Module 1: AC315
Lalaine De Jesus
Erlie Cabral
Professional Practice of Accountancy
Learning Objective 1: Appreciate the role of the professional accountant in the economy
Role of the professional accountant in the economy. Professional accountants in both
commerce and industry and public accounting sectors must understand how organizations
are governed and the key information that boards utilize to ensure that organizations are
managed properly.
Learning Objective 2: Know the attributes of the profession
Accountancy as a Profession
Five major characteristics of an ideal profession according to Ernest Greenwood’s article
Attributes of a Profession (1957):
1. Systematic Theory
2. Professional Authority
3. Community Sanction
4. Regulations Code
5. A culture
1. Systematic Theory
The underlying theory of the public accounting profession consists of accounting theory –
financial accounting and reporting standards and practices and auditing standards – a
science of validation.
Knowledge in systematic theory can be achieved best through formal college level
education in an academic environment.
2. Professional Authority
Clients who use the service of a professional often do not really understand their
own needs. The basis for a professional accountants (CPA’s) authority is his
expertise in systematic theory of accounting and auditing.
3. Community Sanction
To become professional accountant, a candidate must satisfy government educational and
experience requirements and pass the CPA Licensure Board Examination.
The Licensing System is controlled by Professional Regulation Commission (PRC)
through the Board of Accountancy (BOA).
4. Regulations Code
The powers and privileges granted to the Public Accounting Profession by the
community effectively constitute a monopoly.
To prevent abuse of this monopoly and to discipline its members, the rules of
professional conduct or Code of Ethics have been promulgated and made legally
binding through the Accountancy Law.
5. A culture
The most recent revision in the Code of Ethics for Professional Accountants in the Philippines
made effective on April 6, 2016 states:
“A profession is distinguished by certain characteristics including:
A. Mastery of a particular intellectual skill acquired by training and education;
B. Adherence by its members to a common code of values and conduct established by its
administering body, including maintaining an outlook which is essentially objective; and
C. Acceptance of a duty of society as a whole (usually in return for restrictions in use of a
title in the granting of a qualification).”
The Revised Code of Ethics for Certified Public Accountants in the Philippines states
“A profession is distinguished by certain characteristics including:
A. Mastery of a particular intellectual skill, acquired by training and education;
B. Adherence by its members to a common code of values and conduct established by its
administering body, including maintaining an outlook which is essentially objective; and
C. Acceptance to a duty of society as a whole (usually in return for restrictions in use of a
title or in the granting of a qualification)
Learning Objective 3: Know who is a professional accountant
Question: Who is a professional accountant?
A professional accountant is an individual who holds a valid certificate issued by the Board of
Accountancy.
A professional accountant may belong to any of the following sectors:
Professional Accountant in Public Practice
Audit
Tax
Consulting
Professional Accountant in Business
Commerce and industry
Education
Government
Learning Objective 4: Enumerate the scope of the practice of accountancy
Scope of Practice
The Philippine Accountancy Act of 2004 (R.A. 9298), Article 1, Section 4, paragraphs (a) to (d)
spell out the scope of the practice of accountancy as follows:
a) Practice of Public Accountancy
b) Practice in Commerce and Industry
c) Practice in Education / Academe
d) Practice in Government
Learning Objective 5: Know the requirements to enter the accountancy profession
Requirements to Enter the Accountancy Profession
To be able to enter the professional accountancy profession in the Philippines, an individual
should be able to satisfy all of the following requirements:
a) A holder of a degree of Bachelor of Science in Accountancy conferred by school, college
or institute duly recognized and/or accredited by the Commission on Higher Education or
other authorized government office
b) Qualify as a professional accountant by passing the CPA Licensure Board Examination
administered by the Professional Regulatory Board of Accountancy
c) Satisfy all other legal requirements before the individual takes on the role of a
professional accountant
A. Pre-qualification Education Requirements
I. Professional Accounting Education
II. Professional Skills:
Intellectual Skills
Technical and Functional Skills
Personal Skills
Interpersonal and Communications Skills; and
General Education:
knowledge on human behavior
understanding the flow of ideas events in history, the different cultures in
today’s world and an international outlook
appreciation of art, literature, science, issues and contracting economic,
political and social forces in the world
experience in making value judgments
III. Professional Values, Ethics and Attitudes
Values and Attitudes
Nature of Ethics
B. CPA Licensure Examination
I. Qualification of Applicants for the Licensure Examination
Is a Filipino citizen
Is of good moral character
Is a holder of the degree of BS Accountancy
Has not been convicted of any criminal offense involving moral turpitude.
