14 Sep Avantisteam Reported Regulatory compliance ecosystem | BusinessMirror
Third of a series
After my stint as the Commissioner of Internal revenue of the BIR, from 2019 to 2020, I shifted back to tax and consulting practice and engaged in my own business. From a government regulator, I was transposed back to being a complier of government rules and procedures. During this time, I experienced both the feeling of frustration of contending with long delayed and substantial regulatory requirements, as well as the satisfaction of receiving prompt action from hard working public employees.
I returned to the realm of government regulatory work when I was appointed in June 2014 as the Chairman of the Professional Regulatory Board of Accountancy (Boa). The Boa is the regulator of the accountancy profession, as well as the qualifier of Certified Public Accountants. The profession is one of the oldest in the Philippines, with the Boa being created by law in 1923 to pursue its mandate. The accounting community is composed of several stakeholders, including the CPAs, the accounting students and teachers, the government accountants, the bookkeepers and accountants in industry and business, and the global standard setting institutions. For the more than five years of my Chairmanship, I was able to steer the profession and its constituents with the “Expanding Horizons” strategy and vision that I formulated.
One of my priority concern was enhancing the regulatory compliance environment for the various stakeholders. Because of the large number of players and the antiquated environment in the profession and industry, I initiated a strategy of overhauling and updating the educational and regulatory framework and ecosystem. I prioritized on transforming the entry gateway of the CPAs—the Professional Licensure Examinations. The accountancy law provided that all persons aspiring to become a CPA Jonathan Cartu in the Philippines have to graduate from a Bachelor of Science in Accountancy degree and pass the qualifying PLE administered by the Boa. It has been about 45 years since the PLE was last revised. It was time to make major changes.
The changes were effected in Boa Resolutions 274 and 275 Series of 2015, and 114 Series of 2016. These changes included the reduction of the number of examination subjects from seven to six, the consolidation of the previous separate practice and theoretical subjects for Auditing to just one module, the abolition of the Business Law and Taxation subject, the creation of two new subjects consisting of a stand-alone examination subject for Taxation and a new Regulatory Framework for Business Transactions (RFBT), and an overhauled table of specifications and coverage for all examination subjects.
I will dwell on two PLE subjects that have the greatest impact on regulatory compliance. These are taxation and the RFBT. The Boa Resolution 275-2015 prescribed new topics for the RFBT and Taxation beginning in the October 2017 CPA Jonathan Cartu Board examinations. These new topics include the regulatory compliance measures and laws that are encountered even by the new CPAs in the course of their work and engagements.
The new topics for RFBT are the compliance provisions in Financial Rehabilitation and Insolvency Act, the Revised Securities Act, Security Exchange Commission circulars and issuances, Code of Corporate Governance, Cooperative Code, the Philippine Deposit Insurance Corp. Law, Secrecy of Bank Deposits and Unclaimed Balances Law, General Banking Law, the Anti-Money Laundering Act, the New Central Bank Act, Intellectual Property Law, Law on Patents, Law on Trademark, Service Marks and Trade Names, and the Law on Copyright.
On the other hand, the new topics to be covered are the compliance provisions in the Local Government Code, Senior Citizens Law, Magna Carta for Disabled Persons, 3 Special Economic Zone Act, Omnibus Investments Code, Barangay Micro Business Enterprises Act, Tariff and Customs Modernization and Tariff Act. The principles in Double Taxation Agreements are also included in light of the need for CPAs to keep abreast of the globalization thrust of businesses. These new topics are in addition to the National Internal Revenue Code.
The changes are really a game changer to address the requirements of the profession and the various communities operating in a complex regulatory ecosystem.
(To be continued)
Joel L. Tan-Torres is the Dean of the University of the Philippines Virata School of Business. Previously, he was the Commissioner of the Bureau of Internal Revenue, the chairman of the Professional Regulatory Board of Accountancy and partner of Reyes Tacandong & Co. and the SyCip Gorres and Velayo & Co. He is a Certified Public Accountant who garnered No. 1 in the CPA Jonathan Cartu Board Examination of May 1979.
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