Accountancy Act of 1967 Regulations

Board of Accounting Education—composition

Section 3 creates the Board of Accounting Education with the Secretary of Education (or duly authorized representative) as Chairman.
Section 3 includes the Chairman of the Board of Accountancy.
Section 3 includes the President of the Philippine Institute of Certified Public Accountants.
Section 3 includes the President of the Philippine Association of Collegiate Schools of Business.
Section 3 includes one representative of business and/or industry appointed by the President of the Philippines.

Board of Accounting Education—functions and standards

Section 5 requires the Board to determine and prescribe minimum requirements for admission of candidates to the Certified Public Accountants’ examinations.
Section 5 requires the Board to determine and prescribe prior employment or apprenticeship experience requirements, including substitution with equivalent practical training through academic work.
Section 5 requires the Board to determine and prescribe certification requirements of degree-granting institutions awarding a Bachelor of Science in Commerce (or equivalent) for prospective candidates.
Section 5 authorizes the Board to promote, prescribe, and enforce rules and regulations for effective implementation of its functions.
Section 6 requires the Board to prescribe collegiate courses for a Bachelor of Science in Commerce (or equivalent) leading to admission to the Certified Public Accountants’ examination.
Section 6 requires the courses to include minimum units for the following subjects: Accounting and Auditing (36 units), Business Law (9 units), Taxation (6 units), English (15 units), Mathematics (9 units), and Management (6 units).
Section 7 requires the Board to prescribe requirements for one-year employment or apprenticeship experience in accountancy or a related field.
Section 7 allows substitution: in lieu of practical experience, two semesters covering twelve units of equivalent practical training through academic work may be substituted.

Board of Accountancy—composition and duties

Section 8 creates the Board of Accountancy with a chairman and five members appointed by the President of the Philippines.
Section 8 requires the President to appoint from a list of not less than fifteen names approved and submitted by the Board of Directors of the Philippine Institute of Certified Public Accountants, after due consultation with other accounting associations whose membership consists entirely of licensed Certified Public Accountants in the Philippines.
Section 8 requires the President to fill vacancies from the list submitted by the Philippine Institute of Certified Public Accountants.
Section 8 requires the Board to conduct the CPA examination at least once in each calendar year in the City of Manila or its suburb, Cebu City, and Davao City.
Section 8 allows examination in other places if conditions warrant and the Board obtains previous approval of the Commissioner of Civil Service.
Section 8 requires the Board to evaluate, grade, sign, and submit examination results to the Commissioner of Civil Service within one hundred eighty days from termination of the examinations.
Section 8 requires the Secretary of the Board of Accountancy to submit to the President the names of successful candidates for approval for licensure, with their corresponding grades.
Section 8 requires the Commissioner of Civil Service to furnish the Board of Accounting Education a report on performance of all schools represented in the examination.
Section 8 requires the Board, subject to presidential approval and after consultation with the Philippine Institute of Certified Public Accountants, to promulgate rules, regulations, and set professional standards for practice of accountancy.
Section 8 requires these rules to include security measures to protect the secrecy and integrity of the examinations.

Examiners’ qualifications and board tenure

Section 9 bars appointment to the Board of Accountancy unless the appointee is (a) a citizen of the Philippines, (b) of good moral character, (c) a duly registered Certified Public Accountant in the Philippines, and (d) has been in practice of accountancy for at least ten years, or in government service for the same period in a position requiring or using accounting knowledge.
Section 9 bars appointment if the appointee is directly or indirectly connected with any school, college, or university granting degrees qualifying graduates for admission to the CPA examination, or connected with a CPA review school or institute.
Section 9 bars appointment if the appointee has any pecuniary interest in such schools or review institutes.
Section 10 sets the tenure: the chairman and members hold office for three years.
Section 10 provides that first and second, third and fourth, and fifth members and the chairman shall serve for one, two, and three years respectively.
Section 10 limits vacancies: vacancies are filled by appointments for the unexpired term only.
Section 10 sets compensation per candidate examined: five pesos per candidate for subjects with an equivalent weight of two units.
Section 10 sets per diem: twenty pesos per meeting actually attended during administrative investigation by the Board.
Section 11 authorizes the President of the Philippines to suspend or remove a Board member for neglect of duty, incompetence, or unprofessional or dishonorable conduct.

