1 CHAPTER I THE PROBLEM Introduction Ethical requirements and governing standards commit the management to provide services or facilities

with reputable credentials and accreditation in order to maintain valued client relationships. Through accreditation, one can be reasonably sure that the management adheres to certain standards, assurance codes, and professional ethics. As a status, accreditation provides public notification that an institution or program meets standards of quality set forth by an accrediting agency. As a process, accreditation reflects the fact that in achieving recognition by the accrediting agency, the institution or program is committed to self-study and external review by one's peers in seeking not only to meet standards but to continuously seek ways in which to enhance the quality of services and training provided. Accreditation is significant due to its attestation to the respectable business standing of an individual auditor or firm. It ensures public accountability of a program or an institution that it has the means to demonstrate the outcomes for its auditing process that are consistent with the established standards. To ensure competence, integrity, and global competitiveness, Certified Public Accountants in public practice go through accreditation process promulgated by the Cooperative Development Authority (CDA) in order to allow them to be able to practice as a cooperative external auditor.

2 Background of the Study The field of public accounting is composed of individual practitioners, small accounting firms and large multinational organizations that render independent and expert financial services to the public. (Valix, 2011) Of the three common services it offers, Auditing has been the primary service being practice by most public accounting practitioners. During the Industrial Revolution there is an economic growth all over the world, some businesses have vastly grow and became large entities thus emerging a need of passing the management from the owners to professional managers. This led, in the period 1850 to 1905, to an increased demand for auditors who were independent of management and who were engaged to detect not only clerical errors, but also management fraud. Consequently, auditors began to periodically report on the work they had performed to the owners of an entity, and thus the concept of what is now referred to as the "independent auditor's report" emerged. (Arjarquah, 2009) During the early 20th century American and British Audit differs in objective. American audits focused on reporting on the actual financial condition of the entity; conversely British audits continued to focus on the detection of fraud and error. From 1940 onwards, it became increasingly accepted by the auditing profession, that the primary objective of an audit was the provision of an opinion on the financial statements. (Ireneo, 2012) Although the objectives of an audit have remained unchanged since about 1940, pressure from the public to widen

3 audit objectives continues. As a result, there still is an increasing recognition of the importance of audit risk concepts in audit practice. Audit firms adopted what is generally called a 'risk-based approach' in auditing. An external auditor

is an audit professional who performs an audit on the financial statements of a company, government, individual, or any other legal entity or organization, and who is independent of the entity being audited. In the Philippines, in order to be external auditor, a certificate of accreditation shall be issued to Certified Public Accountants only upon showing in accordance with rules and regulations promulgated by the Board of Accountancy (BOA) and approved by the Professional Regulations Commission (PRC) that such registrant has acquired a minimum of three years of meaningful experience in any of the areas of practice. Before the establishment of the Sarbanes-Oxley Act of 2002, the auditing profession was mainly a self-regulated profession where peer review is the primary method which enables auditors to assess audit quality. Because of this, external auditors were subject to business pleasures, the desire for larger fees and profit margins, and the influence of paying clients who wanted certain accounting treatment and tax results. (Rezaee, 2007) Some big companies like Enron went to a bankruptcy due to this threats experienced by the external auditors thus the business world realizes a need to have an audit committee who will evaluate the auditor that will provide the service. In overseeing the work of external auditors, a responsible national body must be assigned to do the tasks. Having a national body in the public sector involves a variety of advantages or benefits that enables external auditors to

4 produce an unbiased audit regarding the public sectors entities. This not only enhances and develops the relationship and communication of both parties, but also contributes to the improvement of the coordination and teamwork being exhibited in the public sector. Accordingly, the State recognizes the rights of the cooperative sector to initiate and foster within its own ranks cooperative promotion, organization, training, information gathering, audit and support services, with government assistance where necessary. Pursuant to Republic Act 6939, an act creating the Cooperative Development Authority (CDA) and Article 80 of Republic Act 9520, otherwise known as the Philippine Cooperative Code of 2008, there are guidelines issued to govern the accreditation of cooperative external auditors. In furtherance of this policy and to ensure that reliance by regulatory authorities and the public on the opinion of external auditors is well placed, the following rules and regulations shall govern the selection, appointment, and delisting for external auditors of cooperatives. Statement of the Problem The study focuses on the analysis of accreditation process for accountants by the Cooperative Development Authority. Specifically, this study aims to seek answers to the following questions: 1.) What rules and regulations govern the accreditation of Cooperative External Auditor?

5 2.) What are the requirements of the Cooperative Development Authority for the accreditation for external auditors? 3.) To what extent does the Cooperative Development Authority accreditation affect the individual CPAs regarding: a. Financial Aspect b. Quality of Services c. Time Period 4.) How does the CDA measure the accountants adherence to the basic ethical principles, in terms of: a. Professional Competence b. Ethical conduct c. Independence Significance of the Study The study is designed to provide significant analyses of the accreditation process made by the Cooperative Development Authority that would help those accredited as well as non-accredited individual accounting practitioners to be acquainted with the requirements of CDA External Auditor Accreditation and to provide an insight of how it would affect them. It would also enable them to fully understand the rules and regulations of being a Cooperative External Auditor that will guide them as they continue to develop their professional competence and in adherence to the ethical conduct.

6 It could also make the accountancy students to become fully aware of the accreditation process, the legal bases behind it, the purpose it serves and how it could possibly affect them in the future. The study serves as a detailed guide of the Cooperative Development Authority Accreditation for the present researchers and lastly, it would help the future researchers as it serve as a reference in acquiring more ideas and information about the topic should they conduct a related study. Scope, Limitation and Delimitation The focus of this research is to analyze the accreditation process for the individual CPA practitioners in Batangas city by the Cooperative Development Authority. However, this study was delimited only to the effects of Cooperative Development Authority Accreditation requirements and did not include the accreditation processes of BIR, SEC, BSP and Insurance Commission Accreditation. Definition of Terms The following terms are operationally and lexically defined for a better understanding of the concepts used in the study. Accreditation. This term refers to a process in which certification of competency, authority, or credibility is presented.

