Govt-Auditing-CHAPTER-3-THE-PROFESSIONAL-PRACTICE-OF-ACCOUNTING.pptx

AUDITING

1. GOVERNMENT AUDITING

2. CHAPTER 3: LOMELYN B. PRADO, PhD THE PROFESSIONAL PRACTICE OF ACCOUNTING

3. Early Sources of Regulation The Professional Regulations Commission (PRC) is an executive branch of the National Government empowered to administer, implement and enforce policies with respect to the licensing and regulation of the various professions under its jurisdiction .

4. Public Sector Regulation of Accounting Practice The public sector regulation of accounting practice is provided by the Professional Regulatory Board of Accountancy (BOA) that is empowered to administer the Accountancy Law and the Commission on Audit (COA).

5. Public Sector Regulation of Accounting Practice The regulatory bodies of certain industries also regulate accounting practice, most significant of these are: the Bangko Sentral ng Pilipinas (BSP) , the Insurance Commission and the Cooperative Development Authority of the Philippines (CDA).

6. Public Sector Regulation of Accounting Practice The Professional Regulatory Board of Accountancy is empowered to administer the Accountancy Law, and as the only licensing body for the accounting profession, BOA can grant or issue and revoke CPA certificates to practice public accounting. The functions and authority of BOA are provided for in the Philippine Accountancy Act of  2004  (Republic Act No.  9298 ).

7. Public Sector Regulation of Accounting Practice The Commission on Audit was created under the Philippine Constitution to be the highest and final authority in the audit of the government and its instrumentalities. COA endeavors to determine that the government agency abides by the principles enumerated in the Auditing Code, among which, are: "No money shall be paid out of any public treasury or depository except in pursuance of an appropriation, law or specific statutory authority", and "Government funds or property shall be spent or used solely for public purposes".

8. National Securities Commissions and Their Role in Effect on Professional Accounting Regulations Standards The Securities and Exchange Commission (SEC) is the government agency exercising a major role in effect on professional accounting regulations standards. The SEC regulates registration and operation of corporations, partnerships and other forms of associations in the Philippines. It has authority for specifying reporting requirements necessary for fair disclosures to investors; and to establish rules for CPAs associated with audited financial statements. submitted to the Commission.

9. National Securities Commissions and Their Role in Effect on Professional Accounting Regulations Standards The other standard-setting bodies for accounting practice are councils created by the Professional Regulation Commission upon the recommendation of the Board of Accountancy aimed to assist the Board in carrying out its powers and functions as provided in Article II Section 9 of Republic Act No.  9298   or the Philippine Accountancy Act of  2004 .

10. Harmonization of Accounting Practice Internationally The International Federation of Accountants (IFAC) is a non-profit, non-governmental, non-political organization of international accounting bodies formed in  1977  in Munich, Germany, with the mission of developing and enhancing a coordinated worldwide accounting profession that would consistently provide the highest quality of service in the public interest.

11. Harmonization of Accounting Practice Internationally The International Accounting Standards Board (IASB) is based in London and began operations in  2001 . The IASB is funded by major accounting firms, private financial institutions, central and development banks, and other international and professional organizations throughout the world.

12. Harmonization of Accounting Practice Internationally The standards issued by the IASB were designated as International Financial Reporting Standards (IFRS). The Philippine Institute of Certified Public Accountants (PICPA) as member of IFAC, initiated the adoption of the IFRS in the Philippines. The Board of Accountancy upon the recommendation of the Accounting Standards Council approved the adoption of the IFRS and designated them as Philippine Financial Reporting Standards (PFRS).

13. Harmonization of Accounting Practice Internationally The United Nations Intergovernmental Working Group of Experts on International Standards of Accounting and Reporting (ISAR) is among the latest group organized by the United Nations with membership from the governments of different countries representing their best minds in the accounting profession. This intergovernmental group analyzes and evaluates for international adaptation the standards of accounting and reporting of various nations.

14. PUBLIC ACCOUNTING PROFESSION B A In the new Code of Ethics for Professional Accountants, a profession is described as distinguished by certain characteristics, among which are: mastery of a particular skill acquired by training and education; C adherence by its members to a common code of values and conduct established by its administering body, including an outlook which is essentially objective; and acceptance of a duty to society on the whole, usually in return for restrictions in the use of a title or in the granting of a qualification.

15. Public Accounting as a Profession COMPETENCE is assured by the educational requirement and the civil service eligibility , which are the prerequisites to the practice of accountancy in the Philippines. In fulfilling the academic requirement, the accountant learned the language and the body of knowledge that make the profession. The civil service eligibility comes with the passing of the Certified Public Accountant licensure examination for admission to the practice of accountancy.

16. Public Accounting as a Profession Independence is the professional accountant's quality of impartiality and fairness to all users of the financial statements. The attitude of independence is the underlying reason why the public relies on the opinion expressed by the professional accountant; that the financial statements he has attested to are fair and unbiased presentations on which a user can base reasonably intelligent analysis for decision-making.

