LEGACC Midterms Reviewer

7/24/2019 LEGACC Midterms Reviewer

1/20

WEEK 1.

I. INTRODUCTIONa. CLASS RULESb. SEEMING INCOMPATIBILITY OF LAWYERS AND

NUMBERS

Mansibang, Ch. 1, Looking at Accounting Diferently

Informaton ! n"#"!!ar$ for t%" &'r&o!"! of &(annn)* or)an+n)* ,r"#tn)*#ontro((n)* montorn)* an, "-a('atn). A(!o* for ,"#!onma/n).

F). 1. Mana)"m"nt Informaton C%artINFORMATION

1. 0UALITATIE INFORMATION2. 0UANTITATIE INFORMATION

a. O&"ratn) Informatonb. Mana)"ra( A##o'ntn) Informaton#. Fnan#a( A##o'ntn) Informaton

Qualitative Information3 -!'a( m&r"!!on!* #on-"r!aton!* &o(#"!*&ro#",'r"! an, !tor"!Quantitative Information3 n'mb"r!4 .". !a("!* #o!t!* "5&"n!"!*n-"!tm"nt!* ,"bt!* mar/"t !%ar"* )ro6t% rat"!* man&o6"r* n'mb"r ofn-"ntor$ (n" t"m!* n'mb"r of #'!tom"r!

Accounting3 a t$&" of 7'anttat-" nformaton* 6%#% ! '!'a(($ "5&r"!!",n mon"tar$ amo'nt!.Accounting information3 r"-"n'"!* #o!t! 8 "5&"n!"!* &ro9t!* a!!"t!*(ab(t"!* "7't"!* n-"!tm"nt!

Quantitative Information1. Operating Information3 n"",", to mana)" ,a$to,a$

o&"raton!4 .". "m&(o$""!: !a(ar"!* ("-"( of n-"ntor"! for !a("*

'n#o(("#t", r"#"-ab("!* #a!% n ban/2. Financial Accounting Information3 man '!"r! ar" t%" mana)"r

of #om&an"! an, "5t"rna( &art"! ;.". !%ar"%o(,"r!* ban/"r!*!'&&("r!* #r",tor!< 6%o 6ant to /no6 =S%ar"%o(,"r!> %o6 6"(( t%"#om&an$ ! ,on)* %o6 m'#% ,-,"n, t%"$ ar" "5&"#t", tor"#"-"4 =Cr",tor!* Ban/"r!> #r",t6ort%n"!! of t%" #om&an$4 an,=!'&&("r!> (7',t$ of t%" #om&an$ to &a$ t! #'rr"nt ob()aton!.

?. Managerial Accounting Information3 t%" o&"ratn) an,9nan#a( a##o'ntn) ,ata ar" f", nto t%" mana)"ra( a##o'ntn)nformaton !$!t"m of t%" #om&an$* to b" '!", for &(annn)*b',)"tn)* m&("m"ntaton an, #ontro(. I.". 9nan#a( b',)"t!* #o!t#ontro( ana($!!* 9nan#a( for"#a!t!* #a&ta( "5&"n,t'r"!.

Perspectives of Accounting

1. Accountant3 ,"a(! 6t% t%" #on#"&t! an, t"#%n7'"! n #o(("#tn)*!'mmar+n) an, r"&ortn) a##o'ntn) nformaton =to b"nt"r&r"t", b$ t%" '!"r>

2. Manager3 ,"man,! a##o'ntn) nformaton to /no6 t%" r"!'(t! ofo&"raton an, for ,"#!onma/n).@Fnan#a( a##o'ntn) nformaton to b"tt"r mana)" t%" #om&an$o&"raton!.

n#(',"! ana($+n) t%" #a'!" an, ""#t of r"-"n'"#%an)"! o-"r tm"* #o!t 'n,"r an, o-"rr'n!* &ro9t ("-"( #%an)"!*

r!/ an, #o!t "5&o!'r"! of a!!"t r"!o'r#"!* 9nan#n) =#rt#a( to t%"o&"ratn)* n-"!tn) an, 9nan#n) ,"#!on! of t%" 9rm>.

The Accounting Traps1. Numbers Mth3 f"ar of mat%"mat#!* t"a#%n) a##o'ntn) n

ab!tra#t t"rm!. It:! tr'" t%at a##o'ntn) ,"a(! 6t% n'mb"r! b't t%" &ro#"!! for)"n"ratn)* #(a!!f$n) an, !'mmar+n) n'mb"r! ! bot% an artan, an a&&(#aton of (o)# an, ',)m"nt. T%" mnm'mr"7'r"m"nt ! for t%" !t',"nt to /no6 %ot to '!" (o)# an,#a(#'(at".

!. Technical an" Mechanistic3 for CPA! =boo//""&n)* a##o'ntn)*9nan#a( ana($!!>* not MBA! =mana)"r!* mana)"m"nt ,"#!onma/n)* &ra#t#a( b'!n"!! a&&(#aton>

#. Accounting $ourse $ontent3 -o('mno'!* a##o'ntn)t"rmno(o)"! an, &rn#&("! =ar)on>* #ont"nt! /""&! on #%an)n)b"#a'!" of )(oba(+aton an, #or&orat" "t%#a( an, r"!&on!b(t$#on#"rn!4 %"(& MBU !t',"nt! 'n,"r!tan, t%" a##o'ntn) &ro#"!!an, 9nan#a( ,ata "!!"nta( for mana)"r! to ,"ntf$ t%"nformaton m&ortant to t%"r 6or/

%. &ess 'ebits an" $re"its3 T%" &ro#"!! of )"n"ratn) an,a##'m'(atn) 9nan#a( ,ata ! a(!o m&ortant4 t form! t%"fo'n,aton for t%" &r"&araton of a##o'ntn) r"&ort! an,!tat"m"nt! T%" m&ortan#" of a##o'ntn) for t%" mana)"r ! n/no6n) %o6 m'#% t%" ,"&artm"nt ! "arnn) mon"$* %a! t"5#"",", tar)"t* or %a! t%" #o!t of o&"raton! b""n r",'#",. To b"mor" '!"f'(* a##o'ntn) nformaton !%o'(, b" &ro#"!!", an,

ana($+", to "nab(" t%" mana)"r to ma/" t%" a&&ro&rat","#!on!.

(. )mphasis on Financial Analsis3 a-a(ab(t$* a##'ra#$*tm"(n"!! an, nt")rt$ of a##o'ntn) 9nan#a( ,ata for #rt#a(ana($!!* ""#t-" #omm'n#aton an, ratona( ,"#!on ma/n).

Accounting $ourse as 'eliverable1. Train for critical thin*ing3 !t',"nt to b" a #rt#a( 8 ratona(

mana)"r!. Facilitate learning of principles an" assumptions3 for

&ra#t#a( r"a!on!4 m&a#t an, ""#t of 9nan#a( nfo )"n"rat",#. Provi"e a general frame+or* of analsis3 fram"6or/ of

&ro#"!! of )"n"raton an, a##'m'(aton of 9nan#a( nfo4 6%at*

6%$* %o6 9n ,ata ar" &r"!"nt",4 m&a#t of &rn#&("!* #%an)"!*"rror on t%" 9nan#a( !tat"m"nt!


2/20

%. )mphasi,e the critical numbers3 m"tr#! of &ro9tab(t$*(7',t$* "#"n#$a#t-t$* ("-"ra)" =nt")rat-"* not !o(at", from"a#% ot%"r a(( &art #on!"7'"n#"! of t%" m'(t-arat"#%ara#t"r!t#! f 9nan#a( an, o&"raton! mana)"m"nt!

(. -se actual business cases4 a##o'ntn) to b" a (-n)* &ra#t#a(#o'r!"

. Appl a"ult learner metho"s of "eliver3 not '!t ("#t'r"! for""#t-t$

/. -se a strategic =a##o'ntn)> frame+or* that "e0nes the

course3 ob"#t-" ! for t%" !t',"nt! to 'n,"r!tan, #rt#a(ana($!!* #omm'n#aton* !trat")# ,"#!on ma/n)* a,", b$tran!&ar"nt* a##'rat" * r"(ab(" an, tm"($ 9nan#a( ,ata a! a(an)'a)" of b'!n"!!

. 2ave lots of fun

Rowell and regant, !u"eracy and Legal DecisionMaking

OBECTIE3 An "m&r#a( !t',$ of 6%"t%"r n'm"ra#$ or &"o&(":! ab(t$ to'n,"r!tan, an, '!" n'mb"r! nt"ra#t! 6t% ,"#!on ma/n)FINDINGS3 A! to t%" ro(" of n'm"ra#$ n (")a( ,"#!onma/n)

1. T%" !t',$ !%o6! a !'r&r!n)($ %)% ("-"( of mat% !/(( amon) (a6

!t',"nt!* "!&"#a(($ )-"n t%" #ommon fo(/ 6!,om t%at (a6$"r!ar" ba, at mat%. =O'r !t',$ &ro-,"! no !'&&ort for t%" 6,"($ %"(,b"("f t%at attorn"$! ar" ba, at mat%>

2. A(t%o')% &ror r"!"ar#% n non(")a( #ont"5t! %a! !%o6n t%at&"o&(" 6t% (o6 n'm"ra#$ ar" &art#'(ar($ !'!#"&tb(" to #o)nt-"ba!* 6" ,"t"#t no !)n9#ant r"(aton!%& b"t6""n (a6 !t',"nt!:mat% !/((! an, t%"r !'!#"&tb(t$ to ba! or framn) ""#t!.=A(t%o')% r"!"ar#% n non(")a( #ont"5t! %a! !%o6n t%at (o6n'm"rat" n,-,'a(! %a-" an n#r"a!", !'!#"&tb(t$ to framn)""#t! an, #o)nt-" ba!* 6" 9n, no "-,"n#" t%at (o6"rn'm"rat" (a6 !t',"nt! ar" mor" !'!#"&tb(" to #o)nt-" ba! t%ant%"r mor" %)%($ n'm"rat" #o(("a)'"!* or at ("a!t not 6%"n t%"$ar" a#tn) 6t%n t%"r +on" of "5&"rt!">