7 Associate. This term refers to any director, officer, manager, or any person occupying a similar status or performing similar functions in the audit firm including employees performing supervisory role in the auditing process. Audit Engagement Letter. This refers to a document which informs the cooperative of an upcoming audit. It details the audit objectives, the timeline, and the audit team members. It also covers the pre-audit meeting, expected deliverables, and the audit teams mission. Auditing Firm. This means either the partners of a firm providing audit services or a sole practitioner providing audit services, as appropriate. Auditor-in-charge. This refers to the team leader of the audit engagement. Certified Public Accountant or CPA. This refers to a person who holds a valid Certificate of Registration and a valid professional identification card issued by the Commission upon recommendation by the board to those who have satisfactory complied with all the legal and procedural requirements for such issuance, including in appropriate cases, having passed the CPA licensure examination. Cooperative Development Authority or CDA. This refers to the only government agency granting juridical personality to cooperatives, herein referred to as the Authority. Cooperative External Auditor. This refers to an independent Certified Public Accountant (CPA) accredited by the CDA, whose relationship to the client

8 is to express an opinion on the financial statements. He/she may be the signing partner in an auditing firm or a sole practitioner. Fraud. This means an intentional act by one or more individuals among management, employees, or third parties that result in a misrepresentation of financial statements. It may involve: Manipulation, falsification or alteration of records or documents. Misappropriation of assets. Suppression or omission of the effects of transactions from records or documents. Recording of transactions without substance. Intentional misapplication of accounting policies. Omission of material information And any other instance/factor which may be classified as fraud. Partner. This term refers to all partners including those not performing audit engagements. Partnership. This means a professional partnership engaged in the practice of public accountancy duly registered with the Securities and Exchange Commission. [Art 1, Sec 1(g), Board of Accountancy Resolution No. 69, Series of 2003] Philippine Institute of Certified Public Accountant or PICPA. This term refers to the integrated national professional organization of Certified Public

9 Accountants accredited by the Board and the Commission per PRC Accreditation No. 15 dated October 2, 1975.

10 CHAPTER II REVIEW OF RELATED LITERATURE AND STUDIES

This chapter presents and discusses the related literature and studies regarding this research study. Related Literature A. Accreditation According to Ramani and Nelson (2008), accreditation refers to third-party determination of the compliance of a conformity assessment body with specific/defined technical and quality standards. Accreditation bodies such as the International Accreditation Service (IAS) provide accreditation for compliance with national and international standards of quality. Accreditation bodies must themselves operate under strict quality standards which are internationally defined by ISO/IEC and participate in a third-party peer-review process to assure compliance with these standards. In accounting and auditing, accreditation is also a must to regulate and improve the practice of these fields. Having accreditation does not necessarily mean that an auditor can provide absolute assurance, but it helps to separate undesirable audit practitioners. Thus, clients can rely and commit with the quality control procedures by audited auditing firms. Accreditation is significant due to its attestation to the respectable business standing of an individual auditor or firm. It ensures public accountability of a program or an institution that it has the

11 means to demonstrate the outcomes for its auditing process that are consistent with the established standards. (Salosagcol, 2009) Ethical requirements and governing standards commit the management to provide services or facilities with reputable credentials and accreditation in order to maintain valued client relationships. Through accreditation, one can be reasonably sure that the management adheres to certain standards, assurance codes, and professional ethics. With this, the International Organization for Standardization (ISO) aptly states that, "if there were no standards, we would soon notice." (http://www.healism.com/) As defined by the American Psychological Association, accreditation is both a status and a process. As a status, accreditation provides public notification that an institution or program meets standards of quality set forth by an accrediting agency. As a process, accreditation reflects the fact that in achieving recognition by the accrediting agency, the institution or program is committed to self-study and external review by one's peers in seeking not only to meet standards but to continuously seek ways in which to enhance the quality of services and training provided. (http://www.apa.org/ed/accreditation/about/about-accreditation.aspx) B. Cooperative Accreditation Akins (2010) stated that Cooperative accreditation is beneficial since a certain level of credibility and respect among the cooperatives and higher administration has been enhanced, as they have learned of the programs

12 accreditation status. The cooperative accreditation can enforce its policies, procedures, and requirements much better with its students and employers. In this, the Philippine Institute of Certified Public Accountants (PICPA) has joined forces with the CDA to enable the country's cooperatives sector come up with and adopt a financial reporting framework that complies with the International Financial Reporting System (IFRS). CDA commits to align the Standard Chart of Accounts (SCA) with the IFRS and the IAS; and draft the financial reporting frameworks for cooperatives. On the other hand, PICPA shall support CDA in the development of the said framework; assist the CDA in the presentation of these frameworks to the Board of Accountancy, as well as the Financial Reporting Standard Council. (http://cooperatives-society.blogspot.com/) The Certified Public Accountants as professionals and practitioners play a vital role in the promotion and development of cooperatives. They are not only the external auditors of cooperatives but also the management and financial consultants and oftentimes advisers of cooperative leaders and managers in the internal affairs of the cooperatives. They are also the educators and trainers in so far as accounting and financial management of cooperatives are concerned. Because of their long standing relationship with these community based and member-oriented organizations, the CPAs become coop advocates and leaders of a higher level consciousness of cooperativism as a way of life. The professional accountants also serve as the conscience of cooperative leaders and managers on the cooperative transparency and their accountability to the general membership and the cooperative movement. Nevertheless, there

13 is also a need for the accountants to regulate its own rank to weed out those who do not practice the profession in accordance with ethical standards and practices. For an independent Certified Public Accountant to be a Cooperative External Auditor, he must be accredited by the Cooperative Development Authority. Under the Memorandum Circular No. 2005-06 released by the CDA, all Certified Public Accountants duly accredited by the Professional Regulatory Commission Board of Accountancy (PRC-BOA) are authorized to render external audit of Cooperatives. Such rule is implemented until it was revised last 2009. Pursuant to Section 3 (f) of Republic Act 6939 and Article 80 of Republic Act 9520, otherwise known as the Philippine Cooperative Code of 2008, Memorandum Circular No. 2009-03 are issued to govern the accreditation of cooperative external auditors. As specified in the provisions of Section 2, an individual Certified Public Accountant (CPA) who seeks to be accredited as Cooperative External Auditor must file an accomplished application form (Annex 1) directly to the Cooperative Development Authority Extension Office (CDAEO) where such CPA is based, attaching thereto duly certified true copies of the following documents: i. ii. Professional Regulation Commission Identification Card (PRC ID); Valid Certificate of Registration with the Professional Regulation Commission Board of Accountancy (PRC-BOA); iii. Current Professional Tax Receipt (PTR) issued by the local

14 government; iv. Certificate of Membership in Good Standing with the Philippine Institute of Certified Public Accountants (PICPA) Chapter; v. Certificate/s of Completion of Training equivalent to a minimum of 24 hours of training with topics on Standard Chart of Accounts (SCA), Performance Standards for Credit & Other Types of Cooperatives with Credit Services of COOP-PESOS, Financial Reporting Standards for Cooperatives, Philippine Cooperative Code and other Rules and Regulations issued by the Authority. Such training shall be provided by the CDA or CDA recognized/ accredited institutions. As stated in Section 3 of the supposed Memorandum, the accreditation of Cooperative External Auditor shall be approved by the CDA Board of Administrators (CDA-BOA) upon recommendation of the Regulatory Unit of the CDA-CO. The applications for accreditation shall be fully disposed of within a period of thirty (30) days from the receipt of completed documents by the CDACO. When the applicant is accredited, he can now engage as an External Auditor prior to the conditions provided in Section 5 of Memorandum Circular No. 2009-03. The said conditions include that a) No external auditor may be engaged/qualified in the audit of a cooperative and any of its subsidiary if he/she or any member of his/her immediate family had or has committed to acquire any direct or indirect financial interest in the cooperative, or if his/her independence is

