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AUDITING THEORY > AT - PHILIPPINE ACCOUNTANCY ACT OF 2004 > Flashcards

AT - PHILIPPINE ACCOUNTANCY ACT OF 2004 Flashcards

1
Q

RA 9298 is known as?

A

The Philippine Accountancy Act of 2004

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2
Q

What are the objectives of RA 9298?

A

a. Standardization and regulation of accounting education
b. Examination and registration of CPAs
c. Supervision,control, and regulation of the practice of accountancy in the Philippines

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3
Q

When shall a position involving the supervision of recording financial transactions, preparations of FS, and coordination with external auditors be occupied by a duly registered CPA?

A

Any position in any private business/company whose:

a. Paid-up capital is at least PHP 5,000,000 OR,
b. Annual revenue of PHP 10,000,000

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4
Q

May members of the Integrated Bar of the Philippines be allowed to teach business law and taxation?

A

Yes.

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5
Q

The dean/department chairman/any equivalent position that supervises the Bachelors of Science in Accountancy must be occupied only by a duly registered CPA. True or False?

A

True.

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6
Q

Discuss the composition of the Board of Accountancy and the nomination of its members.

A

The BoA shall be composed of a CHAIRMAN and SIX (6) MEMBERS to be APPOINTED BY THE PRESIDENT OF THE PHILIPPINES from a LIST OF THREE (3) RECOMMENDEES FOR EACH POSITION and ranked by the COMMISSION from a list of FIVE (5) NOMINEES FOR EACH POSITION SUBMITTED BY APO.

APO shall submit its nominations with complete documentation to PRC within 60 days prior to the expiry of term of chairman or member. Failure by APO to submit will result to PRC, in consultation with BoA, to submit to the President 3 nominees.

The four sectors in the practice of Accountancy shall as much as possible be equitably represented in the Board.

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7
Q

What is APO?

A

Accredited National Profession Organization for CPAs.

It is the integrated national professional organization of CPAs accredited by the Board and PRC.

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8
Q

What are the four sectors in the practice of accountancy?

A
  1. Practice in Public Accountancy
  2. Practice in Commerce and Industry
  3. Practice in Education/Academe
  4. Practice in Government
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9
Q

Discuss the vice-chairmanship of the BoA.

A

A vice-chairman shall be elected from among the members for a term of ONE YEAR.

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10
Q

What are the qualifications of a member of the BoA?

A
  1. Natural-born citizen and resident of Philippines
  2. Duly registered CPA with at least TEN YEARS OF EXPERIENCE IN ANY SCOPE OF PRACTICE OF ACCOUNTANCY.
  3. Must be of good moral character and not convicted of crimes involving moral turpitude.
  4. Must NOT HAVE ANY PECUNIARY INTEREST IN ANY SCHOOL, COLLEGE, UNIVERSITY conferring an academic degree necessary for the admission to the practice of accountancy or review classes, nor be a member of any faculty
  5. Must not be a director or officer of APO at the time of appointment.
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11
Q

What is the term of office for the chairman and members of BoA?

A

3 years. Any vacancy occurring within the term shall be filled up only for the unexpired portion of the term.

A person who has SERVED TWO SUCCESSIVE COMPLETE TERMS AS CHAIRMAN OR MEMBER SHALL NOT BE ELIGIBLE FOR REAPPOINTMENT UNTIL THE LAPSE OF ONE YEAR.

NO PERSON SHALL SERVE IN THE BOARD FOR MORE THAN TWELVE (12) YEARS.

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12
Q

The accounting standard setting body created by PRC and BoA is known as?

A

Financial Reporting Standards Council (FRSC)

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13
Q

The auditing standard setting body created by PRC and BoA is known as?

A

Auditing and Assurance Standards Council (AASC)

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14
Q

What is the composition of the FRSC?

A

FRSC shall be composed of a total of FIFTEEN MEMBERS WITH A CHAIRMAN.

BoA - 1
SEC - 1
BSP - 1
BIR - 1
CoA - 1 
Public Practice - 2
Commerce and Industry - 2 
Academe/Education - 2
Government - 2
Major organization composed of prepares and users of FS - 1

For a total of 14 plus a chairman.

