Philippines

The statutory framework for accounting and auditing in the Philippines is established primarily by Republic Act No. 9298, the Philippine Accountancy Act of 2004, the Revised Corporation Code of the Philippines, the Securities Regulation Code, and sector-specific requirements issued by the Securities and Exchange Commission (SEC) and the Bangko Sentral ng Pilipinas (BSP).

The preparation of financial statements is based on Philippine Financial Reporting Standards (PFRS), which are adopted from IFRS Accounting Standards issued by the International Accounting Standards Board (IASB). The Philippines has also adopted the IFRS for SMEs Accounting Standard as the Philippine Financial Reporting Standard for Small and Medium-sized Entities (PFRS for SMEs). The authority to establish and promulgate applicable accounting standards rests with the Financial and Sustainability Reporting Standards Council (FSRSC), which operates under the Professional Regulatory Board of Accountancy (BOA). Standards adopted by the FSRSC are subject to approval by the BOA and the Professional Regulation Commission (PRC) and are then published in the Official Gazette before being incorporated into the requirements of the SEC and other relevant regulators. In 2022, the BOA renamed the Financial Reporting Standards Council as the FSRSC and approved the adoption of the IFRS Sustainability Disclosure Standards, thereby expanding the Council’s mandate to include sustainability reporting standards.

The SEC requires entities under its supervision to apply the applicable PFRS framework. Full PFRS is required for domestic publicly accountable entities, while PFRS for SMEs is required or permitted for qualifying entities. The BSP likewise requires banks and other supervised financial institutions to prepare audited financial statements in accordance with PFRS. Where the SEC or the BSP permits temporary regulatory reliefs, financial statements prepared using those reliefs are regarded as prepared under an industry-specific compliance framework rather than full PFRS.

Audit requirements are established under the Revised Corporation Code of the Philippines, the Securities Regulation Code, tax laws, and sector-specific requirements applicable to banks and other regulated entities. In general, entities subject to statutory audit must have their financial statements audited by an independent Certified Public Accountant (CPA) accredited to practice public accountancy and, where applicable, accredited by the relevant sector regulator.

Auditing standards are adopted in the Philippines through the Auditing and Assurance Standards Council (AASC) under the authority of the BOA. The AASC adopts Philippine Standards on Auditing (PSA) and other pronouncements based on standards issued by the International Auditing and Assurance Standards Board (IAASB). International Standards on Quality Management (ISQM) 1 and 2 and International Standard on Auditing (ISA) 220 (Revised) have been adopted as Philippine standards on quality management and auditing. New and revised pronouncements become effective following adoption by the AASC and approval by the BOA and the PRC.

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

The BOA, which operates under the supervision of the PRC pursuant to Republic Act No. 9298, is the statutory authority responsible for regulating the practice of accountancy in the Philippines. Its responsibilities include supervising the registration, licensure, and practice of accountancy; issuing, renewing, suspending, and revoking certificates of registration and accreditation for Certified Public Accountants (CPAs); adopting accounting, auditing, ethical, and quality management standards with due consideration to international standards and best practices; overseeing the implementation of quality assurance reviews; investigating professional misconduct and recommending disciplinary sanctions; prescribing the syllabi and administering the licensure examination for CPAs; and monitoring compliance of accountancy education programs with the requirements of the Commission on Higher Education.

PICPA is the accredited integrated professional organization for CPAs in the Philippines, and membership is mandatory for all registered CPAs. 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, supporting accountancy education and continuing 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 profession is regulated under Republic Act No. 9298. Individuals seeking to practice accountancy must satisfy prescribed educational requirements, including completion of a Bachelor of Science in Accountancy degree from a recognized institution, pass the licensure examination administered by the BOA, register with the PRC, and obtain a certificate of registration and professional identification card. All registered CPAs are required to maintain membership in PICPA.

CPAs 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. Accreditation is required for individual practitioners, partnerships, and firms engaged in public accountancy and is subject to periodic renewal and compliance with continuing professional development requirements.

