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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 uly, two

thousand three!

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

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Be it enacted by the Senate and 0ouse of Representati9es of the Philippines

in Congress asse:bled;

Section '! Shorts Title! - This act shall be cellent,


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qualitati9e, world class and globally co:petiti9e though in9iolable, honest,

e?ecti9e, and credible licensure e>a:inations and though regulatory

:easures, progra:s and acti9ities that foster their professional growth and

de9elop:ent!

Section (! 1b@ecti9es! - This "ct shall pro9ide and go9ern;

The standardization and regulation of accounting educationA

The e>a:ination of registration of certied public accountantsA and

The super9ision, control, and regulation of the practice of accountancy in the

Philippines!

Section *! Scope of Practice! - The practice of accountancy shall include, but

not li:ited to, the following;

aD Practice of Public "ccountancy - shall constitute a person, be it hisEher

indi9idual capacity, or as a sta? :e:ber in an accounting or auditing r:,

holding out hi:selfEherself as one s returns when related to accounting

proceduresA or when heEshe represent clients before go9ern:ent agencies on

ta> and other :atters relating to accounting or render professional assistance

in :atters relating to accounting procedures and the recording and

presentation of nancial facts or data!


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bD Practice in Co::erce and /ndustry - shall constitute in a person in9ol9ed

in decision :a


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Section 5! Iualications of a :e:bers of the Professional Regulatory Board! -

" :e:ber of the Board shall, at the ti:e of hisEher appoint:ent, posses the

following qualications;

Must be a natural-born citizen and a resident of the PhilippinesA

Must be a duly registered Certied Public "ccountant with at least ten ')D

years of wor< e>perience in any scope of practice of accountancyA

Must be a good :oral character and :ust not ha9e been con9icted of cri:es

in9ol9ing :oral turpitudeA and

Must not ha9e any pecuniary interest, directly or indirectly, in any school,

college, uni9ersity or institution conferring an acade:ic degree necessary for

ad:ission to the practice of accountancy or where re9iew classes in

preparation for the licensure e>a:ination are being o?ered or conducted, nor

shall heEshe be a :e:ber of the faculty or ad:inistration thereof at a ti:e of

hisEher appoint:ent to the Board!

Section J! Ter: of 1Hce! - The Chair:an and Me:bers of the Board shallhold oHce for a ter: of three (D years! "ny 9acancy occurring within the

ter: of a :e:ber shall be lled up for the une>pired portion of the ter: only!

#o person who has ser9ed two %D successi9e co:plete ter:s shall be eligible

for reappoint:ent until the lapse of one 'D year! "ppoint:ent to ll up an

e>pired ter: is not to be considered as a co:plete ter:!

Section &! Co:pensation and "llowances of the Board! - The chair:an and

the :e:bers of the Board shall recei9e co:pensation and allowances

co:parable to that being recei9ed by the chair:an and :e:bers of e>istingregulatory boards under the Co::ission as pro9ided for in the eneral

"ppropriate "ct!

Section $! Powers and 2unctions of the Board! - The Board shall e>ercise the

following specic powers, functions and responsibilities;


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

the pro9isions of this "ctA

To super9ise the registration, licensure and practice of accountancy in the

PhilippinesA

To ad:inister oaths in connection with the ad:inistration of this "ctA

To issue, suspend, re9o


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and co:pel their docu:ents in connection therewith; Pro9ided, That the

Board upon appro9al of the Co::ission :ay, sub@ect to such rules and

regulations that :ay be pro:ulgated to i:ple:ent this section, delegate the

fact-nding aspect of such in9estigations to the accredited national

professional organization of certied public accountant; Pro9ided, further,

That the Board andEor the Co::ission :ay adopt their ndings of fact as:ay be see:s tAK

The Board :ay, :uto propio in its discretion, :ay such in9estigations as it

dee: necessary to deter:ine whether any person has 9iolated any

pro9isions of this law, any accounting or auditing standard or rules duly

pro:ulgated by the Board as part of the rules go9erning the practice of

accountancyA

To issue a cease or desist order to any person, associations, partnership or

corporation engaged in 9iolation of any pro9ision of this "ct, any accounting

or auditing standards or rules of duly pro:ulgated by the Board as part of the

rules go9erning the practice of accountancy in the PhilippinesA

To punish for conte:pt of the Board, both direct and indirect, in accordance

with the pertinent pro9ision of and penalties prescribed by the Rules of CourtA

To prepare, adopt, issue or a:end the syllabi of the sub@ects for e>a:inations

in consultation with the acade:e, deter:ine and prepare questions for the

licensure e>a:ination which shall strictly be within the scope of the syllabi of

the sub@ects for e>a:inations as well as ad:inister, correct and release the

result of the licensure e>a:inationsA

To ensure the coordination with the Co::ission of the 0igher +ducation

C0+4D or other authorized go9ern:ent oHces that all higher educational

instruction and o?ering of accountancy co:ply with the policies, standards

and require:ents of the course prescribed by the C0+4 or other authorized

go9ern:ent oHces in the areas of curriculu:, faculty, library and facilitiesA

and

To e>ercise such other powers as :ay be pro9ided by law as well as those


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which :ay be i:plied fro:, or which are necessary or incidental to the

carrying out of, the e>press powers granted to the Board to achie9e the

ob@ecti9es and purposes of this "ct!

