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Philippine Institute of Certified Public Accountants

Member | Established: 1929 | Member since 1977

The PICPA was founded in 1929 and is the accredited professional accountancy organization by the Philippines Professional Regulation Commission (PRC). Membership of the institute is mandatory for all professional accountants in the jurisdiction. The institute has a national office headquarters located in Manila and supports field offices throughout all regions of the country. It is primarily responsible for: (i) promoting and maintaining high professional and ethical standards among accountants by adopting a Code of Ethics for its members; (ii) developing and improving the accountancy education; (iii) protecting the CPA designation; and (iv) carrying out the fact-finding component of investigations upon the delegation and approval of the Professional Regulatory Board of Accountancy and the PRC. In addition to being an IFAC Member, PICPA is also a member of Confederation of Asian and Pacific Accountants (CAPA) and the ASEAN Federation of Accountants (AFA) and has led leadership roles in both CAPA and AFA in pursuit of their common objectives to develop the accountancy profession within the region.

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Statements of Membership Obligation (SMO)

The Statements of Membership Obligations form the basis of the IFAC Member Compliance Program. They serve as a framework for credible and high-quality professional accountancy organizations focused on serving the public interest by adopting, or otherwise incorporating, and supporting implementation of international standards and maintaining adequate enforcement mechanisms to ensure the professional behavior of their individual members.

Last updated: 04/2018
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SMO Action Plan

Status of Fulfillment by SMO

  • SMO 1: Quality Assurance

    The Professional Regulatory Board of Accountancy (BOA) and the Securities and Exchange Commission (SEC) are authorized to carry out quality assurance (QA) reviews in the jurisdiction. The SEC only conducts reviews for audits of listed companies while the BOA is responsible for carrying out QA reviews for all auditors in the Philippines.

    The SEC operates the SEC Oversight Assurance Review (SOAR) Inspection Program, which PICPA states is aligned with SMO 1. The BOA has established a Quality Assurance Review Office (QARO) and a Quality Assurance Review Program (QARP) in 2010 for these purposes. The implementation of the QARP has been planned; however, key personnel that would carry out the functions of the QARO and the QARP are still being recruited and therefore, no QA reviews have been carried out as of February 2018. Once the QARO is staffed for operations, it appears that the BOA will utilize a risk-based approach to conduct the reviews and its overall process will align with SMO 1 requirements.

    For its part, PICPA states that it is involved with efforts at the jurisdictional level related to QA reviews. For example, it raises awareness of the SOAR Program amongst members through training and seminars during which it invites SEC representatives to explain the review process and allows members to ask any questions. It also shares information on SOAR on its webpages and circulars. PICPA will also include topics such as “Common Errors on Financial Statements” within its trainings to cover common comments and findings raised by SEC as a result of the reviews of financial statements. In this way, PICPA members become more cognizant of the SEC’s views with respect to disclosures that need to be in the financial statements.

    PICPA reports that it is undertaking similar awareness raising efforts in regards to the BOA’s system in order to prepare members for its future implementation. In particular, due to the delay of the implementation of the BOA’s QARP, PICPA established a voluntary QARP (VQARP) for its members—which includes all auditors—with the assistance of the World Bank and the Association of Certified Public Accountants in Public Practice. Guidelines and templates for the VQARP were approved in January 2016 and in March 2016, PICPA reports, it organized a workshop with the World Bank and the BOA to share and discuss best practices and technicalities related to implementing a VQARP. The same methodology guides both the QARP and VQARP such that after having participated in a voluntary QA review, members will be knowledgeable about the BOA’s procedures. Subsequently, PICPA began implementing its review system in April 2016 although it has only been able to carry out a limited number of inspections due to the voluntary nature of the program.

    PICPA also indicates that it collaborates with the Council for Accreditation and Quality Control of Practicing CPAs to offer quarterly regulators’ forum joint symposiums and informational workshops on the QARP.

    PICPA is encouraged to continue to promote the BOA’s QARP’s alignment with SMO 1 best practices provide and in its next Action Plan submission, should provide update on the operational status of the BOA’s QARP as well as any developments related to its own VQARP such as an increase in the number of practitioners volunteering to undergo reviews.

