PRC Res. No. 19 s. 2000 on CPA Ethics Amendment

The resolution amends the Code of Ethics for CPAs promulgated in March 1978, specifically Sections 10 and 20.
The resolution maintains that the rules prohibiting advertising in print and broadcast media continue to apply except for what is allowed under PRC Resolution No. 96-432 dated June 7, 1996.
The resolution recognizes earlier action allowing web sites under the limits set in November 1999 by the Board of Accountancy.
The resolution reframes the web site restrictions by removing the prior limits on length, font, and content, while keeping the prohibition against self-laudatory client-soliciting statements.

The resolution is anchored on the expectation that CPAs will be at the forefront of developments in information technology because of their key role in business emphasized by the Philippine government.
The resolution supports preparing Filipino CPAs for liberalization of the practice of accountancy ahead of other professions.
The resolution allows modernization of CPA communication, including internet web sites, while preserving ethical limits against client solicitation through advertising-like conduct.

The resolution treats “Advertising” as a form of “Solicitation” for purposes of the solicitation prohibition and related rules in Section 20.
The resolution uses the term “CPA in public accounting” to specify who is covered by the solicitation and client-obtaining restrictions in Section 20.
The resolution provides that certain announcements and publications are governed by their content limitations and frequency/conditions stated in Section 20.

Section 10 requires that a CPA shall not advertise, or cause or allow advertising, of professional attainments or services.
Section 10 allows an exception when the CPA states qualifications in applications for employment.
Section 10 clarifies that the publication of authorship of books, technical reports and studies, and announcements of lectures or papers delivered in conferences and seminars, and similar activities beneficial to the profession as a whole, are not considered advertising.
Section 10 provides that development and maintenance of a web site in the Internet under Section 20 is not considered advertising.
Section 10 operates together with Section 20, especially for web sites and solicitation/advertising equivalents.

Section 20 prohibits that a CPA in public accounting shall not seek to obtain clients by solicitation.
Section 20 states that advertising is a form of solicitation.
Section 20 permits publication of an announcement only for these specific purposes:
- opening of a new office;
- change in partners;
- change in office location or telephone number(s); or
- reorganization of firm or practice.
Section 20 requires that each permitted announcement:
- contains basic information essential to the announcement; and
- is of reasonable size.
Section 20 allows announcing the above information to:
- clients, and
- individuals other than clients with whom professional contacts are maintained.

Section 20 allows listing of firm name in the lobby directory of an office building solely to enable interested parties to locate an office.
Section 20 requires that the lobby directory listing must be in good taste and of modest size.
Section 20 requires that firm stationery must be in keeping with the dignity of the profession and must not mention any specialty.
Section 20 permits firm stationery to include:
- the firm name;
- address;
- telephone number;
- tax account number;
- names of partners; and
- membership in professional societies.
Section 20 allows listing in a telephone, business, or other directory in the alphabetic section and/or the business (yellow page) section under the CPA classification.
Section 20 prohibits directory listings from being in bold type or in a box or other display form.
Section 20 permits firm publication or brochures to be distributed to:
- clients, and
- individuals other than clients with whom professional contacts are maintained.

Section 20 provides that press and other media releases, announcements, newspaper supplements, other similar publications, commemorative media, or holding media-covered events to commemorate anniversaries in public practice are not violative of the advertising and solicitation rules.
The permitted commemoration undertakings are allowed when they inform the public of achievements or accomplishments contributing towards nation building and international understanding, goodwill, or relationship, or enhancing the image or standards of the accounting profession.
Section 20 requires that such announcements or undertakings contain only factual matters and without detailed listing of services provided.
Section 20 imposes a frequency limit: the commemoration undertaking is allowed only every five years of celebration.

Section 20 allows a CPA to develop and maintain a web site in the Internet in suitable length and style.
Section 20 allows the web site to include any or all of the foregoing announcements, press releases, and publications, subject to the ethical limits in Section 20.
Section 20 permits the web site to contain necessary factual information, including:
- the firm’s name;
- partners/principal’s name;
- brief description of educational attainment;
- brief listing of services;
- postal address;
- telephone;
- fax; and
- e-mail addresses.
Section 20 prohibits a web site from containing self-laudatory statements designed to solicit clients.
Section 20 preserves the web site as consistent with the advertising and solicitation rules when the self-laudatory client-soliciting prohibition is observed.

Section 20 requires that a CPA in public accounting display, in conspicuous space, in the main office, in all branches, and in the web site:
- the Certificate of the Securities and Exchange Commission registering the Article of Partnership;
- the current Certificate of the Department of Trade and Industry registering the name of the partnership or the firm;
- the current Certificate of the Board of Accountancy and the Professional Regulation Commission accrediting the partnership of the firms;
- the current Certificate of the Board of Accountancy and the Professional Regulation Commission accrediting the partnership or the firm;
- and all other licenses, permits, or certificates required by law, rules, or regulations on a CPA in public accounting.