Reaction Paper Proposed and Current Accountancy Act :

PLs make a narrative report of your agreements and disagreements with the proposed vs current accounting act.

REPUBLIC OF THE PHILIPPINES HOUSE OF REPRESENTATIVES Quezon City EIGHTEENTH CONGRESS First Regular Session HOUSE BILL NO. Introduced by REPRESENTATIVE EXPLANATORY NOTE The current accountancy law (R.A.No. 9298) was enacted way back in 2004. Although some provisions of the said law are still relevant up to the present time, the proponent of this bill is of the opinion that the law needs amendments of certain provisions in order to make it more responsive to the current requirements of the practice of the accountancy profession in the Philippines. Among others, this proposed bill is intended to amend and introduce certain provisions of R.A. 9298 in order to achieve the following: 1. To redefine the practice of accountancy in accordance with current trends in the practice of the profession. To expressly provide that the Board of Accountancy has the exclusive oversight and supervision over the registration, accreditation and the practice of accountancy in the Philippines to the exclusion of other government regulatory agencies. To legitimize the creation of Standard Setting Bodies and to justify the appropriation of funds to carry out its functions. . To give emphasis to the relationship of the Professional Regulation Commission Board of Accountancy (PRC-PBOA) with the Commission on Higher Education (CHED) and other government agencies in regulating educational institutions which are offering Accountancy program and for this purpose the creation of the Education Technical Council (ETC) To amend the requirements for admission to the licensure examinations for Certified Public Accountants to give Filipino citizens who are graduates of foreign schools the chance to take the examination. Further. it is envisioned that requiring an examinee to undergo professional experience before taking the licensure examination would give him/her a greater chance of passing the licensure examination. Also, this would be a major step of improving the national passing percentage of the licensure examination. . To modify the manner of determining whether an examinee passed or failed the examination and elimination of the provision granting conditional status to some examinees and to discontinue the publication of top performing examinees as this had resulted to being made as marketing strategy by some review centers. Moreover, the existing provision on the conduct of refresher course is being discontinued due to the removal of the granting of conditional status to the examinees. . To strengthen the practice of the profession through accreditation and compliance with continuing professional development requirements. . To provide a provision that will specify the integration of the accountancy profession into one accredited professional organization. 9. A provision on Rules of Professional Conduct is being proposed to strengthen the enforcement of the Code of Ethics of CPAs in the Philippines. 10. To provide appropriations for budgetary requirements necessary for the conduct of the activities of the standard setting bodies of the Accountancy profession and the Education Technical Council. The approval of this bill is earnestly sought. Name of Sponsoring Congressman 124 125 126 127 128 129 130 131 132 133 134 135 136 137 138 139 140 141 142 143 144 145 146 147 148 149 150 151 152 153 154 155 156 157 158 159 160 161 162 163 164 165 166 167 168 169 170 171 172 REPUBLIC OF THE PHILIPPINES HOUSE OF REPRESENTATIVES Quezon City EIGHTEENTH CONGRESS First Regular Session HOUSE BILL NO. Introduced by REPRESENTATIVE AN ACT STRENGHTENING THE PRACTICE OF ACCOUNTANCY IN THE PHILIPPINES, AMENDING FOR THE PURPOSE REPUBLIC ACT NO. 9298 Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled: SECTION 1. - Section 1 of Republic Act No. 9298 is hereby amended to read as follows: \"Section 1. Short Title This Act shall be known as the \"Accountancy Act of 2021 SEC. 2. - Section 4 of the same Act is hereby amended to read as follows: \"Section 4 Definition of practice of Accountancy The practice of accountancy is defined as: a. offering to perform or performing attest and/or compilation services. b. offering to perform or performing, for other persons, one or more types of the following services involving the use of professional skills or competencies, but not limited to, accounting, management advisory services, financial advisory, and tax including professional services rendered to clients in any and all matters related to accounting concepts and to the recording of financial data or information or the preparation or presentation of financial statements. c. performing, for one's employer, a private entity, or government, of one or more types of services, but not limited, to accounting, financial, corporate finance, tax, audit and compliance including the signing, delivering or issuing any financial, accounting or related statement or report involving the use of professional skills or competencies. d. teaching of accountancy, auditing, management services, finance, business law, taxation and other related subjects offered by schools and colleges recognized by the CHED or by authorized government offices.