Mandatory Audited Financial Statement with SEC Accredited CPA

By: Tax and Accounting Center Philippines

An independent certified public accountant (CPA) in the Philippines may not be able to conduct an audit on any and all entities, corporations, and organizations. This would mean that an independent CPA auditor in the Philippines should be qualified and accredited in order for it to conduct an audit and sign on an audited financial statements.

Under Rule No. 68, as amended, financial statements required to be submitted with the Securities and Exchange Commission (SEC) shall be accompanied by an auditor’s report who is accredited by Board of Accountancy (BOA). Moreover, the following entities are required to be audited by an independent CPA with corresponding accreditation before the Securities and Exchange Commission (SEC) in addition to their accreditation with the Board of Accountancy (BOA):

Group A SEC Accredited CPA in Philippines

• Issuers of registered securities which have sold a class of shares under Section 12 of Securities Regulation Code, except those issuers of t imeshares, proprietary and non-proprietary membership certificates which are covered in Group B.
• Issuers with a class of securities listed for trading in a Philippine Stock Exchange
• Public companies or those with have total assets of at least Fifty Million Pesos (PhP50,000,000.00) or such other amount as the SEC shall prescribe, and having Two Hundred (200) or more holders each holding  at least One Hundred (100) shares of a class of its equity shares

Group B SEC Accredited CPA in Philippines

•  Issuers of registered timeshares, proprietary and non-proprietary membership certificates;
• Investment houses
• Brokers and Dealers of Securities
• Investment Companies
• Government Securities Eligible Dealers (GSED)
• Universal Banks registered as underwriters of Securities
• Investment Company Advisers
• Clearing Agency and Clearing Agency as Depository
• Stock and Securities Exchange/s
• Special Purpose Vehicles under Special Purpose Vehicles Act of 2002
• Special Purpose Corporations registered registered under Securitization Act of 2004

Group C SEC Accredited CPA in Philippines

•  Financing Companies
• Lending Companies
• Transfer Agents

Group D SEC Accredited CPA in Philippines

•  Companies not included above but are mandated by other regulatory agencies to have an independent auditor accredited by SEC.

Penalties for non-compliance

A corporation with financial statements required to be audited by an SEC-accredited independent certified public accountant in the Philippines who shall fail to comply shall be subject to fines or penalty by the SEC.  SEC may either deny acceptance of the audited financial statements signed by an independent CPA who is not accredited with the SEC, or simply impose fines or penalties.

To avoid being penalized, please see to it that the auditor is accredited by BOA and SEC. You may check SEC list from time to time through their website at – www.sec.gov.ph.

Disclaimer: This article is for general conceptual guidance only and is not a substitute for an expert opinion. Please consult your preferred tax and/or legal consultant for the specific details applicable to your circumstances.