The Board of Accountancy (BOA), the accounting division of the Professional Regulation Commission (PRC), is raising the revenue threshold of businesses required to engage certified public accountants (CPA) in preparing and signing financial statements.
In a statement, the Philippine Exporters Confederation Inc. (Philexport) said it met with the BOA and urged the accountancy body to review and relax its ruling under BOA Resolution No. 03-2016 —passed January this year—that requires businesses earning P10 million and up annually to engage the services of CPAs.
Philexport President Sergio Ortiz-Luis Jr. and BOA Chairman Joel Tan-Torres met on Thursday with some officers of the Philippine Chamber of Commerce and Industry (PCCI) and other business organizations.
The resolution subjects micro, small and medium enterprises (SME) to higher cost of doing business.
The export community has apprehensions about the new policy, finding it “unnecessary, redundant and a burden to business,” thus, compromising the competitiveness of MSMEs in particular, Luis noted.
Torres agreed to support MSMEs, saying he will endorse raising the revenue threshold from P10 million as stipulated in the Philippine accountancy law to between P100 million, as prescribed by the Department of Trade and Industry, and P350 million, as defined by the Securities and Exchange Commission (SEC).
Torres said the BOA favors amending the accountancy law.
To ensure the integrity of the financial statements crafted without the services of CPAs, the Philexport offcial recommends that the implementing rules and regulations be based on certain policies and legislations issued or approved by BOA or SEC to address the needed controls.
These include the Code of Ethics for Professional Accountants in the Philippines, Philippine Standards on Auditing, SEC’s Securities Regulations Code’s Rule 68, and other related circulars and reminders.
Luis said there should be stricter external auditing guidelines and processes, “especially for publicly-listed firms which have the real accountability for stockholder funds.”