Chapter 1: The Accountancy Profession and its Development PDF

# Chapter 1: The Accountancy Profession and its Development ## Learning Objectives: After studying this chapter, we should be able to: 1. Familiarize the background of the accountancy profession, the career opportunities of a CPA and salient points of the Philippine Accountancy Act of 2004. 2. Le...

# Chapter 1: The Accountancy Profession and its Development ## Learning Objectives: After studying this chapter, we should be able to: 1. Familiarize the background of the accountancy profession, the career opportunities of a CPA and salient points of the Philippine Accountancy Act of 2004. 2. Learn the various acronyms related to business, government agencies and accountancy profession. 3. Understand the reason why Philippine ASC has shifted to IAS. 4. Understand the effect of global accounting practices to our Filipino accountants. ## The Accountancy Profession Accountancy is not only one of the modest, less expensive but also the most prestigious profession in the land today. Since it existed way back in 1923, it hardly gained recognition among the professions like medicine, engineering and law. Accountancy is least known and unpopular because of the nature of services it accorded to its clients which is handled with much needed "confidentiality." Aside from this, the profession becomes the most feared of and dreaded of all, because it maintained the highest mortality rate among courses that require board examinations. Despite the mortality rate problem, accountancy emerged as the most sought-after profession with the tremendous growth and development of business in the country today. From a dismal 43 registered Certified Public Accountants in 1923 to approximately 162,000 as of October 2015 with Mr. Armand Fabella of the Jose Rizal College as holder of the first CPA Certificate or PRC-CPA Certificate No. 001. The accountancy profession demands a quality of high standards performance at all times to the public it served. Be it in government service, commerce and industry or in the academe which requires integrity, competence, due care and diligence in the performance of duty which are embodied in the Code of Ethics for CPAs. Much more in public practice where the CPA should maintain a high degree of independence in mental attitude on matters concerning the impartiality of financial reports and maintain secrecy of confidential information because credibility of the profession is at stake in the performance of the "attest" function. It is a welcome development to note that Accountancy is the first among the professions here in the Philippines to be included under the World Trade Organization's (WTO) policy of liberalization of services. This means that Filipino accountants will be freely competing with other accountants from other parts of the world in the global field of accounting practice. ## What is an Accountant? A Certified Public Accountant or a Professional Accountant is a holder of a baccalaureate degree in Bachelor of Science in Accountancy (BSA), who has taken and passed the difficult and competitive licensure examination for Certified Public Accountants and carries the title as "C.P.A", vested by the laws of the Republic to practice Public Accounting in general under the supervision of the Professional Regulation Commission. The course in BS Accountancy replaces all business courses majoring in the subjects of accounting under the old curriculum. So, those who have taken and passed the said examination are included in the above definition of the profession. In the past, it has been the practice of private companies especially in areas where there are positions as accountant or bookkeeper/accountant although they are not, in the real sense of the word. This created confusion and misled the public of what really is the role of a bookkeeper and a professional accountant. At this juncture, the work of a bookkeeper is clearly distinguished from the work of a professional accountant in Chapter 4. At present, the Board of Accountancy employs strictness in the implementation of the rules and regulations of the practice wherein it requires the accreditation of all CPAs firms or we have to comply with the requirements with both the Professional Regulation Commission and Board of Accountancy before we can be allowed to practice public accountancy. ## What are the Career Opportunities of an Accountant? Once we become accountants, there we find several opportunities to grab with. We can be employed and worked in various fields of endeavor such as the following: ### Public Accounting - Under this field, we are in public practice. - As a public practitioner, we have two options to choose from. - Either we will become individual practitioners and join partnership with other individual practitioners. - Or getting employed with firms of CPAs like, Punongbayan & Araullo, Sycip Gorres Velayo & Co. (SGV & Co.) Ampil Elises Ciudadano & Co., Reyes Tacandong & Co. and many other auditing firms. - We are not an employee of the client company under audit but assume the role as "independent entity" vested with freedom to exercise our own judgment in carrying