Philippines

The statutory framework for accounting and auditing in the Philippines is established primarily through the Republic Act (RA) No. 9298, the Philippine Accountancy Act of 2004, the Corporation Code of the Philippines, and sector-specific regulations issued by financial and market regulators.

Accounting Framework

The preparation of financial statements in the Philippines is governed by the Philippine Financial Reporting Standards (PFRS), which are adopted from International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB), with limited local modifications. The PFRS for Small and Medium-sized Entities (PFRS for SMEs), which are based on the IFRS for SMEs without modification, are also adopted.

The authority to adopt accounting standards rests with the Financial and Sustainability Reporting Standards Council (FSRSC), which operates under the supervision of the Professional Regulatory Board of Accountancy (BOA). The FSRSC was formerly known as the Financial Reporting Standards Council (FRSC) and was renamed following the issuance of BOA Resolution No. 44 in September 2022.

The Securities and Exchange Commission (SEC) requires entities under its supervision, including publicly listed companies and other regulated entities, to apply the standards adopted by the FSRSC. The SEC has established a three-tier financial reporting framework, under which public interest entities are required to apply full PFRS, while non-public interest entities may apply PFRS for SMEs or other permitted frameworks, depending on their size and regulatory classification. The Bangko Sentral ng Pilipinas (BSP) similarly requires banks and other supervised financial institutions to apply PFRS.

In September 2022, the BOA issued Resolution No. 44 approving the adoption of the IFRS Sustainability Disclosure Standards for general purpose financial statements and expanding the mandate of the FSRSC to include sustainability reporting standards. The standards adopted by the FSRSC are subject to approval and pronouncement by the BOA and are applied by entities in accordance with regulatory requirements issued by the SEC and other sector regulators.

Auditing Framework

Audit requirements in the Philippines are established under various laws and regulations, including the Corporation Code of the Philippines, the Securities Regulation Code (SRC), the National Internal Revenue Code, and sector-specific legislation applicable to banks, insurance companies, and other regulated entities. In general, entities subject to statutory audit requirements must have their financial statements audited by a Certified Public Accountant (CPA) accredited to practice public accountancy.

Auditing standards are adopted by the Auditing and Assurance Standards Council (AASC), which operates under the authority of the BOA. The AASC has adopted the Philippine Standards on Auditing (PSAs), which are fully converged with the International Standards on Auditing (ISA) issued by the International Auditing and Assurance Standards Board (IAASB). The AASC also adopts other IAASB pronouncements, including standards on assurance engagements, review engagements, related services, and quality management.

The International Standards on Quality Management, including ISQM 1, have been adopted as Philippine Standards on Quality Management and are effective in the jurisdiction. The AASC may issue additional guidance or local practice statements to address jurisdiction-specific circumstances not covered by international standards.

The regulation of the accountancy profession in the Philippines is established under the Republic Act (RA) No. 9298, the Philippine Accountancy Act of 2004, and operates under a shared regulatory model involving the Professional Regulation Commission (PRC), the Professional Regulatory Board of Accountancy (BOA), and the Philippine Institute of Certified Public Accountants (PICPA).

The PRC operates under the Office of the President of the Philippines and is responsible for the regulation and supervision of the practice of all regulated professions in the country. In relation to the accountancy profession, the PRC oversees the administration of licensure examinations, registration, accreditation, inspection, and continuing professional development requirements, in coordination with the BOA.

The BOA, which operates under the supervision of the PRC, is the statutory authority responsible for regulating the accountancy profession pursuant to RA 9298. The BOA is responsible for supervising the registration, licensing, and practice of accountancy; issuing and renewing Certificates of Registration and Accreditation for Certified Public Accountants; adopting accounting, auditing, ethical, and quality management standards taking into consideration international standards and best practices; overseeing the implementation of quality assurance reviews; investigating professional misconduct and imposing disciplinary sanctions; prescribing syllabi and administering licensure examinations; and ensuring compliance of accountancy education programs with policies and standards prescribed by the Commission on Higher Education.