\" 173 174 175 176 177 178 179 180 181 182 183 184 185 186 187 188 189 190 191 192 193 194 195 196 197 198 199 200 201 202 203 204 205 206 207 208 209 210 211 212 213 SEC. 3 A new section is introduced in Section 4 of the same Act and to read as follows: \"Section 4-a. Definitions. As used in this section: 1. "Attest" means providing the following accountancy services which all require the independence of licensees: a. any audit to be performed in accordance with the domestic and international auditing standards or other similar standards, promulgated by the Board and the Commission; b. any review of a financial statement to be performed in accordance with the domestic and international accounting standards promulgated by the Board and the Commission; or c. any examination to be performed in accordance with the attestation standards promuigated by the Board and the Commission; 2. "Certified Public Accountant" or "CPA" means any person who has received a license from the Professional Regulation Commission, to practice accountancy in the Philippines. 3. "Compilation" means providing a service that presents, in the form of financial statements, information that is the representation of the management or owners of the client without undertaking to express any assurance of the accuracy of the information in the financial statements, to be performed in accordance with the standards promulgated by the Board and the Commission. 4. "Firm" means a domestic entity organized as a sole proprietorship, or a general professional partnership, that is established for the business purpose of lawfully \" engaging in the practice of accountancy. SEC. 4. Section 9(b) of the same Act is hereby amended to read as follows: \"(a) " \"(b) To have exclusive oversight and supervision over the licensure, registration, accreditation and practice of accountancy in the Philippines.\" SEC. 5. Section 9(n) of the same Act is hereby amended to read as follows: \"(a) xo0x * \"(m) 00 \"(n) To coordinate with the Commission on Higher Education (CHED) and other authorized government offices in ensuring that all higher educational instructions and offering of accountancy education comply with the policies, standards and requirements prescribed by CHED and other authorized government offices in the areas of curriculum, faculty, library 214 215 216 217 218 219 220 221 222 223 224 225 226 227 228 229 230 231 232 233 234 235 236 237 238 239 240 241 242 243 244 245 246 247 248 249 250 251 252 253 254 and facilities. For this purpose, an Education Technical Council shall be created by the Board.\" SEC. 6. Section 9(g) of the same Act is hereby amended to include a new sentence andto read as follows: \"Section 9(g) xxxx and generally accepted best practices. For this purpose, Standard- setting bodies shall be established by the Commission to assist the Board in the promulgation and adoption of domestic and international accounting and auditing standards and generally accepted best practices.\" SEC. 7. Section 14 of the same act is hereby amended to read as follows: \"Section 14 Requirements for a license as a Certified Public Accountant - To qualify for a license as a certified public accountant, an applicant shall fulfill the following requirements: 1. Application: file an application with the Commission 2. Age: be at least twenty-one years of age 3. Citizenship: is a Filipino citizen 4. Character: be of good moral character and has not been convicted of any criminal offense involving moral turpitude. 5. Education: is a holder of the degree of Bachelor of Science in Accountancy conferred by a school, or college duly recognized by the CHED or a holder of a degree conferred by a foreign school or college of Accountancy which had been issued a certificate of equivalency by CHED. Graduates of foreign schools shall be required to enroll in any school or college duly recognized by the CHED for 1 year (2 semesters) and complete at least 30 units of subjects related to Philippine Business Laws and Taxation and such other subjects covered by the licensure examination. 6. Experience: have at least two (2) years of diversified experience in any field of practice in accountancy prior to the licensure examination in accordance with the regulations to be prescribed by the Board. 7. Examination: pass a written licensure examination in accordance with the provisions of Section 15 and Section 16 of the same Act, as amended.\" SEC.8. - Section 15 of the same Act is hereby amended to read as follows: \"Section 15 Scope of Examination- The licensure examination for certified public accountants shall cover, but not limited, to the following subjects: 1. Financial Accounting and Reporting 2. Advanced Financial Accounting and Reporting 3. Management Services 4. Auditing 5. Taxation 6. Regulatory Framework for Business Transactions The Board, subject to the approval of the Commission, may revise or exclude any of the subjects and their syllabi, and add new ones, review and modify the format, grading process and passing score of the licensure examination, as the need arises.\" SEC. 9. - Section 16 of the same Act is hereby amended to read as follows: \"To pass the licensure examination for certified public accountants, an examinee must obtain a rating of PASSED in all subjects. A rating of PASSED shall be given fo an examinee in a particular subject if he/she obtained a numerical rating of at least 75% in such subject. The report of rating shall not indicate the numerical score obtained but shall only specify that the examinee either PASSED or FAILED in each subject. SEC. 10. Section 17 of the same Act is hereby amended to read as follows: \"Section 17 Report of Rating and Publication of the Results of Licensure Examination The Board shall report the results of the licensure examination to the Commission within ten (10) calendar days from the last day of the examination, unless extended for just cause. The official results of the examination shall only contain, the names of those who passed and failed the licensure examination without indication as to the passing /failing score, rank or their respective schools/colleges. The list of passing examinees and the names and performance of the schools/colleges, shall