GALANG, KARLIE MARIE P.

IIIBSA-1 TF 2:30-4:00

HISTORY OF ACCOUNTANCY IN THE PHILIPPINES

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:

1. 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.
2. 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.
3. 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.
4. 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.

Impression:

There are so many reasons why accountants are important to a business organization.
Although there are still people who dont know the importance of accountants, I still
believe that with the increasing number of accountants and rapid growth of
accounting profession, the whole world will soon recognize the value of accountants.
Accounting is indeed the backbone of a business because the accountant is the one
who finances and leads the companies into the future. Thats why I have no regrets in
taking this profession, I know someday I will be one of the people who not only provide
competent services but perform their job with integrity.