Implementation Bodies
- Creation of two governing bodies:
- Board of Accounting Education (BAE)
- Board of Accountancy (BOA)
Board of Accounting Education Composition
- Chairman: Secretary of Education or authorized representative.
- Other members: Chairman of BOA, President of the Philippine Institute of CPAs, President of the Philippine Association of Collegiate Schools of Business, and a Presidential appointee representing business/industry.
Board of Accounting Education Functions
- Prescribes minimum admission requirements for CPA exams.
- Sets employment or apprenticeship experience standards or equivalent academic training.
- Establishes certification requirements for accounting degrees.
- Enforces rules to implement these functions effectively.
Collegiate Course Requirements
- Prescribes curriculum leading to CPA exam eligibility, including minimum units for:
- Accounting and Auditing (36 units)
- Business Law (9 units)
- Taxation (6 units)
- English (15 units)
- Mathematics (9 units)
- Management (6 units)
Employment or Apprenticeship Requirement
- Requires one-year practical experience in accounting or related fields.
- Allows substitution with two semesters (12 units) of equivalent academic practical training.
Board of Accountancy Composition and Duties
- Composed of a chairman and five members appointed by the President from a list by the Philippine Institute of CPAs.
- Conducts CPA licensure examinations annually in Manila, Cebu, and Davao.
- Grades examinations and submits results to the Commissioner of Civil Service.
- Issues certificates to successful candidates upon Presidential approval.
- Sets professional standards and promulgates rules for accountancy practice under the President's approval.
Qualifications of Board Members
- Filipino citizen, good moral character.
- Registered CPA with at least 10 years’ experience in practice or related government service.
- No direct connections to academic institutions or review centers for CPA exam candidates.
Tenure and Compensation
- Three-year terms with staggered initial appointments.
- Compensation based on number of examinees and meeting attendance.
Removal/Suspension of Board Members
- President may suspend or remove members for neglect, incompetence, or dishonorable/unprofessional conduct.
Examination Admission Criteria
- Filipino citizen or qualified foreign permanent resident.
- Bachelor of Science in Commerce or equivalent with major in accounting.
- At least 21 years old or conditional eligibility if younger.
- Good moral character.
- Certified employment/apprenticeship experience or equivalent academic training.
Examination Scope and Subjects
- Written examination covering 12 units over 18 hours:
- Theory of Accounts, Business Law, Taxation, Management Services, Auditing (theory and problems), Practical Accounting Problems I & II.
- Coverage includes accounting principles, auditing standards, business law, taxation, management consulting, and practical accounting.
Examination Rating and Conditional Credit
- Passing general weighted average of 75% with no subject below 65% required.
- Conditional credit granted for subjects passed with 75% or higher in at least 3 subjects with combined 6 units, provided remaining subjects are passed within two years.
Certificate Issuance and Grounds for Refusal
- Certificates signed by Board chairman and secretary upon fulfilling requirements.
- Refusal on grounds of criminal conviction involving moral turpitude, dishonorable conduct, or unsound mind.
Fees
- Examination fee: PHP 60.00
- Registration and certificate issuance: PHP 10.00
- Re-examination fees per subject: PHP 10 (two-unit subject), PHP 5 (one-unit subject)
Administrative Investigation Functions
- Studies conditions affecting accountancy practice.
- Maintains ethical/professional standards.
- Issues subpoenas, conducts investigations.
- May reprimand, suspend, revoke registration certificates.
Investigation Procedure
- Charges filed under oath.
- Respondent gets copy within 5 days, and investigation conducted within 5 days of receipt.
Grounds for Disciplinary Proceedings
- Criminal conviction involving moral turpitude.
- Immoral, dishonorable conduct.
- Insanity.
- Fraud in obtaining certificate.
- Gross negligence or incompetence.
- Addiction impairing practice ability.
- False/extravagant advertisement.
- Issuing certificates without auditing standards.
- Enabling unqualified persons to practice.
- Violations of the Board’s Code of Ethics.
Rights of Respondents
- Right to counsel.
- Right to speedy and public hearing.
- Right to confront and cross-examine witnesses.
Appeals
- Board decision final after 30 days unless appealed to Civil Service Commissioner and President, whose decisions are final.
Reinstatement
- Possible after five years if the individual has behaved exemplarily and committed no illegal or dishonorable acts.
Penal Provisions
- Penalties for cheating, falsification, fraud connected with exam or registration: fines up to PHP 1,000 and/or up to 6 months imprisonment.
- Unauthorized practice or false representation as CPA: fines up to PHP 5,000 and/or up to 2 years imprisonment per offense and per day of violation.
- Confidentiality of communications with clients protected except with consent or in cases of state security.
Definition of Public Accounting Practice
- Holding out as skilled in accounting.
- Rendering services such as audits, financial reporting, tax return preparation, systems installation.
- Representing clients in tax matters.
- Providing professional accounting assistance.
Ownership of Working Papers
- Working papers and related documents remain the property of the CPA unless agreement provides otherwise.
- Transfer or disposal requires client consent except to surviving/new partners.
Limitations on Practice
- Only registered CPAs may be partners in accounting firms.
- Corporations for public accounting practice shall not be registered by Securities and Exchange Commission.
Appropriation
- PHP 20,000 appropriated to implement the Act.
Repealing Clause
- Repeals Commonwealth Act No. 342 and inconsistent laws, orders, or regulations.
Effectivity
- Act effective upon approval.
- Board to prescribe courses and experience requirements within one year.
- Examination admission requirements related to education and experience take effect four years after prescription by the Board.