be posted in the official website of the Commission. Examinees who pass and fail the licensure examination are not entitled to receive their examination papers or to see their scores. Schools, colleges and review centers are prohibited from publishing the names of their top performing students and reviewees in newspapers of general circulation, in other types of mass media, and in all types of social media platforms. The report of rating shall be sent by the Commission to every examinee using their e-mail address which they have provided in their application forms. SEC. 11. Section 18 of the same Act is hereby DELETED; SEC. 12. Section 28 of the same Act is hereby amended to read as follows: \"Section 28 Accreditation of a Firm 296 297 298 299 300 301 302 303 304 305 306 307 308 309 310 311 312 313 314 315 316 317 318 319 320 321 322 323 324 325 326 327 328 329 330 331 332 333 334 335 336 \"A firm, a single proprietor or a partnership, engaged in the practice of accountancy, as defined in Section 4(a) & (b) of R.A. No. 9298, as amended, by this Act, shall be required to apply for an accreditation with the Board and the Commission triennially, before it will be allowed to practice accountancy. The Board and the Commission shall establish in regulations an accreditation process for the firms their staff and partners including the requirements in the application and accreditation, reportorial requirements, imposition of fees, procedures in the renewal or revocation of an accreditation or to take other disciplinary action for cause.\" Sec. 13 Section 30 of the same Act is hereby amended to read as follows: \"Section 30 Integration of the Accountancy Profession The Accountancy profession shall be integrated into one (1) national organization which shall be accredited by the Board, subject to the approval by the Commission, as the integrated and accredited professional organization of certified public accountants: Provided however, That such an organization shall be registered with the Securities and Exchange Commission, as a non-profit, non- stock corporation to be governed by by-laws providing for democratic election of its officials. A certified public accountant duly registered with the Board shall automatically become a member of the integrated and accredited professional organization of certified public accountants and shall receive the benefits and privileges provided for in this Act upon payment of the required fees and dues. Membership in the integrated and accredited professional organization of certified public accountants shall not be a bar to membership in other associations or certified public accountants. SEC. 14 Section 31 of the same Act is hereby amended to read as follows: \"Section 31. - Accreditation of CPAs in Academe Certified Public Accountants engaged in the practice of accountancy as defined in Sec. 4(d) of R.A. No 9298, as amended, shall be required to be accredited with the Board and the Commission triennially. The Board and the Commission shall establish in regulations an accreditation process for accounting teachers, including the requirements for initial accreditation and conditions for the renewal of the accreditation, imposition of fees, procedures in the renewal, revocation, or suspension of the accreditation and other related matters.\" SEC. 15 - Section 32 of the same Act shall be amended to read as follows: \"Section 32 Continuing Professional Development Each registered certified public accountant and those employed by firms as certified public accountants, either as partners or staff, shall comply with the mandatory continuing professional development. All certified public accountants shall abide by the regulations on mandatory continuing professional development promulgated by the Board and the Commission in coordination with the accredited national professional organization of certified public accountants or any duly accredited educational institutions. Certified public accountants who do not satisfy the mandated continuing professional development requirements shail not be allowed to practice until they met such requirements and they have been issued their current PICs by the Commission.\" SEC. 16. - Rules of Professional Conduct The Board shall adopt rules of professional conduct to establish and maintain high standards of competence and integrity in the practice of accountancy and to ensure that the conduct of the practice by certified public accountants serve the best interest of the public. SEC. 17. - Section 40 of the same Act is hereby amended to read as follows: \"Section 40 Appropriations The Commission and the CHED shall immediately include in their programs, the implementations of this Act, including the organization, manpower and administrative requirements, and operation of the Standard-setting bodies and the Education Technical Council, the funding of which shall be included in the General Appropriations Act.\" SEC. 18. - Transitory Provision The implementation of Section 14 and Section 16 of RA 9298, as amended by this Act, shall be effective for the licensure examination of 2022 or on a date to be determined by the Board and the Commission as circumstances may warrant. SEC. 19. - Separability Clause If any of the provision of this Act is declared unconstitutional, the same shall not affect the validity and effectivity of the other provisions hereof. SEC. 20. - Repealing Clause All laws, decrees, orders, issuances or portions thereof, which are inconsistent with the provisions of this Act, are hereby repealed, amended or modified accordingly. 378 379 380 381 SEC. 21. - Effectivity This Act shall take effect fifteen (15) days following its publication in at least two (2) national newspapers of general circulation. Approved