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Republic of the Philippines

Congress of the Philippines

Metro Manila

Twelfth Congress

Third Regular Session

Begun and held in Metro Manila, on Monday, the twenty-eight day of July, two

thousand three.

Republic ct !o. "#"$ May %&, #''(

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Be it enacted by the Senate and ouse of Representati7es of the Philippines

in Congress asse8bled9

Section %. Shorts Title. - This act shall be :nown as the ;Philippine

ccountancy ct of #''(;

Section #. 2eclaration of Policy. - The State recogni

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>ualitati7e, world class and globally co8petiti7e though in7iolable, honest,

e?ecti7e, and credible licensure e=a8inations and though regulatory

8easures, progra8s and acti7ities that foster their professional growth and

de7elop8ent.

Section &. /b@ecti7es. - This ct shall pro7ide and go7ern9

The standardiualied person to render professional

ser7ices as a certied public accountantA or o?ering or rendering, or both or

8ore than one client on a fee basis or otherwise, ser7ices as such as the

audit or 7erication of nancial transaction and accounting recordsA or the

preparation, signing, or certication for clients of reports of audit, balance

sheet, and other nancial, accounting and related schedules, e=hibits,

state8ent of reports which are to be used for publication or for credit

purposes, or to be led with a court or go7ern8ent agency, or to be used for

any other purposesA or to design, installation, and re7ision of accountingsyste8A or the preparation of inco8e ta= returns when related to accounting

proceduresA or when heEshe represent clients before go7ern8ent agencies on

ta= and other 8atters relating to accounting or render professional assistance

in 8atters relating to accounting procedures and the recording and

presentation of nancial facts or data.

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bD Practice in Co88erce and ndustry - shall constitute in a person in7ol7ed

in decision 8a:ing re>uiring professional :nowledge in the science of

accounting, or when such e8ploy8ent or position re>uires that the holder

thereof 8ust be a certied public accountant.

cD Practice in )ducationEcade8e - shall constitute in a person in an

educational institution which in7ol7e teaching of accounting, auditing,

8anage8ent ad7isory ser7ices, ancF, business law, ta=ation and other

technically related sub@ect9 Pro7ided, That 8e8bers of the ntegrated Bar of

the Philippines 8ay be allowed to teach business law and ta=ation sub@ects.

dD Practice in *o7ern8ent - shall constitute in a person who holds, or is

appointed to, a position in an accounting professional group in go7ern8ent or

in an go7ern8ent-owned andEor controlled corporation, including thoseperfor8ing proprietary functions, where decision 8a:ing re>uires

professional :nowledge in the science of accounting, or where a ci7il ser7ice

eligibility as a certied public accountant is a prere>uisite.

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Section G. The Professional Regulatory Board of ccountancy and its

Co8position. - The Professional Regulatory Board of ccountancy, hereinafter

referred to as Board, under the super7ision and ad8inistrati7e control of the

Professional Regulation Co88ission, hereinafter referred to as the

Co88ission, shall be co8posed of a Chair8an and si= 3D 8e8bers to be

appointed by the President of the Philippines fro8 a list of three &D

reco88endees for each position and ran:ed by the Co88ission fro8 a list of

7e GD no8inees for each position sub8itted by the accredited national

professional organi

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Section 3. Iualications of a 8e8bers of the Professional Regulatory Board. -

8e8ber of the Board shall, at the ti8e of hisEher appoint8ent, posses the

following >ualications9

Must be a natural-born citi

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To prescribed and adopt the rules and regulations necessary for carrying out

the pro7isions of this ctA

To super7ise the registration, licensure and practice of accountancy in the

PhilippinesA

To ad8inister oaths in connection with the ad8inistration of this ctA

To issue, suspend, re7o:e, reinstate the Certicate of Registration for the

practice of the accountancy professionA

To adopt an oHcial seal of the BoardA

To prescribe andEor adopt a Code of )thics for the practice of accountancyA

To 8onitor the conditions a?ecting the practice of accountancy and adopt

such 8easures, including pro8ulgation of accounting and auditing standards,rules and regulations and best practices as 8ay be dee8ed proper for the

enhance8ent and 8aintenance of high professional, ethical, accounting and

auditing standards9 That do8estic accounting and auditing standards rules

and regulations shall include the international accounting and auditing

standards, and generally accepted best practicesA

To conduct an o7ersight into the >uality of audits of nancial state8ents

though a re7iew of the >uality control 8easures instituted by auditors in

order to ensure co8pliance with the accounting and auditing standards andpractices,

