How to Submit Audited Financial Statement Philippines

September 8, 2022

In the Philippines, submitting an audited financial statement Philippines to the Bureau of Internal Revenue (BIR) and the Securities and Exchange Commission (SEC) is a mandatory compliance requirement for businesses. This ensures transparency, accountability, and adherence to financial reporting standards. The process requires meticulous preparation, coordination with accredited professionals, and strict compliance with deadlines. Understanding how to submit an audited financial statement Philippines is essential for companies to avoid penalties and maintain regulatory compliance. This guide outlines eligibility, preparation, submission processes, deadlines, possible amendments, and the importance of professional assistance, with Triple i Consulting as a trusted partner in navigating this complex regulatory landscape.

Who Must Submit Audited Financial Statement Philippines Requirements?

Determining which businesses must submit an audited financial statement Philippines to the Bureau of Internal Revenue (BIR) and the Securities and Exchange Commission (SEC) is the first step to ensuring compliance. Eligibility depends on specific thresholds and regulatory requirements, which vary according to business type and financial standing.

Corporations and Partnerships: Businesses registered as corporations or partnerships with gross annual sales or receipts exceeding PHP 3,000,000 must submit an audited financial statement Philippines to the BIR, as mandated by the National Internal Revenue Code.
SEC-Registered Entities: Stock and non-stock corporations with total assets or liabilities of PHP 600,000 or more, foreign branches with PHP 1,000,000 in assets, or regional operating headquarters with PHP 1,000,000 in revenues are required to file AFS with both the BIR and SEC.
Exemptions for COA-Audited Entities: Companies audited by the Commission on Audit (COA) may file an affidavit and COA confirmation letter instead of the standard AFS submission, but they must still follow specific reporting requirements.
Public Companies and SRC Entities: Entities under Section 17.2 of the Securities Regulation Code (SRC), such as publicly listed companies, must file audited financial statements with stricter timelines and added disclosures.
Sole Proprietorships with High Revenues: Sole proprietorships with gross annual sales or receipts above PHP 3,000,000 are also required to file AFS with the BIR for tax compliance.
Special Cases: Companies undergoing mergers, acquisitions, or significant capital structure changes may need to submit additional or modified audited financial statements, depending on BIR and SEC regulations.

How to Prepare Audited Financial Statements for BIR Submission

Preparing audited financial statements is essential to meeting BIR and SEC standards. This process requires collaboration with accredited professionals and adherence to established accounting principles.

Engage an Accredited CPA: AFS must be prepared by a Certified Public Accountant (CPA) accredited by the Board of Accountancy and, for SEC submissions, by the SEC, ensuring compliance with Philippine Financial Reporting Standards (PFRS).
Maintain Accurate Records: Businesses should keep detailed financial records throughout the year, including ledgers, receipts, and bank statements, to streamline the audit process and minimize discrepancies.
Reconcile Financial Data: Before the audit, reconcile accounts for accuracy, addressing unrecorded transactions or mismatched balances to ensure the AFS reflects actual financial performance.
Include Required Components: AFS must include a balance sheet, income statement, cash flow statement, statement of changes in equity, and notes to financial statements, all certified by an independent auditor.
Adhere to PFRS Standards: The CPA must ensure the AFS complies with PFRS, which governs accounting principles for revenue recognition, asset valuation, and financial disclosures in the Philippines.
Coordinate Early with Auditors: Start the audit process well before deadlines to allow sufficient time for reviews and corrections, address complex transactions, and reduce the risk of errors.

Steps to Submit Audited Financial Statement Philippines to the BIR

Submitting an audited financial statement Philippines to the Bureau of Internal Revenue (BIR) requires strict attention to documentation and electronic filing procedures. Following these steps helps ensure compliance and prevents costly penalties:

Complete the Audit Process
Have your audited financial statement Philippines finalized by an accredited CPA, including the auditor’s report and the Statement of Management’s Responsibility, which confirms the accuracy of financial information.
Use the BIR eAFS System
Submit the AFS electronically through the BIR’s eAFS portal (eafs.bir.gov.ph), as outlined in Revenue Memorandum Circular (RMC) No. 43-2021. All required documents must be uploaded in PDF format.
Obtain a Transaction Reference Number
Once successfully submitted, the BIR issues a Transaction Reference Number or a “received” stamp. This is required for subsequent SEC filing.
File the Annual Income Tax Return (AITR)
Attach the AFS to your AITR—typically Form 1702 for corporations or Form 1701 for partnerships and sole proprietorships—submitted through the BIR’s eBIRForms system.
Verify Submission
Confirm receipt of the AFS and AITR through the eAFS portal or by contacting your assigned BIR Revenue District Office (RDO).
Retain Copies
Keep both digital and physical copies of the AFS, AITR, and confirmation documents for at least five years, as required for possible BIR audits or inquiries.