The Philippine Institute of Certified Public Accountants is the accredited national professional accountancy organization in the Philippines, and membership in PICPA is mandatory for all registered Certified Public Accountants. PICPA operates under delegated authority from the BOA and the PRC and is responsible for promoting and maintaining high professional and ethical standards among its members, adopting and implementing the Code of Ethics for Professional Accountants for its members under BOA oversight, supporting accountancy education and professional development, protecting the CPA designation, and carrying out fact-finding functions in investigation and disciplinary matters upon delegation and approval of the BOA and the PRC.

Entry into the accountancy profession is regulated under RA 9298. Individuals seeking to practice accountancy must meet prescribed educational requirements, including holding a Bachelor of Science in Accountancy degree from an institution recognized by the Commission on Higher Education, pass the licensure examination administered by the BOA, register with the PRC and the BOA, and obtain a Certificate of Registration and professional identification card. All registered CPAs are required to maintain membership in PICPA.

Certified Public Accountants seeking to engage in public practice are additionally required to complete a minimum of three years of relevant practical experience and obtain a Certificate of Accreditation from the BOA. Accredited CPAs in public practice must renew their accreditation and professional identification cards periodically and comply with applicable continuing professional development requirements.

Auditors in public practice are subject to additional regulatory requirements. Only individual CPAs and audit firms accredited by the BOA may provide statutory audit services. Auditors of public interest entities are also subject to accreditation and oversight requirements imposed by sector regulators, including the Securities and Exchange Commission, the Bangko Sentral ng Pilipinas, the Insurance Commission, and the Cooperative Development Authority of the Philippines, depending on the nature of the audited entity. Quality assurance reviews of auditors are conducted under arrangements established by the BOA, with implementation support provided by PICPA, and oversight exercised by relevant regulatory authorities. Auditors of listed entities are subject to inspection under the SEC Oversight Assurance Review Inspection Program.

There is no single independent audit oversight authority in the Philippines. Oversight of auditors is carried out through a shared regulatory framework involving the Professional Regulation Commission (PRC), the Professional Regulatory Board of Accountancy (BOA), the Philippine Institute of Certified Public Accountants (PICPA), and sector-specific regulators.

The PRC operates under the Office of the President of the Philippines and is responsible for regulating and supervising the practice of all regulated professions, including accountancy. The BOA, which operates under the supervision of the PRC pursuant to Republic Act No. 9298, is responsible for the registration, licensing, and accreditation of Certified Public Accountants and audit practitioners, the adoption of auditing and ethical standards, and the oversight of quality assurance and disciplinary arrangements.

PICPA, as the accredited national professional accountancy organization, supports the implementation of regulatory requirements under delegated authority from the BOA and the PRC, including implementation support for the Quality Assurance Review Program and the conduct of fact-finding activities in investigation and disciplinary matters, subject to regulatory oversight.

Auditors of public interest entities are subject to additional oversight by sector regulators. The Securities and Exchange Commission is responsible for accrediting and overseeing external auditors of entities under its supervision, including publicly listed companies. The SEC conducts inspections of audit firms through its SEC Oversight Assurance Review Inspection Program. Following a series of judicial proceedings, the authority of the SEC to accredit external auditors and conduct audit oversight inspections was affirmed by a Supreme Court resolution issued in January 2025, after which the SEC resumed implementation of its accreditation and inspection programs.

The SEC is a member of the International Forum of Independent Audit Regulators, reflecting alignment with international audit oversight practices. Auditors providing services to banks, insurance companies, and cooperatives are also subject to accreditation and oversight by the Bangko Sentral ng Pilipinas, the Insurance Commission, and the Cooperative Development Authority of the Philippines, respectively, in accordance with applicable laws and regulations.

The Philippine Institute of Certified Public Accountants (PICPA)

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.

The Professional Regulatory Board of Accountancy (BOA), pursuant to Republic Act No. 9298, is responsible for establishing and overseeing a quality assurance review system for auditors in the Philippines, while the Securities and Exchange Commission (SEC) is authorized to conduct quality assurance inspections of auditors of listed entities under the Securities Regulation Code and its implementing rules.

