G.R. No. 256141 - Alexander vs. Spouses Escalona

Petitioner Securities and Exchange Commission (SEC) seeks to uphold Rule 68, paragraph 3 of the Implementing Rules and Regulations (IRR) of Republic Act No. 8799 or the Securities Regulation Code (SRC), as amended, and SEC Memorandum Circular No. 13, s. 2009 (collectively, "the assailed regulations").
Respondents: 1Accountants Party-List, Inc., its President Christian Jay D. Lim, Christian Jay D. Lim in his personal capacity as CPA, Froilan G. Ampil, Allan M. Basarte, Virgilio F. Agunod, and Jonas P. MascariAas, contest the validity of said regulations.

The assailed regulations require accreditation of CPAs acting as external auditors of corporations issuing registered securities and possessing secondary licenses ("covered entities").
SEC argues this accreditation is necessary to promote capital market development, protect investors, ensure fair disclosure, and prevent fraud and insider trading.
SEC claims accreditation is optional and does not curtail CPAs' practice but assures stakeholders of competence and reliability.
SEC cites other financial regulators (BSP, IC, PDIC) already authorized to accredit auditors and a memorandum of agreement (MOA) with them and the Board of Accountancy (BOA) to facilitate centralized accreditation.
SEC asserts implied authority to accredit under SRC Sections 5 and 72 and Revised Corporation Code (RCC) Section 179, citing the necessity to regulate auditors who act as gatekeepers of financial statements.

Respondents contend the Accountancy Act (RA No. 9298) exclusively vests regulation, supervision, and accreditation power over the accountancy profession to the BOA.
They argue the SEC exceeded its authority by imposing additional licensing (accreditation) requirements on CPAs.
Respondents assert the SRC and Corporation Code do not authorize SEC to impose accreditation requirements.
They claim the accreditation should be imposed on persons preparing financial statements, not the external auditors.

The Regional Trial Court declared the assailed regulations null and void.
The Court of Appeals and initially the Supreme Court in the June 21, 2022 decision affirmed this ruling.
The SEC filed a second motion for reconsideration, which was granted by the Supreme Court en banc leading to reversal of prior decisions.

Whether the SEC has express or implied authority under existing laws to require accreditation of CPAs acting as external auditors of covered entities.
Whether the assailed regulations violate the Accountancy Act by imposing an additional licensing requirement for CPAs.
Whether the MOA between the SEC, BOA, and other financial regulators constitutes an unlawful delegation of legislative power.
Whether the accreditation requirement unlawfully restricts the practice of accountancy by CPAs.