    Current Status: Review & Improve

  • SMO 2: International Education Standards

    Initial professional development requirements for Certified Public Accountants (CPA) in the Philippines are stipulated in law and implemented by Professional Regulation Commission (PRC), the Professional Regulatory Board of Accountancy (BOA), and the Commission on Higher Education (CHED). PICPA reports that the requirements outlined in the law are in line with the IES requirements. Further, it notes that the CHED issued several memorandums in 2017 that revise policies for university accountancy curricula to comply with the competency framework issued by the IAESB. PICPA states that served on CHED’s Technical Panel to review and update the curriculum for the Bachelor of Science in Accountancy to reflect the current demands of the market and to review the syllabus for the CPA license exam. The revised syllabus and exam were approved in May 2016 and will take effect for accounting students beginning in 2018.

    The same legislation also mandates that CPAs must comply with continuing professional development (CPD) requirements issued by the BOA and approved by the PRC. CPD is required to be offered in coordination with the accredited national professional accountancy organization—the PICPA. In order to fulfill its mandate, PICPA formed a CPD Council to offer comprehensive CPD courses.

    Most recently, PICPA’s CPD Council and the PRC–BOA’s CPD Council have been engaged in discussions to require CPAs to complete 120 credits of CPD courses over a three-year period, bringing the CPD requirements in line with the IES. In 2016, the BOA issued a resolution that increased the number of CPD credits to 120 over three years and adjusted the division of credits from “thematic areas” to “competence areas” in order to maintain alignment and consistency to align with the latest IES. In 2017, it released operational guidelines that made these requirements effective and by 2019, all CPAs will be required to fulfill the new obligations. The competence areas will be defined as: (i) Technical Competence, (ii) Professional Skills, and (iii) Professional Values, Ethics & Attitudes. PICPA notes that it actively supported the issuance of the new BOA resolution by participating in consultative meetings; informing members of the new changes; and classifying CPD modules based on learning outcomes for competency areas.

    Finally, PICPA outlines that it has progressed in its proposed established of a CPD Learning and Development Institute by signing a contract with a third-party organization to carry out the scoping of the design and operationalization of such an institute. The contract was signed in September 2017 and PICPA details that the next steps of the project will be carried out from 2018–2020.

    In its next Action Plan submission, PICPA is encouraged to provide an update on its progression with the implementation of the new CPD requirements along with any other results of its collaborative review of the 2015 revised IES. The institute is further encouraged to consider how it can incorporate the revised IES which emphasize outcomes-based learnings and include any activities in this regard within its Action Plan.

    Current Status: Review & Improve

  • SMO 3: International Standards on Auditing

    The Professional Regulatory Board of Accountancy (BOA) created the Auditing and Assurance Standards Council (AASC) in 2006 in order to adopt and disseminate applicable auditing standards in the Philippines. In turn, the AASC has adopted the Philippine Standards on Auditing (PSA), which are adopted from the ISA and pronouncements issued by the IAASB. At the time of the assessment, PICPA reports that the 2016 ISA have been adopted as PSAs and are applicable in the jurisdiction.

    PICPA indicates that it supports the AASC’s standard-setting process through the direct participation of nine PICPA representatives serving on the AASC. PICPA will also distribute AASC’s exposure drafts to its members and other stakeholders and collating comments to submit to the AASC when it is updating and revising the PSA. Subsequently, it notes that it will assist the AASC with submissions of the revised standards to the BOA and PRC to ensure their timely adoption and application in the jurisdiction. PICPA will then include a link to the standards on its website.

    To support the implementation of the PSA, PICPA states that, as an extension of its participation in the standard-setting process, it has formed focus groups to discuss issues that arise from the standards and interpretations, which then contribute to trainings and continuing professional development courses. PICPA regularly offers these types of seminars on the standards as well as updates to the standards for its members. For example, PICPA has provided members with a templates and a sample report based on the 2016 ISA and has offered seminars with speakers from auditing firms emphasizing the key changes.

    In addition, PICPA reports that it coordinates with the AASC and other relevant entities such as the Association of CPAs in Education, Association of CPAs in Commerce and Industry, and the Association of CPAs in Public Practice to carry out information campaigns and disseminate new and revised standards as well as related guidance amongst practitioners and stakeholders in the jurisdiction.