15 considered impaired under the circumstances specified in the Code of Professional Ethics for Certified Public Accountants. b) The external auditor and the members of the audit team do not have/shall not have outstanding loans or any credit accommodations with the cooperative at the time of signing of the engagement and during the engagement. c) The external auditor must not be currently engaged nor was engaged during the past 3 years in providing the following services to the Cooperative: Internal audit functions; Information systems design, implementation, and assessment; and such other services, which could affect his/her independence as, may be determined by the CDA. d) The external auditor, auditor-in-charge, and members of the audit team must adhere to the highest standards of professional conduct and shall carry out services in accordance with relevant ethical and technical standards, such as the Philippine Accounting Standards, Philippine Financial Reporting Standards, Philippine Standards on Auditing (PSA) and the Code of Professional Ethics for Certified Public Accountants; e) For the immediate past three years, the external auditor must not have held a position relevant to the conduct of audit such as, but not limited to, Chief Executive Officer, Chief Financial Officer, Comptroller, Accountant, Bookkeeper, Audit Committee, etc; f) For the immediate past three years, the external auditor must not have been a member/officer of the cooperative or employee/officer of a federation/union to which the cooperative being audited is affiliated; g) The external auditor must not be related to any officer and employee of the cooperative up to the fourth degree of consanguinity or affinity; and h) The external auditor, whether on his/her individual capacity or

16 as partner of a firm, may undertake the external audit of the concerned cooperative for not more than five (5) consecutive years, provided that the external auditor may be allowed to audit the same client after a gap of two (2) years. As stated in the provisions of Section 4, also known as the Validity of Accreditation and Inclusion in CDA List, the accreditation of external auditor shall be valid for a period of three (3) years from the date of issue. The CDAaccredited external auditors may apply for the renewal of their accreditation within three months prior to the expiration. The provisions of Section 3 of this Accreditation Criteria shall likewise apply for each application renewal. The CDA will circularize to all cooperatives the list of accredited cooperative external auditors once a year. The CDA, however, shall not be held liable for any damage or loss that may arise from the selection of the accredited cooperative external auditors to be engaged by the cooperatives for regular or special audit engagements. (http://www.cda.gov.ph/website/Downloads/accreditation.pdf) In Section 4 (k) of Memorandum Circular No. 2012-11 issued by the Cooperative Development Authority, the practice of the CDA-accredited external auditors is in adherence to Republic Act 9298 or Philippine Accountancy Act of 2004 as the legal basis of the Guidelines for the Registration of Service Cooperative Organized among Professionals to Practice a Particular Profession. (http://www.cda.gov.ph/website/Downloads/MC2012-11.pdf)

17 C. Republic Act 9520 Article 80 of Republic Act 9520 states that cooperatives registered under this act shall be subject to an annual financial, performance and social audit. Having an effective audit system is important for a cooperative because it enables the management to pursue and attain its various objectives central to the promoting the viability and growth of cooperatives as instruments for equity, social justice and economic development. Cooperative Audit is comprised of annual financial, performance and social audit. One of the most common types of audit is the financial statement audit which provides reasonable assurance as to the fairness of the financial statements taken up as a whole. (Salosagcol et al., 2009) On the other hand, performance audit is an assessment of the activities of an organization to see if the resources are being managed with due regard for economy, efficiency and effectiveness. (Khan, 2000) According to Investopedia (2012), social audit is a formal review of a company's endeavours in social responsibility. A social audit looks at factors such as a company's record of charitable giving and measures the organization's social and ethical performance. Clemens (2005) of Demand Media states that cooperatives need various forms of internal control to facilitate supervision and monitoring, prevent and detect irregular transactions, measure on-going performance, maintain adequate business records and to promote operational productivity. External auditors

18 review the design of the internal controls and informally propose improvements, and document any material irregularities to enable further investigation by management if it is warranted under the circumstances. External auditors express an opinion regarding the fairness of the financial statements to provide reasonable assurance to the intended users of this information. These auditors assess the risk of material misstatement in a company's financial reports. Hence, the management and users can make informed decisions with respect to the outcome of the financial statements. Thus, external auditors, being an essential part of the cooperative, must undergo certain procedures and comply with all the necessary requirements in order to be accredited. Auditors engaging in the cooperative sector are subject to certain qualifications. As to external auditor of financial statements, one must be independent of the cooperative or any of its subsidiary that he is auditing; and a member in good standing of the Philippine Institute of Certified Public Accountants (PICPA) and is accredited by both the Board and Accountancy and the Authority. On the other hand, the social audit shall be conducted by an independent social auditor accredited by the Authority. Performance and social audit reports which contain the findings and recommendations of the auditor shall be submitted to the board of directors. (Section 9, Article 80, R.A. 9520) Focusing on the financial statement audit, without a system of internal controls or an audit system, the cooperative would not be able to create reliable financial reports for internal or external purposes. Thus, it would not be able to

19 determine how to allocate its resources and would be unable to know which of its segments are profitable. Additionally, it could not manage its affairs, as it would not have the ability to tell the status of its assets and liabilities and would be rendered undependable in the marketplace due to its inability to consistently produce its goods and services in a reliable fashion. Accordingly, an audit system is crucial in preventing debilitating misstatements in a company's records and reports. (Clemens, 2005) Related Studies Board of Accountancy accreditation is established to enhance the capability of an individual accounting practitioner in delivering professional service; to foster excellence through the development of principles and guidelines for assessing the delivery of the professional activity; to attain and maintain the highest standards and quality in the practice of accountancy; to contribute to public confidence in the integrity of financial reporting in the Philippines by promoting high quality independent auditing; and to develop and maintain the capabilities that enable a professional accountant to perform competently within the professional environment. (Ebora, Lapitan, Padernos & Virata, 2012) According to Ebora et. al., (2012), BOA Accreditation has varying effects on the income of accounting practitioners. Majority of firms experienced an increase in their income. Complying with the accreditation program is relatively convenient and beneficial since the time consumed is reasonably sufficient. CPA firms have become more well-informed on the matters affecting the accounting

20 profession. With this, the quality of their services has stepped up to an advanced level giving them additional confidence in every report they issue. However, nonaccredited practitioners view BOA accreditation as a regulating process which limits those who enter the public practice. Accreditation strengthened developing work on all sections of an industry or profession and valuation of technical skills, proficiency and competency increased. (Tuunila, 2012)

