S. No. 2748
H. No. 6678
Republic of the Philippines
Congress of the Philippines
Metro Manila
Twelfth Congress
Third Regular Session
Begun and held in Metro Manila,
on Monday, the twenty-eight day of July, two thousand three.
[REPUBLIC ACT NO 9298]
AN ACT REGULATING THE PRACTICE
OF ACCOUNTANCY IN
THE PHILIPPINES, REPEALING FOR
THE PURPOSE
PRESIDENTIAL DECREE NO. 692,
OTHERWISE KNOWN AS
THE REVISED ACCOUNTANCY LAW,
APPROPRIATING
FUNDS THEREFOR AND FOR OTHER
PURPOSES
Be it enacted by the Senate
and House of Representatives of the Philippines in Congress
assembled:
ARTICLE I
TITLE, DECLARATION OF POLICY,
OBJECTIVE AND SCOPE OF PRACTICE
SECTION 1. Short Title.
– This Act shall be known as the “Philippine Accountancy Act of
2004”..
SEC. 2. Declaration of
Policy. – The
State recognizes the importance of accountants in nation
building and development. Hence, it shall develop and nurture
competent, virtuous, productive and well rounded professional
accountants whose standards of practice and service shall be
excellent, qualitative, world class and globally competitive
through inviolable, honest, effective, and credible licensure
examinations and through regulatory measures, programs and
activities that foster their professional growth and
development.
SEC. 3. Objectives.
– This Act shall
provide for and govern:
(a) The standardization and
regulation of accounting education;
(b) The examination for
registration of certified public accountants; and
(c) The supervision, control, and
regulation of the practice of accountancy in the Philippines.
SEC. 4. Scope of Practice.
– The practice of accountancy shall include, but not limited to,
the following:
(a) Practice of Public
Accountancy - shall constitute in a person, be it his/her
individual capacity, or as a partner or as a staff member in an
accounting or auditing firm, holding out himself/herself as one
skilled in the knowledge, science and practice of accounting,
and as a qualified person to render professional services as a
certified public accountant; or offering or rendering, or both,
to more than one client on a fee basis or otherwise, services
such as the audit or verification of financial transaction and
accounting records; or the preparation, signing, or
certification for clients of reports of audit, balance sheet,
and other financial, accounting and related schedules, exhibits,
statements or reports which are to be used for publication or
for credit purposes, or to be filed with a court or government
agency, or to be used for any other purpose; or the design,
installation, and revision of accounting system; or the
preparation of income tax returns when related to accounting
procedures; or when he/she represents clients before government
agencies on tax and other matters related to accounting or
renders professional assistance in matters relating to
accounting procedures and the recording and presentation of
financial facts or data.
(b) Practice in Commerce and
Industry - shall constitute in a person involved in decision
making requiring professional knowledge in the science of
accounting, or when such employment or position requires that
the holder thereof must be a certified public accountant.
(c) Practice in Education/Academe
- shall constitute in a person in an educational institution
which involve teaching of accounting, auditing, management
advisory services, finance, business law, taxation, and other
technically related subjects: Provided, That members of
the Integrated Bar of the Philippines may be allowed to teach
business law and taxation subjects.
(d) Practice in the Government-
shall constitute in a person who holds, or is appointed to, a
position in an accounting professional group in government or in
a government–owned and/or controlled corporation, including
those performing proprietary functions, where decision making
requires professional knowledge in the science of accounting, or
where a civil service eligibility as a certified public
accountant is a prerequisite.
ARTICLE II
PROFESSIONAL REGULATORY BOARD
OF ACCOUNTANCY
SEC. 5. The Professional
Regulatory Board of Accountancy and its Composition.
– The Professional Regulatory
Board of Accountancy, hereinafter referred to as the Board,
under the supervision and administrative control of the
Professional Regulation Commission, hereinafter referred to as
the Commission, shall be composed of a chairman and six (6)
members to be appointed by the President of the Philippines from
a list of three (3) recommendees for each position and ranked by
the Commission, from a list of five (5) nominees for each
position submitted by the accredited national professional
organization of certified public accountants. The Board shall
elect a vice-chairman from among its members for a term one (1)
year. The chairman shall preside in all meetings of the Board
and in the event of a vacancy in the office of the chairman, the
vice-chairman shall assume such duties and responsibilities
until such time as a chairman is appointed.
