How to Submit Audited Financial Statements (AFS) to the SEC in the Philippines

April 23, 2025

In the Philippines, submitting audited financial statements to the Securities and Exchange Commission (SEC) is a critical compliance requirement for many businesses, ensuring transparency and accountability in corporate financial reporting. This process, governed by strict regulations, involves meticulous preparation, certification, and timely filing to meet the SEC and the Bureau of Internal Revenue (BIR) standards. This article provides a comprehensive guide on navigating the submission of audited financial statements in the Philippines, detailing the steps, requirements, and best practices for compliance. Tailored for businesses operating in the Philippines, it outlines the importance of financial statement audits, deadlines, and the role of professional services like Triple i Consulting in streamlining this complex process.

What Are Audited Financial Statements and Why Are They Required?

Audited financial statements are formal documents that present a company’s financial position, performance, and cash flows, independently verified by a certified public accountant (CPA) to ensure accuracy and compliance with accounting standards. In the Philippines, these statements are mandated by the SEC and BIR for specific entities to promote transparency, protect stakeholders, and maintain trust in the financial markets. The Revised Securities Regulation Code (SRC) Rule 68 and the National Internal Revenue Code (NIRC) outline the thresholds and conditions businesses must submit these reports. Understanding the purpose and scope of audited financial statements is essential for compliance.

Definition and Components: Audited financial statements include the balance sheet, income statement, cash flow statement, and statement of changes in equity, accompanied by notes and an auditor’s report. These documents provide a snapshot of a company’s financial health, certified for accuracy.
Regulatory Mandate: The SEC requires audited financial statements from stock and non-stock corporations with total assets or liabilities of PHP 600,000 or more and foreign branches with assets or revenues exceeding PHP 1,000,000. The BIR mandates them for entities with gross annual sales exceeding PHP 3,000,000.
Purpose of Audits: Audits ensure that financial statements are free of material misstatements, enhancing credibility for investors, creditors, and regulators. They also help detect fraud and ensure compliance with tax laws.
Stakeholder Trust: By submitting audited financial statements, companies demonstrate accountability, fostering confidence among shareholders, lenders, and the public.
Legal Consequences: Failure to submit audited financial statements can result in penalties, fines, or rejection of filings by the SEC, potentially disrupting business operations.

Who Prepares Audited Financial Statements and What Qualifications Are Needed?

Preparing audited financial statements in the Philippines requires collaboration between a company’s internal accounting team and an independent, accredited CPA. The CPA conducts the financial statement audit, ensuring compliance with Philippine Financial Reporting Standards (PFRS) and Philippine Standards on Auditing (PSAs). The SEC and BIR have strict requirements for auditors’ qualifications, emphasizing the need for expertise and accreditation. Companies must carefully select their auditors to avoid penalties for non-compliance.

Role of the Company: The company’s accounting team compiles financial records, including ledgers, receipts, and transaction logs, to form the basis of the financial statements. These records must be accurate and complete.
Independent CPA’s Role: An accredited CPA reviews the company’s financial data, performs audit procedures (e.g., sample testing, third-party confirmations), and issues an audit report certifying the statements’ accuracy.
Accreditation Requirements: Auditors must be accredited by the Board of Accountancy (BOA) and, for SEC filings, by the SEC itself. Additional accreditations from agencies like the Bangko Sentral ng Pilipinas (BSP) or the Insurance Commission may be required for specific industries like banking or insurance.
Auditor Independence: To ensure unbiased reporting, the CPA must be independent, with no financial or personal ties to the company.
Penalties for Non-Compliance: The SEC may reject financial statements signed by a non-accredited CPA, leading to fines or delays in compliance.

Why Are Financial Statements Audited and What Benefits Do They Offer?

Financial statements are audited to verify their accuracy, ensure compliance with regulatory standards, and enhance their reliability for decision-making. In the Philippines, the audit process is a cornerstone of corporate governance, mandated to safeguard stakeholders’ interests and maintain the financial system’s integrity. Beyond compliance, audits offer strategic benefits, such as identifying financial weaknesses and improving internal controls. Companies prioritizing high-quality audits often gain a competitive edge in securing investments and partnerships.

Ensuring Accuracy: Audits detect errors, misstatements, or fraud, ensuring that financial statements accurately reflect the company’s performance and position.
Regulatory Compliance: Audits confirm adherence to PFRS, PSAs, and SEC/BIR regulations, reducing the risk of penalties or legal issues.
Enhancing Credibility: Audited financial statements are trusted by investors, banks, and regulators, making it easier to secure loans, attract investors, or negotiate contracts.
Improving Internal Controls: Auditors often recommend improving accounting processes, strengthening financial management, and reducing risks.
Strategic Decision-Making: Reliable financial data from audits helps management make informed decisions about budgeting, expansion, or cost management.

When Are Audited Financial Statements Required and What Are the Deadlines?

The requirement to submit audited financial statements in the Philippines depends on specific thresholds set by the SEC and BIR and the company’s fiscal year. Timely submission is critical to avoid penalties, and deadlines vary based on the company’s SEC registration number, fiscal year-end, and whether it is a publicly listed entity. Businesses must plan their audit and filing processes to meet these deadlines, which are strictly enforced through the SEC’s Electronic Filing and Submission Tool (eFAST).