21 CHAPTER III RESEARCH METHODS AND PROCEDURES

This chapter presents the brief descriptions of the research design, subjects, research materials and procedures and data gathering procedures that will be used by the researchers in conducting the study. Research Design The descriptive method of research is used in this study. Descriptive method of research is a fact-finding study with adequate interpretation of the findings. It describes with emphasis what actually exist such as current conditions, practices situations, or any phenomena. It is a logical manner of inductive-deductive reasoning to arrive at generalizations. Descriptive research is a scientific method which involves observing and describing the behaviour of a subject without influencing it anyway. Subjects The subjects of the study are the accredited cooperative individual practitioners in Batangas city. A total of six respondents within the Batangas city are selected to make as the samples. Due to the constraints of time and location, only four questionnaires are answered and returned to the researchers. Data Gathering Methods and Instruments Data collection comes from both primary and secondary sources. Primary data sources include key informants from the public sector. Secondary data

22 sources covered memorandums, publications and technical documents. Secondary sources provide the researchers with the essential information in preparing the questionnaire. Secondary sources help to verify official information and facilitate brainstorming for a comprehensive study of the analysis of accreditation process for accountants by the Cooperative Development Authority. Information is collected with the aid of secondary source analysis and questionnaires. Data gathered from research instruments are then computed for interpretation. Along with the primary data, the researchers also make use of secondary sources in the form of published articles and literatures to support the survey results. After collecting the accomplished questionnaires, the researchers evaluate the data acquired. Upon further analysis, the researchers draw out possible conclusions to suit its objectives. Data Analysis This research study uses the bar graph in presenting the results. Due to small population, the researchers only use the frequency and percentage in accumulating the results and evaluating the questionnaires given out to the subjects. The data obtained from the respondents are tabulated systematically in order to obtain accurate information related to each element of the target population. Moreover, document analysis is used in the fieldwork conducted for this study.

23 CHAPTER IV PRESENTATION, ANALYSIS AND INTERPRETATION

This chapter presents the tabulated data, analysis and interpretation of data related to the study. Part I: Rules and Regulations Governing the Accreditation of Cooperative External Auditor A. Republic Act No. 6939 An act creating the cooperative development authority to promote the viability and growth of cooperatives as instruments of equity, social justice and economic development, defining its powers, functions and responsibilities, rationalizing government policies and agencies with cooperative functions, supporting cooperative development, transferring the registration and regulation functions of existing government agencies on cooperatives as such and consolidating the same with the authority, appropriating funds therefore, and for other purposes. Cooperative Development Authority requires all cooperatives, their federations and unions to submit their annual financial statements, duly audited by certified public accountants, and general information sheets. B. Republic Act 9298 An act regulating the practice of accountancy in the Philippines, otherwise known as the Philippine Accountancy Act of 2004. The State recognizes the importance of accountants in nation building and

24 development. Hence it shall develop and nurture competent, virtuous, productive, and well rounded professional accountants whose standards of practice and service shall be excellent, qualitative, world class and globally competitive. C. Memorandum Circular No. 2009-03 A circular issued by Cooperative Development Authority (CDA) and implemented starting 2009 up to present, issuing the guidelines, rules, and regulations that govern the accreditation of cooperative external auditors.

Part II: Requirements of Cooperative Development Authority Accreditation for External Auditors Pursuant to Section 3 (f) of Republic Act 6939 and Article 80 of Republic Act 9520, otherwise known as the Philippine Cooperative Code of 2008, Memorandum Circular No. 2009-03 are issued to govern the accreditation of cooperative external auditors. As specified in the provisions of Section 2, separate documentary requirements are needed to be filed by an individual CPA and by partnership or auditing firm. A. For Individual CPA An individual Certified Public Accountant (CPA) who seeks to be accredited as Cooperative External Auditor must file an accomplished application form (Annex 1) directly to the Cooperative Development Authority Extension Office (CDA-EO) where such CPA is based, attaching thereto duly certified true

25 copies of the following documents: i. Professional Regulation Commission Identification Card (PRC ID);

ii. Valid Certificate of Registration with the Professional Regulation Commission Board of Accountancy (PRC-BOA); iii. Current Professional Tax Receipt (PTR) issued by the local government; iv. Certificate of Membership in Good Standing with the Philippine Institute of Certified Public Accountants (PICPA) Chapter; v. Certificate/s of Completion of Training equivalent to a minimum of 24 hours of training with topics on Standard Chart of Accounts (SCA), Performance Standards for Credit & Other Types of Cooperatives with Credit Services of COOP-PESOS, Financial Reporting Standards for Cooperatives, Philippine Cooperative Code and other Rules and Regulations issued by the Authority. Such training shall be provided by the CDA or CDA recognized/ accredited institutions. B. For Partnership/Auditing Firm The Partnership/Auditing Firm which seeks to be accredited as Cooperative External Auditor must file an accomplished application form (Annex 2) directly to the CDA EO where such firm is based; attaching thereto duly certified true copies of the following documents: I. SEC Registration; II. Partnerships Current Certificate of Registration with the BOA;\

26 III. Business Permit/Municipal License; IV. Certificate of Membership in Good Standing with PICPA chapter of at least one (1) partner; V. Certification that at least one (1) partner complied with the required training as prescribed in Section 2.A.1.v for the Individual CPAs, duly supported by certified true copies of certificates of completion or attendance; As stated in Section 3 of the supposed Memorandum, the accreditation of Cooperative External Auditor shall be approved by the CDA Board of Administrators (CDA-BOA) upon recommendation of the Regulatory Unit of the CDA-CO. The applications for accreditation shall be fully disposed of within a period of thirty (30) days from the receipt of completed documents by the CDA CO. When the applicant is accredited, he can now engage as an External Auditor prior to the conditions provided in Section 5 of Memorandum Circular No. 2009-03. These conditions include: a) No external auditor may be engaged/qualified in the audit of a cooperative and any of its subsidiary if he/she or any member of his/her immediate family had or has committed to acquire any direct or indirect financial interest in the cooperative, or if his/her independence is considered impaired under the circumstances specified in the Code of Professional Ethics for Certified Public Accountants. In the case of a partnership, this

27 limitation shall apply to the partners, associates, and the auditor-in-charge of the engagement and members of their immediate family. b) The external auditor and the members of the audit team do not have/shall not have outstanding loans or any credit accommodations with the cooperative at the time of signing of the engagement and during the engagement. In the case of partnership, this prohibition shall apply to the partners and the auditor-in-charge of the engagement. c) The external auditor must not be currently engaged nor was engaged during the past 3 years in providing the following services to the Cooperative: i. Internal audit functions; ii. Information systems design, implementation, and assessment; and iii. Such other services, which could affect his/her independence as, may be determined by the CDA. d) The external auditor, auditor-in-charge, and members of the audit team must adhere to the highest standards of professional conduct and shall carry out services in accordance with relevant ethical and technical standards, such as the Philippine Accounting Standards, Philippine Financial Reporting Standards, Philippine Standards on Auditing (PSA) and the Code of Professional Ethics for Certified Public Accountants; e) For the immediate past three years, the external auditor must not have held a position relevant to the conduct of audit such as, but not limited to,

