REPUBLIC ACT No. 5166
THE ACCOUNTANCY ACT OF 1967
Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:
ARTICLE I
Objectives and ImplementationSection 1. Objectives. - This Act provides for and shall govern:
(a) The standardization and regulation of accounting education;
(b) The examination for registration of certified public accountants; and
(c) The supervision, control and regulation of the practice of accountancy in the Philippines.
Section 2. Implementation. - For the purpose of implementing the provisions of this Act, there are created the following:
(a) Board of Accounting Education; and
(b) Board of Accountancy.
ARTICLE II
The Board of Accounting Education - Its FunctionsSection 3. Composition of the Board of Accounting Education. - The Board of Accounting Education shall be composed of the Secretary of Education or his duly authorized representative as Chairman, the Chairman of the Board of Accountancy, the President of the Philippine Institute of Certified Public Accountants, the President of the Philippine Association of Collegiate Schools of Business, and a representative of business...
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Republic Acts
THE ACCOUNTANCY ACT OF 1967.
Republic Act No. 5166
REPUBLIC ACT No. 5166
THE ACCOUNTANCY ACT OF 1967
Objectives and Implementation (Section 1-2):
- Standardize and regulate accounting education.
- Govern examination for registration of certified public accountants (CPAs).
- Supervise, control and regulate the practice of accountancy in the Philippines.
- Create the Board of Accounting Education and Board of Accountancy.
Board of Accounting Education (Section 3-7):
- Composed of Secretary of Education (Chairman), Chairman of Board of Accountancy, President of Philippine Institute of CPAs, President of Philippine Association of Collegiate Schools of Business, and a business/industry representative appointed by the President of the Philippines. (Section 3)
- Members are not entitled to compensation, except for traveling expenses. (Section 4)
- Functions:
- Determine minimum requirements for admission to CPA examinations. (Section 5a)
- Prescribe prior employment or apprenticeship experience requirements or substitution with practical training. (Section 5b)
- Determine certification requirements by institutions granting Bachelor of Science in Commerce or equivalent. (Section 5c)
- Promote, prescribe and enforce rules and regulations for effective implementation. (Section 5d)
- Prescribe collegiate courses for Bachelor of Science in Commerce or equivalent, including minimum units for Accounting and Auditing (36 units), Business Law (9 units), Taxation (6 units), English (15 units), Mathematics (9 units), and Economics (6 units). (Section 6)
- Prescribe one-year employment or apprenticeship experience requirements in accountancy or related field, or substitute with two semesters of practical training through academic work. (Section 7)
Board of Accountancy and Registration of CPAs (Section 8-22):
- Composed of a Chairman and five members appointed by the President of the Philippines from a list submitted by the Philippine Institute of CPAs. (Section 8)
- Conduct CPA examinations at least once a year in Manila, Cebu City, and Davao City, or other places if warranted. (Section 8)
- Evaluate, grade, sign and submit examination results to the Commissioner of Civil Service within 180 days. (Section 8)
- Promulgate rules and regulations, and set professional standards for the practice of accountancy, subject to the President's approval. (Section 8)
- Qualifications of examiners: Filipino citizen, good moral character, registered CPA, at least 10 years of practice or government service in accounting, and not connected with any school or review institute. (Section 9)
- Tenure of office and compensation: 3 years, with staggered terms for the first appointees; compensation of ₱5 per candidate examined per subject with a weight of 2 units, and ₱20 per diem for administrative investigations. (Section 10)
- The President may suspend or remove a member for neglect of duty, incompetence, or unprofessional conduct. (Section 11)
- Admission requirements for examination: Filipino citizen or permanent resident, at least 21 years old, good moral character, Bachelor of Science in Commerce or equivalent, and certified by the school as possessing the necessary employment or apprenticeship experience or substitute. (Section 12)
- Examination subjects and weights: Theory of Accounts (2 units), Business Law (1.5 units), Taxation (1.5 units), Management Services (1.5 units), Auditing Theory (1.5 units), Auditing Problems (2 units), Practical Accounting Problems I (2 units), Practical Accounting Problems II (2 units). (Section 13)
- Examination rating: General weighted average of 75% or above, with no subject rating below 65%; conditional credit for passing at least 3 subjects with a combined weight of 6 units, but must retake the remaining subjects within 2 years. (Section 14)
- Issuance of certificate of registration; grounds for refusal: Signed by the Chairman and Secretary of the Board of Accountancy; may be refused for conviction of a crime involving moral turpitude, immoral or dishonorable conduct, or being declared of unsound mind. (Section 15)
- Fees: ₱60 for examination, ₱10 for registration and issuance of certificate; ₱10 per subject with a weight of 2 units and ₱5 per subject with a weight of 1 unit for retaking the examination within 2 years. (Section 16)