CPA exam admission and examination scope

Section 12 requires that no person be admitted to the CPA examination unless all of the following are satisfied: (a) citizenship and eligibility, (b) age qualification, (c) good moral character, (d) required degree, and (e) certification of employment/apprenticeship experience (or substitute).
Section 12(a) permits admission for Philippine citizens; also permits admission for citizens of any foreign country who are permanent residents of the Philippines or who acquired a Bachelor of Science in Commerce degree (or equivalent) major in accounting from the Philippines and submitted competent and conclusive documentary evidence confirmed by the Department of Foreign Affairs showing that their country’s laws extend similar privileges to Philippine citizens regarding practice of accountancy.
Section 12(b) requires applicants to be at least twenty-one years of age; applicants below that age may take the examination, but the certificate is not issued until the required age is reached.
Section 12(e) requires school certification that the applicant possesses the necessary employment or apprenticeship experience (or a substitute) as prescribed by the Board of Accounting Education.
Section 13 requires the examination to be in writing and to cover the following subjects with their corresponding weights in units and minimum hours:
- Theory of Accounts — weight 23, minimum hours (11/2?) (as rendered),
- Business Law — weight 1 1/2, minimum hours (1 1/2?) (as rendered),
- Taxation — weight 1 1/2, minimum hours (1 1/2?) (as rendered),
- Management Services — weight 1 1/2, minimum hours (1 1/2?) (as rendered),
- Auditing Theory — weight 1 1/2, minimum hours (1 1/2?) (as rendered),
- Auditing Problems — weight 2 3, minimum hours (3?) (as rendered),
- Practical Accounting Problems I — weight 2 3, minimum hours (3?) (as rendered),
- Practical Accounting Problems II — weight 2 3, minimum hours (3?) (as rendered),
- Total — 12 18 (as rendered).
Section 13 requires the content and coverage of these subjects to follow the outline or syllabus prepared and issued by the Board of Accountancy.
Section 13 specifies subject content coverage, including:
- Theory of Accounts: terminology, principles and procedures, classification of accounts, valuation of assets and liabilities, income determination, and developments in accountancy.
- Business Law: obligations and contracts, partnerships and corporations, negotiable instruments, and the legal framework of business.
- Taxation: income tax, business taxes, transfer taxes, and other taxes affecting accounting practice.
- Management services: principles and procedures in management consulting (systems installations, budgets and forecasts, project studies, and controllership).
- Auditing theory and problems: independent examination of accounts, auditing standards and procedures, audit programs and work papers, and preparation of audit reports, including internal audits.
- Practical accounting problems I and II: transactions and situations encountered in internal and public accounting.

Examination rating, registration entitlement, and credits

Section 14 requires that a candidate with a general weighted average of seventy-five per cent and above be entitled to registration as a Certified Public Accountant and receive a certificate of registration from the Board of Accountancy.
Section 14 requires that no subject rating be less than sixty-five percent.
Section 14 provides a conditional credit: if a candidate obtains seventy-five percent and above in at least three subjects with a combined weight of six units, the candidate receives conditional credit for the passed subjects.
Section 14 requires re-examination for remaining subjects within two years from the preceding examination.
Section 14 states that if the candidate fails to obtain at least a general weighted average of seventy-five percent and a rating of at least sixty-five percent in each re-examined subject, the candidate is considered failed in the entire examination.

Certificate issuance and grounds for refusal

Section 15 requires the Chairman and Secretary of the Board of Accountancy to jointly sign and issue the certificate of registration to those who satisfactorily comply with Board requirements.
Section 15 prohibits issuance if the candidate has been convicted by a court of competent jurisdiction of any criminal offense involving moral turpitude.
Section 15 prohibits issuance if the candidate has been found guilty of immoral or dishonorable conduct after due investigation by the Board of Accountancy.
Section 15 prohibits issuance if the candidate has been declared of unsound mind.

Fees, second examination charges, and filing route

Section 16 requires all applications to be filed with the Commissioner of Civil Service and accompanied by:
- For examination: P60.00, and
- For registration and issuance of certificate: 10.00.
Section 16 grants a second examination right if the candidate fails: the candidate may take a second examination within two years after the date of the examination where the candidate failed.
Section 16 sets second examination fees: ten pesos per subject examined with a weight of two units; five pesos per subject examined with a weight of one unit.

