REPUBLIC ACT No. 5166
THE ACCOUNTANCY ACT OF 1967
Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:
ARTICLE I
Objectives and Implementation
Section 1. Objectives. - This Act provides for and shall govern:
(a) The standardization and regulation of accounting education;
(b) The examination for registration of certified public accountants; and
(c) The supervision, control and regulation of the practice of accountancy in the Philippines.
Section 2. Implementation. - For the purpose of implementing the provisions of this Act, there are created the following:
(a) Board of Accounting Education; and
(b) Board of Accountancy.
ARTICLE II
The Board of Accounting Education - Its Functions
Section 3. Composition of the Board of Accounting Education. - The Board of Accounting Education shall be composed of the Secretary of Education or his duly authorized representative as Chairman, the Chairman of the Board of Accountancy, the President of the Philippine Institute of Certified Public Accountants, the President of the Philippine Association of Collegiate Schools of Business, and a representative of business and/or industry to be appointed by the President of the Philippines.
Section 4. Compensation and Traveling Expenses. - The Chairman and Members of the Board of Accounting Education shall not be entitled to any compensation except for traveling expenses in connection with their official duties as herein provided. For administrative purposes the Board shall hold office in the office of the Chairman who may designate an official in the Department of Education to serve as secretary of the Board.
Section 5. Functions. - The functions of the Board of Accounting Education shall be as follows:
(a) To determine and prescribe minimum requirements leading to the admission of candidates to the Certified Public Accountant's examinations;
(b) To determine and prescribe prior employment or apprenticeship experience requirements or their substitution with equivalent practical training through academic work;
(c) To determine and prescribe certification requirements of prospective candidates by the institutions of learning granting degree of Bachelor of Science in Commerce or its equivalent; and
(d) To promote, prescribe and enforce rules and regulations for the effective implementation of these functions.
Section 6. Collegiate Courses. - The Board of Accounting Education shall prescribe collegiate courses for the degree of Bachelor of Science in Commerce or its equivalent and leading to the admission to the Certified Public Accountant's examination: Provided, That such courses shall include the minimum units herein required for the following subjects:
| Accounting and Auditing | Units |
| 36 |
| Business Law | 9 |
| Taxation | 6 |
| English | 15 |
| Mathematics | 9 |
| Mathematics | 6 |
Section 7. Employment or Apprenticeship Experience Requirements. - The Board of Accounting Education shall prescribe such requirements for one-year employment or apprenticeship, experience in accountancy or related field: Provided, however, That in lieu of such practical experience, two semesters covering twelve units of equivalent practical training through academic work may be substituted.
ARTICLE III
The Board of Accountancy; Registration of Certified Public Accountants
Section 8. The Board of Accountancy, its Composition and Duties. - The Board of Accountancy shall be composed of a chairman and five members to be appointed by the President of the Philippines from a list of not less than fifteen names approved and submitted by the Board of Directors of the Philippine Institute of Certified Public Accountants, after due consultation with other accounting associations whose membership consists entirely of licensed Certified Public Accountants in the Philippines. The President of the Philippines shall fill any vacancy that may occur from the list of names submitted by the Philippine Institute of Certified Public Accountants in accordance with the provisions of this Act.
The Board of Accountancy shall conduct the examination to qualify Certified Public Accountants at least once in each calendar year in the City of Manila or its suburb, Cebu City and Davao City: Provided, However, That if conditions warrants the Board of Accountancy may upon previous approval of the Commissioner of Civil Service consider conducting examinations in other places.
The Board of Accountancy shall evaluate, grade, sign and submit the examination results to the Commissioner of Civil Service within one hundred eighty days from the date of the termination of the examinations.
The Secretary of the Board of Accountancy shall submit to the President of the Philippines for approval the names of the successful candidates as having been duly qualified for licensure with their corresponding grades. The Commissioner of Civil Service shall furnish the Board of Accounting Education with a report on the performance of all schools represented in the examination.
Subject to the approval of the President, the Board of Accountancy, after consultation with the Philippine Institute of Certified Public Accountants shall promulgate necessary rules and regulations, and set professional standards for the practice of accountancy. Such rules shall include security measures to protect the secrecy and integrity of the examinations.