Auditors in public practice are subject to additional regulatory requirements. Auditors of entities regulated by the Securities and Exchange Commission, the Bangko Sentral ng Pilipinas, the Insurance Commission, and the Cooperative Development Authority are required to obtain accreditation from the relevant sector regulator, depending on the nature of the entity being audited. Quality assurance reviews of auditors are conducted under arrangements established by the BOA, with implementation support provided by PICPA and additional oversight exercised by relevant regulatory authorities. Auditors of listed entities are also subject to inspection under the Securities and Exchange Commission 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, which operates under the Office of the President of the Philippines, is responsible for regulating and supervising 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, licensure, and accreditation of Certified Public Accountants and audit practitioners, the adoption of auditing and ethical standards, and the oversight of quality assurance and investigative and disciplinary arrangements.

PICPA, as the accredited integrated professional organization for Certified Public Accountants, 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 investigative 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 (SEC) is responsible for accrediting and overseeing external auditors of entities under its supervision, including publicly listed companies and other covered entities. 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 the Supreme Court in a Resolution dated 28 January 2025 in SEC v. 1Accountant Party-List, Inc. et al. The Court confirmed that SEC accreditation serves as a quality control and quality assurance mechanism for the statutory audits of covered entities and that such oversight is distinct from the general regulation of the accountancy profession by the BOA and the PRC. Following this decision, the SEC resumed implementation of its accreditation and inspection programs.

The SEC is also a member of the International Forum of Independent Audit Regulators, reflecting alignment with international audit oversight practices and continued participation in global inspection and audit quality initiatives.

Auditors providing services to banks, insurance companies, and cooperatives are additionally 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 Philippine Institute of Certified Public Accountants (PICPA) was founded in November 1929 and is the accredited integrated professional organization for Certified Public Accountants (CPAs) in the Philippines, as recognized by the Professional Regulation Commission (PRC). Membership in PICPA is mandatory for all registered CPAs in the jurisdiction. PICPA is headquartered in Mandaluyong City, Metro Manila, and supports a nationwide structure of regional offices, local chapters, and sectoral associations throughout the country.

PICPA is primarily responsible for promoting and maintaining high professional and ethical standards among its members; supporting the development and improvement of accountancy education and continuing professional development; protecting the CPA designation; and carrying out the fact-finding component of investigative and disciplinary matters upon delegation and approval of the Professional Regulatory Board of Accountancy (BOA) and the PRC. PICPA also supports the implementation of quality assurance reviews through its Quality Assurance Review Office under the oversight framework established by the BOA.

In addition to being a member of the International Federation of Accountants, PICPA is also a member of the Confederation of Asian and Pacific Accountants (CAPA) and the ASEAN Federation of Accountants (AFA). PICPA has historically played an active leadership role in both regional organizations and has contributed significantly to the development of the accountancy profession across Asia and the Pacific. Notably, the concept that later evolved into CAPA originated from PICPA leadership through the Far East Conference of Accountants held in Manila in 1957.

The Board of Accountancy, 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 is authorized to conduct audit oversight inspections of external auditors of covered entities under the Securities Regulation Code and its implementing rules. Following the Supreme Court’s Resolution of January 28, 2025 in Securities and Exchange Commission v. 1Accountants Party-List, Inc. et al., the authority of the Securities and Exchange Commission to accredit external auditors of covered entities was affirmed.

The Board of Accountancy revised the rules for the Quality Assurance Review Program through Resolution No. 57, Series of 2023, and designated the Philippine Institute of Certified Public Accountants as the implementing arm of the program. The Professional Regulation Commission subsequently confirmed that compliance with the Quality Assurance Review Program would continue to be strictly enforced as part of accreditation requirements for Certified Public Accountant practitioners. The Quality Assurance Review Office, established by the Philippine Institute of Certified Public Accountants to implement the program, is operational and conducts reviews under this framework.

With respect to quality management standards, the Philippines has adopted International Standard on Quality Management 1 and International Standard on Quality Management 2 as Philippine Standard on Quality Management 1 and Philippine Standard on Quality Management 2, respectively, together with International Standard on Auditing 220 (Revised).