out the engagement requiring our independence and impartiality of the report we prepared. - Our work will include auditing, the examination of financial statements and report our findings to the management; taxation, the preparation of Income Tax Returns and management services, the design and installation of accounting systems. - Once we choose this field, we will become a member of the Association of CPAs in Public Practice (ACPAPP) sector. ### Government Accounting - Under this field, we are to render services to the government. - We will gain employment in the National Government Agencies (NGA), such as: - Department of Finance - Securities and Exchange Commission - Bangko Sentral ng Pilipinas - National Bureau of Investigation - Bureau of Internal Revenue - Department of Budget and Management - Department of Public Works and Highways - Department of Trade and Industry - etc. - Or in the Government-Owned and Controlled Corporations (GOCC), such as: - Government Service Insurance System - Social Security System - Home Development and Mutual Fund - etc. - At present all cities, provinces and municipalities which are considered as Local Government Units (LGU) are already employing accountants pursuant to Republic Act 7160 known as the "Local Government Code of 1991". This widens the job opportunities of accountants. - Once we choose this field, we will become a member of the Government Association of CPAS (GACPA) sector. ### Private Accounting - Under this field, we will gain employment in private firms and hold positions as: - Chief Accountant - Accounting Manager - Internal Auditor - Finance Manager - The highest accounting officer of an enterprise which is known as the "Comptroller". - Once we choose this field, we will become a member of the Association of CPAs in Commerce and Industry (ACPACI) sector. ### Accounting Education - There are CPAs who join in the academe and sacrifice the high income generating profession for the sake of love in accounting education. - They are our accounting professors, researchers, CPA Reviewers where only few become authors in accounting books; the unsung heroes who are committed to painstakingly prepare the candidates to the difficult examinations for Certified Public Accountants. - Once we choose this field, we will become a member of the Association of CPAs in Education (ACPAE) sector. Other accountants become entrepreneurs in their own rights. They managed their own businesses. With all these, can we imagine how versatile the accountants are? All CPAs are members of the national professional organization known as "Philippine Institute of Certified Public Accountants" (PICPA). ## Code of Professional Ethics for CPAs in the Philippines The Code of Ethics for Professional Accountants in the Philippines was recently adopted from the revised Code of Ethics for Professional Accountants developed by International Federation of Accountants (IFAC) which took effect on June 30, 2008. The use of this Code of Ethics has been approved by the Board of Directors of the Philippine Institute of Certified Accountants (PICPA) and the same has been adopted by the Board of Accountancy (BOA) and finally approved by the Professional Regulation Commission (PRC) as part of the rules and regulations of the BOA for the practice of accountancy profession. This is the start of the relationship among business, government, the investing public and other users of financial information. The Internal Federation of Accountants (IFAC) is an international body representing all the major accounting bodies across the world. Its mission is to develop, adopt and implement with high quality international standards and guidance; contributing to the development of strong professional accounting organizations and accounting firms and to high quality practice of by professional accountants worldwide. Being a member of International Federation of Accountants (IFAC), it is committed to observe the following fundamental principles, viz: ### Integrity - A professional accountant should be straightforward and honest in all professional and business relationships. - Integrity also implies fair dealing and truthfulness. - A professional accountant should not be associated with reports, returns, communications or other information where they believe that the information: - Contains a materially false or misleading statement. - Contains statements or information furnished recklessly. - Omits or obscures information required to be included where such omission or obscurity would be misleading. ### Objectivity - A professional accountant should not allow bias, conflict of interest or under influence of others to override professional or business judgments. ### Professional Competence and Due Care - A professional accountant has a continuing duty to maintain professional knowledge and skill at the level required to ensure that a client or employer receives competent professional service based on current developments in practice, legislation and techniques. - A professional accountant should act diligently and in accordance with applicable technical and professional standards when providing professional services (accounting, auditing, taxation, management consulting and financial management services). - They should conform with the technical and professional standards of the following: - Board of Accountancy (BOA)/Professional Regulation Commission (PRC) - Securities and Exchange Commission (SEC) - Financial Reporting Standards Council (FRSC) - Auditing and Assurance Standards Council (AASC) - Relevant legislation Competent professional service requires the exercise of sound judgment in applying professional knowledge and skill in the performance of such services. Professional competence may be divided into two (2) separate phases: 1. **Attainment of professional competence.