    The institute is encouraged to consider participating in the international standard-setting process by coordinating with the AASC to submit comments to exposure drafts issued by the IAASB.

    Current Status: Sustain

  • SMO 4: Code of Ethics for Professional Accountants

    As the national professional accountancy organization accredited by the Professional Regulation Commission (PRC), PICPA has been delegated the responsibility for setting ethical requirements for the profession. In 2015, PICPA adopted the 2013 IESBA Code of Ethics, which was approved by the Professional Regulatory Board of Accountancy (BOA) and the PRC. Subsequently, PICPA reports that its Board of Directors submitted BOD Resolution No. 2017-07-08 to the BOA recommending the adoption of the 2016 IESBA Code of Ethics. The BOA has approved the recommendation with the stipulation that the PRC shall put in place the appropriate mechanism to implement the NOCLAR standard. However, it is not clear if the PRC has formally issued a resolution approving the 2016 IESBA Code for application in the jurisdiction as of the date of the assessment.

    PICPA reports that it regularly offers seminars and workshops on the Code of Ethics for its members as BOA regulations stipulate that practitioners are mandated to complete at least 10 hours of continuing professional development on ethics, governance, and quality principles. PICPA notes that its national office headquarters offers ethical trainings at least once a month while its chapter branches offer trainings on a quarterly basis. Throughout 2017–2018, the institute states that it is emphasizing the 2016 IESBA Code of Ethics in its training and conferences. For example, in November 2017, NOCLAR was included as a discussion topic during a forum for government and commerce sectors.

    In addition, PICPA has established an Ethics Committee, which coordinates dissemination efforts amongst the institute’s chapter offices and a public information campaign on the role of professional accountants and professional ethics. The institute indicates it has been actively engaging with the Association of Certified Public Accountants in Public Practice in regards to the proposed adoption of the 2016 IESBA Code.

    Additionally, of note is the institute’s participation in the country-wide Integrity Initiative and Project Shine, a coalition started by the Makati Business Club and the European Chamber of Commerce of the Philippines to accredit companies that consistently uphold ethical standards and are committed to transparency in their business processes. The BOA requires all CPAs to sign the Integrity Pledge in order to register with the BOA—a prerequisite in order to practice in the jurisdiction.

    In its next Action Plan submission, PICPA should confirm if the PRC has approved the 2016 IESBA Code of Ethics for application in the jurisdiction and issued a resolution to this effect. The institute is also encouraged to consider participating in the international standard-setting process by coordinating by submitting comments to exposure drafts issued by the IESBA.

    Current Status: Review & Improve

  • SMO 5: International Public Sector Accounting Standards

    The Commission on Audit (COA) is responsible for all matters relating to public sector auditing and accounting procedures, systems, and controls. In 2014, the COA issued Resolution No. 2014-003 adopting the Philippine Public Sector Accounting Standards (PPSAS). The PPSAS were first based on the 2012 accrual-basis IPSAS developed by the IPSASB accompanied by a Philippine Application Guidance (PAG) for cases in which IPSAS deviate from the Philippine regulatory or legislative environment. As of 2015, 28 out of 32 IPSAS were adopted as PPSAS. In April 2017, the PICPA reports that the COA issued Resolution No. 2017-006 which prescribed the adoption of additional six PPSAS and updated the PPSAS prescribed through COA Resolution No. 2014-003 in accordance with the 2016 IPSAS.

    PICPA indicates that it works to support the adoption process of the COA by participating in taskforces to study and review IPSAS and evaluate how the standards might be adopted as PPSAS. For example, in 2018, PICPA indicates it will examine and evaluate how IPSAS 18, 22, 39, and 40 might be adopted as PPSAS in 2020 in coordination with the COA. PICPA will also support the preparation of consolidated financial statement templates for three types of government agencies.

    Moreover, PICPA is active in supporting the proper implementation of PPSAS by training public sector accountants on PPSAS. It also states that it conducts Train the Trainer courses on the PPSAS, the revised chart of accountants, and the PAG as building capacity in this area is essential to the successful implementation of accounting reforms in the public sector.

