Board of Accountancy

History
Although accounting has been practiced in the Philippines since the Spanish period and possibly even before, the seeds of Philippine
accountancy as a recognized profession were planted on March 17, 1928, when Act No. 3105 was approved by the Sixth Legislature.
Entitled 'An Act Regulating the Practice of Public Accounting; Creating the Board of Accountancy; Providing for Examination, for the
Granting of Certificates, and the Registration of Certified Public Accountants; for the Suspension or Revocation of Certificates; and
for Other Purposes,' the law paved the way for local accountants to do the work which, up to that time was performed by foreign
accountants in the country. Since then, both the profession and the body that directly regulates it have grown rapidly.
From 43 registered accountants in 1923, the number of CPAs has grown to over 100,689 by 1999. Many of these professionals have
distinguished themselves not only in the field of accountancy itself but in many other areas of human endeavor. To the roster of
Philippine CPAs belong such luminaries, past and present, as Jaime Hernandez and Paciano Dizon, the first and second Filipino
Auditor Generals of the Commission on Audit; Manuel Villar, Speaker of the House of Representatives; Washington SyCip, past
president of the International Federation of Accountants, the only Asian who has held the position and Founder and Chairman of SGV
& Co., the leading accountancy firm in the country; Jose W. Diokno, former Senator of the Philippines and Secretary of Justice;
Wenceslao Lagumbay and Alberto Romulo, former senators; and Andres Soriano, founder of one of the countrys leading
conglomerates. Many others have been cabinet members, heads of government agencies, chairmen and members of corporations
and institutions, heads and professors in the academe, and entrepreneurs.
Local accounting firms and partnerships have likewise entered the mainstream of international practice, establishing tie-ups with the
Big Five of the accounting world, namely, Arthur Andersen, Price Waterhouse Coopers, Ernst & Young, KPMG, and Deloitte Tohmatsu
International. The biggest of the local firms, SGV & Co., was the first to offer services outside the country and initiated the
establishment of The SGV Group composed of leading national accounting firms in East and Southeast Asia.
The increasing complexity of professional regulation and the developments in the practice of the profession have occasioned the
expansion of the Board of Accountancy from three members (president and two members) under Act No. 3105 in 1923, through six
(chairman and five members) under Republic Act No. 5166 ('The Accountancy Act of 1967') in 1967, to seven (chairman and six
members) under Presidential Decree No. 692 (The Revised Accountancy Law) in 1975. Under the stewardship of the PRC, the Board
of Accountancy discharges its mandate of supervising, controlling and regulating the practice of accountancy with authority and
distinction. But over and above its regular functions of standardizing and regulating accounting education, conducting examinations
for registering CPAs, and maintaining the rules of the practice, the Board has taken the lead in raising the standards of the
profession to a very high level of excellence, as evidenced by the following developments:
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Full computerization of the CPA licensure examinations. The accounting profession was the first among the professions to
achieve this, paving the way for the current record two-day release of examination results.
Upgrading of the quality of accounting education. With the PRC, the Board made representations with the DECS for the
adoption of standards for the organization and operation of professional accounting programs leading to the prescription of a
common baccalaureate degree Bachelor of Science in Accountancy. The Board periodically reviews school curricula and syllabi to
maintain their relevance, particularly in the area of information technology. It also initiated the continued monitoring of schools
performance in the CPA examinations and the recommendation of corrective measures, as necessary.
Regulation of CPA firms and partnerships. To assure compliance of their staff and partners with standards and regulations
of the practice, the Board moved for the registration of firms or partnerships of CPAs with both the PRC and the Board of
Accountancy.
Requirement of CPAs in civil service. The Board made representations with the Civil Service Commission to require that
only CPAs be appointed as accountants and auditors or to hold allied positions in government.

In 1975, with the accreditation by the PRC of the Philippine Institute of Certified Public Accountants (PICPA) as the bona fide
professional organization representing CPAs in the country, the Board has coordinated with PICPA to further strengthen the
profession. With PICPA, it has worked for the passage of The Accountancy Act of 1967; the issuance of the Code of Professional
Ethics in 1978; the issuance of guidelines in 1987 for the mandatory continuing professional education (CPE) program for CPAs; the
integration of the accounting profession completed in 1987; the biennial oathtaking of new CPAs; standards setting for the
profession through membership in the Accounting Standards Council and the Auditing Standards Practices Council; and the
declaration of the Accountancy Week.
As the global professional environment unfolds, with the onset of the 21st century, accountancy continues its trailblazing efforts. It is
the first among the Philippine professions to be included under the World Trade Organizations (WTO) policy of liberalization of
services. This means that Philippine accountants will be freely competing with in the global playing field against accountants from
other parts of the world and will be able to hold their own. This is due, in no small measure, to the long and distinguished careers of
the countrys accountants, to the linkages that local firms have forged with the worlds biggest accounting firms, and to the integrity
with which the Board of Accountancy and the Professional Regulation Commission are now administering a profession that has
acquired a global perspective.

Accounting, the Profession

The need for accounting grew as business and economics expanded and became
more complex. Public accounting was born in the nineteenth century in response to
the needs generated by the Industrial Revolution. The factory system was created,
demanding large amounts of capital and increasing commerce by a magnitude that

the world had not seen before. In addition, the legal entity, the corporation, was
formed. These changes led to the need for chartered accountants in Great Britain,
to certified public accountants in the United States, and to their counterparts in
other countries. Business and commerce has become increasingly complex. These
days management relies heavily on accounting data for decision making. In
addition, widespread ownership of corporate stock helped revolutionize the place of
the accountant in business from bookkeeper to strategic decision maker, from
paraprofessional to professional (Roy, McNeill, 1967).