To in7estigate 7iolations of this act and the rules and regulations pro8ulgated

hereunder and for the purpose, to issue su88ons, subpoena and subpoena

ad testicandu8 and subpoena duces tecu8 to 7iolator or witness thereof

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and co8pel their docu8ents in connection therewith9 Pro7ided, That the

Board upon appro7al of the Co88ission 8ay, sub@ect to such rules and

regulations that 8ay be pro8ulgated to i8ple8ent this section, delegate the

fact-nding aspect of such in7estigations to the accredited national

professional organiuestions for the

licensure e=a8ination which shall strictly be within the scope of the syllabi of

the sub@ects for e=a8inations as well as ad8inister, correct and release the

result of the licensure e=a8inationsA

To ensure the coordination with the Co88ission of the igher )ducation

C)2D or other authoriuire8ents of the course prescribed by the C)2 or other authori

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which 8ay be i8plied fro8, or which are necessary or incidental to the

carrying out of, the e=press powers granted to the Board to achie7e the

ob@ecti7es and purposes of this ct.

The policies resolution, rules and regulations issued or pro8ulgated by the

Board shall be sub@ect to re7iew and appro7al of the Co88ission. owe7er,

the BoardLs decisions, resolutions or orders rendered in the ad8inistrati7e

cases shall be sub@ect to re7iew only if on appeal.

Section %'. d8inistrati7e Super7isions of the Board, Custodian of its

Records, Secretariat and Support Ser7ices. - The Board shall be under the

ad8inistrati7e super7ision of the Co88ission. ll records of the Board,

including applications for e=a8ination and ad8inistrati7e and other

in7estigati7e cases conduced by the Board shall be under the custody of theCo88ission. The Co88ission shall designate the secretary of the Board and

shall pro7ide the secretariat and other support ser7ices to i8ple8ent the

pro7isions of this ct.

Section %%. *rounds for Super7ision or Re8o7al of Me8bers of the Board. -

The President of the Philippines, upon the reco88endation of the

Co88ission, after the gi7ing the concerned 8e8ber an opportunity to

defend hi8self in proper ad8inistrati7e in7estigation to be conducted by he

Co88ission, 8ay suspend or re8o7e any 8e8ber of the following grounds9

!eglect of 2uty or inco8petenceA

6iolation or tolerance of any 7iolation of this ct and itLs i8ple8entation rules

and regulations or the Certied Public ccountantLs Code of )thics and the

technical and professional standards of practice for certied public

accountantA

0inal @udg8ent of cri8es in7ol7ing 8oral turpitudeA and

Manipulation or rigging of the certied public accountantLs licensure

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e=a8ination results, disclosure of secret and condential infor8ation in the

e=a8ination >uestions prior to the conduct of the said e=a8ination or

ta8pering of grades.

Section %#. nnual Report. - The Board shall, at the close of each calendar

year, sub8it an annual report to the President of the Philippines though the

Co88ission gi7ing the detailed account of its proceedings and

acco8plish8ent during the year and 8a:ing reco88endations for the

adoption of 8easures that will upgrade and i8pro7e the conditions a?ecting

the practice of accountancy in the Philippines.

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Section %&. The Certied Public ccountant )=a8inations. - ll applicants for

registration for the practice of accountancy shall be re>uired to undergo a

licensure e=a8ination to be gi7en by the Board in such places and dates as

the Co88ission 8ay be designate sub@ect to co8pliance with the

re>uire8ents prescribed by the Co88ission in accordance with Republic ct

!o. $"$%.

Section %(. Iualications of pplicant for )=a8inations. - ny person

applying for e=a8ination shall establish the following re>uisites to the

satisfaction of the Board that heEshe9

is a 0ilipino citi

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has not been con7icted of any cri8inal o?ence in7ol7ing 8oral turpitude.

Section %G. Scope of )=a8ination. - The licensure e=a8ination for certiedpublic accountants shall co7er, but are not li8ited to, the following sub@ects9

Theory of ccounts

Business aw and Ta=ation

Manage8ent Ser7ices

uditing Theory

uditing Proble8s

Practical ccounting Proble8

Practical ccounting Proble8

The Board, sub@ect to the appro7al of the Co88ission, 8ay re7ise or e=clude

any of the sub@ects and their syllabi, and add new ones as the need arises.