17. Public Accounting as a Profession Integrity involves righteousness, sincerity, honesty, and strength of conviction . The professional accountant's moral integrity is the public's assurance that he would not attest to any financial statement unless he has conducted an examination thereof with due professional care and in accordance with generally accepted auditing standards.

18. Public Accounting as a Profession The concepts of ethics of the accountancy profession are declared in the Code of Ethics for Professional Accountants in the Philippines , which demands that the accountants maintain a standard of conduct higher than that required by law. The Code is mandatory for all professional accountants and defines his conduct in relation to his colleagues, his clients, and the public.

19. Public Accounting as a Profession T he members of the accountancy profession render service with due care, competence, and diligence . An accountant has the duty to maintain professional awareness of up-to-date developments in practice, legislation and techniques. 

20. CERTIFIED PUBLIC ACCOUNTANT A Certified Public Accountant holds a Certificate of Registration signed by the Chairperson of the PRC and by the Chairman and members of the Professional Regulatory Board of Accountancy.  The Certified Public Accountant has taken his Oath of Profession and has been issued a valid Professional Identification Card containing his name, signature and photograph .

21. Organizations that Affect Public Accounting The organizations that affect the practice of public accounting are regulatory government agencies, professional organizations and pertinent standard-setting bodies .  Along with these organizations, certain rules and regulations , and relevant legislation also govern the practice of public accounting in the Philippines .

22. Regulatory Government Agencies The PRC administers and implements policies of the government regarding regulation and licensing of the professions under its jurisdiction.  The Professional Regulatory Board of Accountancy (BOA) implements policies on the practice of the accounting profession in the Philippines. 

23. Regulatory Government Agencies The Securities and Exchange Commission (SEC) is empowered to regulate the registration and operation of corporations, partnerships and other forms of business organizations in the country.  The Commission on Audit (COA) determines whether government funds are handled properly and in compliance with existing laws , and whether programs and activities are conducted economically . 

24. PROFESSIONAL ORGANIZATIONS The Philippine Institute of Certified Public Accountants , commonly referred to as PICPA , is the sole integrated national organization of all registered and licensed professional accountants in the Philippines. The Association of Certified Public Accountants in Commerce and Industry is the accredited sectoral organization of CPAs employed in commerce and industry, where such CPA is involved in decision-making that require knowledge in Accounting . The Association of Certified Public Accountants in Public Practice is the accredited sectoral organization of individual CPAs, firms and partnerships of CPAs engaged in the public practice of accountancy. 

25. STANDARD-SETTING BODIES The international harmonization of accounting practice is the primary mission of the IFAC or International Federation of Accountants and the IASB or International Accounting Standards Board. With the International Standards on Auditing (ISAS) , the International Auditing Practices Committee (IAPC) aims to improve the uniformity of practices in financial statement audits, assurance, and other related services throughout the world. The International Auditing Practices Committee (IAPC) is a standing technical committee in the International Federation of Accountants (IFAC) Council.

26. STANDARD-SETTING COUNCILS The Financial Reporting Standards Council (FRSC); T he Education Technical Council (ETC) was created to assist the Professional Regulatory Board of Accountancy in continuously upgrading the accountancy education in the Philippines, to make the Filipino CPAs globally competitive . Auditing and Assurance Standards Council (AASC) were created and empowered to monitor the conditions affecting the practice of accountancy in the country.

27. Regulation of the Public Accounting Practice Republic Act No.  9298   was enacted during the 3rd session of the 12th Philippine Congress to repeal Presidential Decree No.  692   then known as the Revised Accountancy Law RA  9298   was approved by the President on May 13,  2004   to regulate the practice of accountancy in the Philippines and is known as the Philippine Accountancy Act of  2004 , also referred to as The Act.

28. Regulation of the Public Accounting Practice RA  9298   starts with the declaration of policy, thus: "The State recognizes the importance of accountants in nation- building and development. Hence, it shall develop and nurture competent, virt uous, productive and well-rounded professional accountants , whose standards of practice and service shall be excellent, qualitative, world-class and globally competitive through inviolable, honest, effective and credible licensure examinations and through regulatory measures, programs and activities that foster their professional growth and development." (Sec. 2)

29. Regulation of the Public Accounting Practice The three main objectives of the Philippine Accountancy Act of 2004  are: a. standardization and regulation of accounting education; b. examination for registration of Certified Public Accountants; and C. supervision, control and regulation of the practice of accountancy in the Philippines. (Sec. 3)

30. Regulation of the Public Accounting Practice The areas covered by The Act contain provisions on: a. Scope of the practice of accountancy; b. Professional Regulatory Board of Accountancy; c. Examination, regulation and licensure; d. Practice of accountancy, and e. Penal and final provisions.

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