The policies resolution, rules and regulations issued or pro:ulgated by the

Board shall be sub@ect to re9iew and appro9al of the Co::ission! 0owe9er,

the BoardLs decisions, resolutions or orders rendered in the ad:inistrati9e

cases shall be sub@ect to re9iew only if on appeal!

Section ')! "d:inistrati9e Super9isions of the Board, Custodian of its

Records, Secretariat and Support Ser9ices! - The Board shall be under the

ad:inistrati9e super9ision of the Co::ission! "ll records of the Board,

including applications for e>a:ination and ad:inistrati9e and other

in9estigati9e cases conduced by the Board shall be under the custody of theCo::ission! The Co::ission shall designate the secretary of the Board and

shall pro9ide the secretariat and other support ser9ices to i:ple:ent the

pro9isions of this "ct!

Section ''! rounds for Super9ision or Re:o9al of Me:bers of the Board! -

The President of the Philippines, upon the reco::endation of the

Co::ission, after the gi9ing the concerned :e:ber an opportunity to

defend hi:self in proper ad:inistrati9e in9estigation to be conducted by he

Co::ission, :ay suspend or re:o9e any :e:ber of the following grounds;

#eglect of 4uty or inco:petenceA

8iolation or tolerance of any 9iolation of this "ct and itLs i:ple:entation rules

and regulations or the Certied Public "ccountantLs Code of +thics and the

technical and professional standards of practice for certied public

accountantA

2inal @udg:ent of cri:es in9ol9ing :oral turpitudeA and

Manipulation or rigging of the certied public accountantLs licensure


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e>a:ination results, disclosure of secret and condential infor:ation in the

e>a:ination questions prior to the conduct of the said e>a:ination or

ta:pering of grades!

Section '%! "nnual Report! - The Board shall, at the close of each calendar

year, sub:it an annual report to the President of the Philippines though the

Co::ission gi9ing the detailed account of its proceedings and

acco:plish:ent during the year and :aa:inations! - "ll applicants for

registration for the practice of accountancy shall be required to undergo a

licensure e>a:ination to be gi9en by the Board in such places and dates as

the Co::ission :ay be designate sub@ect to co:pliance with the

require:ents prescribed by the Co::ission in accordance with Republic "ct

#o! &$&'!

Section '*! Iualications of "pplicant for +>a:inations! - "ny person

applying for e>a:ination shall establish the following requisites to the

satisfaction of the Board that heEshe;

is a 2ilipino citizenA

is of good :oral characterA

is a holder of the degree of Bachelor of Science in "ccountancy conferred by

the school, college, acade:y or institute duly recognized andEor accredited

by the C0+4 or other authorized go9ern:ent oHcesA and


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has not been con9icted of any cri:inal o?ence in9ol9ing :oral turpitude!

Section 'G! Scope of +>a:ination! - The licensure e>a:ination for certiedpublic accountants shall co9er, but are not li:ited to, the following sub@ects;

Theory of "ccounts

Business .aw and Ta>ation

Manage:ent Ser9ices

"uditing Theory

"uditing Proble:s

Practical "ccounting Proble: /

Practical "ccounting Proble: //

The Board, sub@ect to the appro9al of the Co::ission, :ay re9ise or e>clude

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

Section '5! Rating in the .icensure +>a:ination! - To be qualied as ha9ing

passed the licensure e>a:ination for accountants, a candidate :ust obtain a

general a9erage of se9enty 9e percent JGND, with no grade lower than

si>ty-9e percent 5GND in any gi9en sub@ect! /n the e9ent a candidate

obtains the rating of se9enty-9e percent JGND and abo9e in at least a

:a@ority of sub@ects as pro9ided for in this "ct, heEshe shall recei9e a


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conditional credit for the sub@ects passed; Pro9ided, That a candidate shall

taa:ination in the re:aining sub@ects within two %D years fro:

preceding e>a:ination; Pro9ided, further, That if the candidate fails to obtain

at least a general a9erage of se9enty-9e percent JGND and a rating of at

least si>ty-9e percent 5GND in each of the sub@ects ree>a:ined, heEshe

shall be considered as failed in the entire e>a:ination!