Section 9. Qualifications of Examiners. - No person shall be appointed a member of the Board of Accountancy unless he (a) is a citizen of the Philippines, (b) is of good moral character, (c) is a duly registered Certified Public Accountant in the Philippines, (d) has been in the practice of accountancy for at least ten years, or has been in the government service for the same period of time in a position where the knowledge of accounting is required or used, and (e) is not directly or indirectly connected with any school, college or university granting degrees that may qualify graduates with such degrees for admission to the Certified Public Accountants, Review School or Institute, nor shall have any pecuniary interest in such school, college, university or Certified Public Accountants, Review school or institute.
Section 10. Tenure of Office and Compensation of Members. - The chairman and members of the Board of Accountancy shall hold office for three years: Provided, That the first and second, third and fourth, and fifth members and the chairman appointed under this Act shall serve for one, two and three years respectively. Vacancies shall be filled by appointments for the unexpired term only. Each member shall receive as compensation five pesos for each candidate examined on subject or subjects with an equivalent weight of two units: Provided, That each member of the Board shall receive a per diem of twenty pesos for each meeting actually attended in the course of any administrative investigation being conducted by it.
Section 11. Suspension or Removal of a Member of the Board. - The President of the Philippines may suspend or remove any member of the Board of Accountancy for neglect of duty or incompetence or for unprofessional or dishonorable conduct.
Section 12. Admission Requirements for Examination. - No person shall be admitted to the examination unless he is:
(a) A citizen of the Philippines or a citizen of any foreign country who is a permanent resident of the Philippines or has acquired his bachelor of science in commerce degree, or its equivalent, major in accounting from the Philippines and has submitted competent and conclusive documentary evidence confirmed by the Department of Foreign Affairs, showing that his country's existing laws extend similar privileges to citizens of the Philippines in respect to the practice of accountancy;
(b) At least twenty-one years of age: Provided, however, That an applicant below twenty-one years of age may be allowed to take the examination but in the case he passes the examination shall not be issued the certificate until he reaches the required age;
(c) Of good moral character;
(d) Holder of the degree of Bachelor of Science in Commerce or its equivalent from any institution of learning recognized by the Government in accordance with the provisions of this Act; and
(e) Certified by the school, college or university as possessing the necessary employment or apprenticeship experience or a substitute thereof as prescribed by the Board of Accounting Education.
Section 13. Scope of Examination - The examination shall be in writing and shall cover the following subjects with the corresponding weight in units:
| Subjects | Weight in Units | Minimum Hours |
| Theory of Accounts | 2 | 3 |
| Business Law | 1 | 1 1/2 |
| Taxation | 1 | 1 1/2 |
| Management Services | 1 | 1 1/2 |
| Auditing Theory | 1 | 1 1/2 |
| Auditing Problems | 2 | 3 |
| Practical Accounting Problems I | 2 | 3 |
| Practical Accounting Problems II | 2 | 3 |
| TOTAL | 12 | 18 |
The contents and coverage of these subjects shall be in accordance with the outline or syllabus prepared and issued by the Board of Accountancy containing the following:
Theory of Accounts. - Accounting terminology, accounting principles and procedures, classification of accounts, valuation of assets and liabilities, income determination, developments in the science of accountancy, etc.
Business Law. - Obligations and contracts, partnerships and corporations, negotiable instruments and other phases of the legal framework of business.
Taxation. - Income tax, business taxes, transfer taxes, and other taxes affecting accounting practice.
Management services. - Principles and procedures involved in management consulting services that may be rendered by Certified Public Accountants such as systems installations, preparation of budgets and forecasts, project studies, and controllership.
Auditing Theory and Problems. - Theory and problems involved in the independent examination of accounts, auditing standards and procedures, audit programs and work papers and preparation of audit reports, and internal audits.
Practical Accounting Problems I and II. - Problems on transactions and situations usually encountered in the field of accounting practice both in internal and public accounting.
Section 14. Examination Rating. - A candidate for the examination provided for in this Act obtaining a general weighted average of seventy-five per cent and above shall be entitled to registration as certified public accountant and as such shall receive a certificate of registration from the Board of Accountancy: Provided, That in no case should the rating on any subject be less than sixty-five percent. In the event a candidate obtains the rating of seventy-five percent and above in at least three subjects having a combined weight of six units as provided for in this Act, he shall receive a conditional credit for the subjects passed: Provided, That such candidate shall take an examination in the remaining subjects within two years if the candidate fails to obtain at least a general weighted average of seventy-five percent and a rating of at least sixty-five percent in each of the subjects re-examined, he shall be considered as failed in the entire examination.