SEC. 6. Qualifications of
Members of the Professional Regulatory Board.
– A member of the Board shall, at
the time of his/her appointment, possess the following
qualifications:
(a) Must be a natural-born
citizen and a resident of the Philippines;
(b) Must be a duly registered
Certified Public Accountant with a least ten (10) years of work
experience in any scope of practice of accountancy.
(c) Must be of good moral
character and must not have been convicted of crimes involving
moral turpitude; and.
(d) Must not have any pecuniary
interest, directly or indirectly, in any school, college,
university or institution conferring an academic degree
necessary for admission to the practice of accountancy or where
review classes in preparation for the licensure examination are
being offered or conducted, nor shall he/she be a member of the
faculty or administration thereof at the time of his/her
appointment to the Board.
SEC. 7. Term of Office.
- The Chairman and
members of the Board shall hold office for a term of three (3)
years. Any vacancy occurring within the term of a member shall
be filled up for the unexpired portion of the term only. No
person who has served two (2) successive complete terms shall be
eligible for reappointment until the lapse of one (1) year.
Appointment to fill up an unexpired term is not to be considered
as a complete term.
SEC. 8. Compensation and
Allowances of the Board.
– The chairman and members of the
Board shall receive compensation and allowances comparable to
that being received by the Chairman and members of existing
regulatory boards under the Commission as provided for in the
General Appropriations Act.
SEC. 9. Powers and
Functions of the Board.
– The Board shall exercise the
following specific powers, functions and responsibilities:
(a) To prescribe and adopt the
rules and regulations necessary for carrying out the provisions
of this Act;
(b) To supervise the
registration, licensure and practice of accountancy in the
Philippines;
(c) To administer oaths in
connection with the administration of this Act;
(d) To issue, suspend, revoke, or
reinstate the Certificate of Registration for the practice of
the accountancy profession;
(e) To adopt an official seal of
the Board;
(f) To prescribe and/or adopt a
Code of Ethics for the practice of accountancy;
(g) To monitor the conditions
affecting the practice of accountancy and adopt such measures,
including promulgation of accounting and auditing standards,
rules and regulations and best practices as may be deemed proper
for the enhancement and maintenance of high professional,
ethical, accounting and auditing standards: Provided,
That domestic accounting and auditing standards, rules and
regulations shall include the international accounting and
auditing standards, and generally accepted best practices;
(h) 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;
(i) To investigate violations of
this act and the rules and regulations promulgated hereunder and
for this purpose, to issue summons, subpoena and subpoena ad
testificandum and subpoena duces tecum to violators
or witness thereof and compel their attendance to such
investigation or hearings and the production of documents in
connection therewith: Provided, That the Board upon
approval of the Commission may, subject to such rules and
regulations that may be promulgated to implement this section,
delegate the fact-finding aspect of such investigations to the
accredited national professional organization of certified
public accountants: Provided, Further, That the Board
and/or the Commission may adopt their findings of fact as it may
seems fit;
(j) The Board may, motu propio
in its discretion, make such investigations as it deems
necessary to determine whether any person has violated any
provisions of this law, any accounting or auditing standard or
rules duly promulgated by the Board as part of the rules
governing the practice of accountancy;
(k) To issue a cease or desist
order to any person, association, partnership or corporation
engaged in violation of any provision of this Act, any
accounting or auditing standards or rules duly promulgated by
the Board as part of the rules governing the practice of
accountancy in the Philippines;
(l) To punish for contempt of the
Board, both direct and indirect, in accordance with the
pertinent provisions of and penalties prescribed by the Rules of
Court;
(m) To prepare, adopt, issue or
amend the syllabi of the subjects for examinations in
consultation with the academe, determine and prepare questions
for the licensure examination which shall strictly be within the
scope of the syllabi of the subjects for examinations as well as
administer, correct and release the results of the licensure
examinations; (n) To ensure, in coordination with the Commission
on Higher Education (CHED) or other authorized government
offices that all higher educational instruction and offering of
accountancy comply with the policies, standards and requirements
of the course prescribed by CHED or other authorized government
offices in the areas of curriculum, faculty, library and
facilities; and (o) To exercise such other powers as may be
provided by law as well as those which may be implied from, or
which are necessary or incidental to the carrying out of, the
express powers granted to the Board to achieve the objectives
and purposes of this Act. The policies, resolution, rules and
regulations, issued or promulgated by the Board shall be subject
to review and approval of the Commission. However, the Board’s
decisions, resolutions or orders rendered in administrative
cases shall be subject to review only if on appeal.
