AUDIT MODEL

11.17.2011

AC 516 TTH 9:00 12:00 Group 1 Aparte, Kimberly Longakit, Jann Rhela Mondala, Cricelle Tesaluna, Mary Rose Tiongzon, Jade

Accountancy practice
By Raul J. Palabrica Philippine Daily Inquirer First Posted 03:32:00 02/06/2009 Globalization has become a convenient excuse for developed countries to justify their intrusion in certain commercial activities of developing countries that, by law and tradition, are reserved to the latters citizens. If the encroachment is resisted, the intruder engages in pressure tactics to force the target country into agreeing to the unwelcome entry, using globalization as cover for its action. When the tables are turned, expect the developed country to invoke (what else!) law and tradition to thwart the upstart countrys attempt to enjoy the benefits of globalization. In the guise of consultancy work, many foreign lawyers, engineers and architects have come to the country to engage in activities that can be competently performed by their Filipino counterpart. If the engagement is isolated and the required permits have been secured, theres no problem. But it becomes a cause for concern if the presence is permanent and, in the process, adversely affects the interests of our own professionals. Reports are rife that the local accountancy field is in the crosshair of foreign accounting firms. No longer content with simply forging affiliation ties with home-grown CPAs, they want to play a more active role in the countrys accounting and auditing activities. Citizenship Like law, engineering and architecture, the accountancy profession is a partly nationalized activity, meaning, it is reserved for Filipino citizens. Those who do not possess that qualification may be allowed to engage in its practice only after meeting certain requirements. The Philippine Accountancy Act of 2004 (Republic Act No. 9298) specifies Filipino citizenship, among others, as a qualification to take the licensure examination needed to qualify a person to practice accountancy in the country. The manner by which that citizenship was obtained by birth or through naturalization is immaterial. The citizenship requirement must be fulfilled at the time of filing of the application to take the exams, not any time after. The citizenship criterion in the practice of accountancy, like the other professions, reflects the governments protectionist policy toward our professionals. In essence, it means giving preferential treatment to Filipinos in the exercise of their professions in our country, especially in areas that are imbued with public interest. The discriminatory policy is understandable. No self-respecting country in the world would adopt a policy that would put its citizens at a disadvantage vis--vis foreigners in the pursuit of livelihood activities within its territory. Exceptions Although foreign accountants may, in special cases, be allowed to ply their trade here, the bias against such activity is evident from the way such permission is provided for in the law. A foreigner cannot practice accountancy in the country unless he can prove, in the manner provided by the rules of court that by specific provision of law, his own country allows Filipinos to practice that profession without restriction. The requirement that the proof of reciprocal treatment has to be validated through the judicial process (which is not exactly a breeze) is indicative of the laws intention to limit, as much as possible, the opportunity of any foreigner to compete with the locals in handling domestic accounting work. There is room though for foreign accountants to practice their profession in the country temporarily or for a short period of time.

The Board of Accountancy, the primary licensing authority for CPAs, with the approval of the Professional Regulations Commission, may issue temporary or special permits for such short engagements. That privilege is limited to foreigners called for consultation or for a specific purpose which, in the judgment of the board, is essential for the development of the country. Expertise In addition, it must be shown to the boards satisfaction that there is no Filipino CPA who is qualified to undertake that particular work. Considering the proven competence and expertise of our local bean counters, the latter requirement is practically a deal breaker in any effort to justify the entry of foreign accountants. The special permit may also be granted to foreign accountants who come here for the sole purpose of teaching or sharing his skills in fields that are essential to accountancy education in the country. A similar treatment may be given to foreigners who are internationally recognized for their expertise in a branch of accountancy and whose services are needed to help in the advancement of accountancy in the local scene. There are efforts in the ASEAN region for the accountants in this part of the world to come up with rules and standards that will enable them to engage in cross-border accounting and auditing activities. But getting to that goal may not be that easy because each country has its own laws and traditions on accountancy that are not easy to set aside or modify to allow a seamless practice within the region. Until agreement on permissible regional practice is reached, our laws on accountancy will have to be followed in accordance with the intent and spirit of the law. A contrary position could have serious monetary and penal consequences. SOURCE: http://books.google.com.ph/books?id=HzKuA6Pzc8MC&pg=PA185&lpg=PA185&dq=end+of+chapter+organizational +behavior+case+study+leadership+styles&source=bl&ots=dMn6qIXoY7&sig=S8xZtP_tjnKdKqyFalH0ysdeOM&hl=tl&ei=zkaITsKYE8idmQW0skZ&sa=X&oi=book_result&ct=result&resnum=1&ved=0CBgQ6AEwAA#v=onepage&q&f=false