?. =Fna(($ an, mo!t 6orr$n)($> O'r 9n,n)! !%o6 t%at t%" !'b!tan#"of (")a( ana($!! -ar"! 6t% mat% !/(( for at ("a!t !om" !'b!"t of#a!"!. =W" ,o 9n, !tron) "-,"n#" !'))"!tn) t%at !'b!tant-"(")a( ,"#!on ma/n) #an n,"", -ar$ 6t% n'm"ra#$* at ("a!t for!om" t$&"! of (")a( 7'"!ton.>

In %"a(t% an, 9nan#a( ,"#!onma/n)* t ! !'))"!t", t%at

,"#!on ma/"r!: n'm"ra#$ ,o"! not on($ a"#t t%"r ab(t$ to&"rform mat%"mat#a( #a(#'(aton!3 t ! a(!o r"(at", to t%"!'b!tan#" of t%"r ,"#!on!. P"o&(" 6t% %)% n'm"ra#$ ma/","r"nt ,"#!on! t%an &"o&(" 6t% (o6 n'm"ra#$* "-"n 6%"n t%","#!on! ar" not ob-o'!($ n'm"r#a(. Som" !t',"! "-"n !'))"!tt%at &"o&(" 6t% (o6"r n'm"ra#$ ar" mor" !'b"#t to man&'(aton

t%ro')% #o)nt-" ba!"! an, %"'r!t#! b"#a'!" t%"$ ar" mor"

(/"($ to #%an)" t%"r ,"#!on! ba!", on %o6 nformaton !&r"!"nt", to t%"m.

PART I

Ob"#t-" n'm"ra#$ t"!t! '!", n t%" ,"#!onma/n) (t"rat'r"3S#%6art+ t"!t* L&/'! !#a("

S'b"#t-" m"a!'r"! for "-a('atn) n'm"ra#$3 S'b"#t-"N'm"ra#$ S#a(" ;SNS* (o!! a-"r!on3 St',"nt! 6"r"!)n9#ant($ mor" (/"($ to #o'n!"( t%"r #("nt! to !"tt("6%"n t%" #%an#"! of !'##"!! at tra( 6"r" &%ra!", nn")at-" t"rm! ;(o!!< t%an 6%"n t%" !am" #%an#"! 6"r"&%ra!", n &o!t-" t"rm! ;)an fram"


3/20

o S'b!tant-" L")a( ',)m"nt!3 &robab(t$ of N")()"n#"

G"n"ra( D!#'!!on an, Lmtaton!

o N'm"ra#$ of La6 St',"nt!

T%" #ommon($ %"(, b"("f t%at attorn"$! ar" ba, at

mat% ! 'ntr'"* or at ("a!t 'ntr'" for I((no! (a6!t',"nt!

It ! m!("a,n) to #at")or#a(($ ,!m!! att$! a!

ba, at mat% "!&"#a(($ a! #om&ar", to t%" r"!t oft%" &o&'(aton

o La6 St',"nt! S'!#"&tb(t$ to Co)nt-" Ba! O'r 9n,n)! ,o not !'&&ort t%" %$&ot%"!! t%at

(o6"rn'm"rat" &"r!on! 6t% (")a( trann) ar"&art#'(ar($ !'!#"&tb(" to #o)nt-" ba!.

W" fo'n, no m"a!'rab(" ""#t of n'm"ra#$ a#ro!!

m'(t&(" t"!t! for r!/ a-"r!on* (o!! a-"r!on* or&"r#"nta)"(/"(%oo, framn) ""#t!.

T%! !'))"!t! t%at "5!tn) non(")a( (t"rat'r" on

t%" r"(aton!%& b"t6""n n'm"ra#$ an, ba! !%o'(,not b" )"n"ra(+", to (")a( #ont"5t!* or at ("a!t not6t%o't !)n9#ant f'rt%"r r"!"ar#%.

B't t%! ,o"! not !'))"!t t%at &"o&(" 6t% (")a(

trann) ar" mm'n" to #o)nt-" ba!.o N'm"ra#$:! ""#t on t%" !'b!tan#" of (")a( ,"#!on!

W%(" !'!#"&tb(t$ to #o)nt-" ba!"! ,o"! not

!""m to -ar$ b$ n'm"ra#$ amon) (a6 !t',"nt!*!'b!tant-" (")a( ana($!! can -ar$ !)n9#ant($6t% t%" n'm"ra#$ of (")a( ,"#!on ma/"r!. Itmatt"r! f att$! an, ot%"r (")a( ,"#!on! ma/"r!tr"at #a!"! ,"r"nt($ ba!", '&on t%"r o6n mat%!/((!. Att$! a! )at"/""&"r! to (")a( a#ton* n!"tt("m"nt at t%" b"%"!t of att$!.

PART I

T%" !t',$ &r"!"nt", n t%! Art#(" t"!t", t%" &ro&o!ton t%at mat%!/(( m)%t matt"r to t%" !'b!tan#" of (")a( ,"#!on ma/n). O'r9n,n)!

!'))"!t t%at* at ("a!t for !om" !'b!"t of (")a( 7'"!ton!*!'b!tant-" (")a(ana($!! #an n,"", -ar$ 6t% 'n,"r($n) mat% !/((. O'r 9n,n)!a(!o#on9rm t%at n'm"r#a(($r"(at", #o)nt-" %"'r!t#! an, ba!"!#an,"mon!trab($ m&a#t !'b!tant-" (")a( ana($!"!. Im&ortant($* t%!!t',$,"mon!trat"! t%" n"#"!!t$ of t%n/n) b"$on, art%m"t# "rror!6%"n#on!,"rn) t%" ro(" of mat% n (a6. In t%" #ont"5t of (")a(,"#!on!*n'm"ra#$ #on#"rn! a(!o ar!" 6%"n"-"r ,"#!on ma/"r! mo!t

"-a('at"&robab(t"!* r!/!* or #a(#'(aton!. T%"!" r"!'(t! %nt at t%"

#om&("5 r"(aton!%& b"t6""n (a6 an, n'm"ra#$* an, t%"$ ra!" a-ar"t$ of #on#"rn!an, 7'"!ton! for &ra#tton"r!* r"!"ar#%"r!* an, ",'#ator!.

o ACCURACY IN LEGAL PREDICTIONS

G-"n t%" #"ntra(t$ of (")a( &r",#ton to mo!t

attorn"$!: &ra#t#"!* o'r 9n,n)! t%at n'm"ra#$a"#t! (")a( &r",#ton! !%o'(, b" ta/"n -"r$!"ro'!($. W" 9n, t%at (a6 !t',"nt! &r",#t,"r"nt o't#om"! for ,"nt#a( #a!"!* ,"&"n,n)

'&on n'm"r#a( #o)nt-" ba!"! an, t%"r o6nmat% !/((.

o MATH AND NUMERACY IN LEGAL EDUCATION AND LEGAL

SCHOLARSHIP O'r !t',"! 9n, t%at (a6 !t',"nt!: !'b!tant-"

(")a( ana($!"! -ar$ 6t% t%"r 'n,"r($n) mat% !/((*for at ("a!t !om" !'b!"t of (")a( 7'"!ton!.

O'r 9n,n)! !'))"!t t%at (a6 !#%oo(! !%o'(,

r"#on!,"r t%"r )"n"ra( a)no!t#!m to6ar,! t%"r!t',"nt!: mat% !/((!. For )oo, or ((* n'm"ra#$a&&"ar! to a"#t !t',"nt!: !'b!tant-" (")a(,"#!on!.

o DISTINCTIENESS OF LEGAL DECISION MAKING AND LEGAL

TRAINING T%! Art#(" %a! b""n #on#"rn",* n (ar)" &art* 6t%

t"!tn) 6%"t%"r"5!tn) 9n,n)! abo't n'm"ra#$ an, ,"#!onma/n) from non(")a(#ont"5t! a&&($ to (")a( 7'"!ton!* an, t %a! fo'n,t%at at ("a!t !om" of t%"9n,n)! from ot%"r #ont"5t! !""m not to a&&($ to(")a( ,"#!on! ma," b$&"o&(" tran", n t%" (a6.

o NUMERACY AND LEGAL DECISIONS IN NONLAWYERS

T%" m&(#aton! 6" %a-" not", !%ar" a #ommon

t%r"a,4 t%"$ a((

ra!" t%" 7'"!ton of %o6 non(a6tran", &"o&("m)%t "-a('at" (")a(7'"!ton!. T%" a##'ra#$ of (a6$"r!: &r",#ton!r"("! not on($ on %o6attorn"$! an, ',)"! m)%t -"6 a #a!"* b't&"r%a&! mor" m&ortant($on %o6 #("nt! an, 'ror! -"6 t. If* a! 6" %a-"ar)'",* n'm"ra#$#on!tr'#t! a"#t ,"#!on ma/n) n (")a( #ont"5t!*an, f* a! o'r r"!'(t!!'))"!t* (a6$"r! ar" !)n9#ant($ mor" n'm"rat"t%an t%" )"n"ra( &'b(# ;at("a!t a! m"a!'r", b$ &ror r"!"ar#%


4/20

trann). T%" an!6"r6o'(,* of #o'r!"* a(!o !%", ()%t on %o6 (")a(,"#!on ma/n) -ar"! from,"#!on! n ot%"r #ont"5t!4 f (")a( ,"#!on! ,"r&rmar($ ba!", on#ont"5t a(on"* 6" 6o'(, "5&"#t (a$ &"o&(" toan!6"r !m(ar($ toattorn"$!. If* %o6"-"r* (")a( ,"#!on! ,"rb"#a'!" of t%" ,"#!on

ma/"r!* a!/n) t%" !am" 7'"!ton! of nonattorn"$! !%o'(, $"(, -"r$,"r"nt r"!'(t!. Sm(ar($* 6%"r" (")!(ator! an,r")'(ator! m'!t ma/","#!on! ba!", on t%" (")a( an, n'm"r#a(,"#!on ma/n) of (a$&"o&("*'n,"r!tan,n) %o6 (a$ ,"#!on ma/n) ! a"#t",b$ n'm"ra#$ #o'(, %"(&m&ro-" t%o!" ,"#!on!.