SEC. 10. Administrative
Supervisions of the Board, Custodian of its Records, Secretariat
and Support Services.
– The Board shall be under the
administrative supervision of the Commission. All records of the
Board, including applications for examination and administrative
and other investigative cases conducted by the Board shall be
under the custody of the Commission. The Commission shall
designate the Secretary of the Board and shall provide the
secretariat and other support services to implement the
provisions of this Act.
SEC. 11. Grounds for
Suspension or Removal of Members of the Board.
– The President of the
Philippines, upon the recommendation of the Commission, after
giving the concerned member an opportunity to defend himself in
a proper administrative investigation to be conducted by the
Commission, may suspend or remove any member on the following
grounds:
(a) Neglect of duty or
incompetence;
(b) Violation or tolerance of any
violation of this Act and its implementing rules and regulations
or the Certified Public Accountant’s Code of Ethics and the
technical and professional standards of practice for
certified public accountants;
(c) Final judgment of crimes
involving moral turpitude; and
(d) Manipulation or rigging of
the certified public accountant’s licensure examination results,
disclosure of secret and confidential information in the
examination questions prior to the conduct of the said
examination or tampering of grades.
SEC. 12. Annual Report.
– The Board shall, at
the close of each calendar year, submit an annual report to the
President of the Philippines through the Commission giving a
detailed account of its proceedings and accomplishments during
the year and making recommendations for the adoption of measures
that will upgrade and improve the conditions affecting the
practice of accountancy in the Philippines.
ARTICLE III
EXAMINATION, REGISTRATION AND
LICENSURE
SEC. 13. The Certified
Public Accountant Examinations.
– All applicants for registration
for the practice of accountancy shall be required to undergo a
licensure examination to be given by the Board in such places
and dates as the Commission may designate subject to compliance
with the requirements prescribed by the Commission in accordance
with Republic Act No. 8981.
SEC. 14. Qualifications of
Applicants for Examinations.
– Any person applying for
examination shall establish the following requisites to the
satisfaction of the Board that he/she:
(a) is a Filipino citizen;
(b) is of good moral character;
(c) is a holder of the degree of
Bachelor of Science in Accountancy conferred by a school,
college, academy or institute duly recognized and/or accredited
by the CHED or other authorized government offices; and
(d) has not been convicted of any
criminal offense involving moral
turpitude.
SEC. 15. Scope of
Examination. – The
licensure examination for certified public accountants shall
cover, but are not limited to, the following subjects:
(a) Theory of Accounts
(b) Business Law and Taxation
(c) Management Services
(d) Auditing Theory
(e) Auditing Problems
(f) Practical Accounting Problems
I
(g) Practical Accounting Problems
II
The Board, subject to the
approval of the Commission, may revise or exclude any of the
subjects and their syllabi, and add new ones as the need arises.
SEC. 16. Rating in the
Licensure Examination.
– To be qualified as having
passed the licensure examination for accountants, a candidate
must obtain a general average of seventy-five percent (75%),
with no grades lower than sixty-five percent (65%) in any given
subject. In the event a candidate obtains the rating of
seventy-five percent (75%) and above in at least a majority of
subjects as provided for in this Act, he/she shall receive a
conditional credit for the subjects passed: Provided,
That a candidate shall take an examination in the remaining
subjects within two years from the preceding examination:
Provided, further, That if the candidate fails to obtain at
least a general average of seventy-five percent (75%) and a
rating of at least sixty-five percent (65%) in each of the
subjects reexamined, he/she shall be considered as failed in the
entire examination.
SEC. 17. Report of Ratings.
– The Board shall
submit to the Commission the ratings obtained by each candidate
within ten (10) calendar days after the examination, unless
extended for just cause. Upon the release of the results of the
examination, the Commission shall send by mailing the rating
received by each examinee at his/her given address using the
mailing envelope submitted during the examination.
