Key Definitions
- Accredited Professional Organization (APO): Professionally recognized body for CPAs, e.g., Philippine Institute of Certified Public Accountants (PICPA).
- Board: The Professional Regulatory Board of Accountancy.
- CPA Practitioners: Individual CPAs, CPA firms, or partnerships practicing public accountancy.
- Quality Assurance Review (QAR): Independent appraisal by QAR Department to evaluate audit quality.
Coordinating Council
- Council for Accreditation and Quality Control of Practicing CPAs formed via MOA among Board, SEC, BSP, and Insurance Commission.
- Council discusses policies on quality control, oversees MOA implementation, and reports to the Financial Sector Forum.
Quality Assurance Review Department (QARD)
- QARD operates independently within APO for conducting QARs.
- Executive Committee (chaired by Board members and APO president) sets policies, supervises QARD, hires key personnel, and monitors audit quality.
- QARD personnel include Chief Inspector, Chief of Administration, assistants, staff auditors; appointments require certain qualifications.
Executive Committee Duties and Terms
- Formulates policies, maintains independence of QARD, oversees QARD operations.
- Approves QAR plans, hires personnel, obtains technical advice, evaluates inspection reports.
- Reports erring CPAs and policy matters to the Board.
- Members serve terms aligned with their positions, no active public practice allowed during term.
Qualifications and Responsibilities of Chief Inspector
- Experienced senior manager or partner with 10+ years in public accounting, independent and of good moral character.
- Administers QARD, prepares annual and rolling review plans, approves inspection reports, recommends personnel actions.
Qualifications and Duties of Chief of Administration
- Five years supervisory experience, good moral character, independent from practitioners covered.
- Handles administrative functions: registrations, fee collections, financial reporting, communications.
Staff Auditors
- Must have relevant auditing or teaching experience, good moral character, CPA license, and training in QAR methodology.
- Engaged by contract; responsible for field inspection work.
Scope and Mandatory Coverage of QAR Program
- Covers all CPAs in public practice including individuals, firms, and partnerships.
- Enrollment is mandatory for initial and renewal accreditation.
- Continuous registration required to avoid fines or suspension/revocation.
Operational Funding and Accountabilities
- APO must provide infrastructure and collect QAR fees distinct from membership fees.
- Funds exclusively used for QAR Program, properly accounted and reported monthly.
Registration Categories and Risk-Based Classification
- CPA practitioners classified into Categories A and B based on clients' IFRS usage and risk levels.
- Category A: Auditors of public-interest entities using full IFRS, subcategorized by size and number of clients.
- Category B: Auditors of smaller entities using IFRS for SMEs, subcategorized by number of clients.
- Registration fees correspond to risk and scope of review, ranging from P8,000 to P350,000 per annum.
Registration Rules
- CPA Practitioners register under one category only.
- Changes in category must be reported at renewal.
- Registration requires sworn accurate client information.
Confidentiality
- All QARD information, work, and reports are confidential except when sanctioning violations or court orders require disclosure.
Penalties and Sanctions
- Violations subject to penalties under RA 9298 and Board's administrative sanctions.
- Fines for APO non-compliance escalate from P1,000 up to P4,000/day; persistent violations may lead to suspension or withdrawal of recognition.
- CPA Practitioners face fines for failure to enroll or delayed registration proof, increasing on repeated offenses.
- Failure to pay or comply may result in suspension or revocation of accreditation.
Miscellaneous Provisions
- Separability clause ensures invalidity of any part does not affect the remainder.
- The rules take effect 15 days after publication in the Official Gazette or a major newspaper, whichever is earlier.