II. Scope of the Examination
1. Financial Accounting and Reporting
2. Advanced Financial Accounting and Reporting
3. Management Advisory Services
4. Auditing
5. Taxation
6. Regulatory Framework for Business Transaction
III. Rating in the Licensure Examination
Candidate must obtain general average of 75% with no grades lower than 65% in any
given subject.
C. Other Legal and Regulatory Requirements
I. Oath
II. Issuance of Certificates of registration and Professional Identification Card
III. Indication of Certificate of Registration, Identification Card and Professional Tax
Receipt
Learning Objective 6: Understand the need for the professional accountant to develop
capabilities and competence after admission to the profession
Developing Capabilities and Competence after Admission to the Profession
An individual may need further education and development to acquire capabilities and
competence required of professional accountants.
a. Advanced professional education pursued at academic institutions or through the programs of
professional bodies
b. On-the-job-training and experience programs
c. Off-the-job-training; and
d. Continuing professional development (CPD) courses and activities
Learning Objective 7A: Know the competency requirements for professional accountants
in public practice
Competency Requirements for Professional Accountants in Public Practice
A. Knowledge content
Audit of historical financial information at an advanced level;
Financial accounting and reporting at an advanced level; and
Information technology
B. Practical Experience
Learning Objective 7B: Know the competency requirements for professional accountants
in business
- Professional accountants in business form a very diverse constituency, and can be found
working as employees, consultants, and self-employed owner-managers or advisors.
Professional skills are part of the set of capabilities required by professional accountants
to demonstrate competence. Professional skills will be acquired in part during initial
qualification and training, but will need to be developed and honored throughout a career.
Competency Requirements for Professional Accountants in Business
In addition, with experience, the successful professional accountant in business can typically also
be characterized by a distinctive attitude, outlook or way of thinking or mindset.
1. Professionalism and Ethical Behavior
2. Professional Judgment
3. Organizational and Environmental Awareness
4. An Investor and Wider Stakeholder Focus
5. Change, Uncertainty and Complexity
How Competencies can be Developed and Maintained?
Some companies have specific development programs for professional accountants in business
which may involve:
a) Exposure to various parts of the organization
b) Formal an informal training, including coaching and mentoring; and
c) Synchronization of development with organization maturity
Learning Objective 8: Understand the increased globalization of accounting and auditing
This is brought about by the nature of accounting standards and the demand for accounting-
related information which have changed in several significant ways. These changes include:
a. Global Harmonization of Accounting Standards
b. Expanded Accountability
c. More Detailed Reporting
d. Increased Risk Reporting
e. Global Audit Standards
Learning Objective 9: Be familiar with what a CPA may expect in the future
CPA Horizons 2025: A Road Map for the Future
CPAs overwhelmingly agreed that the profession’s core purpose, “Making sense of a
changing and complex world,” remains relevant today and for the future
The profession’s core values remained substantially unchanged
The profession’s core competencies evolved to reflect the 21st century
The services provided by CPAs have become so varied and diverse that the concept of
core services is no longer representative of the profession
Ten Insights and Directions
The report highlighted 10 following insights with details on how each is likely to impact the
profession:
1. Technology
2. Pre-certification and Lifelong Learning
3. Worldwide Profession
4. Pride in the Profession
5. Trusted Attester
6. Trusted Advisor
7. Market Permissions
8. Marketplace
9. Value Proposition
10. Demographic Shifts
Core Values and Competencies
Integrity
Competence
Lifelong Learning
Objectivity
Commitment to Excellence
Relevance in the Global Marketplace
Core Values and Competencies
Core Competencies:
Communication Skills
Leadership Skills
Critical-Thinking and Problem-Solving Skills
Anticipating and Servicing Evolving Needs
Synthesizing Intelligence to Insight
Integration and Collaboration
Summary of the topic:
Professional accountants in both commerce and industry and public accounting sectors
must understand how organizations are governed and the key information that boards utilize to
ensure that organizations are managed properly. The five major characteristics of an ideal
profession according to Ernest Greenwood’s article Attributes of a Profession (1957): Systematic
Theory, Professional Authority, Community Sanction, Regulations Code and A culture. The
Revised Code of Ethics for Certified Public Accountants in the Philippines states “A profession
is distinguished by certain characteristics including mastery of a particular intellectual skill,