SEC. 18. Failing Candidates
to Take Refresher Course-
Any candidate who fails in two (2) complete Certified Public Accountant
Board Examinations shall be disqualified from taking another set
of examinations unless he/she submits evidence to the
satisfaction of the Board that he/she enrolled in and completed
at least twenty-four (24) units of subject given in the
licensure examination. For purposes of this Act, the examination
in which the candidate was conditioned together with the removal
examination on the subject in which he/she failed shall be
counted as one complete examination.
SEC. 19. Oath. -
All successful
candidates in the examination shall be required to take an oath
of profession before any member of the Board or before any
government official authorized by the Commission or any person
authorized by law to administer oaths upon presentation of proof
of his/her qualification, prior to entering upon the practice of
the profession.
SEC. 20. Issuance of
Certificates of Registration and Professional
Identification Card. –
A certificate of
registration shall be issued to examinees who pass the licensure
examination subject to payment of fees prescribed by the
Commission. The Certificate of Registration shall bear the
signature of the chairperson of the Commission and the chairman
and members of the Board, stamped with the official seal of the
Commission and of the Board, indicating that the person named
therein is entitled to the practice of the profession with all
the privileges appurtenant thereto. The said certificate shall
remain in full force and effect until withdrawn, suspended or
revoked in accordance with this Act. A Professional
Identification Card bearing the registration number, date of
issuance, expiry date, duly signed by the chairperson of the
Commission, shall likewise be issued to every registrant
renewable every three (3) years.
SEC. 21. Roster of
Certified Public Accountants. –
A roster showing the names and
place of business of all registered certified public accountants
shall be prepared and updated by the Board, and copies thereof
shall be made available to any party as may be deemed necessary.
SEC. 22. Indication of
Certificate of Registration, Identification Card and
Professional Tax Receipt.
- The certified public accountant
shall be required to indicate his/her certificate of
registration number, and date of issuance, the duration of
validity, including the Professional Tax Receipt number on the
documents he/she signs, uses or issues in connection with the
practice of his/her profession.
SEC. 23. Refusal to Issue
Certificate of Registration and Professional Identification Card
- The Board shall not register and issue a certificate
of registration and professional identification card to any
successful examinee convicted by a court of competent
jurisdiction of a criminal offense involving moral turpitude or
guilty of immoral and dishonorable conduct or to any person of
unsound mind. In the event of refusal to issue certificate for
any reason, the Board shall give the applicant a written
statement setting forth the reasons for such action, which
statement shall be incorporated in the record of the Board.
SEC. 24. Suspension and
Revocation of Certificates of Registration and Professional
Identification Card and Cancellation of Special Permit. -
The Board shall have
the power, upon due notice and hearing, to suspend or revoke the
practitioner’s certificate of registration and professional
identification card or suspend him/her from the practice of
his/her profession or cancel his/her special permit for any of
the causes or grounds mentioned under Section 23 of this Act or
for any unprofessional or unethical conduct, malpractice,
violation of any of the provisions of this Act, and its
implementing rules and regulations, the Certified Public
Accountant‘s Code of Ethics and the technical and professional
standards of practice for certified public accountants.
SEC. 25. Reinstatement,
Reissuance and Replacement of Revoked or Lost Certificates.
- The Board may, after
the expiration of two (2) years from the date of revocation of a
certificate of registration and upon application and for reasons
deemed proper and sufficient, reinstate the validity of a
revoked certificate of registration and in so doing, may, in its
discretion, exempt the applicant from taking another
examination.
A new certificate of registration
to replace lost, destroyed, or mutilated certificate/license may
be issued, subject to the rules promulgated by the Board and the
Commission, upon payment of the required fees.
ARTICLE IV
PRACTICE OF ACCOUNTANCY
SEC. 26. Prohibition in the
Practice of Accountancy. -
No person shall practice
accountancy in this country, or use the title “Certified Public
Accountant”, or use the abbreviated title “CPA” or display or
use any title, sign, card, advertisement, or other device to
indicate such person practices or offers to practice
accountancy, or is a certified public accountant, unless such
person shall have received from the Board a certificate of
registration/professional license and be issued a professional
identification card or a valid temporary/special permit duly
issued to him/her by the Board and the Commission.