** The normal pattern of development starts initially with a high standard of general education followed by specific education, training and examination in professionally relevant subjects, and whether prescribed or not, a period of work experience. 2. **Maintenance of professional competence.** This requires a continuing awareness and an understanding of relevant technical professional and business developments. Continuing professional development develops and maintains the capabilities that enable a professional accountant to perform competently within the professional environments. Diligent encompasses the responsibility to act in accordance with the requirements of an assignment, carefully, thoroughly and on a timely basis. A professional accountant should take steps to ensure that those working under the professional accountant's authority in a professional capacity have appropriate training and supervision. Where appropriate, a professional accountant should make clients, employers or other users of the professional services aware of limitations inherent in the services to avoid the misinterpretation of an expression of opinion as an assertion of fact. ### Confidentiality - A professional accountant should respect the confidentiality of information acquired as a result of professional and business relationships and should not disclose any such information to third parties without proper and specific authority unless there is a legal or professional right or duty to disclose. - Confidential information acquired as a result of professional and business relationships should not be used for the personal advantage of the professional accountant or third parties. ### Professional Behavior - A professional accountant should comply with relevant laws and regulations and should avoid any action that discredits the profession. - In marketing and promoting themselves and their work, professional accountants should not bring the profession into disrepute. - Professional accountants should be honest and truthful and should not: - Make exaggerated claims for the services they are able to offer, the qualifications. they posses, or experience they have gained. - Make disparaging reference or unsubstantiated comparisons to the work of others. ## Core Competencies Framework for Accountants It has been a problem in the past on how to bridge the gap between clientele-companies' needs and what our graduates from the academe can offer. A competency-based approach to the preparation of professionals offers a systematic and effective way of bridging this gap. A competency-based approach to education is one where the competencies, and skill sets required of a newly admitted professional are identified through a formal process and are later validated by business and industry and subject matter experts. Such identified competencies (or learner outcomes) have predetermined performance measures for assessing skill acquisition. The government has undertaken efforts to improve the entry-level qualification requirements for the Filipino CPAs by releasing the well-defined set of competencies, **Core Competency Framework for Entry to the Philippine Accountancy Profession.** The core competencies for accountants identify the knowledge, skill, and professional values that new CPAs need to have in order to successfully face the challenges of today's changing environment and the future. The strategic goal is to produce technically competent and ethical professional accountants ready to compete internationally. Hence, the higher education structure (which includes the curriculum and course syllabi) should develop the following minimum core competencies: ### Knowledge - The CPAs knowledge must cover: - **General Knowledge** - Of emphasis here are gaining an understanding of the different cultures in the world and developing an international perspective. - It is generally believed that the traits that will make our Filipino CPAs prominent in the global marketplace are: - Competency in the English language (the lingua franca of business). - Adaptability to Western business practices. - Level of training. - Good capabilities in dealing with foreign partners. - **Organizational and Business Knowledge** - In addition to the core knowledge in areas such as economics, quantitative methods and business statistics, organization behavior, marketing and operations management, the CPA must be conversant of international business and have an understanding of how the global business