Chairman and members serve for a term of THREE YEARS, RENEWABLE FOR ANOTHER TERM.

The chairman and members shall be appointed by PRC upon the recommendation of BoA in coordination with APO.

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15
Q

What is the composition of AASC?

A

AASC shall be composed of a total of FIFTEEN MEMBERS WITH A CHAIRMAN.

BoA - 1
SEC - 1
BSP - 1
CoA - 1 
An association or organization of CPAs in active public practice of accounting - 1
Public Practice - 6
Commerce and Industry - 1 
Academe/Education - 1
Government - 1

For a total of 14 plus a chairman.

Chairman and members serve for a term of THREE YEARS, RENEWABLE FOR ANOTHER TERM.

The chairman and members shall be appointed by PRC upon the recommendation of BoA in coordination with APO.

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16
Q

Discuss the Education Technical Council.

A

Education Technical Council (ETC) shall have the following functions:

a. determine the minimum standard curriculum for the study of accountancy for all schools
b. establishing teaching standards
c. monitor the progress of the program on the study of accountancy
d. periodic evaluation of performance of educational institutions offering accountancy.

ETC shall be composed of 7 members with a chairman
BoA - 1
Public Practice - 1
Commerce and Industry - 1
Academe/education - 2
Government - 1

For a total of 6 plus a chairman.

The chairman and members of the ETC shall be appointed by the Commission upon recommendation by the BoA in coordination with APO. The chairman and members shall serve for a term of 3 years.

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17
Q

What are the grounds for suspension/removal of members of the board?

A

The President of the Philippines, upon recommendation by the PRC, may suspend/remove any member of the BoA for:

a. Neglect of duty/incompetence
b. Violation/tolerance of any violation of RA 9298/CPE
c. Final judgment of crimes involving MORAL TURPITUDE
d. Manipulation/rigging of the CPALE results or disclosure of confidential information regarding the examination questions.

18
Q

The BoA submits an annual report to whom and for what purpose?

A

BoA submits an annual report to the President of the Philippines giving a detailed account of its PROCEEDINGS AND ACCOMPLISHMENTS DURING THE YEAR and making RECOMMENDATIONS THAT WILL IMPROVE THE CONDITIONS AFFECTING THE PRACTICE OF ACCOUNTANCY IN THE PHILIPPINES.

19
Q

RA 8981 is known as?

A

“PRC Modernization Act of 2000.”

20
Q

What are the qualifications for an applicant of CPALE?

A

a. Filipino Citizen
b. Of good moral character
c. holder of BSA degree conferred by a CHED accredited institution.
d. Has not been convicted of any criminal offense involving MORAL TURPITUDE.

21
Q

What documents shall be submitted upon application for CPALE?

A

a. Certificate of live birth from NSO
b. Marriage contract from NSO for married female applicants
c. College diploma
d. Baccalaureate TOR
e. NBI Clearance
f. Others as BoA may require

22
Q

When shall the BoA submit the ratings of the CPALE?

A

Within 10 calendar days from the date of examination unless extended for just cause.

23
Q

When does the certificate of registration expire?

A

The certificate of registration shall remain in full force and effect until withdrawn, suspended, revoked in accordance with RA 9298.

24
Q

When does the professional ID card expire?

A

The professional ID card must be renewed every 3 years.

25
Q

When can BoA refuse to issue a certificate of registration/professional ID card to a successful examinee?

A

a. convicted by a competent court of a criminal offense involving moral turpitude
b. Guilty of immoral or dishonorable conduct
c. any person of unsound mind

26
Q

When can BoA suspend/revoke certificate of registration/professional ID card to a successful examinee?

A

a. convicted by a competent court of a criminal offense involving moral turpitude
b. Guilty of immoral or dishonorable conduct
c. any person of unsound mind
d. unprofessional/unethical conduct
e. malpractice
f. violation of RA 9298

27
Q

When can BoA reinstate/reissue revoked certificates of registration?

A

After the expiration of 2 years from the date of revocation of the certificate and upon application and for reasons deemed proper and sufficient.

28
Q

How many years of meaningful experience must a single practitioner/partnerships have for the practice of public accountancy?

A

Minimum of THREE meaningful years of experience of practice in public accounting plus taxation.

