First of all, please allow me to express my profound gratitude to Chancellor Antonieta Fortuna-Ibe for this invitation to be your speaker in the 4th Accounting Lecture being sponsored by the University of the East (UE) and the Philippine Institute of Certified Public Accountants (PICPA).
Let me also thank Acting Dean Veron Elizalde for her very generous introduction.
You may recall that the first speaker in this Accounting Lecture Series was Mr. Washington SyCip, the guru of the accounting profession and founder of the biggest public accounting firm in the Philippines, SyCip Gorres Velayo and Co., CPAs (SGV); the second speaker was Mr. Carlos Alindada, the Chairman of the Financial Reporting Standards Council (FRSC) and former Managing Partner of SGV; and the third was Mr. Benjamin Punongbayan, Chairman of the Auditing and Assurance Standards Council (AASC) and former head of the audit division of SGV and later on Chairman and Chief Executive Officer of his own accounting firm, Punongbayan and Araullo, CPAs. The three previous speakers are all giants in the practice of public accountancy and since I do not have that giant stature, it really gives me the distinct honour and great privilege to be the fourth speaker in this lecture series.
I invited my wife and my children to listen to me this afternoon. I told them that this rare privilege will happen only once in my lifetime and that there will be no other chance. It is also an opportunity for my children to come inside UE, because prior to this occasion, they were only looking at the school from C. M. Recto Avenue. Now, they confirm how great my Alma Mater is, the school you and I love. I have so many things to be thankful from UE. It is not only because I met so many wonderful friends here. It is not only because I earned two degrees, i.e., Bachelor in Business Administration and Bachelor of Laws, which I believe qualified me for the various jobs I applied for. The most important blessing that I had for studying in this great school is the fact that in this campus, I met my wife, Charito, who is also an alumna of UE.
I did not have the privilege of working long in the public practice of accountancy. I have been in the commerce and industry sector for almost 40 years. However, being in commerce and industry and preparer and user of financial statements, I have a better perspective and more independence in the regulation of the practice of the accounting profession, most especially the public practice sector.
This afternoon, I am going to share with you my views and experiences in regulating the accountancy profession in the Philippines during these challenging times.
I am sure that you will agree with me that the accounting profession is currently under the spotlight. With all the recent financial scandals, our profession is in the midst of a storm. Investors, public interest groups and the public at large are demanding professional independence and accountability. Many even accuse the accountancy profession as the culprit in precipitating the recent financial crisis. There is current debate on whether the accountants are to be blamed and whether there are enough laws to regulate the profession.
Normally, one would choose to remain quiet for a while until the accounting storm blows over. But I have chosen to brave the storm and courageously confront the issues; therefore, I thank UE and PICPA, for this is a timely occasion for us in the Board of Accountancy to inform you of the many initiatives that we have introduced and the reforms that are underway to address the issues and problems confronting the accountancy profession.
The Board of Accountancy (BOA)
Let me start by describing to you the BOA and its legal mandate.
The BOA is the body tasked by the Government to regulate the accountancy profession in the Philippines. Its mission is to protect the public by ensuring that only qualified persons and firms are licensed to practice accountancy and that appropriate standards of competency and practice, including ethics, objectivity and independence are established and enforced.
The BOA is composed of a chairman and six members appointed by the President of the Philippines, upon the recommendation of the Professional Regulation Commission (PRC) from the nominees of the Accredited Professional Organization (APO) which at present is PICPA. At this point, may I acknowledge the presence of the honourable members of the BOA who are with us this afternoon. We have the Hon. Ma. Elenita B. Cabrera, an alumna of UE; the Hon. Froilan G. Ampil, an alumnus of De La Salle; the Hon. Lucila C. Tarriela, an alumna of UST; the Hon. Rufo R. Mendoza, another alumnus of De La Salle.
We also have this afternoon many past Chairmen and members of the BOA, namely Chancellor Antonieta Fortuna-Ibe, an alumna of UE; Dr. John S. Bala, another alumnus of UE; Ms. Violeta V. Vicente, an alumna of UE; Ms. Solita V. Delantar, an alumna of FEU; Dean Estelita C. Aguirre, an alumna of the University of the Philippines. It may interest you to know that there are many alumni of UE who were also members of the BOA. To name a few that I can remember are Atty. Hermogenes Pobre, Atty. Silverio Sarmiento. Ms. Violeta Josef and Ms. Winefreda Madarang, and I am sure there are many more.
At the PRC, Atty. Pobre, Chancellor Ibe and Dr. Leonor Rosero, all UE alumni, served as Chairperson one after another. The Chairmen of the Customs Brokers, the Electronics Communications Engineering and Dentistry boards are also graduates of UE.
There many UE alumni who are very much involved in the regulation of the many professions in the Philippines, apart from the many others who are captains of industries and government executives like Ms. Corazon De La Paz-Bernardo, immediate Past President and Chief Executive Officer of the Social Security System and now member of the Board of Trustees of UE. Thank you for coming over, Ms. De la Paz-Bernardo.
UE, our beloved school, therefore is a very rich reservoir of professional regulators for the PRC. I do not think anyone could deny me the privilege to claim that the main considerations for their appointment to these positions are their competence as a result of their UE training and education—and most of all, their personal integrity.
Republic Act 9298 or the “Accountancy Act of 2004” defines the powers, functions and responsibilities of the BOA. The most relevant functions for this lecture are as follows:
a. To supervise the registration, licensure and practice of accountancy in the Philippines;
b. To prescribe and/or adopt a Code of Ethics for the practice of accountancy;
c. To monitor the conditions affecting the practice of accountancy and adopt such measures, including promulgation of accounting and auditing standards, rules and regulations and best practices as may be deemed proper for the enhancement and maintenance of high professional, ethical, accounting and auditing standards: Provided, That domestic accounting and auditing standards, rules and regulations shall include the international accounting and auditing standards, and generally accepted best practices;
d. To conduct an oversight into the quality of audits of financial statements through a review of the quality control measures instituted by auditors, in order to ensure compliance with the accounting and auditing standards and practices;
e. To investigate violations of this act and the rules and regulations promulgated hereunder Provided, That the Board may delegate the fact-finding aspect of such investigations to the accredited national professional organization of certified public accountants;
f. The Board may make such investigation as it deems necessary to determine whether any person has violated any provisions of this law, any accounting or auditing standards or rules;
g. To prepare, adopt, issue or amend the syllabi of the subjects for examinations in consultation with the academe, determine and prepare questions for the licensure examination which shall strictly be within the scope of the syllabi of the subjects for examinations;
h. To ensure that all higher-educational-instruction offering of accountancy complies with the policies, standards and requirements of the courses prescribed by CHED or other authorized government offices in the areas of curriculum, faculty, library and facilities;
As you can see, the BOA has a long list of functions mandated by law. At the end of the day, what we want to accomplish is to strengthen the accounting profession and to reinforce the profession’s most important mandate: performing high quality financial reporting and financial audits so that investors shall have confidence in financial reporting and the capital markets. As we all know, this is a big task and it cannot be done alone by the regulators like the BOA. The journey requires a concerted effort by preparers of financial statements, auditing firms, investors, policymakers, public companies, academe and the regulatory agencies.
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(By Being Your Own Boss)
by Hon. Dante O. Tinga