KEY TERMS Globalization Globalization is a process of interaction and integration among the people, companies, and governments of different nations, a process driven by international trade and investment and aided by information technology. This process has effects on the environment, on culture, on political systems, on economic development and prosperity, and on human physical well-being in societies around the world. Permissible that can be permitted; allowable: a permissible amount of sentimentality under the circumstances. Penal - of, pertaining to, or involving punishment, as for crimes oroffenses. Accountancy - the process of communicating financial information about a business entity to users such as shareholders and managers.[1] The communication is generally in the form offinancial statements that show in money terms the economic resources under the control of management; the art lies in selecting the information that is relevant to the user and is reliable.[2]The principles of accountancy are applied to business entities in three divisions of practical art, named accounting, bookkeeping, and auditing. Affiliation - To adopt or accept as a member, subordinate associate, or branch. Imbue To inspire or influence thoroughly; pervade

Ply -

To practice or perform with diligence; to work at; To act, go, or work diligently and steadily; especially, to do something by repeated actions To go back and forth; as, a steamer plies between certain ports.

Rife - Having power; active; nimble; predominant, prevalent Competence - is the ability of an individual to perform a job properly Seamless - perfectly consistent and coherent

ENUMERATION :

What other profession aside from accountancy partly nationalized activity? 1. Law 2. Engineering 3. Architecture What are the qualifications to take the licensure examination for CPA? 4. Filipino citizen 5. Good moral character 6. Graduate of a degree in BSA from a college accredited by CHED 7. Not been convicted of any criminal offense.

MULTIPLE CHOICES: 1. What is the primary licensing authority for CPAs? a. b. c. d. Board of Accountancy Securities and Exchange Commission Professional Regulations Commission Commission in Higher Education

2.

What criterion in the practice of accountancy, like the other professions, reflects the governments protectionist policy toward our professionals? a. Duly registered CPA b. Have good moral character c. Citizenship d. Do not have any pecuniary interest on any school

3.

The manner by which that citizenship was obtained by birth or through naturalization is? a. Immaterial b. Relevant c. Important d. None of the above

4.

What do you think is the accountancy profession a partly nationalized activity? a. It is available for foreign accountants b. Reserved for Filipino citizens c. Reserved for Asian countries d. Reserve for European countries

5.

Statement: Globalization has become a convenient excuse for developed countries to justify their intrusion in certain commercial activities of developing countries that, by law and tradition, are reserved to the latters citizens. The statement is? a. False b. True c. Maybe d. Answer not given

ESSAY QUESTIONS: 1. Why do you think a foreign accountant can be allowed to ply their trade here in the Philippines? Answer: A foreigner cannot practice accountancy in the country unless he can prove, in the manner provided by the rules of court that by specific provision of law, his own country allows Filipino to practice that profession without restriction. The requirement that the proof of reciprocal treatment has to be validated through the judicial process is indicative of the laws intension to limit, as much as possible, the opportunity of any foreigner to compete with the locals in handling domestic accounting work. There is room though for foreign accountants to practice their profession in the country temporarily or for a short period of time. The BOA with the approval of the Professional Regulations Commission, may issue temporary or special permits for such short engagements.

2. Why is it that in getting the goal may not easy in the ASEAN region for the accountants in this part of the world to come up with the rules and standards that will enable them to engage in cross-border accounting and auditing activities? Answer: Getting to that goal may not be that easy because each country has its own laws and traditions on accountancy that are not easy to set aside or modify to allow a seamless practice within the region. Until agreement on permissible regional practice is reached, our laws on accountancy will have to be followed in accordance with the intent spirit of the law.