Wednesday, March 2, 2016

PRC BOA Resolution No. 03, Series of 2016 entitled "Requiring the Submission of Certificate by the Responsible Certified Public Accountants on the Compilation Services for the Preparation of Financial Statements and Notes Thereto"

The bureau just issued Revenue Memorandum Circular No. 21-2016 circularizing the Professional Regulatory Board of Accountancy Resolution No. 03, Series of 2016 entitled "Requiring the Submission of Certificate by the Responsible Certified Public Accountants on the Compilation Services for the Preparation of Financial Statements and Notes Thereto."


PRC BOA Resolution No. 03 Series of 2016:

SECTION 1. Preparation of the Financial Statements (FS) and Notes to the FS. - 

The preparation and presentation of financial information of an entity in accordance with an applicable financial reporting framework and reports as required by accounting and auditing standards is a practice of accountancy in commerce and industry and therefore shall be prepared by a Certified Public Accountant ("CPA").

The CPA preparing these documents shall either be (1) CPA/s employed by the organizations ("CPA employee") or (2) CPA/s contracted by the organizations to perform said service (contracted CPA).

If a contracted CPA shall be preparing the FS and notes to the FS, said CPA shall not be the same CPA who shall be rendering the attest services for the organization.

SECTION 2. Prohibition for CPAs Handling the Attest Services to Prepare or Assist in the Preparation of FS and Notes to the FS. - 

Due to the self-review threat or risk as mentioned in paragraph 200.5 of Section 200 of the Code of Ethics, CPAs in public practice are prohibited from preparing or assisting in the preparation of FS and notes to the FS of their clients engaged them to render attest services for the same documents.

CPAs who shall violate this provision shall be subject to stern sanctions by the Board.

SECTION 3. Certificate on the Compilation Services for Preparation of FS and Notes to the FS

The Certificate on the preparation  of FS and notes to the FS shall be prepared and signed by the CPA who is tasked to assist management in the preparation and presentation of financial information of an entity in accordance with an applicable financial reporting framework and reports as required by accounting and auditing standards. The format prescribed in "ANNEX A" shall be used for this purpose.

The Certificate shall be attached to the audited FS that are to be submitted to the regulatory offices.

The Certificate shall be prepared only for issuers which/who have gross sales or revenues exceeding Ten Million Pesos (Php10,000,000.00) for a particular accounting year.

However, the rules prescribed in all other sections of this Resolution shall apply to all issuers of FS.

Please refer http://www.bir.gov.ph/images/bir_files/internal_communications_2/RMCs/PRB_CPA_Reso2016_003_e.pdf  of the full text of Professional Regulatory Board of Accountancy Resolution No. 03, Series of 2016 entitled "Requiring the Submission of Certificate by the Responsible Certified Public Accountants on the Compilation Services for the Preparation of Financial Statements and Notes Thereto."




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