Section 15. Issuance of a Certificate of Registration; Grounds for refusal of Same. - The Chairman and the Secretary of the Board of Accountancy shall sign jointly and issue certificate or registration to those who have satisfactorily complied with the requirements of the Board of Accountancy. They shall not issue a certificate of registration to any candidate who has been convicted by a court of competent jurisdiction of any criminal offense involving moral turpitude, or has been found guilty of immoral or dishonorable conduct after due investigation by the Board of Accountancy, or has been declared to be of unsound mind.
Section 16. Fees. - All applications must be filed with the Commissioner of Civil Service and accompanied by the following fees:
| For examination | - | P60.00 |
| For registration and issuance of certificate | - | 10.00 |
Provided, however, That in the event any candidate fails to pass the required examinations, he shall be entitled to take a second examination, within two years after the date of the examination, at which he fails to pass, by paying a fee of ten pesos per subject examined with a weight of two units and five pesos per subject examined with a weight of one unit.
Section 17. Administrative Investigation. - In addition to the functions provided for in the preceding sections, the Board of Accountancy shall perform the following duties: (a) to study the conditions affecting the practice of accountancy in all parts of the Philippines; (b) to exercise the powers conferred upon it by this article with the view of maintaining the ethical and professional standards of the accounting profession; (c) to issue subpoena or subpoena duces tecum to witnesses for all purposes required in the discharge of its duties; and (d) to promulgate such rules and regulations as it may deem necessary for the performance of its duties in harmony with the provisions of this Act and necessary for the proper practice of accountancy in the Philippines.
Administrative investigations may be conducted by not less than four members of the Board of Accountancy; otherwise the proceedings shall be considered void. The Board of Accountancy may disapprove applications for examination or registration, reprimand erring certified public accountants or suspend or revoke registration certificates, if the respondents are found guilty after due investigations.
Section 18. Procedure and Rules. - Within five days after the filing of written charges under oath, the respondent Certified Public Accountant shall be furnished a copy thereof, without requiring him to answer the same, and the Board of Accountancy shall conduct the investigation within five days after the receipt of such copy by the respondent. The investigation shall be completed as soon as practicable.
Section 19. Grounds of proceedings against a Certified Public Accountant. - Any of the following shall be sufficient ground for proceeding against a Certified Public Accountant:
(a) Conviction by a court of competent jurisdiction of any criminal offense involving moral turpitude;
(b) Immoral or dishonorable conduct;
(c) Insanity;
(d) Fraud in the acquisition of the certificate or registration;
(e) Gross negligence or incompetence in the practice of his profession;
(f) Addiction to alcoholic beverages or to any habit-forming drugs rendering him incompetent to practice his profession;
(g) False or extravagant or unethical advertisement wherein other things than his name, profession, limitation of practice, office and home address are mentioned;
(h) Issuing an accountant's certificate covering the examination of the client's accounts without observing the necessary auditing standards;
(i) Aiding or acting as a dummy of an unqualified or unregistered person to practice accountancy; and
(j) Violation of any provision of the Code of Ethics promulgated by the Board of Accountancy.
Section 20. Rights of Respondents. - The respondent certified public accountant shall be entitled to be represented by counsel, to have a speedy and public hearing, and to confront and to cross-examine witnesses against him.
Section 21. Appeal from Judgment. - The decision of the Board of Accountancy shall become final thirty days after receipt by the respondent of a copy of the decision, unless during the same period, he has appealed to the Commissioner of Civil Service and later to the President of the Philippines, whose decision shall be final.
Section 22. Reinstatement. - After five years the Board of Accountancy may order the reinstatement of any certified public accountant whose certificate of registration has been revoked, if the respondent, during this period, has acted in an exemplary manner and has not committed any illegal, immoral or dishonorable act.
ARTICLE IV
Penal and Other Provisions
Section 23. Criminal Offenses. - Any person who shall, by himself or in cooperation with another, defeat, deceive or obstruct any person in the matter of his right of examination by the Board of Accountancy, or who shall falsely rate, grade, estimate, or report upon the examination or standing of any person examined by the Board of Accountancy, or shall aid in so doing, or shall make any false representation relative thereto or concerning the person or persons examined or who shall use or furnish any special or secret information for the purpose of improving or injuring the prospects or chances of any person so examined or to be examined or receiving a certificate, shall for each offense be punished with a fine not exceeding one thousand pesos, or by imprisonment for a period not exceeding six months, or both.