CONCLUSIONT%! Art#(" &r"!"nt! t%" 9r!t "m&r#a( "-,"n#" r")ar,n) t%" r"(aton!%&b"t6""n n'm"ra#$ an, (")a( ,"#!on ma/n). It #on#(',"! t%at*,"!&t" #ommon 6!,om to t%" #ontrar$* &"o&(" 6t% (")a( trann) ar"!'r&r!n)($ )oo, at mat%. It a(!o 9n,! "-,"n#" t%at* 6%(" (a6 !t',"nt!ar"!'!#"&tb(" to n'm"r#a(($r"(at", #o)nt-" ba!"! n t%"r (")a( ,"#!onma/n)* t%"r !'!#"&tb(t$ ,o"! not -ar$ !)n9#ant($ b$ n'm"ra#$.Ho6"-"r* 6" ,o 9n, t%at t%" !'b!tan#" of (")a( ana($!! #an -ar$ b$ t%"n'm"ra#$ ("-"( of t%" (")a( ,"#!on ma/"r.

Milot, #llu"inating #nnu"eracy

INTROI. En'm"ratn) L")a( Inn'm"ra#$

a. Inn'm"ra#$ t%ro')% m!#a(#'(atonb. Inn'm"ra#$ t%ro')% o-"r!m&(9#aton#. Inn'm"ra#$ t%ro')% m!'n,"r!tan,n)

II. T%" !)n9#an#" of (")a( nn'm"ra#$a. O-"r-a('n) n'm"r#a( nformaton

b. Fa(n) to !&"a/ t%" (an)'a)" of n'mb"r!#. L")tma#$* m"ann) an, t%" &ra#t#" of (a6

III. D"9nn) t%" &rob("m3 #om&"t"n#" or #on9,"n#"a. Ob"#t-" nn'm"ra#$

. D"9#t! n #o)nt-" f'n#tonn). D"9#t! n mat%"mat#! ",'#aton

b. S'b"#t-" nn'm"ra#$. Mat% an5"t$. R"(at-" #om&"t"n#"

CONCLUSIONS


5/20

II. ACCOUNTING PROFESSION

$hili%%ine Accountancy Act o& '(1) *RA+'+-

AN ACT REGULATING THE PRACTICE OF ACCOUNTANCY IN THE PHILIPPINES*REPEALING FOR THE PURPOSE PRESIDENTIAL DECREE NO Q2* OTHERWISEKNOWN AS THE REISED ACCOUNTANCY LAW* APPROPRIATING FUNDSTHEREFOR AND FOR OTHER PURPOSES

Be it enacted by the Senate and House of Representatives of thePhilippines in Congress assembled:

ARTICLE ITITLE* DECLARATION OF POLICY* OBECTIE AND SCOPE OF PRACTICE

SECTION 1 Short Title T%! A#t !%a(( b" /no6n a! t%" P%(&&n"A##o'ntan#$ A#t of 2.

SEC 2 Declaration of Policy T%" Stat" r"#o)n+"! t%" m&ortan#" ofa##o'ntant! n naton b'(,n) an, ,"-"(o&m"nt H"n#"* t !%a(( ,"-"(o&an, n'rt'r" #om&"t"nt* -rt'o'!* &ro,'#t-" an, 6"(( ro'n,", &rof"!!ona(a##o'ntant! 6%o!" !tan,ar,! of &ra#t#" an, !"r-#" !%a(( b" "5#"(("nt*

7'a(tat-"* 6or(, #(a!! an, )(oba(($ #om&"tt-" t%ro')% n-o(ab("* %on"!t*""#t-"* an, #r",b(" (#"n!'r" "5amnaton! an, t%ro')% r")'(ator$m"a!'r"!* &ro)ram! an, t%at fo!t"r t%"r &rof"!!ona( )ro6t% an,,"-"(o&m"nt.

SEC ? Obectives T%! a#t !%a(( &ro-," for an, )o-"rn3;a< T%" !tan,ar,+aton an, r")'(aton of a##o'ntn) ",'#aton4;b< T%" "5amnaton for r")!traton an, #"rt9", &'b(# a##o'ntant!4 an,;#< T%" !'&"r-!on* #ontro( an, r")'(aton of t%" &ra#t#" of a##o'ntan#$n t%" P%(&&n"!.

SEC Scope of Practice T%" &ra#t#" of a##o'ntan#$ !%a(( n#(',"* b'tnot (mt", to t%" fo((o6n)3

;a< Pra#t#" of P'b(# A##o'ntan#$ !%a(( #on!tt't" n a &"r!on* b" t%!%"r n,-,'a( #a&a#t$* or a! a &artn"r or a! a !ta m"mb"r n ana##o'ntn) or a',tn) 9rm* %o(,n) o't %m!"(f%"r!"(f a! on" !/((", n t%"/no6(",)"* !#"n#" an, &ra#t#" of a##o'ntn)* an, a! a 7'a(9", &"r!onto r"n,"r &rof"!!ona( !"r-#"! a! a #"rt9", &'b(# a##o'ntant4 or o"rn)or r"n,"rn)* or bot%* to mor" t%an on" #("nt on a f"" ba!! or ot%"r6!"*!"r-#"! !'#% a! t%" a',t or -"r9#aton of 9nan#a( tran!a#ton an,a##o'ntn) r"#or,!4 or t%" &r"&araton* !)nn)* or #"rt9#aton for #("nt!of r"&ort! of a',t* ba(an#" !%""t* an, ot%"r 9nan#a(* a##o'ntn) an,r"(at", !#%",'("!* "5%bt!* !tat"m"nt! or r"&ort! 6%#% ar" to b" '!", for&'b(#aton or for #r",t &'r&o!"!* or tob" 9(", 6t% a #o'rt or )o-"rnm"nt a)"n#$* or to b" '!", for an$ ot%"r&'r&o!"4 or t%" ,"!)n* n!ta((aton* an, r"-!on of a##o'ntn) !$!t"m4 or

t%" &r"&araton of n#om" ta5 r"t'rn! 6%"n r"(at", to a##o'ntn)&ro#",'r"!4 or 6%"n %"!%" r"&r"!"nt! #("nt! b"for" )o-"rnm"nt a)"n#"!

on ta5 an, ot%"r matt"r! r"(at", to a##o'ntn) or r"n,"r! &rof"!!ona(a!!!tan#" n matt"r! r"(atn) to a##o'ntn) &ro#",'r"! an, t%" r"#or,n)an, &r"!"ntaton of 9nan#a( fa#t! or ,ata.;b< Pra#t#" an, Comm"r#" an, In,'!tr$ !%a(( #on!tt't" n a &"r!onn-o(-", n ,"#!on ma/n) r"7'rn) &rof"!!ona( /no6(",)" n t%"!#"n#" of a##o'ntn)* or 6%"n !'#% "m&(o$m"nt or &o!ton r"7'r"! t%att%" %o(,"r t%"r"of m'!t b" a #"rt9", &'b(# a##o'ntant.;#< Pra#t#" n E,'#atonA#a,"m" !%a(( #on!tt't" n a &"r!on n an",'#atona( n!tt'ton 6%#% n-o(-" t"a#%n) of a##o'ntn)* a',tn)*

mana)"m"nt a,-!or$ !"r-#"!* 9nan#"!* b'!n"!! (a6* ta5aton an, ot%"rt"#%n#a(($ r"(at", !'b"#t!3 Providedt%at m"mb"r! of t%" Int")rat", Barof t%" P%(&&n"! ma$ b" a((o6", to t"a#% b'!n"!! (a6 an, ta5aton!'b"#t!.;,< Pra#t#" n t%" Go-"rnm"nt !%a(( #on!tt't" n a &"r!on 6%o %o(,! or !a&&ont", to* a &o!ton n an a##o'ntn) &rof"!!ona( )ro'& n )o-"rnm"ntor n a )o-"rnm"nto6n", an,or #ontro((", #or&oraton n#(',n) t%o!"&"rformn) &ro&r"tar$ f'n#ton!* 6%"r" ,"#!on ma/n) r"7'r"!&rof"!!ona( /no6(",)" n t%" !#"n#" n a##o'ntn)* or 6%"r" a #-(!"r-#" "()b(t$ a! a #"rt9", &'b(# a##o'ntant! ! a &r"r"7'!t".

ARTICLE IIPROFESSIONAL REGULATORY BOARD OF ACCOUNTING

SEC J The Professional Regulatory Board of !ccountancy and itsComposition T%" Prof"!!ona( R")'(ator$ Boar, of A##o'ntan#$*%"r"naft"r r"f"rr", to a! t%" Boar,* 'n,"r t%" !'&"r-!on an,a,mn!trat-" #ontro( of t%" Prof"!!ona( R")'(aton Comm!!on*%"r"naft"r r"f"rr", to a! t%" Comm!!on* !%a(( b" #om&o!", of a#%arman an, !5 ;Q< m"mb"r! to b" a&&ont", b$ t%" Pr"!,"nt of t%"P%(&&n"! from a (!t of t%r"" ;?< r"#omm"n,""! "a#% &o!ton an, ran/",b$ t%" Comm!!on* from (!t of 9-" ;J< nomn""! for "a#% &o!ton!'bmtt", b$ t%" a##r",t", natona( &rof"!!ona( or)an+aton of #"rt9",&'b(# a##o'ntant! T%" boar, !%a(( "("#t a -#"#%arman from amon) t!m"mb"r! for a t"rm of on" ;1< $"ar m""tn)! of t%" boar, an, n t%" "-"ntof a -a#an#$ n t%" o#" of t%" #%arman* t%" -#" #%arman !%a(( a!!'m"!'#% ,'t"! an, r"!&on!b(t"! 'nt( !'#% tm" a! a #%arman ! a&&ont",.