The BOA established the Quality Assurance Review Program (QARP) and, through subsequent resolutions and memoranda of agreement, designated the Philippine Institute of Certified Public Accountants (PICPA) as the implementing arm of the program under BOA oversight. The Quality Assurance Review Office (QARO) is operational and conducts firm-level and engagement-level reviews, with remediation requirements linked to the renewal of accreditation for auditors in public practice.

In 2025, the implementation of the QARP was temporarily suspended following a court-issued injunction but resumed later in the year after the injunction was lifted. Auditors of listed entities are subject to inspection under the SEC Oversight Assurance Review Inspection Program. In January 2025, a Supreme Court resolution affirmed the authority of the SEC to accredit external auditors and conduct audit oversight inspections, after which the SEC resumed implementation of its accreditation and inspection programs.

While a quality assurance review system has been established and is operational, it has not yet demonstrated sustained operation across all mandatory audits without interruption. Accordingly, the quality assurance system is assessed as partially adopted.

Current Status: Partially Adopted

The Republic Act 9298, Philippine Accountancy Act stipulates the initial professional development requirements for Certified Public Accountants (CPA) in the Philippines. These include specific education, examination, and practical experience requirements.

The accountancy education programs and CPA examination are regulated by the Professional Regulation Commission (PRC), the Professional Regulatory Board of Accountancy (BOA), and the Commission on Higher Education (CHED). Tertiary education providers may offer accountancy programming that is in line with the requirements prescribed by the CHED while the examination is offered by the BOA.

The Philippine Institute of Certified Public Accountants (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.

The law also mandates that CPAs 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 PAO—PICPA—and CPD providers must be accredited. For these purposes, the PRC has established a CPD Council.

In November 2016, the BOA issued Board Resolution No. 358 Series of 2016, “Increasing the Required Continuing Professional Development (CPD) Units from Sixty (60) to One Hundred twenty (120) Credit Units within a Compliance Period of Three (3) Years for all CPAs and Changing the Thematic Areas to Competence Areas” to align with latest IES requirements. In July 2017, the BOA issued operational guidelines that made these requirements effective and by 2019, all CPAs are required to comply with 120 hours of CPD.

With the subsequent enactment of Republic Act (R.A. No. 10968 or the “Philippine Qualifications Framework (PQF) Act”, there is a need to review the IRR of the CPD Act of 2016 and institutionalize the Career Progression and Specialization in all professions as part of CPD for the transfer or award of Credit Units to upgrade professional qualification levels. CPD is a recognition and eligibility requirement in bilateral, regional or international agreements, such as in the ASEAN Mutual Recognition Agreements that facilitate mobility and cross border practice.

CPD as Mandatory Requirement in the Renewal of Professional License and Accreditation System for the Practice of Professions. – The CPD is hereby made as a mandatory requirement in the renewal of the PICs of all registered and licensed professionals under the regulation of the Commission.

The implementation of this provision shall provide a transition period to develop the necessary standards, processes, capacity, and infrastructure while minimizing the cost and inconvenience to professionals covered by the requirement. Attached hereto as Annex “A” is the list of the priority deliverables as antecedent requirements for the full implementation of the CPD Act of 2016.

Current Status: Partially Adopted

While audit requirements are outlined in various legislations, in sum, all companies in the Philippines must have their financial statements audited.

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.

The AASC has adopted the Philippine Standards on Auditing (PSA) which incorporate the ISA and pronouncements issued by the IAASB and include additional country-specific standards to address issues not covered by IAASB pronouncements. In order for the new and revised PSA to become effective, the standards must be approved by AASC, the BOA, Professional Regulation Commission, and be published in the official gazette. At the time of the assessment, the Philippine Institute of Certified Public Accountants reports that the most recent ISA, including ISQM 1, and the revised ISA 220 have been adopted as PSAs and are applicable in the jurisdiction.

Current Status: Adopted

While the Professional Regulatory Board of Accountancy (BOA), in accordance with Republic Act 9298 (Philippine Accountancy Act of 2004), is tasked with setting ethical requirements for the profession, this responsibility has been delegated to the Philippine Institute of Certified Public Accountants (PICPA) as the national professional accountancy organization accredited by the Professional Regulation Commission (PRC).