Section %3. Rating in the icensure )=a8ination. - To be >ualied as ha7ing

passed the licensure e=a8ination for accountants, a candidate 8ust obtain a

general a7erage of se7enty 7e percent GND, with no grade lower than

si=ty-7e percent 3GND in any gi7en sub@ect. n the e7ent a candidate

obtains the rating of se7enty-7e percent GND and abo7e in at least a

8a@ority of sub@ects as pro7ided for in this ct, heEshe shall recei7e a

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conditional credit for the sub@ects passed9 Pro7ided, That a candidate shall

ta:e an e=a8ination in the re8aining sub@ects within two #D years fro8

preceding e=a8ination9 Pro7ided, further, That if the candidate fails to obtain

at least a general a7erage of se7enty-7e percent GND and a rating of at

least si=ty-7e percent 3GND in each of the sub@ects ree=a8ined, heEshe

shall be considered as failed in the entire e=a8ination.

Section %. Report of Rating. - The Board shall sub8it to the Co88ission the

rating obtained by each candidate within ten %'D calendar days after the

e=a8ination, unless e=tended for @ust cause. +pon the release of the results

of the e=a8ination, the Co88ission shall send by 8ailing the rating recei7ed

by each e=a8inee at hisEher gi7en address using the 8ailing en7elop

sub8itted during the e=a8ination.

Section %$. 0ailing Candidates to Ta:e Refresher Course. - ny candidate who

fails in two #D co8plete Certied Public ccountant Board )=a8inations shall

be dis>ualied fro8 ta:ing another set of e=a8inations unless heEshe sub8it

e7idence to the satisfaction of the Board that heEshe enrolled in and

co8pleted at least twenty-four #(D units of sub@ect gi7en in the licensure

e=a8ination.

0or purposes of this ct, the e=a8ination in which the candidate was

conditioned together with the re8o7al e=a8ination on the sub@ect in whichheEshe failed shall be counted as one co8pete e=a8ination.

Section %". /ath. - ll successful candidates in the e=a8ination shall re>uired

to ta:e an oath of professional before any 8e8ber of the Board or before any

go7ern8ent oHcial authori

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that the person na8ed therein is entitled to the practice of the profession

with all the pri7ileges appurtenant thereto. The said certicate shall re8ain in

full force and e?ect until withdrawn, suspended or re7o:ed in accordance

with this ct.

Professional dentication Card bearing the registration nu8ber date of

issuance, e=piry date, duly signed by the chairperson of the Co88ission,

shall li:ewise be issued to e7ery registrant renewable e7ery three &D years.

Section #%. Roster of Certied Public ccountant. - roster showing the

na8es and place of business of all registered certied public accountants

shall be prepared and updated by the Board, and copies thereof shall be

8ade a7ailable to any party as 8ay dee8ed necessary.

Section ##. ndication of Certicate of Registration, dentication Card and

Professional Ta= Receipt. - The certied public ccountant shall be re>uired to

indicate hisEher certicate of registration nu8ber and date of issuance, the

duration of 7alidity, including the Professional Ta= Receipt nu8ber on the

docu8ents heEshe signs, uses or issues in connection with the practice of

hisEher profession.

Section #&. Refusal to ssue Certicate of Registration and Professional

dentication Card. - The Board shall not register and issue a certicate of

registration and professional identication Card to any successful e=a8inee

con7icted by the court of co8petent @urisdiction of a cri8inal o?ence

in7ol7ing 8oral turpitude or guilty of i88oral and dishonorable conduct to

any person or unsound 8ind. n the e7ent of refusal to issue certicate for

any reason, the Board shall gi7e the applicant a written state8ent setting

forth the reasons for such action, which state8ent shall be incorporated in

the record of the Board.

Section #(. Suspension and Re7ocation of Certicate of Registration and

Professional dentication Card and Cancellation of Special Per8it. - The

Board shall ha7e the power, upon the notice and hearing, to suspend or

re7o:e the practitionerLs certicate of registration and professional

identication card or suspend hisEher fro8 the practice of hisEher profession

or cancel hisEher special per8it for any of the causes or ground 8entioned

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under Section #& of this ct or any of the pro7isions of this ct, and its

i8ple8enting rules and regulations, the certied Public ccountantLs Code of

)thics and the technical and professional standards of practice for certied

public accountants.

Section #G. Reinstate8ent, Reissuance and Replace8ent of Re7o:ed or ost

Certicates. - The Board 8ay, after the e=piration of two #D years fro8 the

date of re7ocation of a certicate of registration and upon application and for

reasons dee8ed proper and suHcient, reinstate the 7alidity of a re7o:ed

certicate of registration and in so doing, 8ay, in its discretion, e=e8pt the

applicant fro8 ta:ing another e=a8ination.

new certicate of registration to replace lost, destroyed, or 8utilated

certicateElicense 8ay be issued, sub@ect to the rules and pro8ulgated by theBoard and the Co88ission, upon the pay8ent of the re>uired fees.