- Administrative investigation: Study conditions affecting the practice of accountancy, maintain ethical and professional standards, issue subpoenas, promulgate rules and regulations; conducted by at least 4 members of the Board of Accountancy; may disapprove applications, reprimand, suspend or revoke registration certificates after due investigation. (Section 17)
- Procedure and rules: Respondent CPA to be furnished with written charges within 5 days, investigation to be conducted within 5 days after receipt of charges, and completed as soon as practicable. (Section 18)
- Grounds for proceedings against a CPA: Conviction of a crime involving moral turpitude, immoral or dishonorable conduct, insanity, fraud in acquisition of certificate, gross negligence or incompetence, addiction to alcohol or drugs, false or unethical advertisement, issuing certificates without observing auditing standards, aiding unqualified persons to practice accountancy, and violation of the Code of Ethics. (Section 19)
- Rights of respondents: Representation by counsel, speedy and public hearing, and confrontation and cross-examination of witnesses. (Section 20)
- Appeal from judgment: Decision of the Board of Accountancy becomes final after 30 days unless appealed to the Commissioner of Civil Service and then to the President of the Philippines. (Section 21)
- Reinstatement: After 5 years, the Board of Accountancy may order reinstatement of a revoked CPA certificate if the respondent has acted in an exemplary manner and not committed any illegal, immoral or dishonorable act. (Section 22)
Penal and Other Provisions (Section 23-29):
- Criminal offenses and penalties: Defeating or obstructing the examination process, falsely rating or reporting examination results, making false representations, impersonating or aiding impersonation, committing fraud or violating the Act or regulations; punishable by a fine not exceeding ₱1,000, imprisonment not exceeding 6 months, or both. (Section 23)
- Representing oneself as a CPA without a certificate or after suspension or revocation; punishable by a fine not exceeding ₱5,000, imprisonment not exceeding 2 years, or both, with each day of practice considered a separate offense. (Section 23)
- Confidentiality of communications between a CPA and client, except when permitted by the client or when required by state security; violation punishable as in the preceding paragraph. (Section 23)
- Definition of the practice of public accounting. (Section 24)
- Ownership of working papers, schedules and memoranda made by a CPA in the course of an examination, unless otherwise agreed with the client. (Section 25)
- Limitations on the practice of public accountancy: All partners or partnerships organized for public accountancy must be registered CPAs in the Philippines; corporations organized for public accountancy are not allowed to be registered. (Section 26)
- Appropriation of ₱20,000 from the National Treasury to carry out the provisions of the Act. (Section 27)
- Repealing clause: Commonwealth Act No. 342 and other inconsistent laws, executive orders, administrative orders, rules and regulations are repealed or modified accordingly. (Section 28)
- Effectivity: The Act takes effect upon approval; the Board of Accounting Education shall prescribe the necessary collegiate courses and employment or apprenticeship experience requirements within 1 year; the admission requirements for examination pertaining to education and experience shall take effect after 4 years from the date of prescription by the Board of Accounting Education. (Section 29)
THE ACCOUNTANCY ACT OF 1967
Objectives and Implementation (Section 1-2):
- Standardize and regulate accounting education.
- Govern examination for registration of certified public accountants (CPAs).
- Supervise, control and regulate the practice of accountancy in the Philippines.
- Create the Board of Accounting Education and Board of Accountancy.
Board of Accounting Education (Section 3-7):
- Composed of Secretary of Education (Chairman), Chairman of Board of Accountancy, President of Philippine Institute of CPAs, President of Philippine Association of Collegiate Schools of Business, and a business/industry representative appointed by the President of the Philippines. (Section 3)
- Members are not entitled to compensation, except for traveling expenses. (Section 4)
- Functions:
- Determine minimum requirements for admission to CPA examinations. (Section 5a)
- Prescribe prior employment or apprenticeship experience requirements or substitution with practical training. (Section 5b)
- Determine certification requirements by institutions granting Bachelor of Science in Commerce or equivalent. (Section 5c)
- Promote, prescribe and enforce rules and regulations for effective implementation. (Section 5d)
- Prescribe collegiate courses for Bachelor of Science in Commerce or equivalent, including minimum units for Accounting and Auditing (36 units), Business Law (9 units), Taxation (6 units), English (15 units), Mathematics (9 units), and Economics (6 units). (Section 6)
- Prescribe one-year employment or apprenticeship experience requirements in accountancy or related field, or substitute with two semesters of practical training through academic work. (Section 7)
Board of Accountancy and Registration of CPAs (Section 8-22):
- Composed of a Chairman and five members appointed by the President of the Philippines from a list submitted by the Philippine Institute of CPAs. (Section 8)
- Conduct CPA examinations at least once a year in Manila, Cebu City, and Davao City, or other places if warranted. (Section 8)
- Evaluate, grade, sign and submit examination results to the Commissioner of Civil Service within 180 days. (Section 8)