Ethical requirements for professional accountants are approved by PICPA’s Board of Directors and then submitted to the BOA for adoption and the PRC for approval prior to application.

PICPA has confirmed that the Philippines adopted the 2024 edition of the IESBA International Code of Ethics for Professional Accountants, including the International Independence Standards, as the Code of Ethics for Professional Accountants in the Philippines (2024 Edition), with corresponding amendments to align with Philippine laws. This was adopted through PRC BOA Resolution No. 48-2025.

Current Status: Adopted

Presidential Decree No. 898 1976 has given the Commission on Audit (COA) the authority and power on all matters relating to auditing and accounting procedures, systems, and controls for the Philippine government.

In 2014, the COA issued Resolution No. 2014-003 adopting the Philippine Public Sector Accounting Standards (PPSAS) that are aligned with the IPSAS.

The PPSAS were first based on the 2012 accrual-basis IPSAS developed by the IPSASB accompanied by a Philippine Application Guidance 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 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.

The PPSAS apply to all National Government Agencies, Local Government Units and Government-Owned and/or Controlled Corporations not considered as Government Business Enterprises (GBEs). COA issued Circular 2015-003, which states that accounting standards for GBEs are the Philippine Financial Reporting Standards and relevant standards issued by the Financial Reporting Standards Council, the Professional Board of Accountancy, and Professional Regulation Commission.

Current Status: Partially Adopted

The Professional Regulatory Board of Accountancy (BOA), under the Republic Act 9298, Philippine Accountancy Act 2004, is responsible for the investigation and discipline (I&D) of any violations of the accountancy law by any professional accountant. The Professional Regulation Commission (PRC) is ultimately responsible for approving any sanction recommended by the BOA.

The BOA and the PRC may delegate the fact-finding component of investigations to the nationally accredited professional accountancy organization which is the Philippine Institute of Certified Public Accountants (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 on: (i) violations of the PICPA Constitution and By-laws; (ii) a breach of the Code of Ethics; (iii) infringements of any provisions of the Rules of Professional Conduct of the BOA; and (iv) a violation of any of the rules provided by the Rules and Regulations of the BOA. The Ethics Board will forward its decision onto the PICPA Board and the BOA, unless the decision of the Ethics Board has been appealed to the PICPA Board in which case it is the duty of the PICPA Board to forward its final decision to the BOA. The BOA may then recommend a sanction which is approved by the PRC before becoming final.

Lastly, the Securities and Exchange Commission (SEC) is authorized to carry out investigations and issue penalties for auditors of listed companies as per the Securities Regulation Code Rule 68. Through a Memorandum of Understanding between the SEC and the BOA, the SEC’s findings are also forwarded to the BOA as appropriate given that the BOA issues and grants licenses to practice auditing.

In 2018, the PICPA carried out an extensive assessment of all three I&D systems 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 system as only the SEC has an operational QA review system.

In 2006, the Financial Reporting Standards Council (FRSC) was created by the Board of Accountancy (BOA), a government agency operating under the Philippines Professional Regulation Commission (PRC), to adopt and promulgate applicable corporate accounting standards in the Philippines. The FRSC has adopted the IFRS as the Philippine Financial Reporting Standards (PFRS) with several limited modifications and the PFRS for Small-and Medium-sized Entities (PFRS for SMEs) which are the IFRS for SMEs without modifications.

The PFRS are subject to the approval and pronouncement process of the BOA, PRC, and the Philippine Securities and Exchange Commission (SEC), which includes issuing invitations for comments on exposure drafts, adoption of the standard, BOA and PRC approval, publication in an official gazette, and SEC adoption of the new pronouncement. As of October 2022, the Philippine Institute of Certified Public Accountants reports that the FRSC has adopted all standards as issued by the IASB such that the PFRS are fully converged with the IFRS.

The SEC has established a three-tier financial reporting framework. Public interest entities must apply the full PFRS if they meet certain thresholds. SMEs are permitted to use PFRS for SMEs provided that they do not fall into one of the categories of entities required to use full PFRS. Finally, micro-sized entities have option to use either income tax basis accounting standards effective 31 December 2004 (standards before entities transitioned to PFRS), or the PFRS for SMEs.