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Section #3. Prohibition in the Practice of ccountancy. - !o person shall

practice accountancy in this country, or use the title ;Certied Public

ccountant;, or use the abbre7iated title ;CP; or display or use any title,

sign, card, ad7ertise8ent or other de7ice to indicate such person practices or

o?ers to practice accountancy, or is a certied public accountant, unless such

person shall ha7e recei7ed fro8 the Board a certicate of

registrationEProfessional license and be issued a professional identication

card or a 7alid te8poraryEspecial per8it duly issued to hi8Eher by the Board

and the Co88ission.

Section #. 6ested Rights. - Certied Public ccountants Registered 4hen

This aw is Passed. - ll certied public accountants registered at the ti8e

this law ta:es e?ect shall auto8atically be registered under the pro7isions

hereof, sub@ect, howe7er, to the pro7isions herein set forth as to future

re>uire8ents. Certicate of RegistrationEProfessional license held by such

persons in good standing shall ha7e the sa8e license force and e?ect as

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though issued after the passage of this ct.

Section #$. i8itation of the Practice of Public ccountancy. - Single

practitioners and partnerships for the practice of public accountancy shall be

registered certied public accountants in the Philippines9 Pro7ided, That fro8

the e?ecti7ity of this ct, a certicate of accreditation shall be issued to

certied public accountant in public practice only upon showing, in

accordance with rules and regulations pro8ulgated by the Board and

appro7ed by the Co88ission, that such registrant has ac>uired a 8ini8u8 of

three &D years 8eaningful e=perience in any of the areas of public practice

including ta=ation9 Pro7ide, further, that this re>uire8ent shall not apply to

those already granted a certicate of accreditation prior to the e?ecti7ity of

this ct. The Security and )=change Co88ission shall not register any

corporation organi

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Section &%. ccreditation to Practice Public ccountancy. - Certied public

accountants, r8s and partnerships of certied public accountants, engaged

in the practice of public accountancy, including partners and sta? 8e8bers

thereof, shall registered with the Co88ission and the Board, such

registration to be renewed e7ery three &D years9 Pro7ided, That sub@ect to

the appro7al of the Co88ission, the Board shall pro8ulgate rules andregulations for the i8ple8entation of registration re>uire8ents including the

fees and penalties for 7iolation thereof.

Section . Continuing Professional )ducation CP)D Progra8. - ll certied

public accountants shall abide by the re>uire8ents, rules and regulations on

continuing professional education to be pro8ulgated by the Board, sub@ect to

the appro7al of the Co88ission, in coordination with the accredited national

professional organi

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foreign certied public accountant called for consultation or for specic

purpose which, in the @udg8ent of the Board, is essential for the de7elop8ent

of the country9 Pro7ided, That hisEher practice shall be li8ited only for the

particular wor: that heEshe is being engaged9 Pro7ided, further, That there isno 0ilipino certied public accountant >ualied for such consultation or

specic purposesA

foreign certied public accountant engaged as professor, lecturer or critic in

elds essential to accountancy education in the Philippines and hisEher

engage8ent is conned to teaching onlyA and

foreign certied public accountant who is an internationally recogni

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Section &$. nterpretation of this ct. - !othing in this ct shall be construed

to e?ect or pre7ent the practice or any other legally recogni

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of this ct under the rules and regulations to be pro8ulgated by the Board

sub@ect to the appro7al by the Co88ission.

Section (#. Separability Clause. - f any clause, pro7isions, paragraph or parts

thereof shall be declared unconstitutional or in7alid, such @udg8ent shall not

a?ect, in7alidate or i8pair any other part hereof, but shall be 8erely conned

to the clause, pro7isions, paragraph or part directly in7ol7ed in the

contro7ersy in which such @udg8ent has been rendered.

Section (&. Repealing Clause. - Presidential 2ecree !o. 3"# is hereby

repealed and all other laws, orders, rules and regulations or resolutions or

partEs thereof inconsistent with the pro7isions of this ct are hereby repealed

or 8odied accordingly.

Section ((. )?ecti7ity. - This ct shall ta:e e?ect after 0ifteen %GD days

following its publication in the /Hcial *a

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/SCR *. 1B)S

Secretary of Senate

R/B)RT/ P. !OR)!/

Secretary *eneral

ouse of Represenati7es