    Additionally, the institute states that it disseminates information on the applicable standards and manuals along with information on new softwares developed by the COA to support implementation by the government agencies. It will also invite COA and IPSASB representatives to events in order to provide updates and latest developments in regards to public sector accounting and auditing standards, and public finance management. For example, the IPSASB Chair visited with government and accountancy organizations in 2016 and 2017 to provide updates and highlight the importance of IPSAS for accountability purposes.

    In its next Action Plan submission, PICPA is encouraged to provide an update on the COA’s plans to adopt the entire suit of 2016 accrual-IPSAS along with examples of its continued support for the standards’ adoption and implementation processes.

    Current Status: Review & Improve

  • SMO 6: Investigation and Discipline

    The Professional Regulation Commission (PRC), the Professional Regulatory Board of Accountancy (BOA), and the Securities and Exchange Commission (SEC) are legally responsible for the investigation and discipline (I&D) of any violations of the accountancy law by any professional accountant, with the SEC focused on auditors of listed companies. The BOA and the PRC may delegate the fact-finding component of investigations to the nationally accredited professional accountancy organization, which is the PICPA. The BOA and PRC may then proceed with adopting PICPA’s findings and issuing sanctions as it sees fit.

    PICPA’s by-laws provide for the establishment of an Ethics Board which may hear and decide cases for its members related to misconduct and violations of the Code of Ethics and any regulations of the BOA. In 2018, the PICPA carried out an extensive assessment of all three I&D systems in the jurisdiction—the BOA’s, the SEC’s, and its own procedures—against the SMO 6 components. The information can be found in its 2018 SMO Action Plan and indicates that a gap remains between linking results of quality assurance (QA) reviews with the BOA’s and PICPA’s I&D systems as only the SEC has an operational QA review system.

    In 2017, PICPA reports that there were three cases forwarded to the PICPA Ethics Board, one of which was referred to the PICPA’s National Board for appeal, one was dismissed, and one case remains pending.

    PICPA indicates that its Training Department is responsible for conducting seminars and disseminating information on the Code of Ethics and consequences of non-compliance with professional standards and other obligations, such as continuing professional development obligations.

    In its next Action Plan submission, PICPA is encouraged to provide an update on efforts to operationalize the QA review of the BOA and/or enhance its own voluntary QA review system in order to address the gap in its I&D procedures.

    Current Status: Execute

  • SMO 7: International Financial Reporting Standards

    In 2006, the Financial Reporting Standards Council (FRSC) was created by the Board of Accountancy (BOA) to adopt and promulgate applicable corporate accounting standards in the Philippines. The FRSC has adopted Philippine Financial Reporting Standards (PFRS) which are fully converged with IFRS as of December 2017 along with the PFRS for Small-and Medium-sized Entities (PFRS for SMEs) which are the IFRS for SMEs without modifications.

    PICPA has historically played an active role in the national accounting standard-setting process. The FRSC is the successor of the Accounting Standards Council, which was created in 1981 by PICPA to establish generally accepted accounting principles in the Philippines. Consequently, PICPA now has eight representatives on the FRSC alongside individuals from the BOA, the Securities and Exchange Commission, and other key stakeholders. Furthermore, the FRSC receives financial support from the PICPA Foundation for its technical activities.

    PICPA states that it further supports the FRSC’s standard-setting process by distributing FRSC exposure drafts to its members and other stakeholders and collating comments to submit to the FRSC when it is updating and revising the PFRS. It will then distribute updated standards amongst its members and include links on its website.

    In addition to its standard-setting support, PICPA also actively supports the implementation of PFRS and PFRS for SMEs by offering continuing professional development (CPD) courses for its members as practitioners are required to completed 24 hours of CPD on applicable standards. For example, the institute offers trainings on full IFRS/PFRS, PFRS updates, and IFRS for SMEs as well as upcoming standards that will be issued by the IFRS. PICPA notes that it coordinates its activities in this area with the Association of CPAs in Education, Association of CPAs in Commerce and Industry, and the Association of CPAs in Public Practice.

    PICPA may consider participating in the international standard-setting process by coordinating with the FRSC to submit comments to exposure drafts issued by the IASB.

    Current Status: Sustain


IFAC bears no responsibility for the information provided in the SMO Action Plans prepared by IFAC member organizations. Please see our full Disclaimer for additional information.


PICPA Building, 700 Shaw Boulevard
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