28 Chief Executive Officer, Chief Financial Officer, Comptroller, Accountant, Bookkeeper, Audit Committee, etc; f) For the immediate past three years, the external auditor must not have been a member/officer of the cooperative or employee/officer of a federation/union to which the cooperative being audited is affiliated; g) The external auditor must not be related to any officer and employee of the cooperative up to the fourth degree of consanguinity or affinity; and h) The external auditor, whether on his/her individual capacity or as partner of a firm, may undertake the external audit of the concerned cooperative for not more than five (5) consecutive years, provided that the external auditor may be allowed to audit the same client after a gap of two (2) years. As stated in the provisions of Section 4, also known as the Validity of Accreditation and Inclusion in CDA List, the accreditation of external auditor shall be valid for a period of three (3) years from the date of issue. The CDA accredited external auditors may apply for the renewal of their accreditation within three months prior to the expiration. The provisions of Section 3 of this Accreditation Criteria shall likewise apply for each application renewal. The CDA will circularize to all cooperatives the list of accredited cooperative external auditors once a year. The CDA, however, shall not be held liable for any damage or loss that may arise from the selection of the accredited cooperative external auditors to be engaged by the cooperatives for regular or special audit engagements.

29 Part III: The Effects of the Cooperative Development Authority Accreditation to the Individual Practitioners A. Financial Aspect

5 4 3 2 1 0 Expensive Reasonable Inexpensive

Figure 1 Cost Incurred in the Accreditation Process Foremost, the respondents of this study are uniformly re -accredited individual CPA practitioners in Batangas City. All of them have less than ten cooperative clients. Only four out of six questionnaires have been returned to the researchers due to time and distance constraints. Furthermore, the relatively small number of respondents has caused difficulty to trace the target subjects; consequently, the researchers have only come up with four out of six CDA accredited practitioners. According to Section 8 of Memorandum Circular No. 2009-03, the accreditation fees vary from individual practitioners to partnerships or firm. The initial filing fee costs two thousand pesos (P2, 000.00) and five thousand pesos (P5, 000.00) for an individual and partnership or firm, respectively.

30 With respect to renewal fee, accreditation fees cost one thousand pesos (P1, 000.00) for an individual practitioner and three thousand pesos (P3, 000.00) for partnership or Firm. On the other hand, re-application fee costs two thousand pesos (P2, 000.00) for an individual practitioners and five thousand pesos (P5, 000.00) for partnership or firm. All four respondents find the accreditation fees reasonable. The accreditation fee is neither too expensive nor inexpensive. It suffices the firms capability to carry out its duties for the period which the accreditation is valid. They further note that the benefits derived from being a CDA-accredited CPA reasonably compensate the cost of the accreditation.

2.5 2 1.5 1 0.5 0 Significantly Increased Slightly Increased No change in Income

Figure 2 Change in Income after being accredited

50% of the respondents reveal that after being accredited by the Cooperative, their income slightly increased while the other half felt no increased in income at all. The slight increase in income can be attributed to the offsetting of the costs from accreditation and the earnings from auditing cooperatives.

31 Though there is only a slight increase in income, the benefits of the accreditation process still exceeds its cost since the auditors have been benefited from the trainings and learnings gained from the CDA. B. Quality of Service

3.5 3 2.5 2 1.5 1 0.5 0 Significantly Improved Slightly Improved Did not improve

Figure 3 Improvement in the Quality of Service 75% of the respondents remark that there have been significant improvements on the quality of services that they execute. Only one out of four respondents assesses that there has been only a slight improvement in the quality of service he or she gives. With this, they also believe that there is a difference in the quality of services before and after completion of training with topics on Standards Chart of Accounts of the Cooperative, FRSC-Cooperative and other rules and regulations. These trainings make the CDA-accredited auditor different and essentially preferred from those who are not accredited. They have gained substantial

32 learning in auditing the cooperative financial statements. With this, the respondents believe that the accreditation process has significantly helped the cooperative sector in pursuing and attaining reliable and dependable financial information and the accounting profession in advancing the knowledge of auditing financial statements for key areas in the Philippine economy, such as the Cooperative. C. Time Period

3.5 3 2.5 2 1.5 1 0.5 0 Lengthly Sufficient Too Short

Figure 4 Time consumed in Accreditation About 75% of the respondents consider the time they spent in complying with the requirements for the accreditation for renewal as ample and sufficient while the remaining 25% feels that the accreditation process is lengthy. Respondents consider the accreditation process time-consuming due to the required training for the cooperatives. This can probably be attributed to the required certificate of completion of training equivalent to a minimum of 24 hours

33 of training with topics on Standard Chart of Accounts (SCA), Performance Standards for Credit & Other Types of Cooperatives with Credit Services of COOP-PESOS, Financial Reporting Standards for Cooperatives, Philippine Cooperative Code and other Rules and Regulations issued by the Authority. Such training shall be provided by the CDA or CDA recognized/accredited institutions.

Part

IV:

How

Cooperative

Development

Authority

measures

the

accountants adherence to the basic ethical principles, in terms of: A. Professional Competence A certificate or license defining professional status implies that the holder has a certain minimum level of professional competence. The Cooperative Development Authority has long realized the importance of establishing a minimum level of competence for the public accounting profession engaged with the cooperative sector. Thus, an individual CPA who seeks to be accredited as Cooperative External Auditor must file an accomplished application form directly to Cooperative Development Authority Extension Office (CDA-EO) where the such CPA is based, attaching thereto duly certified true copies of the following documents: PRC ID, Individuals current Certificate of Registration with the PRC BOA, iii. Current Professional Tax Receipt (PTR) issued by the local government, Current PTR issued by the local government, Certificate of Membership in Good Standing with his/her PICPA Chapter, Certificate of Training equivalent to 24 hours of training attended on cooperative updates and issuances and other

34 related courses provided by CDA/CDA-accredited institutions. On the other hand, partnerships and firms need to file additional documents other than those above such as SEC registration and business permits. As stated in Section 130 of the Code of Ethics for Professional Accountants in the Philippines, a professional accountant has a continuing duty to maintain professional knowledge and skill at the level required to ensure that a client or employer receives competent professional service based on current developments in practice, legislation and techniques. A professional accountant should act diligently and in accordance with applicable technical and professional standards when providing professional services. In addition, they should conform with the technical and professional standards of the following: Board of Accountancy (BOA) / Professional Regulation Commission (PRC); Securities and Exchange Commission (SEC); Financial Reporting Standards Council (FRSC); Auditing and Assurance Standards Council (AASC); and Relevant legislation. Competent professional service requires the exercise of sound judgment in applying professional knowledge and skill in the performance of such service. Professional competence may be divided into two separate phases: (a) Attainment of professional competence; and (b) Maintenance of professional competence. The attainment of professional competence requires initially a high standard of general education followed by specific education, training and