Section 'J! Report of Rating! - The Board shall sub:it to the Co::ission the

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

e>a:ination, unless e>tended for @ust cause! pon the release of the results

of the e>a:ination, the Co::ission shall send by :ailing the rating recei9ed

by each e>a:inee at hisEher gi9en address using the :ailing en9elop

sub:itted during the e>a:ination!

Section '&! 2ailing Candidates to Taa:inations shall

be disqualied fro: taa:inations unless heEshe sub:it

e9idence to the satisfaction of the Board that heEshe enrolled in and

co:pleted at least twenty-four %*D units of sub@ect gi9en in the licensure

e>a:ination!

2or purposes of this "ct, the e>a:ination in which the candidate was

conditioned together with the re:o9al e>a:ination on the sub@ect in whichheEshe failed shall be counted as one co:pete e>a:ination!

Section '$! 1ath! - "ll successful candidates in the e>a:ination shall required

to ta


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that the person na:ed therein is entitled to the practice of the profession

with all the pri9ileges appurtenant thereto! The said certicate shall re:ain in

full force and e?ect until withdrawn, suspended or re9opiry date, duly signed by the chairperson of the Co::ission,

shall li


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under Section %( of this "ct or any of the pro9isions of this "ct, and its

i:ple:enting rules and regulations, the certied Public "ccountantLs Code of

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

public accountants!

Section %G! Reinstate:ent, Reissuance and Replace:ent of Re9opiration of two %D years fro: the

date of re9ocation of a certicate of registration and upon application and for

reasons dee:ed proper and suHcient, reinstate the 9alidity of a re9oe:pt the

applicant fro: taa:ination!

" new certicate of registration to replace lost, destroyed, or :utilated

certicateElicense :ay be issued, sub@ect to the rules and pro:ulgated by theBoard and the Co::ission, upon the pay:ent of the required fees!

"RT/C.+ /8

PR"CT/C+ 12 "CC1T"#C3

Section %5! Prohibition in the Practice of "ccountancy! - #o person shall

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

"ccountant=, or use the abbre9iated title =CP"= or display or use any title,

sign, card, ad9ertise:ent or other de9ice to indicate such person practices or

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

person shall ha9e recei9ed fro: the Board a certicate of

registrationEProfessional license and be issued a professional identication

card or a 9alid te:poraryEspecial per:it duly issued to hi:Eher by the Board

and the Co::ission!

Section %J! 8ested Rights! - Certied Public "ccountants Registered 6hen

This .aw is Passed! - "ll certied public accountants registered at the ti:e

this law ta


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though issued after the passage of this "ct!

Section %&! .i:itation of the Practice of Public "ccountancy! - Single

practitioners and partnerships for the practice of public accountancy shall be

registered certied public accountants in the Philippines; Pro9ided, That fro:

the e?ecti9ity 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 pro:ulgated by the Board and

appro9ed by the Co::ission, that such registrant has acquired a :ini:u: of

three (D years :eaningful e>perience in any of the areas of public practice

including ta>ation; Pro9ide, further, that this require:ent shall not apply to

those already granted a certicate of accreditation prior to the e?ecti9ity of

this "ct! The Security and +>change Co::ission shall not register any

corporation organized for the practice of public accountancy!

Section %$! 1wnership of 6or


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Section ('! "ccreditation to Practice Public "ccountancy! - Certied public

accountants, r:s and partnerships of certied public accountants, engaged

in the practice of public accountancy, including partners and sta? :e:bers

thereof, shall registered with the Co::ission and the Board, such

registration to be renewed e9ery three (D years; Pro9ided, That sub@ect to

the appro9al of the Co::ission, the Board shall pro:ulgate rules andregulations for the i:ple:entation of registration require:ents including the

fees and penalties for 9iolation thereof!

Section (%! Continuing Professional +ducation CP+D Progra:! - "ll certied

public accountants shall abide by the require:ents, rules and regulations on

continuing professional education to be pro:ulgated by the Board, sub@ect to

the appro9al of the Co::ission, in coordination with the accredited national

professional organization of certied public accountants or any duly

accredited educational institutional! 2or this purpose, a CP+ Council is herebycreated to i:ple:ent the CP+ progra:!

Section ((! Seal and se of Seal! - "ll license certied public accountants

shall obtain and use a seal of a design prescribed by the Board bearing the

registrantLs na:e, registration nu:ber and title! The auditors reports shall be

sta:ped with the said seal, indicating therein hisEher current Professional Ta>

Receipt PTRD nu:ber, dateEplace of pay:ent when led with go9ern:ent

authorities or when used professionally!