In addition, the Bangko Sentral ng Pilipinas (BSP; the Philippines Central Bank) has required all banks to follow PFRS since 2005.

The Professional Regulatory Board of Accountancy issued Resolution No. 44 in September 2022 on the Adoption of the International Financial Reporting Standards (IFRS) sustainability disclosure standards for general purpose financial statements and renaming Financial Reporting Standards Council (FRSC) to Financial and Sustainability Reporting Standards Council (FSRSC).

Whereas, the Professional Regulatory Board of Accountancy (Board) is empowered to monitor the conditions affecting the practice of accountancy and adopt such measures, including the promulgation of accounting and auditing standards, rules and regulations and best practices as may be deemed proper for the enhancement and maintenance of high professional, ethical, accounting and auditing standards: Provided, that the domestic accounting and adulting standards shall include the international accounting and auditing standards and generally accepted best practices;

Under Section 9 (A) of Board Resolution No. 71 (s.2004), known as the “Rules and Regulations Implementing Republic Act No. 9298, otherwise known as the ‘Philippine Accountancy Act of 2004’, and for other Purposes”, the Professional Regulation Commission (Commission), upon the recommendation of the Board, created an accounting setting body known as the Financial Reporting Standards Council (FRSC);

From the time of its inception/creation in 2004 up to this date, the FRSC has consistently assisted the Board In carrying out its power and function to promulgate accounting standards in the Philippines by adopting the international financial reporting standards (IFRS Standards) issued by the IFRS Foundation and set by its standard setting-board, the International Accounting Standards Board (IASB) in the preparation of general-purpose financial statements;

The IFRS Foundation recently created another standard setting-board, the International Sustainability Standards Board (ISSB) that sets IFRS Sustainability Disclosure Standards on how a company discloses information in the financial statements about sustainability-related factors that could create or erode its enterprise value in the short, medium and long term;

On July 18, 2022, the Board approved the recommendation of the FRSC to adopt the IFRS Sustainability Disclosure Standards that will be developed by the ISSB in the preparation of general-purpose financial statements and the renaming of the Financial Reporting Standards Council to Financial and Sustainability Reporting Standards Council;

The Board recognizes the importance of the IFRS Sustainability Disclosure Standards for the guidance of companies as well as CPAs preparing financial statements;

In view thereof, the Board resolves, as it is hereby resolved, to recommend to the Commission the approval of the following:

• Adoption of the IFRS Sustainability Disclosure Standards that will be developed by the International Sustainability Standards Board (ISSB) in the preparation of the general-purpose financial statements; and
• Renaming of the Financial Reporting Standards Council (FRSC) to Financial and Sustainability Reporting Standards Council (FSRSC)

Current Status: Adopted

Relevant Organizations

• Auditing and Assurance Standards Council (AASC)
• Bangko Sentral ng Pilipinas (BSP)
• Commission on Audit (COA)
• Financial Reporting Standards Council (FRSC)
• Philippine Institute of Certified Accountants (PICPA)
• Philippine Securities and Exchange Commission (SEC)
• Professional Board of Accountancy (BOA)
• Professional Regulation Commission (PRC)

Relevant Legislation

• BSP Circular 2014-494
• COA Circular 2015-003
• COA Resolution No. 2017-006
• PICPA’s By-laws
• Republic Act (RA) 9298, Philippine Accountancy Act
• Resolution No. 2015-263
• Securities Regulation Code (SRC) Rule 68

Relevant Publications

• ASEAN, Handbook on liberalization of professional services through mutual recognition in ASEAN: Accountancy services, September 2015.
• ASEAN and ACCA, Easy Guide to Setting Up Accountancy Practices in ASEAN Countries, March 2010.
• PICPA, SMO Action Plan, April 2018.
• IFRS Foundation, “IFRS Application Around the World, Jurisdictional Profile: Philippines,” 16 June 2016.
• World Bank, Report on the Observance of Standards and Codes (ROSC), Accounting and Auditing: Republic of the Philippines, 15 March 2006.