29
Q

What are the instances wherein a temporary/special permit is issued to a foreign CPA?

A

a. A foreign CPA is called for consultation for a specific purpose which in the judgment of BoA is essential, and his practice be limited only for the particular work, and that no Filipino CPA is qualified for such consultation
b. foreign CPA is engaged as a professor/lecturer/critic in fields essential to accountancy education in the Philippines and the engagement is confined to teaching only
c. A foreign CPA who is an internationally recognized expert whose service is essential for the advancement of accountancy in the Philippines.

30
Q

What is the penalty of violating RA 9298?

A

A fine of NOT LESS THAN PHP 50,000 OR BY IMPRISONMENT FOR A PERIOD NOT EXCEEDING TWO YEARS, OR BOTH.

31
Q

What is the APO of Accountancy?

A

PICPA, which is a non-stock registered corporation. Its certificate of accreditation is RENEWABLE EVERY 3 YEARS.

32
Q

Discuss the naming of the firm practicing public accounting.

A

For an INDIVIDUAL CPA, he shall do business under his registered name with the BoA and PRC ( Abdul Jakol, CPA)

For FIRMS, they shall do business under their respective duly registered and AUTHORIZED FIRM NAME appearing in documents with the proper government office, and MUST INCLUDE THE REAL NAME OF THE SOLE PROPRIETOR (Abdul Jakol and Associates, or other similar names)

For registered Partnerships, they shall do business under their respective PARTNERSHIP NAMES AS INDICATED IN THEIR ARTICLES OF PARTNERSHIP and CERTIFICATES OF REGISTRATION (Abdul, Mohammed, Rashid and Company or other similar names)

33
Q

Discuss what happens when a partnership dissolves with regards to the name of the partnership firm.

A

A partner surviving the death or withdrawal of alll other partners may CONTINUE TO PRACTICE UNDER THE ORIGINAL PARTNERSHIP NAME for A PERIOD OF NOT MORE THAN TWO (2) YEARS AFTER BECOMING A SOLE PROPRIETOR.

34
Q

Discuss the Quality Review Committee (QRC)

A

QRC is to conduct an oversight into the QUALITY OF THE AUDIT OF FINANCIAL STATEMENTS THROUGH REVIEW OF THE QUALITY CONTROL MEASURES INSTITUTED BY INDIVIDUAL CPAs AND PARTNERSHIP FIRMS in order to ensure compliance with accounting and auditing standards.

QRC shall be composed of 7 members with a chairman

BoA - 1
Public Practice - 2
Academe - 1
Commerce - 1
Government - 1

For a total of SIX plus a Chairman, all of whom are appointed by PRC upon the BoA and APO recommendation, and whose term shall be three years.

35
Q

After how many days shall the death or disability of an individual CPA be reported and to whom is it reported?

A

The notice of death/disability of an individual CPA shall be REPORTED TO BOA NOT LATER THAN THIRTY (30) DAYS.

36
Q

After how many days shall the dissolution or liquidation of a partnership firm be reported and to whom is it reported?

A

The notice of dissolution or liquidation of a partnership firm shall be REPORTED TO BOA NOT LATER THAN THIRTY (30) DAYS.

37
Q

The Board, subject to the approval of the PRC, may revise or exclude any of the subjects and their syllabi, and add new ones as the need arises, provided that THE CHANGE SHALL NOT BE MORE OFTEN THAN EVERY?

A

3 YEARS.

38
Q

Any candidate who fails in two (2) complete Certified Public Accountant Board Examinations shall be disqualified from taking another set of examinations unless he/she submits evidence to the satisfaction of the Board that he/she enrolled in and completed at least?

A

Twenty-four (24) units of subject given in

the licensure examination.

39
Q

The Board may, upon application and for reasons deemed proper and sufficient, reinstate the validity of a revoked certificate of registration and in so doing, may, in its discretion, exempt the applicant from taking another examination after how many years?

A

After the expiration of two (2) years from the date of revocation of a certificate of registration.

40
Q

The “CPA registration number” shall be engraved in what part of the CPA’s seal?

A

UPPER PORTION OF THE SPACE BETWEEN THE BIGGER AND SMALLER CIRCLE

AUDITING THEORY (17 decks)

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