Definition of Practice of Accountancy
- Encompasses individuals practicing accounting professionally, whether individually or as part of firms.
- Includes services like auditing, verification of financial records, preparation and certification of financial reports, installation and revision of accounting systems, preparation of income tax returns related to accounting, and representation before government agencies on tax matters.
- CPAs employed in private, educational, or government positions with duties requiring professional accounting knowledge are considered practicing.
Composition and Organization of the Board of Accountancy
- Composed of a Chairman and six members appointed by the President upon recommendations of the Professional Regulation Commission.
- The Board elects a Vice-Chairman for a one-year term.
- The Vice-Chairman assumes duties if the Chairman's office is vacant.
Functions of the Board of Accountancy
- Set admission requirements for the CPA examinations.
- Prepare and administer the licensure examinations.
- Score the examinations and submit results.
- Monitor and improve professional standards in accountancy.
- Conduct investigations on violations of laws and regulations.
- Issue administrative decisions including suspension or revocation of licenses.
- Perform additional duties for effective regulation of the profession.
Qualifications of Board Members
- Must be Filipino citizens, of good moral character, and registered CPAs.
- At least ten years in the practice of accountancy.
- No direct or indirect connections or pecuniary interests with schools or institutes granting degrees or review courses for CPA exams.
Tenure and Compensation of Board Members
- Term of office is three years with staggered initial terms for first appointees.
- Reappointment is barred after two successive terms without a one-year gap.
- Compensation includes fees per examinee and per diem for administrative and inspection duties.
Suspension or Removal of Board Members
- Grounds include revocation or suspension of practice certificates, neglect of duty, incompetence, or other just causes.
- Recommendations for removal come from the Professional Regulation Commission to the President.
Certified Public Accountant Examination
- Conducted at least once a year in Manila and Cebu, or other places as approved.
- Content and coverage determined by the Board.
Admission Requirements for Examinations
- Filipino citizenship, at least 21 years old (examination may be taken earlier but certificate issued after age 21).
- Good moral character.
- Holder of a Bachelor of Science in Commerce or equivalent degree.
- Candidates failing twice must comply with refresher course requirements before taking the exam again.
Scope of Examination
- Covers subjects including Theory of Accounts, Business Law and Taxation, Management Services, Auditing Theory, Auditing Problems, and Practical Accounting Problems.
- Total examination time is 21 hours with 14 weighted units.
- Subject matter detailed in Board-issued syllabi.
Examination Rating and Conditional Credit
- General weighted average of 75% with no subject below 65% required for passing.
- Conditional credit granted if candidate passes at least four subjects totaling eight units, with remaining subjects to be passed within two years.
- Failure to meet criteria in re-examination results in failure of the entire exam.
Refresher Course Requirement for Repeat Examinees
- Candidates failing two complete examinations must complete 24 units of related subjects to retake the exam.
- Partial examinations count as one complete examination.
Certificate of Registration
- Issued to candidates who pass and fulfill requirements.
- Shows registrant’s name, serial number, and signatures of Board members and Professional Regulation Commission chairman.
- Not issued to those convicted of crimes involving moral turpitude, found guilty of immoral conduct, or declared mentally unsound.
Examination and Registration Fees
- Payments processed through the Professional Regulation Commission.
- Fees prescribed by the Commission.
Rules and Regulations
- Established by the Board subject to approval by the Professional Regulation Commission.
- Includes code of professional ethics and examination security measures.
Grounds for Disciplinary Proceedings
- Include conviction of crimes involving moral turpitude, immoral conduct, insanity, fraud, gross negligence, addiction impairing competence, unethical advertising, violation of auditing standards, aiding unauthorized practitioners, and any discreditable conduct.
Administrative Investigation Procedures
- Respondents served copies of charges and required to answer.
- Investigations conducted by the Board or designated officers.
- Decisions rendered by a majority of Board members.
- Procedures governed by Professional Regulation Commission rules.
Rights of Respondents in Disciplinary Cases
- Right to counsel, speedy and public hearing.
- Right to confront and cross-examine witnesses.
Appeals Process
- Board decisions become final after 30 days unless appealed to the Professional Regulation Commission.
- Commission decisions are final.
Conditions for Reinstatement
- Eligible after two years for reinstatement if exemplary conduct is demonstrated.
Criminal Offenses and Penalties
- Penalizes fraud or deception connected with examinations.
- False statements, impersonation, and forgery related to examination are punishable.
- Illegal practice or misuse of CPA title carries fines and/or imprisonment.
- Each day of unauthorized practice considered a separate offense.
Foreign Reciprocity
- Foreigners may only take CPA exams or register if their country grants reciprocal privileges to Filipino CPAs on equal terms.
Ownership of Working Papers
- Working papers and memoranda remain property of the CPA unless otherwise agreed.
- Transfer or disposal requires client consent, except to surviving or new partners.
Restrictions on Practice Organization
- All partners in accountancy partnerships must be registered CPAs.
- Securities and Exchange Commission not to register corporations for public accountancy practice.
Integration of the Accountancy Profession
- The Professional Regulation Commission empowered to institute integration rules to enhance standards and public accountability.
Accreditation and Registration
- CPAs and firms must register with the Board and Professional Regulation Commission annually.
- Rules and penalties for non-compliance established by the Board with Commission approval.
Repealing Clause
- Repeals Republic Act No. 5166 and all inconsistent laws, orders, and regulations.
Effectivity
- The Decree took effect immediately except specific provisions on examination admission and refresher courses, which apply beginning with the 1976 CPA examinations.