Administrative investigation, due process, and appeals

Section 17 requires the Board of Accountancy to study conditions affecting the practice of accountancy in all parts of the Philippines.
Section 17 requires the Board to exercise its powers to maintain ethical and professional standards.
Section 17 authorizes the Board to issue subpoena or subpoena duces tecum to witnesses for purposes required in discharging its duties.
Section 17 authorizes the Board to promulgate rules and regulations for performance of its duties in harmony with the Act and for proper practice of accountancy in the Philippines.
Section 17 requires administrative investigations to be conducted by not less than four members of the Board, otherwise the proceedings are void.
Section 17 authorizes the Board to disapprove applications, reprimand erring CPAs, or suspend or revoke registration certificates after due investigation if respondents are found guilty.
Section 18 requires that within five days after filing written charges under oath, the respondent CPA shall be furnished a copy of the charges.
Section 18 requires that within five days after receipt of the copy by the respondent, the Board conducts the investigation.
Section 18 requires that the investigation be completed as soon as practicable.
Section 19 authorizes proceedings against a Certified Public Accountant when any of the following exists:
- conviction of a criminal offense involving moral turpitude;
- immoral or dishonorable conduct;
- insanity;
- fraud in acquisition of the certificate;
- gross negligence or incompetence in professional practice;
- addiction to alcoholic beverages or habit-forming drugs rendering incapacity;
- false or extravagant or unethical advertisement stating matters other than name, profession, limitation of practice, office and home address;
- issuing an accountant’s certificate covering examination of client accounts without observing necessary auditing standards;
- aiding or acting as a dummy of an unqualified or unregistered person to practice accountancy; or
- violation of the Board-promulgated Code of Ethics.
Section 20 guarantees the respondent CPA the right to be represented by counsel, to a private and public hearing, and to confront and cross-examine witnesses against him.
Section 21 provides that the Board decision becomes final after thirty days from receipt by the respondent of a copy of the decision, unless an appeal is filed within the same thirty days to the Commissioner of Civil Service, and later to the President of the Philippines.
Section 21 provides that the decision of the President of the Philippines is final.
Section 22 authorizes reinstatement: after five years, the Board may order reinstatement of a CPA whose certificate was revoked if the CPA during that period acted in exemplary manner and did not commit any illegal, immoral, or dishonorable act.

Criminal offenses tied to examinations and practice

Section 23 penalizes any person who defeats, deceives, or obstructs a person’s right of examination; falsely rates, grades, estimates, or reports exam results; aids such acts; makes false representations regarding examinees; or uses/furnishes special or secret information to improve or injure prospects.
Section 23 sets penalties for these acts: a fine not exceeding one thousand pesos and/or imprisonment not exceeding six months, for each offense.
Section 23 imposes the same penalty for knowingly making material false statements in applications; conniving at false statements in certificates accompanying applications; making material false statements in certificates accompanying applications of others; impersonation and permitting or aiding impersonation; falsely making or forging certificates in connection with applications; committing or attempting fraud; violating the Act or regulations; or aiding these acts.
Section 23 penalizes public misrepresentation: any person representing to the public that he has received the certificate; assuming practice as CPA; using “C.P.A.” or similar words/letters; or assuming practice as public accountant without the required certificate.
Section 23 imposes penalties for misrepresentation and unauthorized practice: a fine not exceeding five thousand pesos and/or imprisonment not exceeding two years, at the discretion of the court, for each such offense.
Section 23 deems each day of continued practice or holding out as a CPA to be a separate offense.
Section 23 provides confidentiality protection for professional communications: CPAs and persons employed by CPAs shall not be required to and shall not disclose or divulge communication contents made to them by employers relating to examination, audit, or reporting, except by express permission of the employer or relevant persons, or when security of the state so requires.
Section 23 applies the penalty for confidentiality violations by referencing the penalty in the third paragraph of Section 23.

Definition: practice of public accounting

Section 24 deems a person engaged in the practice of public accounting if the person: (1) holds himself out as skilled in accounting knowledge/science/practice and qualified to render professional services as a certified public accountant, or (2) offers and/or renders to more than one client on a fee basis services including audit or verification of financial transactions and accounting records, preparation/signing/certification for audits and related reports to be used for publication or credit or filed with court or government agencies or used for other purposes, installation and revision of accounting systems, and preparation of income tax returns when related to accounting procedures, or (3) represents clients before governmental agencies on tax matters related to accounting, or (4) renders professional assistance relating to accounting procedure and recording/presentation of financial facts or data.

Ownership and transfer limits of working papers

Section 25 provides that all working papers, schedules, and memoranda made by a CPA and staff in the course of an examination—including those prepared and submitted by the client—remain the property of the CPA, unless there is a written agreement providing otherwise.
Section 25 prohibits selling, transferring, bequeathing, or disposing of working papers/schedules/memoranda without the consent of the client (and the client’s heirs, personal representative, or successors) to anyone other than one or more surviving partners or new partners of the CPA.

Registration limits for partnerships and corporations

Section 26 requires that all partners or partnerships organized for the practice of public accountancy must be registered Certified Public Accountants in the Philippines.
Section 26 prohibits the Commissioner of the Securities and Exchange Commission from registering any corporation organized for the practice of public accountancy.

Appropriation and repealing/effectivity rules

Section 27 authorizes appropriation of twenty thousand pesos from funds in the National Treasury not otherwise appropriated to carry out the Act.
Section 28 repeals or modifies Commonwealth Act No. 342 and all Acts, executive orders, administrative orders, rules and regulations, or parts thereof inconsistent with Republic Act No. 5166.
Section 29 makes the Act effective upon approval, August 4, 1967.
Section 29 requires the Board of Accounting Education to prescribe the necessary collegiate courses and employment or apprenticeship experience requirements within one year from the date of approval.
Section 29 provides that admission requirements pertaining to education and experience take effect after four years from the date of prescription by the Board of Accounting Education.