The quality assurance system is therefore established and operational. However, implementation of the Quality Assurance Review Program was subject to interruption in 2025 and later resumed, and the system continues to operate through a combination of Board of Accountancy oversight, Philippine Institute of Certified Public Accountants implementation arrangements, and separate Securities and Exchange Commission inspections for covered entities. On this basis, the jurisdiction is best assessed as Partially Adopted rather than Adopted.

Current Status: Partially Adopted

Initial professional development requirements for Certified Public Accountants are established under Republic Act No. 9298, the Philippine Accountancy Act of 2004, and are implemented through a shared framework involving the Professional Regulation Commission (PRC), the Professional Regulatory Board of Accountancy (BOA), and the Commission on Higher Education (CHED). These requirements include completion of an approved accountancy education program, passing the licensure examination administered by the BOA, and meeting practical experience requirements.

CHED is responsible for establishing policies, standards, and guidelines for accountancy education programs offered by higher education institutions, including curriculum requirements aligned with competency-based outcomes. The BOA prescribes the syllabus and administers the Certified Public Accountant licensure examination, while the PRC oversees registration and licensing. Together, these bodies establish the framework for entry into the profession.

Continuing professional development requirements are governed by Republic Act No. 10912, the Continuing Professional Development Act of 2016, and related PRC regulations. Certified Public Accountants are required to complete continuing professional development as a condition for the renewal of their professional identification cards. The BOA has established a requirement of 120 continuing professional development units over a three-year compliance period, with implementation supported by accredited providers, including the Philippine Institute of Certified Public Accountants. The PRC has established Continuing Professional Development Councils to oversee the implementation of these requirements.

The Philippine Institute of Certified Public Accountants reports that the national requirements are broadly aligned with the International Education Standards issued by the International Accounting Education Standards Board, and CHED has undertaken curriculum reforms to support competency-based education approaches. However, the International Education Standards have not been formally adopted at the jurisdiction level, and full alignment with the latest International Education Standards in effect, including those related to professional competence for engagement partners, is not demonstrably established. Accordingly, the jurisdiction is assessed as Partially Adopted.

Current Status: Partially Adopted

Audit requirements in the Philippines are established under the Revised Corporation Code of the Philippines, the Securities Regulation Code, tax laws, and sector-specific legislation applicable to regulated entities. Entities subject to statutory audit are required to have their financial statements audited by an independent Certified Public Accountant accredited to practice public accountancy.

The Professional Regulatory Board of Accountancy (BOA) established the Auditing and Assurance Standards Council (AASC) to adopt and promulgate auditing standards in the jurisdiction. The AASC adopts Philippine Standards on Auditing (PSA), which are based on the International Standards on Auditing issued by the International Auditing and Assurance Standards Board (IAASB), together with other IAASB pronouncements, including standards on assurance engagements, review engagements, related services, and quality management.

The Philippines follows a rolling convergence approach, whereby new and revised standards are adopted individually through due process involving approval by the AASC, the BOA, and the Professional Regulation Commission before becoming effective. The jurisdiction has adopted recent IAASB pronouncements, including International Standard on Quality Management 1, International Standard on Quality Management 2, and International Standard on Auditing 220 (Revised), as Philippine standards. However, there is no clear public confirmation that the latest IAASB Handbook in effect as of the time of the assessment has been fully adopted and is currently effective in its entirety.

Accordingly, while the Philippine Standards on Auditing are substantially converged with International Standards on Auditing and reflect post-2018 revisions, the jurisdiction is assessed as Partially Adopted.

Current Status: Partially Adopted

In accordance with Republic Act No. 9298, the Philippine Accountancy Act of 2004, the Professional Regulatory Board of Accountancy (BOA) is responsible for establishing ethical requirements for the profession. In practice, this responsibility is exercised in coordination with the Philippine Institute of Certified Public Accountants (PICPA), the accredited integrated professional organization for Certified Public Accountants in the Philippines.