system works. - He should also have an appreciation of the importance of ethics and corporate governance in business. - The CPA must demonstrate competence in the following: - Administrative capability and efficiency. - Decision modelling. - Risk analysis and management. - Measurement. - Industry and sector perspective. - **Information Technology (IT) Knowledge** - This includes not only being conversant with IT concepts for business system but sound knowledge on internal control in computer-based systems, development standards and practices for business systems, management of the adoption, implementation and use of IT, evaluation of computer business systems, and managing the security of information. - **Accounting Knowledge** - This includes core knowledge related to accounting and related areas and must include proficiency in the international accounting and auditing standards, cost management and the latest concepts in management accounting, recent tax laws, business and commercial laws. - It also includes knowledge of corporate finance and the Philippine capital markets, professional ethics and environmental accounting and reporting. - The CPA should demonstrate competence in the following: - Basic Accounting and Preparation of Financial Statements, the Accounting Profession and International Accounting Standards. - Advanced Financial Accounting Practices. - Advanced Financial Reporting Principles. - Management Accounting - Basic Concepts. - Management Accounting-Information for Planning, Decision-Making and Control. - Taxation. - Business and Commercial Laws. - Auditing - Fundamentals. - Auditing Advanced Concepts. - Business Finance and Financial Management. ### Skills - The skills to be developed include: - **Intellectual** - This set of skills includes the ability to carry out abstract logical thinking and understand critical thinking. - It also includes creative thinking or the generation of new ideas; visualization or "seeing things in the mind's eye"; and reasoning skills or the discovery of a rule or principle underlying the relationship between two or more objects and applying it when solving a problem. - The CPA must demonstrate the following skills: - Analysis. - Problem solving. - Strategic/critical thinking. - **Interpersonal** - This involves developing the ability of CPAs to work in groups and being a team player. - It includes the skills to participate as member of a team and contributing to group effort; teaching others new skills; working to satisfy clients' expectations; negotiation skills and working with diversity or working well with men and women from diverse backgrounds. - The CPA must demonstrate attributes, such as: - Being a team player. - Persuasion, confidence and diplomacy. - Discreetness, open mind and patience. - Capability for work and ability to respond well to pressure. - **Communication** - This refers to active listening skills and the ability to communicate effectively one's points of view, both orally and in writing, at all organization levels; being able to justify one's position, deliver powerful presentations and to persuade and convince others. - The CPA must demonstrate skills such as the ability to: - Verbally and/or in writing explain financial/statistical/administrative matters/policies/procedures/regulatory matters/audit results at a level appropriate to the audience. - Ask clear, concise and relevant questions to obtain desired information to perform a task. - Negotiate effectively. ### Values - Values must concentrate on: - **Professional Ethics** - Since the objectives of the accountancy profession are to work in accordance with the highest standards of professionalism, to attain the higher level of performance and generally to meet the public interest, the need for CPAs to conform to the ethical standards of the profession become vital. - These include integrity, objectivity and independence, professional competence and due care, confidentiality, and professional behavior. - **Moral Values** - Beyond ethical rules, there is a need for CPAs to be able to discern between what is morally right or wrong. ## The Accountancy Law of 2004 One of the remarkable developments in the accountancy profession is the signing into law on May 13, 2004 by her Excellency, Madam President Gloria Macapagal-Arroyo, R.A. No. 9298 known as "Philippine Accountancy Act of 2004" which repealed Presidential Decree No. 692 formerly known as the "Revised Accountancy Law" that was enacted on May 5, 1975 by his Excellency, the late President Ferdinand E. Marcos. The law mentions the revival of the Continuing Professional Development (CPD) for CPAs which originally took effect in 1987. It states that, "All Certified Public Accountants shall abide by the requirements, rules and regulations on continuing professional education to be promulgated by the Board, subject to the approval of the Commission, in coordination with the accredited national professional organizations of certified public accountants or any duly accredited educational institutions. For this purpose, a CPD Council is hereby created to implement the CPD program". Other salient points of the law are as follows: - **The Board of Accountancy and its Composition (Sec. 5)** - The Board of Accountancy (BOA), under the supervision and administrative control of the Professional Regulation Commission (PRC) shall be composed of a chairman and six (6)' members to be appointed by the President of the Philippines from a list of three (3) recommendees for each position and ranked by the Commission, from a list of five (5) nominees for each position submitted by the accredited national professional organization of Certified Public Accountants. The Board shall elect a vice-chairman from among its members for the term of one (1) year. The chairman shall preside in all meetings of the Board and in the event of a vacancy in the office of the chairman, the vice-chairman shall assume such duties and responsibilities until such time that a chairman is appointed. - **Admission Requirements to the CPA Board Examinations (Sec. 14)** - Any person applying for examination shall establish the following requisites to the satisfaction of the Board that he/she: 1. Is a Filipino Citizen. 2. Has a good moral character. 3. Is a holder of the degree of Bachelor of Science in Accountancy conferred by a school, college, academy or institute, duly recognized and/or accredited by the Commission on Higher Education (CHED) or other authorized government offices; and 4. Has not been convicted of any criminal offense involving moral turpitude. - **Scope of the CPA Board Examination (Sec. 15)** - The licensure examination for CPA shall cover the following subjects with the corresponding weights in units of two (2) and maximum number of hours of three (3), viz: Theory of Accounts, Business Law and Taxation, Management Services, Auditing Theory, Auditing Problems, Practical Accounting Problems I, Practical Accounting Problems II. The purpose of this CPA Examination is to test the overall knowledge and competence of the candidates. The contents and coverage of these subjects shall be in accordance with the outline or syllabus prepared and issued by Board of Accountancy upon approval by the Professional Regulation Commission. The Board however, subject to the approval of the Commission, may revise or exclude any of the subjects and their syllabi, and add new ones as the need arises. However, after having series of consultations with the members of the academe and other stakeholders, the Board Licensure Examination for Certified Public Accountants (BLECPA) through the Professional Regulatory Board of Accountancy has resolved and approved on Dec. 15, 2015, Resolution No. 275 series of 2015 that the following changes be made to the existing subjects, thereby, reducing the number of the CPA Examination subjects from seven (7) to six (6) starting May 2016 examinations and onwards, viz: | From | To | |------------------------------------------|----------------------------------------------------| | Theory of Accounts | Financial Accounting and Reporting | | Practical Accounting Problems I | Advanced Financial Accounting and Reporting | | Practical Accounting Problems II | Management Advisory Services | | Management Services | Auditing | | Auditing Theory | Auditing | | Auditing Problems | Taxation | | Business Law and Taxation | Regulatory Framework for Business Transactions | The approved resolution does not depart radically from the prescribed content of the BLECPA subjects but serve merely to rationalize and integrate related subjects for better comprehension and more effective application of the theory into practice. - **Rating in the Licensure Examination (Sec. 16)** - To be qualified as having passed the licensure examination for accountants, a candidate must obtain a general average of seventy-five (75%), with no grades lower than sixty-five (65%) in any given subject. In the event a candidate obtains the rating of seventy-five (75%) and above in at last a majority of subjects as, provided for in this Act, he / she shall receive a conditional credit for the subjects passed: Provided, That a candidate shall take an examination in the remaining subjects within two years from the preceding examination: Provided further, That if the candidate fails to obtain at least a general average of seventy-five (75%) and a rating of at least sixty-five percent (65%) in each of the subjects re-examined, he/she shall be considered as failed in the entire examination. That this approved resolution shall not be deemed to affect those who are eligible to take the conditional or removal examinations pursuant to Section 16 of R.A. No. 9298, and who, as such, shall be allowed within a period of two (2) years from the effectivity of this Resolution to take and pass the particular subject/s in which they have failed under the old scheme, i.e. original six (6) subjects. Provided, that if an examinee fails to pass the conditional or removal examination after the lapse of the two (2) year period, he/she shall considered as having failed in the entire examination, and henceforth, has to take all the new subjects for the BLECPA as prescribed under this resolution. - **Reports of Rating (Sec. 17)** - The Board shall submit to the commission the ratings obtained by each candidate within