Fifth part of a series
Should the accountancy profession have an integrated and unified Accredited Profession Organization (APO)?
This intent of the Professional Regulatory Board of Accountancy (BOA) is quite clear with its proposed revision of Section 30 of the Accountancy Act of 2004 (Republic Act 9298 or “Accountancy Act”). The present clause provides for an “Accredited Professional Organization where all registered certified public accountants who appear in the roster of certified public accountants [CPA] shall be united and integrated through their membership in a one and only registered and accredited national professional organization of registered and licensed certified public accountants.”
While the present law clearly enunciates for a “united and integrated” professional organization that all CPAs should be a member of, this was never implemented to the letter. The Philippine Institute of CPAs, the largest professional organization for CPAs, has never been able to gather a great number of CPAs to be its members. Various reasons have been cited for this failure, including the lack of implementing rules from the BOA to effectively implement the integrated organization provision of the law, lack of marketing or operational effort by PICPA, legal issues raised against PICPA, the “competition” from the various sectoral accountancy organizations, and others. Professional organizations, such as the Integrated Bar of the Philippines for lawyers, have managed to become the integrated and sole organization for all the licensed individuals in their profession.
The proposed amendment suggests that all CPAs in the Philippines shall automatically become members of the integrated professional organization, without citing that PICPA shall be designated as such. I submit before PICPA, or any other organization, can claim to be the united and integrated organization or APO of CPAs, it should be able to justify such exclusive designation. Such organization should be able to present to BOA and all the accountancy stakeholders that it has the governance principles in place, operational and financial capacity to service the members, and the vision for enhancing the standing and welfare of the CPAs and the profession in the local and international community. Such organization should not be comfortable and confident that it should automatically be the integrated organization for reason that it is the biggest among the accountancy professional organizations.
I also suggest that this organization should be provided by law with responsibilities and authority befitting the APO of all CPAs. These include the sole responsibility to discipline and penalize erring CPAs. All APOs, including PICPA, have already a system of handling complaints against or cases committed by erring CPAs. However, the process of assessment of such cases and the disciplining of its members are slow and not too effective. The integrated APO should be able to exercise is disciplinary mandate to the hilt. The BOA role in disciplining CPAs should be limited to instituting the penalty of dropping from the CPA rolls the erring accountants upon the recommendation of the APO. With this arrangement, the APO can gain the respect of the accountancy stakeholders and “fear” from erring CPAs.
Another mandate of the APO that should be included in the Accountancy Law amendments is issuing accounting and auditing standards for practice. Presently, it is the BOA that issues resolutions to promulgate accounting or auditing standards or rules. Likewise, it is the BOA that implements the same rules. Finally, it is the same BOA that adjudicates legal or regulatory issues or questions pertaining to the standards. The BOA is all powerful under the present set up of being the legislator, implementor and judge of the rules. Check and balance principles require that there should be a separation of these three functions into different persons or entities. Following this principle, the role of legislation or standard setting should be assigned to an institution different from the one implementing the same, i.e., the BOA. Properly, the APO of the accountancy profession should be able to discharge this important task.
I support the move to institute amendments to the Accountancy Law on a united and integrated APO, but, with the additional responsibilities and authority befitting this organization.
To be continued
Joel L. Tan-Torres is the Dean of the University of the Philippines Virata School of Business. Previously, he was the Commissioner of the Bureau of Internal Revenue, the chairman of the Professional Regulatory Board of Accountancy and partner of Reyes Tacandong & Co. and the SyCip Gorres and Velayo & Co. He is a Certified Public Accountant who garnered No. 1 in the CPA Board Examination of May 1979.
This column accepts articles for publication from the business and academic community. Articles not exceeding 600 words can be e-mailed to jltantorres@up.edu.ph.