Ethical requirements for professional accountants are developed by PICPA and submitted to the BOA and the Professional Regulation Commission (PRC) for approval prior to becoming effective in the jurisdiction.

The Philippines has adopted the 2024 edition of the International Code of Ethics for Professional Accountants (including International Independence Standards) issued by the International Ethics Standards Board for Accountants as the Code of Ethics for Professional Accountants in the Philippines (2024 Edition), with limited amendments to align with national laws and regulatory requirements. This adoption was formalized through PRC BOA Resolution No. 48, Series of 2025.

As the latest version of the International Code of Ethics in effect at the time of the assessment is the 2025 edition, the jurisdiction has not yet demonstrably adopted the most current version in its entirety. Accordingly, the jurisdiction is assessed as Partially Adopted.

Current Status: Partially Adopted

The Commission on Audit (COA), pursuant to Presidential Decree No. 1445, the Government Auditing Code of the Philippines, and related legal authorities, is responsible for establishing accounting and reporting requirements for the public sector in the Philippines.

In 2014, the COA issued Resolution No. 2014-003 adopting the Philippine Public Sector Accounting Standards (PPSAS), which are accrual-basis national standards based on the International Public Sector Accounting Standards issued by the International Public Sector Accounting Standards Board (IPSASB). These standards were initially based on the 2012 accrual-basis IPSAS and were accompanied by Philippine Application Guidance to address areas where local legal and regulatory requirements differ from the international standards.

In 2017, the COA issued Resolution No. 2017-006, which prescribed the adoption of additional PPSAS and updated existing standards to align with the 2016 edition of IPSAS. The PPSAS apply to national government agencies, local government units, and government-owned and controlled corporations that are not classified as government business enterprises.

For government business enterprises, COA Circular No. 2015-003 requires the application of Philippine Financial Reporting Standards and other relevant pronouncements issued under the private sector reporting framework.

While the public sector accounting framework in the Philippines is accrual-based and substantially aligned with IPSAS, the jurisdiction applies national standards with local modifications and there is no clear evidence that the latest IPSAS in effect at the time of the assessment have been fully adopted in their entirety. Accordingly, the jurisdiction is assessed as Partially Adopted.

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.

The Financial and Sustainability Reporting Standards Council (FSRSC), formerly the Financial Reporting Standards Council, was established under the authority of the Professional Regulatory Board of Accountancy (BOA) and the Professional Regulation Commission (PRC) to adopt and promulgate corporate financial reporting standards in the Philippines.

The FSRSC adopts IFRS Accounting Standards issued by the International Accounting Standards Board (IASB) as Philippine Financial Reporting Standards (PFRS). The jurisdiction has also adopted the IFRS for SMEs Accounting Standard as the Philippine Financial Reporting Standard for Small and Medium-sized Entities (PFRS for SMEs). These standards are subject to the approval and pronouncement process of the BOA and the PRC and are implemented through the requirements of the Securities and Exchange Commission (SEC) and other sector regulators.

The SEC applies a differential reporting framework under which domestic publicly accountable entities are required to apply full PFRS, while qualifying small and medium-sized entities may apply PFRS for SMEs. Micro-sized entities may apply either the applicable tax-basis framework or PFRS for SMEs, depending on their classification and regulatory requirements. The Bangko Sentral ng Pilipinas likewise requires banks and other supervised financial institutions to apply full PFRS.

In 2022, the BOA issued Resolution No. 44, Series of 2022, approving the adoption of the IFRS Sustainability Disclosure Standards and renaming the Financial Reporting Standards Council as the Financial and Sustainability Reporting Standards Council, thereby expanding its mandate to include sustainability reporting standards.

While the Philippines maintains a well-established convergence framework and requires the application of full PFRS by domestic publicly accountable entities, there is no clear public confirmation that the latest IFRS Accounting Standards in effect as of the time of the assessment have been fully adopted and are currently effective in the jurisdiction. Accordingly, the jurisdiction is assessed as Partially Adopted.

Current Status: Partially 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.