ten (10) calendar days after the examination, unless extended for just cause. Upon the release of the results of the examination, the Commission shall send by mailing the rating received by each examinee at his/her given address using the mailing envelope submitted during the examination. - **Failing Candidates to Take Refresher Course (Sec. 18)** - Any candidate who fails in two (2) complete Certified Public Accountant Board Examinations shall be disqualified from taking another set of examinations unless he/she submits evidence to the satisfaction of the Board that he/she enrolled in and completed at least twenty-four (24) units of subject given in the licensure examination. For purposes of this Act, the examination in which the candidate was conditioned together with the removal examination on the subject in which he/she failed shall be counted as one complete examination. The Accountancy Law of 2004's declaration of policy provided that "the state recognizes the importance of accountants in nation building and development. Hence, it shall develop and nurture competent, virtuous, productive and well-rounded professional accountant whose standards of practice and service shall be excellent, qualitative, word class and globally competitive through regulatory measures, programs and activities that fasten their professional growth and development." ## The Birth of the Philippine Accounting Standards (PAS) Accounting Standards are authoritative statements of how particular types of. transactions and other events should be reflected in the financial statements. The Accounting Standards Council (ASC) was created by Philippine Institute of Certified Public Accountants (PICPA) on November 18, 1981. It is a standard-setting body which is tasked to establish and improve the "Generally Accepted Accounting Principles" (GAAP) in the Philippines. The approved statements and the relative interpretations of the ASC are known as "Statement of Financial Accounting Standards" or SFAS which will be effective only upon approval by the Professional Regulation Commission (PRC) and unless indicated to the contrary, shall not be retroactive.. The ASC is composed of eight (8) members with four (4) members nominated by PICPA and one (1) each from Securities and Exchange Commission (SEC), Bangko Sentral ng Pilipinas (BSP), Professional Regulation Commission (PRC) specifically the Board of Accountancy (BOA) and the Financial Executive Institute of the Philippines (FINEX). The term of office of the. members is two (2) years which can be renewed. At present, however, Section 9 (A) of the Rules and Regulations Implementing R.A. 9298 otherwise known as the Philippine Accountancy Act of 2004, created the new accounting standard-setting body known as the Philippine Financial Reporting Standards Council (PFRSC) to replace the Accounting Standards Council. Consequently, the Statement of Financial Accounting Standards (SFAS) are now known as the Philippine Accounting Standards (PAS). The PFRSC is created by the Professional Regulation Commission (PRC) upon recommendation of the Board of Accountancy (BOA) to assist the Board of Accountancy in carrying out its powers and functions. The PFRSC is composed fifteen (15) members with a Chairman who has been or is presently a senior accounting practitioner and fourteen (14) representatives from the following: | Organization | Representatives | |---------------------------------------------|-----------------| | Board of Accountancy | 1 | | Securities and Exchange Commission | 1 | | Bangko Sentral ng Pilipinas | 1 | | Bureau of Internal Revenue | 1 | | Commission on Audit | 1 | | Major organization of preparers and users of financial Statements | 1 | | Accredited National Professional Organization of CPAS: | | | - Public Practice | 2 | | - Commerce and Industry | 2 | | - Academe or Education | 2 | | - Government | 2 | | **Total** | 15 | The Chairman and members of the Council shall have a term of three (3) years renewable for another term. Any member of the ASC shall qualify for appointment to the PFRSC. However, the ASC shall continue to function until the full creation of PFRSC. ## International Accounting Standards Board (IASB) Replaces the International Accounting Standards Council (IASC) Standards With the growing and seemingly unstoppable internationalization of business and trade, the IASC, a private independent standard-setting body was created with the objective of achieving uniformity in accounting principles which are used by business and other organizations for financial reporting around the world by formulating and publishing for the public interest, the accounting standards to be observed in the presentation of financial statements, to promote their worldwide acceptance and to work for the improvement and harmonious application of accounting standards and procedures. The approved statements of the IASC are known as International Accounting Standards (IAS). The IAS was founded in 1973 through an agreement made by the professional accountancy bodies from Australia, Canada, France, Germany, Japan, Mexico, the Netherlands, the United Kingdom, Ireland and the United States of America. In 