SEC Q "uali#cation of members of the Professional Regulatory Board Am"mb"r of t%" boar, !%a((* at t%" tm" of %!%"r a&&ontm"nt* &o!!"!! t%"fo((o6n) 7'a(9#aton!3;a< M'!t b" a nat'ra( born #t+"n an, a r"!,"nt of t%" P%(&&n"!4;b< M'!t b" a ,'($ r")!t"r", C"rt9", P'b(# A##o'ntant 6t% at ("a!t t"n;1< $"ar! of 6or/ "5&"r"n#" n an$ !#o&" of &ra#t#" of a##o'ntan#$4;#< M'!t b" a )oo, mora( #%ara#t"r an, m'!t not %a-" b""n #on-#t", of#rm"! n-o(-n) mora( t'r&t',"4 an,;,< M'!t not %a-" an$ &"#'nar$ nt"r"!t",* ,r"#t($ or n,r"#t($* n an$!#%oo(!* #o((")"* 'n-"r!t$ or n!tt'ton #onf"rrn) an a#a,"m# ,")r""n"#"!!ar$ for a,m!!on to t%" &ra#t#" of a##o'ntan#$ or 6%"r" r"-"6#(a!!"! n &r"&araton for t%" (#"n!'r" "5amnaton* ar" b"n) o"r", or

#on,'#t",* nor !%a(( %"!%" b" a m"mb"r of t%" fa#'(t$ or a,mn!tratont%"r"of at t%" tm" of %!%"r a&&ontm"nt to t%" Boar,.


6/20

SEC Term of O$ce T%" #%arman an, m"mb"r! of t%" boar, !%a(( %o(,o#" for a t"rm of t%r"" $"ar! An$ -a#an#$ o##'rrn) 6t%n t%" t"rm or am"mb"r !%a(( b" 9((", '& for t%" 'n"5&r", &orton of t%" t"rm on($ No&"r!on 6%o %a! !"r-", t6o ;2< !'##"!!-" #om&("t" t"rm! !%a(( b" "()b("for r"a&&ontm"nt 'nt( t%" (a&!" of on" ;1< $"ar A&&ontm"nt to 9(('& an"5&r", t"rm ! not to b" #on!,"r", a! a #om&("t" t"rm.

SEC Compensation and !llo%ances of the Board T%" #%arman an,

m"mb"r! of t%" boar, !%a(( r"#"-" #om&"n!aton an, a((o6an#"!#om&arab(" to t%at b"n) r"#"-", b$ t%" #%arman an, m"mb"r! of"5!tn) r")'(ator$ boar,! 'n,"r t%" #omm!!on a! &ro-,", for n t%"G"n"ra( A&&ro&raton! A#t.

SEC Po%ers and &unctions of the Board T%" boar, !%a(( "5"r#!" t%"fo((o6n) !&"#9# &o6"r!* f'n#ton! an, r"!&on!b(t"!3;a< To &r"!#rb" an, a,o&t t%" r'("! an, r")'(aton! n"#"!!ar$ for #arr$n)o't t%" &ro-!on! of t%! A#t4;b< To !'&"r-!" t%" r")!traton* (#"n!'r" an, &ra#t#" of a##o'ntan#$ nt%" P%(&&n"!4;#< To a,mn!t"r oat%! n #onn"#ton 6t% t%" a,mn!traton of t%! A#t4;,< To !!'"* !'!&"n,* r"-o/"* or r"n!tat" t%" C"rt9#at" of R")!traton fort%" &ra#t#" of t%" a##o'ntan#$ &rof"!!on4;"< To a,o&t an o#a( !"a( of t%" Boar,4;f< To &r"!#rb" an,or a,o&t a Co," of Et%#! for t%" &ra#t#" ofa##o'ntan#$4;)< To montor t%" #on,ton a"#tn) t%" &ra#t#" of a##o'ntan#$ an,a,o&t !'#% m"a!'r"!* n#(',n) &rom'()aton of a##o'ntn) an, a',tn)!tan,ar,!* r'("! an, r")'(aton! an, b"!t &ra#t#"! a! ma$ b" ,""m",&ro&"r for t%" "n%an#"m"nt an, mant"nan#" of %)% &rof"!!ona(* "t%#a(*a##o'ntn) an, a',tn) !tan,ar,!3 Provided* T%at ,om"!t# a##o'ntn)an, a',tn) !tan,ar,! r'("! an, r")'(aton! !%a(( n#('," t%" nt"rnatona(a##o'ntn) an, a',tn) !tan,ar,!* an, )"n"ra(($ a##"&t", b"!t &ra#t#"!4;%< To #on,'#t an o-"r!)%t nto t%" 7'a(t$ of a',t! 9nan#a( !tat"m"nt!t%ro')% a r"-"6 of t%" 7'a(t$ #ontro( m"a!'r"! n!tt't", b$ a',tor! nor,"r to t !'r" #om&(an#" 6t% t%" a##o'ntn) an, a',tn) !tan,ar,! an,

&ra#t#"!4;< To n-"!t)at" -o(aton! of t%! a#t an, r'("! an, r")'(aton!&rom'()at", %"r"'n,"r an, for t%! &'r&o!"* to !!'" !'mmon!* !'b&o"naan, !'b&o"na a, t"!t9#an,'m an, !'b&o"na ,'#"! t"#'m to -o(ator! or6tn"!! t%"r"of an, #om&"( t%"r att"n,an#" to !'#% n-"!t)aton or%"arn) n t%" &ro,'#ton! of ,o#'m"nt! n #onn"#ton t%"r"6t%3 Provided*T%at t%" Boar, '&on a&&ro-a( of t%" #omm!!on ma$* !'b"#t to !'#% r'("!an, r")'(aton! t%at ma$ b" &rom'()at", to m&("m"nt t%! SEC* ,"(")at"t%" fa#t 9n,n) a!&"#t of !'#% n-"!t)aton! to t%" a##r",t", natona(&rof"!!ona( or)an+aton of #"rt9", &'b(# a##o'ntant!3 Provided* further*t%at t%" Boar, or t%" #omm!!on ma$ a,o&t t%"r 9n,n)! of fa#t a! t ma$!""m! 9t4;< T%" Boar, ma$ mot' &ro&ro n t! ,!#r"ton* ma/" !'#% n-"!t)aton!

a! t ,""m! n"#"!!ar$ to ,"t"rmn" 6%"t%"r an$ &"r!on %a! -o(at", an$&ro-!on! of t%! (a6* an$ a##o'ntn) or a',tn) !tan,ar,! or r'("! ,'($

&rom'()at", b$ t%" Boar, a! &art of t%" r'("! )o-"rnn) t%" &ra#t#" ofa##o'ntan#$4;/< To !!'" a #"a!" or ,"!!t or,"r to an$ &"r!on* a!!o#aton* &artn"r!%&or #or&oraton "n)a)", n -o(aton of an$ &ro-!on of t%! A#t* an$a##o'ntn) or a',tn) !tan,ar,! or r'("! ,'($ &rom'()at", b$ t%" Boar,a! &art of t%" r'("! )o-"rnn) t%" &ra#t#" of a##o'ntan#$ n t%"P%(&&n"!4;(< To &'n!% for #ont"m&t of t%" Boar,* bot% ,r"#t an, n,r"#t na##or,an#" 6t% t%" &"rtn"nt of t%" &"na(t"! &r"!#rb", b$ t%" R'("! of

Co'rt4;m< To &r"&ar"* a,o&t* !!'" or am"n, t%" !$((ab of t%" !'b"#t! for"5amnaton! n #on!'(taton 6t% t%" a#a,"m"* ,"t"rmn" an, &r"&ar"7'"!ton! for t%" (#"n!'r" "5amnaton 6%#% !%a(( !tr#t($ b" 6t%n t%"!#o&" of t%" !$((ab of t%" !'b"#t! for "5amnaton! a! 6"(( a! a,mn!t"r*#orr"#t an, r"("a!" t%" r"!'(t! of t%" (#"n!'r" "5amnaton!4;n< To "n!'r"* n #oor,naton 6t% t%" Comm!!on on H)%"r E,'#aton;CHED< or ot%"r a't%or+", )o-"rnm"nt o#"! t%at a(( %)%"r ",'#atona(n!tr'#ton an, o"rn) of a##o'ntan#$ #om&($ 6t% t%" &o(#"!* !tan,ar,!an, r"7'r"m"nt! of t%" #o'r!" &r"!#rb", b$ CHED or ot%"r a't%or+",)o-"rnm"nt o#"! n t%" ar"a! of #'rr#'('m* fa#'(t$* (brar$ an, fa#(t"!4an,;o< To "5"r#!" !'#% ot%"r &o6"r! a! ma$ b" &ro-,", b$ (a6 a! 6"(( a!t%o!" 6%#% ma$ b" m&(", from* or 6%#% ar" n"#"!!ar$ or n#,"nta( tot%" #arr$n) o't of* t%" "5&r"!! &o6"r! )rant", to t%" Boar, to a#%"-" t%"ob"#t-"! an, &'r&o!"! of t%! A#t.T%" &o(#"!* r"!o('ton!* r'("! an, r")'(aton!* !!'", a! &rom'()at", b$t%" Boar, !%a(( b" !'b"#t to r"-"6 an, a&&ro-a( of t%" Comm!!onHo6"-"r* t%" Boar,:! ,"#!on!* r"!o('ton! or or,"r! r"n,"r", na,mn!trat-" #a!"! !%a(( b" !'b"#t to r"-"6 on($ f on a&&"a(.