SEC. 27. Vested Rights:
Certified Public Accountants Registered When This Law is Passed.
- All certified
public accountants registered at the time this law takes effect
shall automatically be registered under the provisions hereof,
subject however, to the provisions herein set forth as to future
requirements. Certificates of registration/professional license
held by such persons in good standing shall have the same force
and effect as though issued after the passage of this Act.
SEC. 28. Limitation of the
Practice of Public Accountancy. –
Single practitioners and partnerships for the practice of public
accountancy shall be registered certified public accountants in
the Philippines: Provided, That from the effectivity of
this Act, a certificate of accreditation shall be issued to
certified public accountants in public practice only upon
showing, in accordance with rules and regulations promulgated by
the Board and approved by the Commission, that such registrant
has acquired a minimum of three (3) years meaningful experience
in any of the areas of public practice including taxation:
Provided, further, That this
requirement shall not apply to
those already granted a certificate of accreditation prior to
the effectivity of this Act. The Securities and Exchange
Commission shall not register any corporation organized for the
practice of public accountancy.
SEC. 29. Ownership of
Working Papers -
All working papers, schedules and memoranda made by a certified
public accountant and his staff in the course of an examination,
including those prepared and submitted by the client, incident
to or in the course of an examination, by such certified public
accountant, except reports submitted by a certified public
accountant to a client shall be treated confidential and
privileged and remain the property of such certified public
accountant in the absence of a written agreement between the
certified public accountant and the client, to the contrary,
unless such documents are required to be produced through
subpoena issued by any court, tribunal, or government regulatory
or administrative body.
SEC. 30. Accredited
Professional Organization.-
All registered certified public
accountants whose names appear in the roster of certified public
accountants shall be united and integrated through their
membership in a one and only registered and accredited national
professional organization of registered and licensed certified
public accountants, which shall be registered with the
Securities and Exchange Commission as a nonprofit corporation
and recognized by the Board, subject to the approval by the
Commission. The members in the said integrated and accredited
national professional organization shall receive benefits and
privileges appurtenant thereto upon payment of required fees and
dues. Membership in the integrated organization shall not be a
bar to membership in any other association of certified public
accountants.
SEC. 31. Accreditation to
Practice Public Accountancy. –
Certified public accountants,
firms and partnerships of certified public accountants, engaged
in the practice of public accountancy, including partners and
staff members thereof, shall register with the Commission and
the Board, such registration to be renewed every three (3)
years: Provided, That subject to the approval of the
Commission, the Board shall promulgate rules and regulations for
the implementation of registration requirements including the
fees and penalties for violation thereof.
SEC. 32. Continuing
Professional Education (CPE) Program.
– All certified public accountants shall abide by the requirements,
rules and regulations on continuing professional education to be
promulgated by the Board, subject to the approval of the
Commission, in coordination with the accredited national
professional organization of certified public accountants or any
duly accredited educational institutions. For this purpose, a
CPE Council is hereby created to implement the CPE program.
SEC. 33. Seal and Use of
Seal. - All
licensed certified public accountants shall obtain and use a
seal of a design prescribed by the Board bearing the
registrant’s name, registration number and title. The auditor’s
reports shall be stamped with said seal, indicating therein
his/her current Professional Tax Receipt (PTR) number,
date/place of payment when filed with government authorities or
when used professionally.
SEC. 34. Foreign
Reciprocity. –
Subjects or citizens of foreign countries may be allowed to
practice Accountancy in the Philippines in accordance with the
provisions of existing laws, international treaty obligations
including mutual recognition agreements entered into by the
Philippine government with other countries. A person who is not
a citizen of the Philippines shall not be allowed to practice
accountancy in the Philippines unless he/she can prove, in the
manner provided by the rules of court that, by specific
provision of law, the country of which he/she is a citizen,
subject or national admits citizens of the Philippines to the
practice of the same profession without restriction.