SEC Thresholds: Stock and non-stock corporations with total assets or liabilities of PHP 600,000 or more and foreign branches with assets or revenues of PHP 1,000,000 or more must submit audited financial statements annually.
BIR Thresholds: Companies with gross annual sales, earnings, or receipts exceeding PHP 3,000,000 must file audited financial statements as part of their Annual Income Tax Return (AITR).
Filing Deadlines for Calendar Year-End: The BIR deadline for companies ending their fiscal year on December 31 is April 15 of the following year. The SEC uses a staggered schedule based on the last digit of the SEC registration number, typically starting in April.
Non-Calendar Year-End: Companies with a different fiscal year-end must file within 120 calendar days from the end of their fiscal year for SEC submissions or by the 15th day of the fourth month for BIR filings.
Public Companies: Corporations listed on the Philippine Stock Exchange (PSE) or covered under Section 17.2 of the SRC must file within 105 calendar days after their fiscal year-end, attached to their annual reports (SEC Form 17-A).
Exceptions: Companies audited by the Commission on Audit (COA) may be exempt from standard deadlines, provided they submit an affidavit and COA confirmation letter. Late filings are accepted starting July 8, with penalties calculated from the original due date.

How to Prepare Audited Financial Statements for SEC Submission

Preparing audited financial statements requires careful coordination between the company, its accounting team, and the external auditor. The process involves compiling financial data, ensuring compliance with PFRS, securing necessary certifications, and submitting through the SEC’s eFAST platform. Given the complexity, businesses must maintain diligent bookkeeping and engage qualified professionals to avoid errors or delays. The following steps outline the preparation process to ensure a smooth submission.

Maintain Accurate Records: Throughout the fiscal year, record all financial transactions, including revenues, expenses, assets, and liabilities, in compliance with PFRS. Use accounting software for efficiency and accuracy.
Engage an Accredited CPA: Select a CPA accredited by the BOA and SEC to conduct the financial statement audit. Verify their credentials to ensure compliance with regulatory requirements.
Compile Financial Statements: Prepare the balance sheet, income statement, cash flow statement, and statement of changes in equity, along with detailed notes explaining key financial items.
Conduct the Audit: The CPA performs audit procedures, such as analytical reviews, document inspections, and third-party confirmations, to verify the accuracy of the financial statements. Management must review and approve any proposed adjustments.
Secure Certifications: Obtain a Statement of Management’s Responsibility (SMR) signed by authorized officers, affirming the accuracy of the financial statements. The CPA issues an audit report certifying the statements.
Prepare Supporting Documents: Include additional SEC requirements, such as disclosures on equity, retained earnings, and a general form for financial statements, as prescribed by Revised SRC Rule 68.
Submit to BIR First: The audited financial statements must be stamped “received” by the BIR or include a BIR Transaction Reference Number if filed through the e-AFS system. This is a prerequisite for SEC submission.
File via eFAST: Register with the SEC’s eFAST platform, upload the audited financial statements and supporting documents, and ensure submission within the prescribed deadline. Hard copies are no longer accepted.

Challenges in Submitting Audited Financial Statements and Why Professional Help Is Essential

Submitting audited financial statements to the SEC is challenging, from navigating complex regulations to meeting tight deadlines. Errors in preparation, non-compliance with PFRS, or failure to use accredited auditors can lead to rejections, penalties, or delays that disrupt business operations. Given these complexities, engaging professional services like Triple i Consulting is critical to ensure accuracy and compliance. As a trusted provider in the Philippines, Triple i Consulting offers expert guidance to simplify the process and mitigate risks.

Regulatory Complexity: The SEC and BIR have distinct requirements, such as specific disclosures and certifications, which can be challenging to navigate without expert knowledge.
Tight Deadlines: Staggered SEC filing schedules and BIR deadlines require precise planning, especially for companies with non-calendar fiscal years or large transaction volumes.
Auditor Accreditation: Selecting a qualified, SEC-accredited CPA is essential, as non-accredited auditors can lead to rejected filings and penalties.
Technical Errors: Inaccurate financial data, incomplete disclosures, or improper formatting can result in SEC rejections, requiring costly corrections.
Resource Constraints: Small and medium enterprises (SMEs) often lack the in-house expertise or resources to prepare audited financial statements efficiently.
Why Choose Triple i Consulting: Triple i Consulting, accessible via its website, specializes in accounting and compliance services, offering tailored solutions for SEC and BIR filings. Our experienced CPA team ensures accurate preparation, timely submission, and adherence to all regulatory requirements, saving businesses time and reducing compliance risks.

Final Insights

Submitting audited financial statements to the SEC in the Philippines is a vital process that demands precision, expertise, and adherence to strict regulatory standards. By understanding the requirements, engaging qualified auditors, and leveraging professional services, businesses can confidently navigate this complex task. The benefits of compliance extend beyond avoiding penalties, enhancing credibility, and fostering stakeholder trust. Professional assistance is a strategic investment to ensure accuracy and efficiency for companies seeking to streamline their annual financial statement submissions in the Philippines.

Is Assistance Available?

Yes, Triple i Consulting, a trusted provider of accounting and compliance services, can guide your business through the intricate process of preparing and submitting audited financial statements. Contact us today to schedule an initial consultation with one of our experts: