BOA & SEC UPDATES

Key Highlights
Mark Chito D. Fajiculay, CPA
Managing Director, Powerhouseconsultants Company (PHC)
Co-Chair of Professional Development, PICPA-NMMC
Resource Speaker, Philippine Institute of Certified Public Accountants (PICPA)
Resident Resource Person, Inquirer Academy of Philippine Daily Inquirer
CPA Reviewer, Lecturer & Subject Matter Expert
BOA UPDATES
BOA Updates: Then
BOA Updates: Now & Next
THE SIX-POINT STRATEGY
Expanding Horizons, Leveling Up the Profession

To upgrade accountancy profession

in the Philippines to the levels
that exceed global standards in the
medium term.

To institute quality and governance

measures in light of practice of
accountancy and the profession
itself.
THE SIX-POINT STRATEGY
1. Institute quality and governance measures
 Enhancement of Continuing Professional Development
[Resolution Nos. 254-2017 | 358-2016]
Increasing the minimum CPD units to 120 units over 3-year
compliance period & changing thematic areas to competence
areas. Relaxing certain transitory provisions and extending
undertakings of CPD completion until December 31, 2018.
Setting minimum CPD units maximum CPD units for self-directed
or life-long learning at 48 units per PRC’s IRR on CPD Law
provisions. Conformance of 120 units is also anchored to IFAC
requirements being member-country of the said body.

 Accounting, Auditing and Accreditation Development

[BOA Resolution Nos. 18-2018 | 22-2018]
[BOA Resolution Nos. 03-2016 | 68-2016 | 295-2015]
Provisions about compilation certificate on financial statements
preparation with enforcement to follow for non-compliance. For
approval of 2016 IESBA Code of Ethics with NOCLAR of IFAC
endorsed by PICPA. Streamlining accreditation procedures and
requirements. Accreditation of partners including CPA
professional staff and creation of Expanded Auditor’s Report
Task Force (EAR) to monitor compliance.
THE SIX-POINT STRATEGY
1. Institute quality and governance measures
 Accounting and Auditing Standards Adoption
[BOA Resolution Nos. 19-2018| 154-2016 | 125-2016]
[BOA Resolution Nos. 124-2016| 70-2016 | 69-2016]
• Adoption of PFRS for Small Entities
• Amendments to PFRS 10, PFRS 12 and PAS 28
• Amendments to PAS 1
• Philippine Interpretations Committee PIC Q&A:
• P-I-C Financial Reporting Guidance on Common
Pitfalls & Application issues on Cash Flows Statement
• PFRS 16, Leases
• Amendments to PAS 7, Disclosure Initiative
• Amendments to PAS 12, Recognition of Deferred Tax
Assets for Unrealized Losses
• Effective date of amendments to PFRS 10,
Consolidated Financial Statements & PAS 28,
Investments in Associates and Joint Ventures
• Philippine Interpretations Committee (PIC) Q&A No.
2015-01 Conforming Changes to PIC Q&As – Cycle
2015
• P-I-C Guidance on Financial Reporting
• PSA 700 (Revised), Forming an Opinion and Reporting
on Financial Statements
• PSA 701 (Revised), Communicating Key Audit Matters
in the Independent Auditor’s Report
• PSA 705 (Revised), Modifications to the Opinion in the
Independent Auditor’s Report
• PSA 706 (Revised), Emphasis of Matter Paragraphs
and Other Matter Paragraphs in the Independent
Auditor’s Report
• PSA 720 (Revised), The Auditor’s Responsibilities
Relating to Other Information
• PSA 570 (Revised) Going Concern
• PSA 260 (Revised) Communications with those
charged with governance
• PSA 610 (Revised) Using the Work of Internal Auditors
and Related Working Arrangements
• PSAE 3410 Assurance Statements on Greenhouse
Financial Statements
• PSRS 4410 (Revised) Compilation Engagements
• PSRE 2410 (Revised) Engagements to Review
Historical Financial Statements
THE SIX-POINT STRATEGY
1. Institute quality and governance measures
 Major Initiatives in Integrity, Governance & Ethics
Entered partnership with Integrity Initiative Inc. Furthering the
evolving Code of Ethics and responding to Non-compliance
with Laws and Regulations (NOCLAR). Performing oversight
over the Accredited Professional Organization (APO) and
sectoral organizations and run after erring CPAs.

 Globalization Development
Continuing and working in-progress bilateral ASEAN Mutual
Recognition Arrangement (MRA) for Accountancy services
with the objective to mobilize accountants within ASEAN
members, enhances informational exchanges & networking
and promotes adoption of best practices on standards and
qualifications. Joining and qualifying the envisioning of IFAC
& other global accountancy organizations setting footprints
in Philippine accountancy profession.
International Federation of Accountants (IFAC)
Global organization for accountancy profession dedicated
to serving the public interest by strengthening the profession
and contributing to the development of strong international
economies with 175 members in 130 countries, 3 million
accountants and continuing.
THE SIX-POINT STRATEGY
2. Effectively regulate the profession
 Implementation of Quality Assurance Review (QAR)
Implement QAR based on BOA Resolution No. 244-2015 with the
final decisions of the Court and OSG. Organize Quality
Assurance Review Office (QARO) using consultants, interns and
inspectors. Focus QAR on ‘low-lying fruits’ such as ‘notarial
auditors’. Gradually conduct QAR inspections on risk-based
approach using 2009-2010 Manuals and PICPA Voluntary QAR
(V-QAR) methodology. Coordinate with SEC on its SOAR.
Establish network, partnerships & relationships with global and
regional audit regulators such as IFIAR and AARG and
inspectors and developmental partners. Transition strategy shall
be established and soft implementation shall be considered in
light of anticipated QAR programs.

 Erring CPAs and Schools or Firms Inspections

Based on January 2018 forum, there are around 50 schools
inspected and 451 accounting firms visited. Procedures on
administrative cases against erring CPAs are streamlined. Also,
the office visitation requirements have been modified in
accordance to BOA Resolution No. 22-2018 by submission of
sufficient documentation showing office premises & other
representations of capacity to render professional practice.
THE SIX-POINT STRATEGY
2. Effectively regulate the profession
THE SIX-POINT STRATEGY
2. Effectively regulate the profession
THE SIX-POINT STRATEGY
3. Enhance image and reputation of accounting professional

 Publications and Releases

Publishing and releasing ‘The News
Ledger’, the official news magazine of
the accountancy profession and
‘Highest Standards’, which is the official
technical journal of the Board of
Accountancy to reach greater number
of CPAs about updates and current
practices in the profession.
THE SIX-POINT STRATEGY
3. Enhance image and reputation of accounting professional

 Debit Credit column in the Business Mirror

Releasing of articles about certain issues and trends in
the accountancy profession that may impact general
public and businesses.

 Other activities
Releases of annual report and yearbook and Champion
CPAs coffee table book. Lead testimonials for the new
CPAs, pioneers and pillars of the profession. The
regulator also participated in the 75th Anniversary
Celebration of ASEAN. Releases of advisories, notices
and memoranda on different issues and concerns
affecting professional practice. Video release of ‘I am
Accountant’ introducing what the profession is and who
we are as partners of recognizing and protecting the
public interest in driving economy growth and helping
them in statutory compliance.
THE SIX-POINT STRATEGY
3. Enhance image and reputation of accounting professional

 95 Years Celebration of the Profession

The profession celebrates 95 years & the Board conducts
activities to share the success of professional practice for the
past years. Various activities are logo competition; Proclamation
of Malacañang of 95th year of the profession; commemorative
stamp; history of accountancy Profession and tidbits; anniversary
jingle or song; write-up or recognition of prominent
accountancy graduates from various schools; approval of
Accountancy Law amendments; showcasing the Filipino
accountant; conference and special events and some
marketing or publicity.
THE SIX-POINT STRATEGY
4. Enhance stakeholders’ involvement and cooperation