Any person who shall knowingly make any material false statement in his application for examination, or who shall connive at any false statement made in any certificate which may accompany his application, or who shall make any material false statement in any certificate to accompany the application for examination of any person, or who shall impersonate any other person or permit or aid in any manner other persons to impersonate him in connection with any examination or application for examination, or who shall falsely make or forge any certificate in connection with his application, or who shall commit or attempt to commit any fraud, or violate in any manner the provisions of this Act or any regulations promulgated under the provisions hereof, or aid in so doing, shall be subject to the same penalty as in the preceding paragraph provided.
Any person who represents himself to the public as having received a certificate as provided in this Act, or shall assume to practice as Certified Public Accountant or use the abbreviated title "C.P.A." or any similar words or letters to indicate that the person using the same is a Certified Public Accountant, without having received such certified public accountant's certificate or shall assume to practice as a public accountant without having received such certificate, has been thereafter deprived of the use of the same by temporary suspension or revocation shall be punished with a fine in a sum not exceeding five thousand pesos or by imprisonment for a period not exceeding two years, or both, at the discretion of the Court, for each such offense, and each day that such person shall so practice or hold himself out as a certified public accountant shall be deemed a separate offense.
A certified public accountant or persons employed by a certified public accountant shall not be required to, and shall not disclose or divulge the contents of any communication made to him by any person employing him to examine, audit, or report on any books, records, or accounts in rendering professional service, except by express permission of the person employing him, or of the heirs, personal representatives or successors of such person, or when the security of the state so requires. Any person violating this provision shall be subject to the same penalty provided in paragraph three hereof.
Section 24. Practice of Public Accounting, Defined. - A person is deemed to be engaged in the practice of public accounting, if (1) he holds himself out to the public as one killed in the knowledge, science and practice of accounting and as qualified to render professional services as a certified public accountant; or (2) he offers and/or renders to more than one client on a fee basis of otherwise, such services as the audit or verification of financial transactions and accounting records; the preparation, signing or certification for clients of reports of audits, balance sheets and other financial, accounting and related schedules, exhibits, statements or reports which are to used for publication or for credit purposes, or to be filed with a court or government agency or to be used for any other purpose; installation and revision of accounting systems; the preparation of income tax returns (when related to accounting procedures); (3) he represents clients before governmental agencies on tax matters related to accounting; and (4) he renders professional assistance in matters relating to accounting procedure and the recording and presentation of financial facts of data.
Section 25. Ownership of Working Papers, Etc. - All working papers, schedules and memoranda made by a certified public accountant and his staff in the course of an examination, including those prepared and submitted by the client, incident to or in the course of professional service to the client by such certified public accountant, to a client shall be and remain the property of such certified public accountant, in the absence of a written agreement between the certified public accountant and the client, to the contrary. However, no such working papers, schedules, and memoranda shall be sold, transferred or bequeathed or disposed of in any manner without the consent of the client, his heirs, personal representative or successors to anyone other than one or more surviving partners or new partners of such certified public accountant.
Section 26. Limitations on the Practice of Public Accountancy. - Hereafter, all partners or partnerships organized for the practice of public accountancy shall be registered certified public accountants in the Philippines. The Commissioner of the Securities and Exchange Commission shall not register any corporation organized for the practice of public accountancy.
Section 27. Appropriation. - To carry out the provisions of this Act, there is hereby authorized to be appropriated, out of any funds in the National Treasury not otherwise appropriated, the sum of twenty thousand pesos.
Section 28. Repealing Clause. - Commonwealth Act Numbered Three hundred forty-two and all Acts, executive orders, administrative orders, rules and regulations, or parts thereof inconsistent with the provisions of this Act are repealed or modified accordingly.
Section 29. Effectivity. - This Act shall take effect upon its approval: Provided, That the Board of Accounting Education shall prescribe the necessary collegiate courses and employment or apprenticeship experience requirements within one year from the date of approval of this Act: And provided, further, That the admission requirements for examination pertaining to education and experience shall take effect after four years from the date of prescription by the Board of Accounting Education.
Approved, August 4, 1967.
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