Submitting AFS to the SEC: Key Requirements and Process

Filing AFS with the SEC involves navigating the mandatory electronic submission platform and meeting specific requirements. Understanding the process is vital for timely and accurate compliance.

Use the SEC eFAST Platform: As of 2024, the SEC mandates electronic submission of AFS through the Electronic Filing and Submission Tool (eFAST), eliminating hard-copy submissions for all registered entities.
Include BIR Confirmation: Attach the BIR’s Transaction Reference Number or “received” stamp to the AFS submission, as the SEC requires proof of prior BIR filing.
Submit Additional Disclosures: Include disclosures on equity, retained earnings, and corporate governance reports, as the SEC requires for stock corporations and certain non-stock entities.
Register for eFAST: Companies must create an account on the eFAST portal, ensuring accurate company details and authorized signatories for seamless submission.
Address Special Filings: For events like mergers, acquisitions, or capital changes, submit amended AFS or additional reports as specified in SEC regulations, such as Memorandum Circular No. 01, series of 2025.
Verify Submission Status: After submission, check the eFAST portal for confirmation and promptly address any discrepancies or requests for clarification to avoid penalties.

Deadlines and Penalties for AFS BIR and SEC Submission

Meeting AFS submission deadlines is critical to avoid financial and legal repercussions. Both the BIR and SEC enforce strict timelines and penalties for non-compliance.

BIR Filing Deadline: AFS and the AITR must be submitted to the BIR on or before the 15th day of the fourth month following the end of the fiscal year, typically April 15 for calendar-year companies.
SEC Filing Schedule: The SEC follows a staggered schedule based on the last digit of the company’s SEC registration number, generally within the last two weeks of April, as outlined in Memorandum Circular No. 01, series of 2025.
Public Company Deadlines: Public companies or those under SRC Section 17.2 must file AFS with the SEC within 105 days from the fiscal year-end, a stricter timeline than private entities.
Late Filing Penalties: Late submissions to the BIR incur penalties starting at PHP 1,000, plus interest. At the same time, the SEC accepts late filings from July 8 with penalties calculated from the original due date.
Non-Compliance Consequences: Failure to file AFS can lead to fines, suspension of business permits, or legal action by the BIR or SEC, impacting business operations and reputation.
Extensions and Relief: In exceptional cases, such as natural disasters, the BIR or SEC may issue circulars extending deadlines, but businesses must monitor official announcements for eligibility.

Why Professional Assistance from Triple i Consulting is Essential

The complexity of AFS submission makes professional support indispensable for businesses aiming to comply with BIR and SEC regulations. Triple i Consulting offers expert guidance to simplify this intricate process.

Navigating Complex Regulations: The AFS submission process involves intricate compliance with BIR and SEC regulations, requiring expertise to avoid errors that could lead to penalties or delays.
Ensuring PFRS Compliance: Triple i Consulting employs accredited CPAs who ensure AFS adheres to PFRS, reducing the risk of rejections or audit issues.
Streamlining eAFS and eFAST Processes: With extensive experience in BIR’s eAFS and SEC’s eFAST systems, Triple i Consulting simplifies electronic submissions, saving businesses time and effort.
Managing Deadlines and Penalties: The firm monitors filing schedules and ensures timely submissions, helping clients avoid costly penalties and maintain compliance.
Handling Amendments and Special Filings: For errors or special cases like mergers, Triple i Consulting provides guidance on restatements, board resolutions, and coordination with regulators to ensure accuracy.
Trusted Expertise: As a leading provider in the Philippines, Triple i Consulting offers tailored solutions for businesses of all sizes, making the complex AFS process manageable and efficient.

Wrapping Up

Submitting Audited Financial Statements to the BIR and SEC is a vital responsibility for businesses in the Philippines, ensuring transparency and compliance with tax and corporate regulations. By engaging accredited CPAs, maintaining accurate records, and adhering to electronic submission processes like eAFS and eFAST, companies can meet deadlines and avoid penalties. The complexity of preparing and filing AFS, coupled with evolving regulations, underscores the value of professional assistance. Triple i Consulting is a trusted provider that offers expertise to streamline this process.