 Holding Accountancy Stakeholders’ Forum & dialogue with

affiliated Accountancy Certification Bodies

 Establishing academic and industry linkages

Partnership with developmental partners, organization of
various summit for academe administrators, educators &
government accountants, discussion with Cooperative
Development Authority on its financial reporting circulars,
assistance in implementing Tax Academy Law, Pursue and
obtain membership and/or interaction in UNCTAD-ISAR, IFIAR,
AOSSG, AARG, IFAC, AICPA, PCAOB, UN & OECD.
THE SIX-POINT STRATEGY
5. Institute structural changes
 Revision of Accountancy Law
 Structural changes – Setting audit thresholds into 3 categories. Practice of accountancy under limited
partnership form. Accredited professional organization and strengthening standard-setting bodies such as
AASC, FRSC and Accountancy Education Council.
 Mandate of ARO & BOA – Creation of Accounting Regulatory Office (ARO) and delineating its function from
BOA. Increasing number of BOA members. Prescribing mandate of QAR to ARO and its authority to enter into
MOA with other regulators. Accreditations enshrined to ARO and BOA only. Setting QAR fees and creating
special fund for it.
 Practice of accountancy – Definition in light of 3 new accountancy programs. Issuance of accreditations, not
necessarily licensing, for accountants under new accountancy programs. Need for oversight over ‘specialized
accountancy certification bodies’. Allowing public practice to foreign accountants pursuant to mutual
recognition agreement (MRA) and/or reciprocity.
 Examination & program matters – Insertion of new accounting tracks or programs. Outsourcing of questions in
data bank aside from preparation. Qualification of accounting teachers. Applicability of CPA board
examinations to foreign nationals from Philippine accounting schools under reciprocity agreement.
 Special provisions – Incentives on consolidation of SMPs. Exemptions of SMEs in accountancy regulatory rules.
Whistle-blower program. Mandatory membership of CPAs in audit committees. Other government CPA matters.
 Penalties and sanctions – more comprehensive sanctions provisions
THE SIX-POINT STRATEGY
5. Institute structural changes

CHED CMO No. 27 to 30

Four specialized accounting programs
beginning school year 2018-2019

 BS Accountancy
 BS Management
Accounting
 BS Internal Auditing
 BS Accounting
Information System
BS Accounting Technology (BSAT) shall
be discarded
THE SIX-POINT STRATEGY
5. Institute structural changes
THE SIX-POINT STRATEGY
5. Institute structural changes

 Accounting and Auditing Report on the Observance of Standards and

Codes (AA ROSC) by World Bank (WB)
 Quality Assurance is not currently in place
 Harmonize requirements of quality assurance among laws and regulations
 Rationalization of statutory audit thresholds among regulators
 Strengthening capacity of small and medium-sized practitioners (SMPs)
such as assistance on trainings, practice management, incentives for
networking and non-attest services offerings and rendering support for
digital and technical services.
 Onerous requirements of regulators on matters involving auditor
certifications, thresholds and inability of small and medium-sized entities
(SMEs) to afford audit fees
 Modernization of University-level accountancy education such as
specialized programs of study, the CPA passing rates, consistency of
education within ASEAN to support mutual recognition agreement (MRA)
and curriculum exemptions for foreign certificate providers
 Operational inefficiencies and matters involving effectiveness of GOCCs
THE SIX-POINT STRATEGY
6. Provide communication and assistance mechanisms
 Website
 Facebook
 Twitter
 Sectoral and Career Tracking Surveys
 Volunteer Program
 Information Technology System Project
 Notification system
 formation of the Technical and Secretariat Office
 organization of a Special Project Office
 Coordinate the giving of donated computers
THE SIX-POINT STRATEGY
6. Provide communication and assistance mechanisms
THE SIX-POINT STRATEGY
6. Provide communication and assistance mechanisms
THE SIX-POINT STRATEGY
6. Provide communication and assistance mechanisms
BOA UPDATES
BOA Updates: Then
BOA Updates: Now & Next
THE PROFESSIONAL REGULATORY BOARD
Meet the Members of the Board of Accountancy
THE REGULATOR & THE AIPO (formerly APO)
Board of Accountancy & AIPO plus Sectoral Organizations

