of the work of external auditors. Presently, RA 9298 provides that the BOA is tasked “to conduct an oversight into the quality of audits of financial statements through a review of the quality control measures instituted by auditors in order to ensure compliance with the accounting and auditing standards and practices.” in 2017, the sec, with its Memorandum circular 9, promulgated its sec oversight Assurance Review inspection Program. The soar is “an on-site review of the quality control policies and procedures of accredited firms auditing companies.” Very clearly, the sec soar is a duplication of the BOA task of oversight and quality assurance review. There should be a decision as to which government agency should perform this task. if it is resolved that BOA should continue to discharge this mandate pursuant to the Accountancy law, the appropriate resources and support should be provided to BOA to effectively pursue this responsibility. To effect this provision of support, it is proper that this is incorporated as part of the amendments of RA 9298.

it is very clear that this issue on overlapping and multiple interventions of various government agencies in the accountancy profession and its cpas should be addressed head on. The cpas of the Philippines deserve nothing less than being given relief from the many impositions of the many government regulators.

To be continued.

Joel L. Tan-torres is the Dean of the University of the Philippines Virata School of Business. Previously, he was the Commissioner of the Bureau of Internal Revenue, the chairman of the Professional Regulatory Board of Accountancy and partner of Reyes Tacandong & Co. and the Sycip Gorres and Velayo & Co. He is a Certified Public Accountant who garnered No. 1 in the CPA Board Examination of May 1979.

This column accepts articles for publication from the business and academic community. Articles not exceeding 600 words can be e-mailed to jltantorres@up.edu.ph.