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Thursday, February 25, 2016

New Code of Ethics for Professional Accountants released by PRC BOA

Mr. Benjamin R. Punongbayan, founder of the
Punongbayan & Araullo (P&A) Grant Thornton.
Photo owned by the University of the East, Manila.
Visit their website at https://www.ue.edu.ph/manila/index.html.

As posted on January 5, 2016 on their website www.boa.com.ph, the Board of Accountancy, through PRC BOA Resolution No. 263, Series of 2015, has released the new Code of Ethics for Professional Accountants in the Philippines. The new code was essentially an adoption of the International Federation of Accountants (IFAC) 2013 Code of Ethics with exceptions on matters related to the Public Interest Entities (PIE) wherein Rule 68 of the Revised Securities Regulation Code is being considered.

As per last search through Google, I haven't found a copy or a link leading me to download a copy of the 2013 Code of Ethics. Nevertheless, you can download a copy of the IFAC 2013 Code of Ethics through their website with the following link: https://www.ifac.org/publications-resources/2013-handbook-code-ethics-professional-accountants. You need to agree with the terms and conditions provided by IFAC and sign in (if you already have an account) or sign up (if you don't have one yet) to download the said Code of Ethics.

These are the revisions made by the PRC BOA in matters relating to PIEs as provided in the first page of the resolution published in their website (link: http://boa.com.ph/2016/01/new-code-of-ethics-released/)

  • Section 290 - contains additional provisions that reflect the extent of public interest in certain entities.
  • Section 290.25 - enumerates the categories of Public Interest Entities (PIEs).
  • Section 290.26 - encourages firms and member bodies to determine whether or not to treat additional entities, or certain categories of entities as PIEs on account of their large number and wide range of stockholders
  • Definition of PIE (under Rule 68 of SRC) - Publicly Accountable Entities (PAE) which to same extent would fall under different criteria and categories inconsistent with the definition and category of PIE as prescribed under the IFAC Code.
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Wednesday, February 10, 2016

Audit Insights: The Vouching Process


One of the required tasks that auditors do in performing audit engagements is vouching. In my definition, vouching is a term used for inspecting the documents. Well as auditors, we need to understand the systems used, the processes and procedures done, the internal controls in place, the business systems, among others.

After being able to understand the processes, we will now identify the controls that the Company used in order to safeguard its assets and to detect fraud and error. We call these controls as attributes of our testing. Once we established our attributes, we will now test the documents supporting the transactions (e.g., inventory movements, cash deposits, etc.) based on the samples selected.

Well yeah audit is pretty challenging and toxic. But you've got to learn many things when doing an audit especially when you are exposed to different industries ranging from banks to healthcare institutions.

Sunday, February 7, 2016

Financial Doctors and their importance to the Business Environment

Frances Ouano Ponce

Since the start of the 19th century, business transactions are becoming complex. The concept of
Capitalism has led several businessmen to venture into different kinds of businesses to accumulate wealth.

One the other hand, the rise of the information technology and the world wide web (WWW) has raised the complexities of doing business. Although, information technology and the internet made significant contributions in processing voluminous business transactions we do everyday-- it had also brought with it several security risks and other risks inherent in doing business the automated way.

In the meantime, business executives and stakeholders nowadays make their business decisions based on information provided from the information systems they installed in their businesses. These information are very vital for the success of their organization and businesses.

Due to certain risks (e.g., inherent risks, control risks and information risks) present in a business information system, these stakeholders require and seek the services of qualified professionals who will do the risk assessment and provision of valuable opinion that would help them manage critical decisions.

These professionals are like financial doctors. They are called doctors in a way that they find indications of weaknesses and risks present in an information system. These doctors are very knowledgeable to different business processes from different industries.

Furthermore, they can also provide valuable opinions and possible remedies that could help businesses grow and improve their operations. Businesses cannot grow without the aid of these financial doctors.
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