SEC. 35. Coverage of
Temporary/Special Permits. -
Special / temporary permit may be
issued by the Board subject to the approval of the Commission
and payment of the fees the latter has prescribed and charged
thereof to the following persons:
(a) A foreign certified public
accountant called for consultation or for a specific purpose
which, in the judgment of the Board, is essential for the
development of the country: Provided, That his//her
practice shall be limited only for the particular work that
he/she is being engaged: Provided, further, That there is
no Filipino certified public accountant qualified for such
consultation or specific purposes; (b) A foreign certified
public accountant engaged as professor, lecturer or critic in
fields essential to accountancy education in the Philippines and
his/her engagement is confined to teaching only; and (c) A
foreign certified public accountant who is an internationally
recognized expert or with specialization in any branch of
accountancy and his/her service is essential for the advancement
of accountancy in the Philip-pines.
ARTICLE V
PENAL AND FINAL PROVISIONS
SEC. 36. Penal Provision.
- Any person who
shall violate any of the provisions of this Act or any of its
implementing rules and regulations as promulgated by the Board
subject to the approval of the Commission, shall, upon
conviction, be punished by a fine of not less than fifty
thousand pesos (P 50,000.00) or by imprisonment for a period not
exceeding two (2) years or both.
SEC. 37. Implementing Rules
and Regulations. -
Within ninety (90) days after the effectivity of this Act, the
Board, subject to the approval of the Commission and in
coordination with the accredited national professional
organization of certified public accountants, shall adopt and
promulgate such rules and regulations to carry out the
provisions of this Act and which shall be effective fifteen (15)
days following their publication in the Official Gazette
or in any major daily newspaper of general circulation.
SEC. 38. Interpretation of
this Act. -
Nothing in this Act shall be construed to effect or prevent the
practice of any other legally recognized profession.
SEC. 39. Enforcement of the
Act. - It shall be
the primary duty of the Commission and the Board to effectively
enforce the provisions of this Act. All duly constituted law
enforcement agencies and officers of
national, provincial, city or
municipal government or of any political subdivision thereof,
shall, upon the call or request of the Commission or the Board,
render assistance in enforcing the provisions of this Act and to
prosecute any person violating the provisions of the same. The
Secretary of Justice or his duly designated representative shall
act as legal adviser to the Commission and the Board and shall
render legal assistance as may be necessary in carrying out the
provisions of this Act. Any person may bring before the
Commission, Board or the aforementioned officers of the law,
cases of illegal practice or violations of
this Act committed by any person
or party. The Board shall assist the Commission in filing the
appropriate charges through the concerned prosecution office in
accordance with law and rules of court.
SEC. 40. Funding Provision.
- The chairperson
of the Professional Regulation Commission shall immediately
include in the Commission’s programs the implementation of this
Act, the funding of which shall be included in the annual
General Appropriations Act.
SEC. 41. Transitory
Provision. - The
incumbent chairman and members of the Board shall continue to
serve in their respective positions under the terms for which
they have been appointed under Presidential
Decree No. 692, without the need
of new appointments. All graduates with a Bachelors Degree,
major in Accounting shall be allowed to take the CPA Licensure
Examination within two (2) years from the effectivity of this
Act under the rules and regulations to be promulgated by the
Board subject to the approval by the Commission.
SEC. 42. Separability
Clause. - If any
clause, provision, paragraph or part thereof shall be declared
unconstitutional or invalid, such judgment shall not affect,
invalidate or impair any other part hereof, but shall be merely
confined to the clause, provision, paragraph or part directly
involved in the controversy in which such judgment has been
rendered.
SEC. 43. Repealing Clause.
- Presidential Decree No. 692 is hereby repealed and all
other laws, orders, rules and regulations or resolutions or
part/s thereof inconsistent with the provisions of this Act are
hereby
repealed or modified accordingly.
SEC. 44. Effectivity. -
This Act shall take
effect after fifteen (15) days following its publication in the
Official Gazette or in any major daily newspaper of
general circulation.
Approved,
Signed
JOSE DE VENECIA
JR. FRANKLIN M. DRILLON
Speaker of theHouse President of the Senate of Representatives
This act which is a consolidation
of Senate Bill No. 2748 and House Bill 6678 was finally passed
by the Senate and the House of Representatives on February 6,
2004 and February 7, 2004, respectively.
ROBERTO P. NAZARENO OSCAR G. YABES
Secretary General House Secretary of Senate
Of Representatives
APPROVED: May 13, 2004
GLORIA MACAPAGAL ARROYO
President of the Philippines