SEC 1!dministrative' Supervisions of the Board' Custodian of its Records'Secretariat and Support Services T%" Boar, !%a(( b" 'n,"r t%"a,mn!trat-" !'&"r-!on of t%" Comm!!on A(( r"#or,! of t%" Boar,*n#(',n) a&&(#aton! for "5amnaton an, a,mn!trat-" an, ot%"rn-"!t)at-" #a!"! #on,'#t", b$ t%" Boar, !%a(( b" 'n,"r t%" #'!to,$ oft%" Comm!!on T%" Comm!!on !%a(( ,"!)nat" t%" !"#r"tar$ of t%" Boar,

an, !%a(( &ro-," t%" !"#r"tarat an, ot%"r !'&&ort !"r-#"! to m&("m"ntt%" &ro-!on! of t%! A#t.

SEC 11 (rounds for Suspension or Removal of )embers of the Board T%"Pr"!,"nt of t%" P%(&&n"!* '&on t%" r"#omm"n,aton of t%" Comm!!on*aft"r )-n) t%" #on#"rn", m"mb"r an o&&ort'nt$ to ,"f"n, %m!"(f n a&ro&"r a,mn!trat-" n-"!t)aton to b" #on,'#t", b$ t%" Comm!!on*ma$ !'!&"n, or r"mo-" an$ m"mb"r on t%" fo((o6n) )ro'n,!.;a< N")("#t of ,'t$ or n#om&"t"n#"4;b< o(aton or to("ran#" of an$ -o(aton of t%! A#t an, t! m&("m"ntn)r'("! an, r")'(aton! or t%" C"rt9", P'b(# A##o'ntant:! Co," of Et%#!an, t%" t"#%n#a( an, &rof"!!ona( !tan,ar,! of &ra#t#" for C"rt9", P'b(#A##o'ntant!4

;#< Fna( ',)m"nt of #rm"! n-o(-n) mora( t'r&t',"!4 an,;,< Man&'(aton or r))n) of t%" #"rt9", a##o'ntant! (#"n!'r"


7/20

"5amnaton r"!'(t!* ,!#(o!'r" of !"#r"t an, #on9,"nta( nformaton n t%""5amnaton 7'"!ton! &ror to t%" #on,'#t of t%" !a, "5amnaton ortam&"rn) of )ra,"!.

SEC 12!nnual Report T%" Boar, !%a((* at t%" #(o!" of "a#% #a("n,ar $"ar*!'bmt an ann'a( r"&ort to t%" Pr"!,"nt of t%" P%(&&n"! t%ro')% t%"Comm!!on )-n) a ,"ta(", a##o'nt of t! &ro#"",n)! an,a##om&(!%m"nt! ,'rn) t%" $"ar an, ma/n) r"#omm"n,aton! for t%"a,o&ton of m"a!'r"! t%at 6(( '&)ra," an, m&ro-" t%" #on,ton!

a"#tn) t%" &ra#t#" of a##o'ntan#$ n t%" P%(&&n"!.

ARTICLE IIIEVAMINATION* REGISTRATION AND LICENSURE

SEC 1? The Certi#ed Public !ccountant *+aminations A(( a&&(#ant! forr")!traton for t%" &ra#t#" of a##o'ntan#$ !%a(( b" r"7'r", to 'n,"r)o a(#"n!'r" to b" )-"n b$ t%" Boar, n !'#% &(a#"! an, ,at"! a! t%"Comm!!on ma$ ,"!)nat" !'b"#t to #om&(an#" 6t% t%" r"7'r"m"nt!&r"!#rb", b$ t%" Comm!!on n a##or,an#" 6t% R"&'b(# A#t No 1.

SEC 1 "uali#cations of !pplicants for *+aminations An$ &"r!on a&&($n)for "5amnaton !%a(( "!tab(!% t%" fo((o6n) r"7'!t"! to t%" !at!fa#ton oft%" Boar, t%at %"!%"3;a< ! a F(&no #t+"n4;b< ! of )oo, mora( #%ara#t"r4;#< ! a %o(,"r of t%" ,")r"" of Ba#%"(or of S#"n#" n A##o'ntan#$#onf"rr", b$ a !#%oo(* #o((")"* a#a,"m$ or n!tt't" ,'($ r"#o)n+", an,ora##r",t", b$ t%" CHED or ot%"r a't%or+", )o-"rnm"nt o#"!4 an,;,< %a! not b""n #on-#t", of an$ #rmna( o"n!" n-o(-n) mora(t'r&t',".

SEC 1J Scope of *+amination T%" (#"n!'r" "5amnaton for #"rt9",&'b(# a##o'ntant! !%a(( #o-"r* b't ar" not (mt", to t%" fo((o6n)!'b"#t!3;a< T%"or$ of A##o'nt!;b< B'!n"!! La6 an, Ta5aton

;#< Mana)"m"nt S"r-#"!;,< A',tn) T%"or$;"< A',tn) Prob("m!;f< Pra#t#a( A##o'ntn) Prob("m! I;)< Pra#t#a( A##o'ntn) Prob("m! IIT%" Boar,* !'b"#t to t%" a&&ro-a( of t%" Comm!!on* ma$ r"-!" or"5#('," an$ of t%" !'b"#t! an, t%"r !$((ab* an, a,, n"6 on"! a! t%"n"", ar!"!.

SEC 1Q Rating in the ,icensure *+amination To b" 7'a(9", a! %a-n)&a!!", t%" (#"n!'r" "5amnaton for a##o'ntant!* a #an,,at" m'!t obtana )"n"ra( a-"ra)" of !"-"nt$9-" &"r#"nt ;J


8/20

Professional Ta+ Receipt T%" #"rt9", &'b(# a##o'ntant !%a(( b" r"7'r",to n,#at" %!%"r #"rt9#at" of r")!traton n'mb"r* an, ,at" of !!'an#"*t%" ,'raton of -a(,t$* n#(',n) t%" Prof"!!ona( Ta5 R"#"&t n'mb"r ont%" ,o#'m"nt! %"!%" !)n!* '!"! or !!'"! n #onn"#ton 6t% t%" &ra#t#"of %!%"r &rof"!!on.

SEC 2? Refusal to .ssue Certi#cate of Registration and Professional.denti#cation Card T%" Boar, !%a(( not r")!t"r an, !!'" a #"rt9#at" ofr")!traton an, &rof"!!ona( ,"nt9#aton #ar, to an$ !'##"!!f'( "5amn""

#on-#t", b$ a #o'rt of #om&"t"nt 'r!,#ton of a #rmna( o"n!"n-o(-n) mora( t'r&t'," or )'(t$ of mmora( an, ,!%onorab(" #on,'#t orto an$ &"r!on of 'n!o'n, mn, In t%" "-"nt of r"f'!a( to !!'" #"rt9#at"for an$ r"a!on* t%" Boar, !%a(( )-" t%" a&&(#ant a 6rtt"n !tat"m"nt!"ttn) fort% t%" r"a!on! for !'#% a#ton* 6%#% !tat"m"nt !%a(( b"n#or&orat", n t%" r"#or, of t%" Boar,.

SEC 2 Suspension and Revocation of Certi#cates of Registration andProfessional .denti#cation Card and Cancellation of Special Permit T%"Boar, !%a(( %a-" t%" &o6"r* '&on ,'" not#" an, %"arn)* to !'!&"n, orr"-o/" t%" &ra#tton"r:! #"rt9#at" of r")!traton an, &rof"!!ona(,"nt9#aton #ar, or !'!&"n, %m%"r from t%" &ra#t#" of %!%"r&rof"!!on or #an#"( %!%"r !&"#a( &"rmt for an$ of t%" #a'!"! or )ro'n,!m"nton", 'n,"r !"#ton 2? of t%! A#t or for an$ 'n&rof"!!ona( or'n"t%#a( #on,'#t* ma(&ra#t#"* -o(aton of an$ of t%" &ro-!on! of t%!A#t* an, t! m&("m"ntn) r'("! an, r")'(aton!* t%" C"rt9", P'b(#A##o'ntant:! Co," of Et%#! an, t%" t"#%n#a( an, &rof"!!ona( !tan,ar,!of &ra#t#" for #"rt9", &'b(# a##o'ntant!.

SEC 2J Reinstatement' Reissuance and Replacement of Revo-ed or ,ostCerti#cates T%" Boar, ma$* aft"r t%" "5&raton of t6o ;2< $"ar! from t%",at" of r"-o#aton of a #"rt9#at" of r")!traton an, '&on a&&(#aton an,for r"a!on! ,""m", &ro&"r an, !'#"nt* r"n!tat" t%" -a(,t$ of ar"-o/", #"rt9#at" of r")!traton an, n !o ,on)* ma$* n t! ,!#r"ton*"5"m&t t%" a&&(#ant from ta/n) anot%"r "5amnaton.A n"6 #"rt9#at" of r")!traton to r"&(a#" (o!t* ,"!tro$",* or m't(at",#"rt9#at"(#"n!" ma$ b" !!'",* !'b"#t to t%" r'("! &rom'()at", b$ t%"

Boar, an, t%" Comm!!on* '&on &a$m"nt of t%" r"7'r", f""!.

ARTICLE IPRACTICE OF ACCOUNTANCY

SEC 2Q Prohibition in the Practice of !ccountancy No &"r!on !%a((&ra#t#" a##o'ntan#$ n t%! #o'ntr$* or '!" t%" tt(" C"rt9", P'b(#A##o'ntant* or '!" t%" abbr"-at", tt(" CPA or ,!&(a$ or '!" an$ tt("*!)n* #ar,* a,-"rt!"m"nt* or ot%"r ,"-#" to n,#at" !'#% &"r!on &ra#t#"!or o"r! to &ra#t#" a##o'ntan#$* or ! a #"rt9", &'b(# a##o'ntant* 'n("!!!'#% &"r!on !%a(( %a-" r"#"-", from t%" Boar, a #"rt9#at" ofr")!traton&rof"!!ona( (#"n!" an, b" !!'", a &rof"!!ona( ,"nt9#aton#ar, or a -a(, t"m&orar$!&"#a( &"rmt ,'($ !!'", to %m%"r b$ t%"

Boar, an, t%" Comm!!on.