acquired by training and education; adherence by its members to a common code of values and
conduct established by its administering body, including maintaining an outlook which is
essentially objective; and acceptance to a duty of society as a whole; a professional accountant is
an individual who holds a valid certificate issued by the Board of Accountancy; and a
professional accountant may belong to any of the following sectors in professional accountant in
public practice and professional accountant in business. In the scope of practice, The Philippine
Accountancy Act of 2004 (R.A. 9298), Article 1, Section 4, paragraphs (a) to (d) spell out the
scope of the practice of accountancy as follows: Practice of Public Accountancy, Practice in
Commerce and Industry, Practice in Education / Academe, and Practice in Government. To be
able to enter the professional accountancy profession in the Philippines, an individual should be
able to satisfy all of the following requirements: a holder of a degree of Bachelor of Science in
Accountancy conferred by school, college or institute duly recognized and/or accredited by the
Commission on Higher Education or other authorized government office; qualify as a
professional accountant by passing the CPA Licensure Board Examination administered by the
Professional Regulatory Board of Accountancy; and satisfy all other legal requirements before
the individual takes on the role of a professional accountant. In the pre-qualification education
requirements are professional accounting education, professional skills, general education, and
professional values, ethics and attitudes. In CPA licensure examination, the qualification of
applicants is; a Filipino citizen, of good moral character, a holder of the degree of BS
Accountancy and has not been convicted of any criminal offense involving moral turpitude. The
scope of the examination is Financial Accounting and Reporting, Advanced Financial
Accounting and Reporting, Management Advisory Services, Auditing, Taxation, and Regulatory
Framework for Business Transaction. The candidate must obtain general average of 75% with no
grades lower than 65% in any given subject. Other legal and regulatory requirements are; oath,
issuance of certificates of registration and professional identification card and indication of
Certificate of Registration, Identification Card and Professional Tax Receipt. The developing
capabilities and competence after admission to the profession are; advanced professional
education pursued at academic institutions or through the programs of professional bodies, on-
the-job-training and experience programs, off-the-job-training; and continuing professional
development (CPD) courses and activities. The competency requirements for professional
accountants in public practice are knowledge content which are the audit of historical financial
information at an advanced level, financial accounting and reporting at an advanced level, and
information technology; and practical experience which professional accountants in business
form a very diverse constituency, and can be found working as employees, consultants, and self-
employed owner-managers or advisors, and professional skills are part of the set of capabilities
required by professional accountants to demonstrate competence that will be acquired in part
during initial qualification and training, but will need to be developed and honored throughout a
career. Some companies have specific development programs for professional accountants in
business which may involve: exposure to various parts of the organization, formal an informal
training, including coaching and mentoring; and synchronization of development with
organization maturity. The increased globalization of accounting and auditing is brought about
by the nature of accounting standards and the demand for accounting-related information which
have changed in several significant ways. These changes include: Global Harmonization of
Accounting Standards, Expanded Accountability, More Detailed Reporting, Increased Risk
Reporting, and Global Audit Standards. The CPA Horizons 2025: A Road Map for the Future,
CPAs overwhelmingly agreed that the profession’s core purpose, “Making sense of a changing
and complex world,” remains relevant today and for the future, the profession’s core values
remained substantially unchanged, the profession’s core competencies evolved to reflect the 21 st
century, and the services provided by CPAs have become so varied and diverse that the concept
of core services is no longer representative of the profession. The report highlighted 10 following
insights with details on how each is likely to impact the profession: Technology, Pre-certification
and Lifelong Learning, Worldwide Profession, Pride in the Profession, Trusted Attester, Trusted
Advisor, Market Permissions, Marketplace, Value Proposition, and Demographic Shifts. The
core values are; integrity, competence, lifelong learning, objectivity, and commitment to
excellence, relevance in the global marketplace. The core competencies are; communication
skills, leadership skills, critical-thinking and problem-solving skills, anticipating and servicing
evolving needs, synthesizing intelligence to insight, and integration and collaboration.