35 examination in professionally relevant subjects, and whether prescribed or not, a period of work experience. This should be the normal pattern of development for a professional accountant. The maintenance of professional competence requires a continuing awareness and an understanding of relevant technical professional and business developments. Continuing professional development develops and maintains the capabilities that enable a professional accountant to perform competently within the professional environments. B. Ethical conduct Professional accountants should consider the ethical requirements as the basic principles which they should follow in performing their work particularly in the cooperative sector. A distinguishing mark of the accountancy profession is its acceptance of the responsibility to act in the public interest. Therefore, a professional accountants responsibility is not exclusively to satisfy the needs of an individual client or employer. In acting in the public interest a professional accountant

should observe and comply with the ethical requirements of this Code. With this, memorandum circular no. 2009-03 issues guidelines to govern the accreditation of cooperative external auditors. Under Section 5, the Cooperative Development Authority has given the following conditions the auditor should comply before engaging in the financial statement audit of a cooperative. No external auditor may be engaged/qualified in the audit of a cooperative

36 and any of its subsidiary if he/she or any member of his/her immediate family had or has committed to acquire any direct or indirect financial interest in the cooperative, or if his/her independence is considered impaired under the circumstances specified in the Code of Professional Ethics for Certified Public Accountants. In the case of a partnership, this limitation shall apply to the partners, associates, and the auditor-in-charge of the engagement and members of their immediate family. The external auditor and the members of the audit team do not have/shall not have outstanding loans or any credit accommodations with the cooperative at the time of signing of the engagement and during the engagement. In the case of partnership, this prohibition shall apply to the partners and the auditor -in-charge of the engagement. The external auditor must not be currently engaged nor was engaged during the past 3 years in providing the following services to the Cooperative: Internal audit functions; Information systems design, implementation, and assessment; and Such other services, which could affect his/her independence as, may be determined by the CDA. The external auditor, auditor-in-charge, and members of the audit team must adhere to the highest standards of professional conduct and shall carry out services in accordance with relevant ethical and technical standards, such as the Philippine Accounting Standards, Philippine Financial Reporting Standards,

37 Philippine Standards on Auditing (PSA) and the Code of Professional Ethics for Certified Public Accountants. For the immediate past three years, the external auditor must not have held a position relevant to the conduct of audit such as, but not limited to, Chief Executive Officer, Chief Financial Officer, Comptroller, Accountant, Bookkeeper, Audit Committee, and other similar positions. For the immediate past three years, the external auditor must not have been a member, officer of the cooperative, employee, officer of a federation/union to which the cooperative being audited is affiliated. The external auditor must not be related to any officer and employee of the cooperative up to the fourth degree of consanguinity or affinity; and The external auditor, whether on his/her individual capacity or as partner of a firm, may undertake the external audit of the concerned cooperative for not more than five (5) consecutive years, provided that the external auditor may be allowed to audit the same client after a gap of two (2) years. C. Independence Cooperative Members want effective control of finances. An effective audit committee is an essential tool in overseeing the financial health of a cooperative. Some areas of common audit committee oversight include the following partial list: Key areas of business and financial risk Code of ethics at the top

38 Internal controls and systems External audit activity and relationships Periodic financial reporting Internal audit activity Key personal selection for critical financial/control positions Although it does not directly apply to cooperatives, the Sarbanes -Oxley Act must be kept in mind and respected even in the non-corporate arena. The Sarbanes-Oxley Act contains a number of provisions affecting audit committees, including heightened independence standards for audit committee membership, audit oversight, audit committee financial experts, audit independence and auditor communications with audit committees. Basically, it is important to understand that no audit committee member from the board of directors is to have any special business arrangements with the party under audit or the cooperative. Before generating an audit committee, Sarbanes-Oxley should be comprehended and considered. A professional accountant in public practice who provides an assurance service is required to be independent of the assurance client. Independence of mind and in appearance is necessary to enable the professional accountant in public practice to express a conclusion, and be seen to express a conclusion, without bias, conflict of interest or undue influence of others. Section 290 of the Code of Ethics for Professional Accountants in the Philippines provides specific guidance on independence requirements for professional accountants in public

39 practice when performing an assurance engagement. Independence of Mind is the state of mind that permits the expression of a conclusion without being affected by influences that compromise professional judgment, allowing an individual to act with integrity, and exercise objectivity and professional skepticism. Independence in Appearance is the avoidance of facts and circumstances that are so significant that a reasonable and informed third party, having knowledge of all relevant information, including safeguards applied, would reasonably conclude a firms, or a member of the assurance teams, integrity, objectivity or professional skepticism had been compromised. A professional accountant in public practice should evaluate the significance of identified threats and, if they are other than clearly insignificant, safeguards should be considered and applied as necessary to eliminate them or reduce them to an acceptable level. Such safeguards may include: Withdrawing from the engagement team. Supervisory procedures. Terminating the financial or business relationship giving rise to the threat. Discussing the issue with higher levels of management within the firm. Discussing the issue with those charged with governance of the client

40 CHAPTER V SUMMARY, FINDINGS, CONCLUSIONS AND RECOMMENDATIONS This chapter presents the summary of findings, conclusions, and recommendations drawn from the gathered information by conducting the study.

Summary This research study focuses on the analysis of accreditation process for accountants by the Cooperative Development Authority in Batangas city. Specifically, it sought to answer the following questions: 1. What rules and regulations govern the accreditation of Cooperative External Auditor? 2. What are the requirements of the Cooperative Development Authority for the accreditation for external auditors? 3. To what extent does the Cooperative Development Authority accreditation affect the individual CPAs regarding: a. Financial Aspect b. Quality of Services c. Time Period 4. How does the CDA measure the accountants adherence to the basic ethical principles, in terms of: a. Professional Competence b. Ethical conduct c. Independence

41 Findings Based on the gathered data, the researchers came up with the following findings:
1. There are three rules and regulations that govern the accreditation of a

cooperative external auditor (1) Republic Act No. 6939 which is an act creating the Cooperative Development Authority which requires all

cooperatives, their federations and unions to submit their annual financial statements, duly audited by certified public accountants, and general information sheets. For this rule to be implemented and fulfilled, (2) Memorandum Circular No. 2009-03, was issued by CDA and implemented starting 2009 up to present. The circular provides the guidelines, rules, and regulations that govern the accreditation of cooperative external auditors. The practice of the accountants accredited shall be guided by (3) Republic Act 9298. An act regulating the practice of accountancy in the Philippines, otherwise known as the Philippine Accountancy Act of 2004.
2.

