Small and medium enterprises (SMEs) are saved from unnecessary additional costs of doing business by the Securities and Exchange Commission’s (SEC) decision earlier this year not to amend some existing audit rules, the Philippine Chamber of Commerce and Industry (PCCI) said.
In a statement, the PCCI, the largest business group in the country, has lauded the SEC on its en banc decision not to amend Securities Regulation Code (SRC) 68, which is the commission’s existing regulation on audited financial statements (FS).
PCCI President George T. Barcelon said this spared companies, particularly SMEs, from unnecessary, redundant, and additional cost burdens that would have resulted if the SEC had adopted a proposal by the Board of Accountancy (BOA) to amend SRC 68.
The amendment would have required companies to hire certified public accountants (CPAs) accredited by the BOA to prepare the firms’ FS, as well as sign a certificate of preparation and disclosure noted as attachments to the annual FS.
“Business deserves a break from rising costs of doing business,” Barcelon said.
In a letter to Barcelon, SEC Chairperson Teresita J. Herbosa said that maintaining the existing rules and regulations of SRC 68 was decided on en banc on January 26.
“The said rules do not require the new [Board of Accountancy] policy/requirements,” Herbosa was quoted in writing.
This means SEC-registered companies filing audited FS will not be required to attach a disclosure note or certification signed by a hired CPA that would have added unnecessary burden to firms, especially SMEs.
Barcelon said many SMEs do not have CPAs as employees, and would still have to allot budget to engage CPAs to prepare financial statements.
He also said that a CPA disclosure note would be redundant, as a firm’s management is already required to submit a duly signed Statement of Management Responsibility together with the FS.
Herbosa in her letter said the SEC would also inform the BOA that the SRC 68 will be kept as is. This is to settle the BOA’s request to monitor compliance with the BOA Resolution 3-2016, which require companies with revenues above P10 million yearly to engage services of CPAs in preparing the audited FS.
In line with this, the PCCI said it is set to have a dialogue with BOA Chairman Joel Tan Torres following the Bureau of Internal Revenue’s adoption of the new BOA policy through Revenue Memorandum Circular 21-2016, requiring CPA services in preparing and compiling companies’ FS.