OP DOLE PRC BOA

PICPA OTHERS

AIP0 ACPACI
ACPAPP
GACPA

NACPAE
THE ENVIRONMENT OF ACCREDITATIONS
Commerce & Industry-Public Practice-Academe

BOA ACCREDITATION

C&I PP Educ CPD

Compiler
BIR SEC Provider

BSP CDA

IC ERC Teacher

PCAB NEA
CONTINUING PROFESSIONAL DEVELOPMENT
The ‘Controversial’ 120 CPD Units
CONTINUING PROFESSIONAL DEVELOPMENT
The ‘Controversial’ 120 CPD Units

CPD –BOA RES 2016-358

Technical Competence Professional Skills Ethics, Values & Attitudes

30 units 5 units 5 units

2017 – 80 units 2018 – 100 units 2019 – 120 units

THE ACCOUNTANCY PROFESSION
The Objectives
THE ACCOUNTANCY PROFESSION
Declaration of Policy
THE ACCOUNTANCY PROFESSION
The Regulatory Framework
THE ACCOUNTANCY LANDSCAPE
The Current Landscape of Accountancy Education
THE ACCOUNTANCY LANDSCAPE
Past Results of CPA Licensure Examination (CPALE)
THE ACCOUNTANCY LANDSCAPE
What Should Be Done?
THE ACCOUNTANCY LANDSCAPE
The Status of CPA Licensure Examination (CPALE)
THE ACCOUNTANCY LANDSCAPE
Strategic Directions to Improve the Licensure Examination
THE ACCOUNTANCY LANDSCAPE
Strategic Directions to Improve the Licensure Examination
THE ACCOUNTANCY LANDSCAPE
Existing Regulations Affecting Practice of Profession
THE ACCOUNTANCY LANDSCAPE
Strategic Directions in the Regulation of Profession
THE ACCOUNTANCY LANDSCAPE
Strategic Directions in the Regulation of Profession
UPDATES ON CPA LICENSURE EXAMINATIONS
Changes in Taxation
UPDATES ON CPA LICENSURE EXAMINATIONS
Changes in Regulatory Framework for Business Transactions
UPDATES ON CPA LICENSURE EXAMINATIONS
Changes in Regulatory Framework for Business Transactions
UPDATES ON CPA LICENSURE EXAMINATIONS
Proposed Topics or Sub-topics Effective May 2019 CPALE

CORPORATIONS
 Securities Regulation Code
 SRC Rule 68, as amended
 Code of Corporate Governance
 SEC Memorandum Circulars (MCs) and Issuance

COOPERATIVES
 Membership

DATA PRIVACY ACT or REPUBLIC ACT NO. 10173

ELECTRONIC COMMERCE ACT or REPUBLIC ACT NO. 8792

UPDATES ON CPA LICENSURE EXAMINATIONS
Proposed Topics or Sub-topics Effective May 2019 CPALE

ANTI-MONEY LAUNDERING ACT

 Unlawful activities
 Covered persons or institutions
 Powers of Anti-Money Laundering Council

EASE OF DOING BUSINESS IN THE PHILIPPINES

UPDATES ON SPECIAL CONCERNS

 Globalization
 Digital and information technology
 Governance and ethics
 New regulatory requirements
 Effective business communication
UPDATES ON CPA LICENSURE EXAMINATIONS
Topics Integration in the Examination Courses
UPDATES ON CPA LICENSURE EXAMINATIONS
Proposed Modifications in the Format of Examinations