An individual Certified Public Accountant (CPA) who seeks to be accredited as Cooperative External Auditor must file an accomplished application form (Annex 1) directly to the Cooperative Development Authority Extension Office (CDA-EO) where such CPA is based, attaching thereto duly certified true copies of the following documents: (a) Professional Regulation Commission Identification Card (PRC ID); (b) Valid Certificate of Registration with the Professional Regulation Commission Board of Accountancy (PRCBOA); (c) Current Professional Tax Receipt (PTR) issued by the local

42 government; (d) Certificate of Membership in Good Standing with the Philippine Institute of Certified Public Accountants (PICPA) Chapter; and (e) Certificate/s of Completion of Training equivalent to a minimum of 24 hours of training with topics on Standard Chart of Accounts (SCA), Performance Standards for Credit & Other Types of Cooperatives with Credit Services of COOP-PESOS, Financial Reporting Standards for Cooperatives, Philippine Cooperative Code and other Rules and Regulations issued by the Authority. Such training shall be provided by the CDA or CDA recognized/ accredited institutions. The accreditation of Cooperative External Auditor shall be approved by the CDA Board of Administrators (CDA-BOA) upon recommendation of the Regulatory Unit of the CDA-CO. The applications for accreditation shall be fully disposed of within a period of thirty (30) days from the receipt of completed documents by the CDA-CO. When the applicant is accredited, he can now engage as an External Auditor prior to the conditions provided in Section 5 of Memorandum Circular No. 2009-03. The accreditation of external auditor shall be valid for a period of three (3) years from the date of issue. The CDA-accredited external auditors may apply for the renewal of their accreditation within three months prior to the expiration. The provisions of Section 3 of this Accreditation Criteria shall likewise apply for each application renewal.
3. The accreditation process by the Cooperative Development Authority has

affected the individual accounting practitioners, regarding:

43 a. Financial Aspects All four respondents find the accreditation fees reasonable. The accreditation fee is neither too expensive nor inexpensive. They further noted that the benefits derived from being a CDA -accredited CPA reasonably compensate the cost of the accreditation. 50% of the respondents reveal that after being accredited by the Cooperative, their income slightly increased while the other half felt no increased in income at all. b. Quality of Service. 75% of the respondents remark that there have been significant improvements on the quality of services that they execute. Only one out of four respondents assesses that there has been only a slight improvement in the quality of service he or she gives. They also noted that there is difference in the quality of services before and after completion of training with topics on Standards Chart of Accounts of the Cooperative, FRSC-Cooperative and other rules and regulations. c. Time Period About 75% of the respondents consider the time they spent in complying with the requirements for the accreditation as ample and sufficient while the remaining 25% feels that the accreditation process is lengthy. Respondents consider the accreditation process time-consuming due to the required training for the cooperatives. This can probably be attributed to the required certificate of completion of training equivalent to a minimum of 24

44 hours of training with topics on Standard Chart of Accounts (SCA), Performance Standards for Credit & Other Types of Cooperatives with Credit Services of COOP-PESOS, Financial Reporting Standards for Cooperatives, Philippine Cooperative Code and other Rules and Regulations issued by the Authority. Such training shall be provided by the CDA or CDA recognized/ accredited institutions.
4. The

Cooperative

Development Authority

measures

the

accountants

adherence to the basic ethical principles, in terms of: a. Professional Competence The Cooperative Development Authority issues guidelines that will establish a minimum level of competence for the public accounting profession engaged with the cooperative sector. Thus, an individual accountant as well as the partnership/auditing firm who seeks to be accredited as cooperative external auditor must file an accomplished application form together with the true copies of documents required by the authority. When providing services, professional accountants must act with required professional knowledge and skills and in accordance with applicable technical and professional standards. b. Ethical conduct The responsibility of a professional accountant is to act in the public interest and to comply with the ethical requirements of the profession. No external auditor, auditor-in-charge, and members of the audit team may be engaged/qualified in the audit if his independence is considered impaired

45 under the circumstances specified in the Code of Professional Ethics. He must adhere to the highest standards of professional conduct and shall carry out services in accordance with relevant ethical and technical standards. c. Independence A professional accountant in public practice who provides an assurance service is required to be independent of the assurance client. Independence of mind and in appearance is necessary to enable the professional accountant in public practice to express a conclusion, and be seen to express a conclusion, without bias, conflict of interest or undue influence of others. A professional accountant in public practice should evaluate the significance of identified threats to independence and, if they are other than clearly insignificant, safeguards such as withdrawing from the engagement and supervisory procedures, should be considered and applied as necessary to eliminate them or reduce them to an acceptable level. Conclusions After conducting the study, the researcher was able to draw the following conclusions: 1. There are three rules and regulations that govern the accreditation of a Cooperative External Auditor. These are Republic Act No. 6939, Memorandum Circular No. 2009-03, and Republic Act 9298. 2. In order for an individual Certified Public Accountant (CPA) to be

46 accredited as Cooperative External Auditor, he/she must file an accomplished application form (Annex 1) directly to the Cooperative Development Authority Extension Office (CDA-EO) where such CPA is based, together with duly certified true copies of the required documents stated in Memorandum Circular No. 2009-03. The accreditation shall be approved by the CDA Board of Administrators upon recommendation of the Regulatory Unit of the CDA-CO. When the applicant is accredited, he can now engage as an External Auditor, valid for three years from the date of issue prior to the conditions provided. 3. The accreditation process by the Cooperative Development Authority has varying effects to the individual practitioners, regarding financial aspect, time used and quality of services rendered. In regards to the financial aspect, the respondents find the accreditation fees reasonable. However, there are no significant changes in the income of the auditors after being accredited by the Cooperative Development Authority. Majority of the respondents only experience a slight increase in income or no significant changes at all. In terms of their quality of service, most of the respondents remark that there have been significant improvements on the quality of services that they execute. In terms of time used, majority of the respondents consider the time they spent in complying with the requirements for the accreditation as ample and sufficient. 4. In its guidelines, the Cooperative Development Authority provides some qualifications that must be possess by the auditors to ensure that they

47 have the professional competence when conducting the audit. Aside from competence, they also emphasize the ethical conduct and the independence of an auditor. The key factor to be considered by an external auditor to be able to produce a reliable audit is his ability to work in line with his professional ethics. Through the accreditation process, the Cooperative Development Authority can reasonably measure the

accountants adherence to the basic ethical principles. The CDA accreditation process has helped the cooperative sector in pursuing and attaining reliable and dependable financial information. Recommendation Based from the foregoing conclusions, the following recommendations are hereby presented. 1. Future researchers can conduct a study with a larger scope to achieve a more comprehensive analysis of the accreditation process for financial statement auditors by the Cooperative Development Authority. 2. A similar study should be conducted to partnership/auditing firm to determine the similarities and differences of the requirements and the effects of the accreditation to them. 3. A further survey should be conducted to verify whether the accredited cooperative external auditors adhere to the basic ethical principles of the practice of accountancy. 4. Strict measures and controls should be put in place and strengthen to

48 check and monitor the external auditors of the Cooperative. 5. The Cooperative Development Authority should strictly implement and inform all the cooperatives about the accreditation process so that they will be well-versed to whom they should rightly engage for a financial statement audit.