Section (*! 2oreign Reciprocity! - Sub@ect or citizen of foreign countries :ay

be allowed to practice accountancy in the Philippines in accordance with the

pro9isions of e>isting laws, international treaty obligations including :utual

recognition agree:ent entered into by the Philippines go9ern:ent with other

countries! " person who is not a citizen of the Philippines shall not be allowed

to practice accountancy in the Philippines unless heEshe can pro9e, in the

:anner pro9ided by the Rules of Court that, specic pro9ision of law country

of which heEshe is a citizen, sub@ect or national ad:its citizens of the

Philippines to the practice of the sa:e profession without restriction!

Section (G! Co9erage of Te:poraryESpecial Per:its! - SpecialEte:porary

per:it :ay be issued by the Board sub@ect to the appro9al of the Co::ission

and pay:ent of the fees the latter has prescribed and charged thereof to the

following persons;


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" foreign certied public accountant called for consultation or for specic

purpose which, in the @udg:ent of the Board, is essential for the de9elop:ent

of the country; Pro9ided, That hisEher practice shall be li:ited only for the

particular wor< that heEshe is being engaged; Pro9ided, further, That there isno 2ilipino certied public accountant qualied 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

engage:ent is conned to teaching onlyA and

" foreign certied public accountant who is an internationally recognizede>pect or with specialization in any branch of accountancy and hisEher

ser9ice is essential for the ad9ance:ent of accountancy in the Philippines!

"RT/C.+ 8

P+#". "#4 2//#". PR18/S/1#S

Section (5! Penal Pro9ision! - "ny person who shall 9iolate any of the

pro9isions of this "ct or any of its i:ple:enting rules and regulations as

pro:ulgated by the Board sub@ect to the appro9al of the Co::ission, shall

upon con9iction, be punished by a ne of not less than 2ifty Thousand Pesos

G),)))!))D or by i:prison:ent for a period not e>ceeding two %D years or

both!

Section (J! /:ple:enting Rules and Regulations! - 6ithin #inety $)D daysafter the e?ecti9ity of this "ct, the Board, sub@ect to the appro9al of the

Co::ission and in coordination with the accredited national professional

organization of certied public accountants, shall adopt and pro:ulgate such

rules and regulations to carry out the pro9isions of this "ct and which shall be

e?ecti9e 2ifteen 'GD days following their publication in the 1Hcial azette or

in any of the :a@or daily newspaper of general circulation!


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Section (&! /nterpretation of this "ct! - #othing in this "ct shall be construed

to e?ect or pre9ent the practice or any other legally recognized profession!

Section ($! +nforce:ent of this "ct! - /t shall be pri:ary duty of the

Co::ission and the Board to e?ecti9ity enforce the pro9isions of this "ct! "ll

duly constituted law enforce:ent agencies and oHcers of national,

pro9incial, city or :unicipal go9ern:ent or of any political subdi9ision

thereof, shall upon the call or request of the Co::ission or the Board, render

assistance in enforcing the pro9isions of this "ct and to prosecute any person

9iolating the pro9isions of the sa:e! The Secretary of ustice or his duly

designated representati9e shall act as legal ad9iser to the Co::ission and

the Board and shall render legal assistance as :ay be necessary in carrying

out the pro9isions of this "ct!

"ny person :ay bring before the Co::ission, Board of the afore:entioned

oHcers of the law, cases of illegal practice or 9iolations of this "ct co::itted

by any person or party!

The Board shall assist the Co::ission in ling the appropriate charges

though the concerned prosecution oHce in accordance with law and Rules of

Court!

Section *)! 2unding Pro9ision! - The chairperson of the Professional

Regulation Co::ission shall i::ediately include the Co::issionLs progra:s

the i:ple:entation of this "ct, the funding of which shall be included in the

annual eneral "ppropriations "ct!

Section *'! Transitory Pro9ision! - The incu:bent chair:an and :e:bers of

the Board shall continue to ser9e in their respecti9e positions under the ter:sfor they ha9e been appointed under Presidential 4ecree #o! 5$%, without the

need of new appoint:ents!

"ll graduates with Bachelors 4egree, Ma@or in "ccounting shall be allowed to

ta


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of this "ct under the rules and regulations to be pro:ulgated by the Board

sub@ect to the appro9al by the Co::ission!

Section *%! Separability Clause! - /f any clause, pro9isions, paragraph or parts

thereof shall be declared unconstitutional or in9alid, such @udg:ent shall not

a?ect, in9alidate or i:pair any other part hereof, but shall be :erely conned

to the clause, pro9isions, paragraph or part directly in9ol9ed in the

contro9ersy in which such @udg:ent has been rendered!

Section *(! Repealing Clause! - Presidential 4ecree #o! 5$% is hereby

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

partEs thereof inconsistent with the pro9isions of this "ct are hereby repealed

or :odied accordingly!

Section **! +?ecti9ity! - This "ct shall ta


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1SC"R ! 3"B+S

Secretary of Senate

R1B+RT1 P! #"O"R+#1

Secretary eneral

0ouse of Represenati9es

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