Part 8
IN this tele-tax-novela on the “Official Receipt for sale” story, it is clear that there should be an active collaboration between the government actors to investigate and prosecute the perpetrators of the crime. The Masterminds and sellers, as well as the buyers of the fake ORs, together with the negligent, if not conniving, Certified Public Accountant (CPA) external auditors of the Masterminds, should all bear the brunt of the efforts of the concerned government authorities in ensuring that the guilty are convicted and penalized for their evil doings.
A key government body in this campaign against the perpetrators is the Professional Regulatory Board of Accountancy. This is an institution that is tasked to regulate the accountancy practice and the CPAs. The listing of accredited CPA practitioners on the Professional Regulations Commission website indicates that there are 3,548 individual CPA auditors and 278 professional partnership firms as of December 31, 2022 (https://www.prc.gov.ph/acd-lists-accreditation-registrationcomplianceauthority). I note that these numbers have substantially decreased from the time I was the BOA Chairman when there were around 8,500 CPA practitioners and firms as of April 2018.
With the limited number of staff and resources, the BoA has a herculean task of monitoring and regulating the practice of these external auditors. However, this should not be cited as an excuse for the BoA not to be proactive in supporting the government’s efforts in running after the parties involved in the OR for sale crime. As discussed in my previous article, the CPA external auditors of the companies involved in the buying and selling of fake ORs are culpable in abetting these misdeeds if they have been negligent or failed to comply with the standards and rules in doing their audit engagements and issuing their attest opinions. I speculate that these CPAs have been remiss in their obligations if they issued unqualified fairness opinions when qualified or adverse opinions should have been the case. It is common knowledge that the so-called “notarial CPAs” continue to operate and issue countless unqualified opinion statements without performing the appropriate audit procedures and for the most minimal of audit fees. Sometimes even accepting fees for as low as P5,000 for attaching his “valuable” signature to the audit certification.
Despite the widespread news of the existence of the OR for sale syndicate discovered in the raid by government enforces of the Eastwood City office last November 2022, it was the Bureau of Internal Revenue, and not the BOA, which initiated the criminal and administrative proceedings against the syndicate and the erring CPAs alleged to be involved in the irregularity. Last March 16, 2023, the BIR initiated the filing of criminal cases with the Department of Justice against all these parties. The BIR also filed with the BoA an administrative complaint for the revocation of license against the same CPA on March 21, 2023.
The ball is now in the court of the BoA. What should it be doing now? The tele-tax-novela continues.
To be continued.
Joel L. Tan-Torres was the former 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. He is now back to his tax practice with his firm JL2T Consulting. He can be contacted at joeltantorress@yahoo.com