1997, after nearly 25 years of achievements, the IASC concluded that if it were to effectively continue to perform its task, it must find a way to bring about convergence between national accounting standards and practices and high quality global accounting standards. And as a result, not too long after, on July 1, 2000, the IASC was replaced by International Accounting Standards Board (IASB). The. IASB has come out with new reporting standards that are called International Financial Reporting Standards (IFRS). Although the IASB has no legal authority to impose the standards that it promulgates, many countries support them. For the meantime, the pronouncements of the IASC will continue to be designated as International Accounting Standards (IAS). ## Philippine ASC has Shifted to IAS In an effort to improve and harmonize the accounting standards relative to the preparation and presentation of financial statements, the Philippine Accounting Standards Council which in many decades 'nostly based its Accounting Standards from the United States or American Accounting Standards has shifted to International Accounting Standards (IAS) in 1997 but it was only in the year 2000 wherein the Philippine ASC made a sweeping revision of its old "Statement of Financial Accounting Standards" (SFAS) to conform with its counterpart, the IAS. Currently, the IASB has revised its IASs which the ASC adopted and are called Philippine Accounting Standards (PASS). The IASB has also formulated new standards and are called International Financial Reporting Standards (IFRS) which the ASC adopted and are called Philippine Financial Reporting Standards (PFRS). In short, Philippine Accounting Standards (PASS) corresponds to the adopted International Accounting Standards (IASs) and Philippine Financial Reporting Standards (PFRSs) corresponds to the adopted International Financial Reporting Standards (IFRSs). The move of Philippine ASC to shift to IAS could be attributed to the following factors: 1. The Philippine organizations, such as the Securities and Exchange Commission, Board of Accountancy and Philippine Institution of Certified Public Accountants (PICPA) support the IASB standard. 2. The removal of free choice of accounting alternative treatment under the IASB standard which will redound to having a uniform financial reporting around the world and. 3. The IASB standard was recognized by Asian Development Bank (ADB), World Bank and World Trade Organization (WTO). ## Government Sector Adopts International Accounting Standards Meanwhile, in the government sector, the Commission on Audit (COA) adopted the International Accounting Standards on January 1, 2014 and they call it, Philippine Public Sector Accounting Standards (PPSAS) and was fully implemented on January 1, 2015 after the creation of the Philippine Public Sector Accounting Standards Board (PPSASB) on October 10, 2008. The role of the PPSASB is to assist the omission in formulating and implementing the public sector accounting standards which will redound to establishing and maintaining linkages with international bodies, professional organizations and academe on accounting related fields on financial management. The PPSAS will align with prevailing international standards, provide quality accounting standards thereby enhancing the quality and uniformity in financial reporting by the Philippine public sector entities, and ensuring accountability, transparency and comparability of financial information with other public sector entities around the world. It sets out the recognition, measurement, presentation and disclosure requirements for financial reporting in the Philippine Government. PPSAS shall apply to all National Government Agencies (NGAs) which refer to departments, agencies, bureaus, state universities and colleges, government instrumentalities and commissions including judiciary and constitutional commission, Local Government Units and Government-Owned and/or Controlled Corporation. ## Aiming Towards Globalization Globalization has resulted in business enterprises entering into transactions that extend beyond the borders of their home country as evidence by multinational corporations which have grown widely with their subsidiaries and affiliates located in other parts of the world. It has also awakened the need for accounting principles and standards to have international acceptability. It is toward this trend of accounting practice where we are in now. This gives opportunity to Filipino accountants to be able to practice accounting freely in other parts of the world. Just imagine, we will be competing with other accountants from other parts of the world! The worst scenario is, what if these foreign investors bring along with them their own accountants for reason that we are not so familiar with their nature of business? It is like the "rules" in playing basketball. We do not know when is a shot to be counted as "two or three points", how many dribbles that a player should make before he "takes off for a twinner" or when is a "technical foul" or flagrant foul" be called, etc. There are rules of the game which are obsolete and new rules emerged are adopted.