SEC 2 /ested Rights: Certi#ed Public !ccountants Registered 0hen This,a% is Passed A(( #"rt9", &'b(# a##o'ntant! r")!t"r", at t%" tm" t%!(a6 ta/"! ""#t !%a(( a'tomat#a(($ b" r")!t"r", 'n,"r t%" &ro-!on!%"r"of* !'b"#t %o6"-"r* to t%" &ro-!on! %"r"n !"t fort% a! to f't'r"r"7'r"m"nt! C"rt9#at"! of r")!traton&rof"!!ona( (#"n!" %"(, b$ !'#%&"r!on! n )oo, !tan,n) !%a(( %a-" t%" !am" for#" an, ""#t a! t%o')%!!'", aft"r t%" &a!!a)" of t%! A#t.

SEC 2 ,imitation of the Practice of Public !ccountancy Sn)("

&ra#tton"r! an, &artn"r!%&! for t%" &ra#t#" of &'b(# a##o'ntan#$ !%a((b" r")!t"r", #"rt9", &'b(# a##o'ntant! n t%" P%(&&n"!3 Provided* T%atfrom t%" ""#t-t$ of t%! A#t* a #"rt9#at" of a##r",taton !%a(( b" !!'",to #"rt9", &'b(# a##o'ntant! n &'b(# &ra#t#" on($ '&on !%o6n)* na##or,an#" 6t% r'("! an, r")'(aton! &rom'()at", b$ t%" Boar, an,a&&ro-", b$ t%" Comm!!on* t%at !'#% r")!trant %a! a#7'r", a mnm'mof t%r"" ;?< $"ar! m"ann)f'( "5&"r"n#" n an$ of t%" ar"a! of &'b(#&ra#t#" n#(',n) ta5aton3 Provided* further* T%at t%! r"7'r"m"nt !%a((not a&&($ to t%o!" a(r"a,$ )rant", a #"rt9#at" of a##r",taton &ror to t%"""#t-t$ of t%! A#t T%" S"#'rt"! an, E5#%an)" Comm!!on !%a(( notr")!t"r an$ #or&oraton or)an+", for t%" &ra#t#" of &'b(# a##o'ntan#$.

SEC 2 O%nership of 0or-ing Papers A(( 6or/n) &a&"r!* !#%",'("! an,m"moran,a ma," b$ a #"rt9", &'b(# a##o'ntant an, %! !ta n t%"#o'r!" of an "5amnaton* n#(',n) t%o!" &r"&ar", an, !'bmtt", b$ t%"#("nt* n#,"nt to or n t%" #o'r!" of an "5amnaton* b$ !'#% #"rt9",&'b(# a##o'ntant* "5#"&t r"&ort! !'bmtt", b$ a #"rt9", &'b(#a##o'ntant to a #("nt !%a(( b" tr"at", #on9,"nta( an, &r-(")", an,r"man t%" &ro&"rt$ of !'#% #"rt9", &'b(# a##o'ntant n t%" ab!"n#" of a6rtt"n a)r""m"nt b"t6""n t%" #"rt9", &'b(# a##o'ntant an, t%" #("nt*to t%" #ontrar$* 'n("!! !'#% ,o#'m"nt! ar" r"7'r", to b" &ro,'#",t%ro')% !'b&o"na !!'", b$ an$ #o'rt* trb'na(* or )o-"rnm"nt r")'(ator$or a,mn!trat-" bo,$.

SEC ?!ccredited Professional Organi1ation A(( r")!t"r", #"rt9", &'b(#a##o'ntant! 6%o!" nam"! a&&"ar n t%" ro!t"r of #"rt9", &'b(#a##o'ntant! !%a(( b" 'nt", an, nt")rat", t%ro')% t%"r m"mb"r!%& n a

on" on($ r")!t"r", an, a##r",t", natona( &rof"!!ona( or)an+aton ofr")!t"r", an, (#"n!", #"rt9", &'b(# a##o'ntant!* 6%#% !%a(( b"r")!t"r", 6t% t%" S"#'rt"! an, E5#%an)" Comm!!on a! a non&ro9t#or&oraton an, r"#o)n+", b$ t%" Boar,* !'b"#t to t%" a&&ro-a( b$ t%"Comm!!on T%" m"mb"r! n t%" !a, nt")rat", an, a##r",t", natona(&rof"!!ona( or)an+aton !%a(( r"#"-" b"n"9t! an, &r-(")"! a&&'rt"nantt%"r"to '&on &a$m"nt of a r"7'r", f""! an, ,'"! M"mb"r!%& n t%"nt")rat", or)an+aton !%a(( not b" a bar to m"mb"r!%& n an$ ot%"ra!!o#aton of #"rt9", &'b(# a##o'ntant!.

SEC ?1!ccreditation to Practice Public !ccountancy C"rt9", &'b(#a##o'ntant!* 9rm! an, &artn"r!%&! of #"rt9", &'b(# a##o'ntant!*"n)a)", n t%" &ra#t#" of &'b(# a##o'ntan#$* n#(',n) &artn"r! an, !ta

m"mb"r! t%"r"of* !%a(( r")!t"r 6t% t%" Comm!!on an, t%" Boar,* !'#%r")!traton to b" r"n"6", "-"r$ t%r"" ;?< $"ar!3 Provided* T%at !'b"#t to


9/20

t%" a&&ro-a( of t%" Comm!!on* t%" Boar, !%a(( &rom'()at" r'("! an,r")'(aton! for t%" m&("m"ntaton of r")!traton r"7'r"m"nt! n#(',n)t%" f""! an, &"na(t"! for -o(aton t%"r"of.

SEC ?2 Continuing Professional *ducation 2CP*3 Program A(( #"rt9",&'b(# a##o'ntant! !%a(( ab," b$ t%" r"7'r"m"nt!* r'("! an, r")'(aton!on #ontn'n) &rof"!!ona( ",'#aton to b" &rom'()at", b$ t%" Boar,*!'b"#t to t%" a&&ro-a( of t%" Comm!!on* n #oor,naton 6t% t%"a##r",t", natona( &rof"!!ona( or)an+aton of #"rt9", &'b(#

a##o'ntant! or an$ ,'($ a##r",t", ",'#atona( n!tt'ton! For t%!&'r&o!"* a CPE Co'n#( ! %"r"b$ #r"at", to m&("m"nt t%" CPE &ro)ram.

SEC ?? Seal and use of Seal A(( (#"n!", C"rt9", P'b(# A##o'ntant! !%a((obtan an, '!" a !"a( of a ,"!)n &r"!#rb", b$ t%" Boar, b"arn) t%"r")!trant:! nam"* r")!traton n'mb"r an, tt(" T%" a',tor:! r"&ort! !%a((b" !tam&", 6t% !a, !"a(* n,#atn) t%"r"n %!%"r #'rr"nt Prof"!!ona(Ta5 R"#"&t ;PTR< n'mb"r* ,at"&(a#" of &a$m"nt 6%"n 9(", 6t%)o-"rnm"nt a't%ort"! or 6%"n '!", &rof"!!ona(($.

SEC ? &oreign Reciprocity S'b"#t! or #t+"n! of for")n #o'ntr"! ma$b" a((o6", to &ra#t#" a##o'ntan#$ n t%" P%(&&n"! n a##or,an#" 6t%t%" &ro-!on! of "5!tn) (a6!* nt"rnatona( tr"at$ ob()aton! n#(',n)m't'a( r"#o)nton a)r""m"nt! "nt"r", nto b$ t%" P%(&&n" )o-"rnm"nt6t% ot%"r #o'ntr"! A &"r!on 6%o ! not a #t+"n of t%" P%(&&n"! !%a((not b" a((o6", to &ra#t#" a##o'ntan#$ n t%" P%(&&n"! 'n("!! %"!%" #an&ro-"* n t%" mann"r &ro-,", b$ t%" R'("! of Co'rt t%at* b$ !&"#9#&ro-!on of (a6* t%" #o'ntr$ of 6%#% %"!%" ! a #t+"n* !'b"#t ornatona( a,mt! #t+"n! of t%" P%(&&n"! to t%" &ra#t#" of t%" !am"&rof"!!on 6t%o't r"!tr#ton.

SEC ?J Coverage of Temporary4Special Permits S&"#a(t"m&orar$ &"rmtma$ b" !!'", b$ t%" Boar, !'b"#t to t%" a&&ro-a( of t%" Comm!!on an,&a$m"nt of t%" f""! t%" (att"r* %a! &r"!#rb", an, #%ar)", t%"r"of to t%"fo((o6n) &"r!on!3;a< A for")n #"rt9", &'b(# a##o'ntant #a((", for #on!'(taton or for a!&"#9# &'r&o!" 6%#%* n t%" ',)m"nt of t%" Boar,* ! "!!"nta( for t%"

,"-"(o&m"nt of t%" #o'ntr$3 Provided* T%at %!%"r &ra#t#" !%a(( b" (mt",on($ for t%" &art#'(ar 6or/ t%at %"!%" ! b"n) "n)a)",3 Provided' further'T%at t%"r" ! no F(&no C"rt9", P'b(# A##o'ntant 7'a(9", for !'#%#on!'(taton or !&"#9# &'r&o!"!4;b< A for")n #"rt9", &'b(# a##o'ntant "n)a)", a! &rof"!!or* ("#t'r"r or#rt# n 9"(,! "!!"nta( to a##o'ntan#$ ",'#aton n t%" P%(&&n"! an,%!%"r "n)a)"m"nt ! #on9n", to t"a#%n) on($4 an,;#< A for")n #"rt9", &'b(# a##o'ntant 6%o ! an nt"rnatona(($r"#o)n+", "5&"rt or 6t% !&"#a(+aton n an$ bran#% of a##o'ntan#$ an,%!%"r !"r-#" ! "!!"nta( for t%" a,-an#"m"nt of a##o'ntan#$ n t%"P%(&&n"!.