Gradual shift from Multiple Choice Questions to Situational or

Task-based Simulations Questions
Combining Theories and Practice
More focus on Applications and Analyses, less focus on
Remembering and Understanding
Technical Working Group (TWG) on Case Development
organized by the Board of Accountancy (BOA) and academe
or NACPAE (National Association of CPAs in Education
SEC UPDATES
Selected Memorandum Circulars
Sustainability Reporting
SEC Memorandum Circulars
Selected SEC Memorandum Circulars Highlighted

M.C. No. Title or Brief Description Date Issued

02-2016 Additional Requirement for Accreditation as Auditing Firm or Sole 11-Feb-16

Practitioner
21-2016 Adoption of New and Revised Auditing Standards and Standards on 09-Dec-16
Assurance Engagements and other Related Services (PSA 610; 260; 570;
700; 701; 705; 706; 720; PSAE 3410; PSRS 4410; and PSRE 2400)

04-2017 Term Limit of Independent Directors 10-Mar-17

09-2017 Rules & Regulations on the Implementation of Securities and Exchange 18-Aug-17
Commission (SEC) Oversight Assurance Review Inspection Program

10-2017 Adoption of New and Revised Accounting Standards & Interpretations 29-Aug-17
(Amendments to PFRS 4, Applying PFRS 9 with PFRS 4; Clarifications to
PFRS 15; PIC Q&A No. 2016-01; and PIC Q&A No. 2016-04)
SEC Memorandum Circulars
Selected SEC Memorandum Circulars Highlighted

M.C. No. Title or Brief Description Date Issued

01-2018 Adoption of Revised Auditing Standards and Amendments to Existing 09-Jan-18

Accounting Standards and Interpretations (PSA 800; 805; 810; PAS 40;
IFRIC 22; and Annual Improvements to PFRS 2014-2016 Cycle)

05-2018 Adoption of Philippine Financial Reporting Standards for Small Entities 26-Mar-18

06-2018 Adoption of New Accounting Standards & Amendments to Existing 06-Apr-18

Accounting Standards (PFRS 16; Amendment to PAS 7; and PAS 12)

07-2018 Amendment to Rule 38.2.7 of 2015 Implementing Rules and Regulation 20-Apr-18
of the Securities Regulation Code (SRC)

08-2018 1) Shareholders’ Approval on Any Change/s in the Company’s External 20-Apr-18

Auditor; 2) Audit Committee Composed Entirely of Board Members
SEC UPDATES
SELECTED MEMORANDUM CIRCULARS HIGHLIGHTED
M.C. No. Title or Brief Description Date Issued
01-2018 Adoption of Revised Auditing Standards and Amendments to 09-Jan-18
Existing Accounting Standards and Interpretations (PSA 800;
805; 810; PAS 40; IFRIC 22; and Annual Improvements to PFRS
2014-2016 Cycle)
05-2018 Adoption of Philippine Financial Reporting Standards for 26-Mar-18
Small Entities (PFRS for Small Entities)
06-2018 Adoption of New Accounting Standards & Amendments to 06-Apr-18
Existing Accounting Standards (PFRS 16; Amendment to PAS
7; and PAS 12)
07-2018 Amendment to Rule 38.2.7 of 2015 Implementing Rules and 20-Apr-18
Regulation of the Securities Regulation Code (SRC)
08-2018 1) Shareholders’ Approval on Any Change/s in the 20-Apr-18
Company’s External Auditor; 2) Audit Committee Composed
Entirely of Board Members
SEC UPDATES
SELECTED MEMORANDUM CIRCULARS HIGHLIGHTED
M.C. No. Title or Brief Description Date Issued
09-2018 Amendment of Guidelines and Procedures on the Use of 18-Jul-18
Corporate and Partnership Names

