Tax BlogFinancial Statements: Procedures & Requirements

May 2, 2016

The new procedures & requirements to Audit Financial Statements were issued by the Professional Regulatory Board of Accountancy in its Resolution No. 03 Series of 2016 . The main goal is to address the need to have professional competence in its preparation in accordance to the Accountancy Law and the Code of Ethics of Certified Public Accountants (CPA).

Here are the important things that you should ask your accountant:

1. Has my Financial Statement been prepared by a CPA who is accredited with the BOA?

Financial Statements preparation and disclosure notes can only be done by a Certified Public Accountant (CPA) who should be accredited with the Board of Accountancy (BOA). Gone are the days when companies can employ non-professional accounting staff to do their FS. While the companies still have the option of outsourcing their accounting services instead of employing a CPA, said CPA should be accredited by the BOA. Accreditation should be applied and as part of its requirement, Continuing Professional Development (CPD) should be complied.

2. Is there a Certificate for Compilation Services attached to my Financial Statement?

A Certificate for Compilation Services must be accomplished and submitted by the responsible CPA who prepared the FS and notes. This Certificate indicates that the responsibility in accomplishing the FS was faithfully complied with by the CPA as attested by his signature. This Certificate is now a requirement to be attached to annual statutory reports or FS being submitted to the Bureau of Internal Revenue (BIR) and Securities & Exchange Commission (SEC).

Note that these two new requirements for financial statements are optional for FS ending December 31, 2015 and subsequent periods until May 30, 2016. This resolution was implemented starting February 8, 2016 and is applicable for Financial Statements ending June 30, 2016 and all subsequent periods.

If you want to learn more about our tax and audit services and the new requirements to audit financial statements, do not hesitate to contact us.

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