- Promulgate rules and regulations, and set professional standards for the practice of accountancy, subject to the President's approval. (Section 8)
- Qualifications of examiners: Filipino citizen, good moral character, registered CPA, at least 10 years of practice or government service in accounting, and not connected with any school or review institute. (Section 9)
- Tenure of office and compensation: 3 years, with staggered terms for the first appointees; compensation of ₱5 per candidate examined per subject with a weight of 2 units, and ₱20 per diem for administrative investigations. (Section 10)
- The President may suspend or remove a member for neglect of duty, incompetence, or unprofessional conduct. (Section 11)
- Admission requirements for examination: Filipino citizen or permanent resident, at least 21 years old, good moral character, Bachelor of Science in Commerce or equivalent, and certified by the school as possessing the necessary employment or apprenticeship experience or substitute. (Section 12)
- Examination subjects and weights: Theory of Accounts (2 units), Business Law (1.5 units), Taxation (1.5 units), Management Services (1.5 units), Auditing Theory (1.5 units), Auditing Problems (2 units), Practical Accounting Problems I (2 units), Practical Accounting Problems II (2 units). (Section 13)
- Examination rating: General weighted average of 75% or above, with no subject rating below 65%; conditional credit for passing at least 3 subjects with a combined weight of 6 units, but must retake the remaining subjects within 2 years. (Section 14)
- Issuance of certificate of registration; grounds for refusal: Signed by the Chairman and Secretary of the Board of Accountancy; may be refused for conviction of a crime involving moral turpitude, immoral or dishonorable conduct, or being declared of unsound mind. (Section 15)
- Fees: ₱60 for examination, ₱10 for registration and issuance of certificate; ₱10 per subject with a weight of 2 units and ₱5 per subject with a weight of 1 unit for retaking the examination within 2 years. (Section 16)
- Administrative investigation: Study conditions affecting the practice of accountancy, maintain ethical and professional standards, issue subpoenas, promulgate rules and regulations; conducted by at least 4 members of the Board of Accountancy; may disapprove applications, reprimand, suspend or revoke registration certificates after due investigation. (Section 17)
- Procedure and rules: Respondent CPA to be furnished with written charges within 5 days, investigation to be conducted within 5 days after receipt of charges, and completed as soon as practicable. (Section 18)
- Grounds for proceedings against a CPA: Conviction of a crime involving moral turpitude, immoral or dishonorable conduct, insanity, fraud in acquisition of certificate, gross negligence or incompetence, addiction to alcohol or drugs, false or unethical advertisement, issuing certificates without observing auditing standards, aiding unqualified persons to practice accountancy, and violation of the Code of Ethics. (Section 19)
- Rights of respondents: Representation by counsel, speedy and public hearing, and confrontation and cross-examination of witnesses. (Section 20)
- Appeal from judgment: Decision of the Board of Accountancy becomes final after 30 days unless appealed to the Commissioner of Civil Service and then to the President of the Philippines. (Section 21)
- Reinstatement: After 5 years, the Board of Accountancy may order reinstatement of a revoked CPA certificate if the respondent has acted in an exemplary manner and not committed any illegal, immoral or dishonorable act. (Section 22)
Penal and Other Provisions (Section 23-29):
- Criminal offenses and penalties: Defeating or obstructing the examination process, falsely rating or reporting examination results, making false representations, impersonating or aiding impersonation, committing fraud or violating the Act or regulations; punishable by a fine not exceeding ₱1,000, imprisonment not exceeding 6 months, or both. (Section 23)
- Representing oneself as a CPA without a certificate or after suspension or revocation; punishable by a fine not exceeding ₱5,000, imprisonment not exceeding 2 years, or both, with each day of practice considered a separate offense. (Section 23)
- Confidentiality of communications between a CPA and client, except when permitted by the client or when required by state security; violation punishable as in the preceding paragraph. (Section 23)
- Definition of the practice of public accounting. (Section 24)
- Ownership of working papers, schedules and memoranda made by a CPA in the course of an examination, unless otherwise agreed with the client. (Section 25)
- Limitations on the practice of public accountancy: All partners or partnerships organized for public accountancy must be registered CPAs in the Philippines; corporations organized for public accountancy are not allowed to be registered. (Section 26)
- Appropriation of ₱20,000 from the National Treasury to carry out the provisions of the Act. (Section 27)
- Repealing clause: Commonwealth Act No. 342 and other inconsistent laws, executive orders, administrative orders, rules and regulations are repealed or modified accordingly. (Section 28)
- Effectivity: The Act takes effect upon approval; the Board of Accounting Education shall prescribe the necessary collegiate courses and employment or apprenticeship experience requirements within 1 year; the admission requirements for examination pertaining to education and experience shall take effect after 4 years from the date of prescription by the Board of Accounting Education. (Section 29)