13-2018 Adoption of Accounting Standards and Interpretations 15-Oct-18

(Amendment to PFRS 9, PAS 28, PFRS Practice Statement 2
Guidance on Financial Reporting and PFRS 15)
15-2018 Guidelines for the protection of SEC Registered Non-Profit 07-Nov-18
Organizations from Money Laundering & Terrorist Financing
Abuse (“NPO Guidelines”)
16-2018 2018 Guidelines on Anti-Money Laundering & Combatting 07-Nov-18
the Financing of Terrorism for SEC Covered Institutions
17-2018 Revision of General Information Sheet (GIS) to Include 27-Nov-18
Beneficial Ownership Information
SEC Memorandum Circulars
S-O-A-R Inspection Program
 SOAR – SEC initiative of on-site review of quality control policies & procedures of accredited auditing companies with
equity or debt securities listed in an Exchange and a review of portions of audit work on selected audit engagements
of these firms from time to time.
 Implementing Body – Office of the General Accountant (OGA) of SEC following risk-based approach in selection of
engagements and firms subject to SOAR inspection. Inspection team shall be created to be supervised by OGA. OGA-
prepared Final Inspection Report (FIR) shall be submitted to Commission en banc for clearance before being released
to the subject firm.
 Scope – Office level review and Engagement level review shall be conducted. The former is based on compliance to
the 6 elements of quality control set forth by PSQC 1 while the latter refers to adherence on professional standards,
relevant regulatory frameworks involving audit matters and other considerations related to publicly-listed entities. It shall
be held once every 3 years. During triennial period, at least 1 engagement will be selected. Duration of on-site
inspection shall be at least 2 weeks.
 Reporting – please see steps in reporting
1. Inspection Team issues Letter of Findings (LOF)
2. Firm replies on LOF
3. Inspection Team issues Preliminary Inspection Report (PIR)
4. Firm replies on PIR (optional)
5. Inspection Team issues FIR duly approved by en banc
SEC UPDATES
Selected Memorandum Circulars
Sustainability Reporting
Sustainability Reporting
Expanding financial metrics involving non-financial metrics
Sustainability Reporting
Expanding financial metrics & involving non-financial metrics
Sustainability Reporting – reporting on non-financial information involving issues related to Environmental, social,
governance (ESG); Ethics; Human Capital; Environment, Health & Safety (EHS); and Corporate responsibility.
Sustainability Reporting
Pro-forma Reportorial Disclosures
Sustainability Reporting
Pro-forma Reportorial Disclosures
Sustainability Reporting
Pro-forma Reportorial Disclosures
Sustainability Reporting
Pro-forma Reportorial Disclosures
Sustainability Reporting
Pro-forma Reportorial Disclosures
Sustainability Reporting
Pro-forma Reportorial Disclosures
Sustainability Reporting
Pro-forma Reportorial Disclosures
Sustainability Reporting
Pro-forma Reportorial Disclosures
Sustainability Reporting
Pro-forma Reportorial Disclosures
 THE END
- - - Thank You - - -
BOA & SEC UPDATES
REFERENCES & AUTHORITATIVE LITERATURES
 Regulators Update Forum by BOA Commissioner Hon. Joel Tan-Torres held last July 24, 2018
 BOA, Six Point Strategy and BOA Updates by former BOA Chair, Hon. Joel Tan-Torres
 The Securities & Exchange Commission: Promoting Integrity and Quality in Corporate and
Sustainability Reporting by CFOs and External Auditors by SEC Commissioner Hon.
Antonieta Fortuna-Ibe held last July 20, 2018
 BOA Updates by current BOA Chair, Hon. Noe Quiñanola held last November 23, 2018 at
73rd PICPA Annual National Convention (ANC), Bacolod City
 Integrated Reporting, Integrated Thinking and Sustainability Reporting by International
Federation of Accountants (IFAC) published 2017

Disclaimer:
This material has been prepared for seminar or general purposes only and not intended for
professional advice. Please refer to relevant regulatory framework and regulator for details. Neither this
is a substitute for reading the regulations themselves. Thus, participants should refer to appropriate
regulations and issuance and evaluate its relevance and impact on current practice.
 Valenzuela City | Quezon City | Taguig City

Website: powerhouseconsultants.me.pn
Email: powerhouseconsultants21@gmail.com
mcdfcpa@gmail.com [MDF]

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Mobile: +63 936 677 6241 [MDF]
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