ARTICLE

PENAL AND FINAL PROISIONS

SEC ?Q Penal Provision An$ &"r!on 6%o !%a(( -o(at" an$ of t%" &ro-!on!of t%! A#t or an$ of t! Im&("m"ntn) r'("! an, r")'(aton! a! &rom'()at",b$ t%" Boar, !'b"#t to t%" a&&ro-a( of t%" Comm!!on* !%a((* '&on#on-#ton* b" &'n!%", b$ a 9n" of not ("!! t%an Fft$ t%o'!an, &"!o!;PJ*.< or b$ m&r!onm"nt for a &"ro, not "5#"",n) t6o ;2< $"ar!or bot%.

SEC ? .mplementing Rules and Regulations Wt%n nn"t$ ;< ,a$! aft"rt%" ""#t-t$ of t%! A#t* t%" Boar,* !'b"#t to t%" a&&ro-a( of t%"

Comm!!on an, n #oor,naton 6t% t%" a##r",t", natona( &rof"!!ona(or)an+aton of #"rt9", &'b(# a##o'ntant!* !%a(( a,o&t an, &rom'()at"!'#% r'("! an, r")'(aton! to #arr$ o't t%" &ro-!on! of t%! A#t an, 6%#%!%a(( b" ""#t-" 9ft""n ;1J< ,a$! fo((o6n) t%"r &'b(#aton n t%" O$cial(a1etteor n an$ maor ,a($ n"6!&a&"r of )"n"ra( #r#'(aton.

SEC ? .nterpretation of this !ct Not%n) n t%! A#t !%a(( b" #on!,"r", to""#t or &r"-"nt t%" &ra#t#" of an$ ot%"r (")a(($ r"#o)n+", &rof"!!on.

SEC ? *nforcement of the !ct It !%a(( b" t%" &rmar$ ,'t$ of t%"Comm!!on an, t%" Boar, to ""#t-"($ "nfor#" t%" &ro-!on! of t%! A#tA(( ,'($ #on!tt't", (a6 "nfor#"m"nt a)"n#"! an, o#"! of natona(*&ro-n#a(* #t$ or m'n#&a( )o-"rnm"nt or of an$ &o(t#a( !'b,-!ont%"r"of* !%a((* '&on t%" #a(( or r"7'"!t of t%" Comm!!on or t%" Boar,*r"n,"r a!!!tan#" n "nfor#n) t%" &ro-!on! of t%! A#t an, to &ro!"#'t"an$ &"r!on -o(atn) t%" &ro-!on! of t%" !am" T%" S"#r"tar$ of '!t#" or%! ,'($ ,"!)nat", r"&r"!"ntat-" !%a(( a#t a! (")a( a,-!"r to t%"Comm!!on an, t%" Boar, an, !%a(( r"n,"r (")a( a!!!tan#" a! ma$ b"n"#"!!ar$ n #arr$n) o't t%" &ro-!on! of t%! A#t.An$ &"r!on ma$ brn) b"for" t%" Comm!!on* Boar, or t%"afor"m"nton", o#"r! of t%" (a6* #a!"! of ((")a( &ra#t#" or -o(aton! oft%! A#t #ommtt", b$ an$ &"r!on or &art$.T%" Boar, !%" a!!!t t%" Comm!!on n 9(n) t%" a&&ro&rat" #%ar)"!t%ro')% t%" #on#"rn", &ro!"#'ton o#" n a##or,an#" 6t% (a6 an, R'("!an, Co'rt.

SEC &unding Provision T%" #%ar&"r!on of t%" Prof"!!ona( R")'(aton

Comm!!on !%a(( mm",at"($ n#('," n t%" Comm!!on:! &ro)ram! t%"m&("m"ntaton of t%! A#t* t%" f'n,n) of 6%#% !%a(( b" n#(',", n t%"ann'a( G"n"ra( A&&ro&raton! A#t.

SEC 1 Transitory Provisions T%" n#'mb"nt #%arman an, m"mb"r! oft%" Boar, !%a(( #ontn'" to !"r-" n t%"r r"!&"#t-" &o!ton! 'n,"r t%"t"rm! for 6%#% t%"$ %a-" b""n a&&ont", 'n,"r Pr"!,"nta( D"#r"" NoQ2* 6t%o't t%" n"", of n"6 a&&ontm"nt!.A(( )ra,'at"! 6t% a Ba#%"(or! D")r""* maor n A##o'ntn) !%a(( b"a((o6", to ta/" t%" CPA L#"n!'r" E5amnaton 6t%n t6o ;2< $"ar! fromt%" ""#t-t$ of t%! A#t 'n,"r t%" r'("! an, r")'(aton! to b" &rom'()at",b$ t%" Boar, !'b"#t to t%" a&&ro-a( b$ t%" Comm!!on.

SEC 2 Separability Clause If an$ #(a'!"* &ro-!on* &ara)ra&% or &artt%"r"of !%a(( b" ,"#(ar", 'n#on!tt'tona( or n-a(,* !'#% ',)m"nt !%a((


10/20

not a"#t* n-a(,at" or m&ar an$ ot%"r &art %"r"of* b't !%a(( b" m"r"($#on9n", to t%" #(a'!"* &ro-!on* &ara)ra&% or &art ,r"#t($ n-o(-", n t%"#ontro-"r!$ n 6%#% !'#% ',)m"nt %a! b""n r"n,"r",.

SEC ? Repealing Clause Pr"!,"nta( D"#r"" No Q2 ! %"r"b$ r"&"a(",an, a(( ot%"r (a6!* or,"r!* r'("! an, r")'(aton! or r"!o('ton! or &art!t%"r"of n#on!!t"nt 6t% t%" &ro-!on! of t%! A#t ar" %"r"b$ r"&"a(", ormo,9", a##or,n)($.

SEC *5ectivity T%! A#t !%a(( ta/" ""#t aft"r 9ft""n ;1J< ,a$!fo((o6n) t! &'b(#aton n t%" O$cial (a1etteor n an$ maor ,a($n"6!&a&"r of )"n"ra( #r#'(aton.

#RR o& RA +'+

a. PRIATE AND PUBLIC ACCOUNTANTSb. BECOMING A CPA

Antolin . Do"ondon, /R 10(20 *'(1(-

Examinations have a two-fold purpose. First, they are summative; examinations are intended

to assess and record what and how much the students have learned. Second, and perhaps moreimportantly, they are formative; examinations are intended to be part and parcel of the

learning process. In a perfect system, they are tools for learning. In view of the pedagogical

aspect of national examinations, the need for all parties to fully ventilate their respective

positions, and the view that government transactions can only be improved by public scrutiny,

we remand these cases to the trial court for further proceedings.

Facts

etitioner too! the accountancy licensure examinations "the #ertified ublic $ccountant

%#$& 'oard Exams( conducted by the 'oard of $ccountancy "the 'oard( in )ctober *++.

he examination results were released on )ctober +, *++; out of /,01* examinees, only

*,** passed. 2nfortunately, petitioner did not ma!e it. 3hen the results were released, she

received failing grades in four out of the seven sub4ects. #onvinced that she deserved to passthe examinations, she wrote to respondent 5omondon, $cting #hairman of the 'oard of

$ccountancy, and re6uested that her answer sheets be re-corrected. )n 7ovember 8, *++,

petitioner was shown her answer sheets, but these consisted merely of shaded mar!s, so she

was unable to determine why she failed the exam. hus, on 7ovember *9, *++, she again

wrote to the 'oard to re6uest for copies of "a( the 6uestionnaire in each of the seven sub4ects

"b( her answer sheets; "c( the answer !eys to the 6uestionnaires, and "d( an explanation of the

grading system used in each sub4ect. 5omondon denied petitioners re6uest on two grounds:

first, that Section 8/, $rticle III of the ules and egulations


11/20

Finally, she claims that her demand for access to documents was not rendered moot

by her passing of the 1998 CPA Board Exams.

Our Ruling

Propriety of Writ of Mandamus

$t the very outset let us be clear of our ruling. Any claim for re-correction or revision of her

1997 examination cannot be compelled by mandamus.his much was made evident by our

ruling inAgstin%amos v. Sandoval where we stated:$fter deliberating on the petition in relation to the other pleadings filed in the

proceedings at bar, the #ourt resolved to 5E7> said petition for lac! of merit.

he petition at bar prays for the setting aside of the )rder of respondent ?udge

dismissing petitioners mandamus action to compel the other respondents

"@edical 'oard of Examiners and the rofessional egulation #ommission(

to reconsider, recorrect andAor rectify the board ratings of the petitioners from

their present failing grades to higher or passing mar!s. he function of

revie!ing and re-assessing the petitioners ans!ers to the examination

"uestions# in the light of the facts and arguments presented by them x x x

is a discretionary function of the $edical %oard# not a ministerial and

mandatory one# hence# not !ithin the scope of the !rit of mandamus. he

obvious remedy of the petitioners from the adverse 4udgment by the @edical

'oard of Examiners was an appeal to the rofessional egulation#ommission itself, and thence to the #ourt of $ppeals; and since they did not

apply for relief to the #ommission prior to their institution of the special civil

action of mandamus in the egional rial #ourt, the omission was fatal to the

action under the familiar doctrine re6uiring exhaustion of administrative

remedies. $part from the obvious undesirability of a procedure which would

allow #ourts to substitute their 4udgment for that of


12/20

as basis for policy development, shall be afforded the citiBen, sub4ect to such limitations as

may be provided by law.

ogether with the guarantee of the right to information, Section 1, $rticle II promotes full

disclosure and transparency in government, vi1,GSub4ect to reasonable conditions prescribed

by law, the State adopts and implements a policy of full public disclosure of all its transactions

involving public interest.