49 Bibliography

A. Books Salosagcol, Jekell G., et al., (2009) Auditing Theory, A Guide in understanding the AASC Pronouncements PSA, PSRE, PSAE & PSRS, GIC Enterprises & Co., Inc., Manila Philippines

B. Thesis Ebora, Angelica, et al., (2012) A Study on the Effects of BOA Accreditation among Individual Accounting Practitioners in Batangas Province,

University of Batangas, p. 36 40 Tuunila, R. (2012) Accreditation of chemical engineering programmes in Lappeenranta University of Technology: observations of its effect on development of education Lappeenranta University of Technology, Department of Chemical Technology, p. 2 3 C. Journals Muhammad Akram Khan (2000) Performance Auditing, Asian Journal of Government Audit Clements, Jeff (2005) The Importance of an Audit System to Companies, Demand Media Ramani, C. P. & Nelson, David (2008) The Effect of Accreditation on International Trade, IAS Akins, Thomas (2010) Why Accreditation is important, Co-op Accreditation, Georgia Institute of Technology, Division of Professional Practice

50 D. Websites http://www.apa.org/ed/accreditation/about/about-accreditation.aspx http://www.healism.com/medical_tourism_safety/accreditation/importance_of_acc reditation/ http://www.investopedia.com/terms/s/social-audit.asp http://smallbusiness.chron.com/importance-audit-system-companies-14705.html http://www.lawphil.net/statutes/repacts/ra2009/ra_9520_2009.html http://www.cda.gov.ph/website/Downloads/accreditation.pdf

51 Appendix Questionnaire

Sir/Madam: Greetings! We are third year college students of the College of Business and Accountancy of the University of Batangas. In line with the requirements in our Research Subject, we are writing a research paper about the Analysis of Accreditation Process for Accountants by Cooperative Development Authority in Batangas city. In order to come up with an objective and comprehensive paper, may we be allowed to conduct a survey regarding the said topic. Your insights on the matter will be of utmost importance to us. Be assured that your inputs will be treated with utmost confidentiality and will be used for research purposes only. We thank you for your anticipated cooperation. Yours truly, _______________ Falculan, Delsie Group Member _______________ Ortega, Mirare D. Group Member _______________ Macasaet, Sherlyn Group Member

Noted by:

______________________ MRS. SOCORRO TAMAYO Research Adviser

52 QUESTIONNAIRE Directions: Please read carefully the items provided below. Please check the item that corresponds to your answer.

PART I PROFILE OF THE RESPONDENT Name (optional): _______________ Age: ________ Type of Respondent: First time accredited cooperative auditor Re-accredited Under Renewal Process Number of Cooperative Client Gender: Male Female

Less than five 5 10 10 20 More than 20

PART II QUESTIONNAIRE PROPER A. Has the Cooperative Development Authority Accreditation affect you, with respect to:

I. Financial Aspect a. Cost incurred in the Accreditation Process

Too expensive Reasonable Inexpensive

53 b. Changes in income after being Accredited

Significant increase in income Slightly increase in income No changes in income Decrease in income
II. Time Aspects a. Time consumed in Accreditation

Lengthy Sufficient enough Too short

b. Period of Renewal

Lengthy Sufficient enough Too short

III. Quality of Service

Significantly improved my quality of service Slightly improved my quality of service Did not improve my quality of service
B. Insights about the CDA Accreditation Process 1. Are the requirements for audit engagement (ethical requirements and independence) met before auditing cooperatives?

Yes

Partially met

No

2. Are the reportorial requirements (PFRS compliance and disclosures of adverse findings) met during the audit engagement?

Yes

Partially met

No

54 3. Is there a difference in the quality of services before and after completion of training with topics on Standard Chart of Accounts of the Cooperative, FRSC-Cooperative and other rules and regulations?

There is.

There is none.

4. Is there a difference in the quality of services offered to Cooperatives by CDA-accredited accounting practitioners from those who are not accredited?

There is.
cost of the accreditation?

There is none.

5. Do the benefits derived from being a CDA-accredited CPA compensate the

Yes Very strict

There is.

No

6. How strict is the CDA accreditation process? Strict Not strict at all

7. Do you think there really is a need for accreditation?

8. In your opinion, does the CDA accreditation process help the cooperative sector in pursuing and attaining reliable and dependable financial information?

Yes

No

9. Do you agree that the CDA accreditation has contributed significantly in providing more reliable financial statements and ensuring that the cooperative is operating according to cooperative principles?

Yes

No

10. In your opinion, does the CDA accreditation process for individual accounting practitioners contribute to the advancement of the accounting profession?

Yes

No

55 CURRICULUM VITAE

Name Date of Birth Place of Birth Address

: : : :

Delsie F. Falculan January 10, 1994 Batangas City Greenwoods South, Pallocan East, Batangas city

Educational Background Tertiary Course Bachelor of Science in Accountancy University of Batangas Hilltop, Batangas City 2010 present

Secondary Course University of Batangas High school department Hilltop, Batangas City 2006 - 2010 Primary Course University of Batangas Elementary department MH Del Pilar St., Batangas City 1999 2006

56 CURRICULUM VITAE

Name Date of Birth Place of Birth Address

: : : :

Sherlyn B. Macasaet March 25, 1993 Batangas City Nueva Villa Subdivision, Alangilan, Batangas City

Educational Background Tertiary Course Bachelor of Science in Accountancy University of Batangas Kumintang Ilaya, Batangas City 2010 present

Secondary Course Batangas National High School Rizal Avenue, Batangas City 2006 - 2010 Primary Course Batangas City South Elementary School P. Canlapan St., Batangas City 1999 - 2006

57 CURRICULUM VITAE

Name Date of Birth Place of Birth Address

: : : :

Mirare D. Ortega August 15, 1994 Batangas Malapad na Parang, Lobo, Batangas

Educational Background Tertiary Course Bachelor of Science in Accountancy University of Batangas Hilltop, Batangas City 2010 present

Secondary Course University of Batangas High school department Hilltop, Batangas City 2006 - 2010 Primary Course Malapad na Parang Elem. School P. Canlapan St., Batangas City 1999 2006