Perhaps a number of the CPAs are not that compliant. The Board of Accountancy (BOA) Resolutions 03-2016 and 68-2016 pertaining to the preparation of the Compilation Certificate by CPAs continue as regulatory requirements for the preparation of Financial Statements (FS) for 2017.
This requirement for CPAs on the preparation and attachment of the Certificate of Compilation with the audited FS, that started for 2016 FS, continues for the FS for 2017. There are more than 6,000 accredited CPAs in commerce and industry, as well as over 8,200 CPAs in public practice, who are doing these compilation requirements and services required under BOA Resolutions 03-2016 and 68-2016. Business enterprises that have gross revenues exceeding P10 million for the year are covered by these rules.
The coverage of the compilation services and the responsibilities of the CPA in terms of the services rendered and the issuance of the certificate are essentially covered and discussed in the Philippine Standard on Related Services 4410 (Revised), Compilation Engagements. These are the guidelines that can guide both the CPAs in commerce and industry and the auditors in public practice hired by non-audit clients in performing the compilation services.
All external auditors of all companies and persons should bring to the attention of the management of their audit clients any instance(s) of omissions or noncompliance with the provisions of BOA Resolutions 03-2016 and 68-2016, including failure of the audit client to have a duly accredited CPA who is responsible for preparing the FS, the non-attachment of the Certificate in the annual statutory FS.
Pursuant to BOA Resolution 68-2016, all external auditors should notify the BOA of these client violations within one month from the conclusion of the audit engagement. It is incumbent on the external auditors to comply with this reporting that the BOA mandates, with sanctions being imposed on those auditors who do not follow these requirements of law and rule.
There will be more detailed rules that will be issued soon that will provide for the sanctions that will be imposed on violations or non-compliance. These violations include: (1) a covered enterprise filing its FS with the regulatory government offices without attaching the certificate, (2) the application for accreditation of the CPA not being approved/denied because of oversight/negligence/failure to comply with the accreditation requirement after the FS has been issued; (3) the external auditor of an audit client is the one doing the compilation services for the preparation of the FS and notes of the audit client; and (4) and any other pertinent cases. These noncompliance or violations will result in sanctions that will be imposed on either the CPA, the covered organization/person, or both.
The sanction/s that may be imposed by the Professional Regulation Commission (PRC)/BOA can be:
Reprimand of the CPA and/or covered organization/person.
Suspension of license of the CPA.
Imposition of fines and penalties on the CPA and/or covered organization/person.
Revocation of the license of the CPA.
Requirement for the submission or resubmission of a corrected or valid Certificate to replace the defective Certificate previously issued with the imposition of the corresponding sanctions on the erring CPA.
Pursuant to BOA Resolution 68-206, CPAs who have filed with the Professional Regulation Commission their applications for accreditation for CPA in commerce and industry and which are still pending in the PRC, can already sign the Certificate of Compilation. They will just need to indicate in such certificate the information that 'application filed on [date] and pending in PRC.'
My advise to my fellow CPAs, be aware and comply.