Ci!e all the constitutional guarantees, the right to information is not absolute. he peopleHs

right to information is limited to matters of public concern, and is further sub4ect to such

limitations as may be provided by law. Similarly, the StateHs policy of full disclosure is

limited to transactions involving public interest, and is sub4ect to reasonable conditions

prescribed by law. he #ourt has always grappled with the meanings of the terms public

interest and public concern. $s observed in2egaspi v. ivil Service ommission,

In determining whether x x x a particular information is of public concern

there is no rigid test which can be applied. ublic concern li!e public

interest is a term that eludes exact definition. 'oth terms embrace a broad

spectrum of sub4ects which the public may want to !now, either because these

directly affect their lives, or simply because such matters naturally arouse the

interest of an ordinary citiBen. In the final analysis, it is for the courts to

determine on a case by case basis whether the matter at issue is of interest or

importance, as it relates to or affects the public.

3e have also recogniBed the need to preserve a measure of confidentiality on some matters,

such as national security, trade secrets and ban!ing transactions, criminal matters, and other

confidential matters.

3e are prepared to concede that national board examinations such as the #$ 'oard Exams

are matters of public concern. he populace in general, and the examinees in particular, would

understandably be interested in the fair and competent administration of these exams in order

to ensure that only those 6ualified are admitted into the accounting profession. $nd as with all

matters pedagogical, these examinations could be not merely 6uantitative means of

assessment, but also means to further improve the teaching and learning of the art and science

of accounting.

)n the other hand, we do realiBe that there may be valid reasons to limit access to the

Examination apers in order to properly administer the exam. @ore than the mere

convenience of the examiner, it may well be that there exist inherent difficulties in the

preparation, generation, encoding, administration, and chec!ing of these multiple choice

exams that re6uire that the 6uestions and answers remain confidential for a limited duration.

)o!ever# the *R+ is not a party to these proceedings. hey have not been given an

opportunity to explain the reasons behind their regulations or articulate the ,ustification

for eeping the 'xamination (ocuments confidential. In view of the far-reaching

implications of this case, which may impact on every board examination administered by the

#, and in order that all relevant issues may be ventilated, we deem it best to remand these

cases to the # for further proceedings.

/ 0' OF )' FOR'2O/2, the petitions are 2RA/'(. he 5ecember **, 99/

and February */, 990 5ecisions of the #ourt of $ppeals in #$-


13/20

#. RELEANT ORGANIXATIONS,. PROFESSIONAL ETHICS

!ak%il . 3aldes, AC '()( *1++-

The friendship of JOSE NAKPIL and respondent CARLOS J. VALDES dates bac tothe !"s d#rin$ their schoo%da&s in De La Sa%%e and the Phi%ippine La' Schoo%. Theirc%oseness e(tended to their fa)i%ies and respondent beca)e the b#siness cons#%tant*

%a'&er and acco#ntant of the Napi%s. In +,-!* Jose Napi% beca)e interested inp#rchasin$ a s#))er residence in oran Street* /a$#io Cit&. 0or %ac of f#nds* here1#ested respondent to p#rchase the oran propert& for hi). The& a$reed thatrespondent 'o#%d eep the propert& in tr#st for the Napi%s #nti% the %atter co#%d b#& itbac. P#rs#ant to their a$ree)ent* respondent obtained t'o 234 %oans fro) a ban 2inthe a)o#nts of P-!*"""."" and P5!*""".""4 'hich he #sed to p#rchase and reno6atethe propert&. Tit%e 'as then iss#ed in respondents na)e. It 'as the Napi%s 'hoocc#pied the oran s#))er ho#se. 7hen Jose Napi% died on J#%& 8* +,59*respondent acted as the %e$a% co#nse% and acco#ntant of his 'ido'* co)p%ainantIELDA NAKPIL. On arch ,* +,5-* respondents %a' fir)* Car%os J. Va%des :Associates* hand%ed the proceedin$ for the sett%e)ent of Joses estate. Co)p%ainant'as appointed as ad)inistrati( of the estate. The o'nership of the oran propert&beca)e an iss#e in the intestate proceedin$s. It appears that respondent e(c%#dedthe oran propert& fro) the in6entor& of Joses estate. On 0ebr#ar& +9* +,58*

respondent transferred his tit%e to the oran propert& to his co)pan&* the Ca6a%Rea%t& Corporation. On arch 3,* +,5,* co)p%ainant so#$ht to reco6er the oranpropert& b& fi%in$ 'ith the then Co#rt of 0irst Instance 2C0I4 of /a$#io Cit& an actionfor recon6e&ance 'ith da)a$es a$ainst respondent and his corporation. In defense*respondent c%ai)ed abso%#te o'nership o6er the propert& and denied that a tr#st 'ascreated o6er it.D#rin$ the pendenc& of the action for recon6e&ance* co)p%ainant fi%edthis ad)inistrati6e case to disbar the respondent. She char$ed that respondent6io%ated professiona% ethics 'hen he;

+. Assi$ned to his fa)i%& corporation the oran propert& 2Pulong Maulap4'hich be%on$ed to the estate he 'as sett%in$ as its %a'&er and a#ditor.

3. E(c%#ded the oran propert& fro) the in6entor& of rea% estate properties heprepared for a c%ient4 of his acco#ntin$ fir) to the /a$#io Cit& treas#rer re)ittin$ the rea% estate ta(esfor the oran propert& on beha%f of the Napi%s. >e contended that the %etter co#%d bea )ere error or o6ersi$ht.

Respondent a6erred that it 'as co)p%ainant 'ho acno'%ed$ed that the& did not o'nthe oran propert& for; 2+4 co)p%ainants 0ebr#ar& +,5, State)ent of Assets andLiabi%ities did not inc%#de the said propert&* and? 234 co)p%ainant* as ad)inistratri(*si$ned the /a%ance Sheet of the Estate 'here the oran propert& 'as not )entioned.

Respondent ad)itted that co)p%ainant retained the ser6ices of his %a' andacco#ntin$ fir)s in the sett%e)ent of her h#sbands estate. >o'e6er* he pointed o#tthat he has resi$ned fro) his %a' and acco#ntin$ fir)s as ear%& as +,5@. >e a%%e$edthat it 'as Att&. Perci6a% Cendaa 2fro) the %a' fir) Car%os Va%des : Associates4 'hofi%ed the inestate proceedin$s in co#rt in +,5-.

As to the third char$e* respondent denied there 'as a conf%ict of interest 'hen his %a'


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fir) represented the estate in the inestate proceedin$s 'hi%e his acco#ntin$ fir) 2C.J. Va%des : Co.* CPAs4 ser6ed as acco#ntant of the estate and prepared the c%ai)s ofcreditors An$e% Napi% and ENORN* Inc. a$ainst the estate. >e proffered the fo%%o'in$reasons for his thesis; 0irst* the t'o c%ai)ants 'ere c%ose%& re%ated to the %ate Napi%.C%ai)ant ENORN* Inc. is a fa)i%& corporation of the Napi%s of 'hich the %ate Napi%'as the President. C%ai)ant An$e% Napi% is a brother of the %ate Napi% 'ho* #pon the%atters death* beca)e the President of ENORN* Inc. These t'o c%ai)ants had beenc%ients of his %a' and acco#ntin$ fir)s e6en d#rin$ the %ifeti)e of Jose Napi%.Second* his a%%e$ed representation of conf%ictin$ interests 'as 'ith the no'%ed$eand consent of co)p%ainant as ad)inistratri(. Third* there 'as no conf%ict of interestsbet'een the estate and the c%ai)ants for the& had for$ed a modus vivendi* i.e.* thatthe s#b=ect c%ai)s 'o#%d be satisfied on%& after f#%% pa&)ent of the principa% bancreditors. Co)p%ainant* as ad)inistratri(* did not contro6ert the c%ai)s of An$e% Napi%and ENORN* Inc. Co)p%ainant has started pa&in$ off the c%ai)s of An$e% Napi% andENORN* Inc. after satisf&in$ the bans c%ai)s. Co)p%ainant did not assert that theirc%ai)s ca#sed pre=#dice to the estate. 0o#rth* the 'or of Car%os J. Va%des and Co. asco))on a#ditor redo#nded to the benefit of the estate for the fir) prepared a tr#eand acc#rate a)o#nt of the c%ai). 0ifth* respondent resi$ned fro) his %a' andacco#ntin$ fir)s as ear%& as A#$#st +!* +,5@. >e re=oined his acco#ntin$ fir) se6era%&ears %ater. >e s#b)itted as proof the SECs certification of the f i%in$ of his acco#ntin$fir) of an A)ended Artic%es of Partnership. Th#s* it 'as not he b#t Att&. Perci6a%Cendaa* fro) the fir) Car%os J. Va%des and Associates* 'ho fi%ed the intestateproceedin$s in co#rt. On the other hand* the c%ai)ants 'ere represented b& their o'n

co#nse% Att&. Enri1#e O. Chan. Si(th* respondent a%%e$ed that in the re)ote possibi%it&that he co))itted a breach of professiona% ethics* he co))itted s#ch )iscond#ct notas a %a'&er b#t as an acco#ntant 'ho acted as co))on a#ditor of the estate and itscreditors. >ence* he sho#%d be he%d acco#ntab%e in another for#).

On No6e)ber +3* +,5,* co)p%ainant s#b)itted her REPL. She )aintained that thependenc& of the recon6e&ance case is not pre=#dicia% to the in6esti$ation of herdisbar)ent co)p%aint a$ainst respondent for the iss#e in the %atter is not theo'nership of the oran propert& b#t the ethics and )ora%it& of respondents cond#ctas a CPAe a%%e$ed that his acco#ntin$ fir) )ere%& prepared the %ist of c%ai)s of the creditorsAn$e% Napi% and ENORN* Inc. Their c%ai)s 'ere not defended b& his acco#ntin$ or%a' fir) b#t b& Att&. Enri1#e Chan. >e a6erred that his %a' fir) did not oppose thesec%ai)s as the& 'ere %e$iti)ate and not beca#se the& 'ere prepared b& his acco#ntin$fir). >e e)phasiBed that there 'as no a%%e$ation that the c%ai)s 'ere fra#d#%ent ore(cessi6e and that the fai%#re of respondents %a' fir) to ob=ect to these c%ai)sda)a$ed the estate.

In o#r Jan#ar& 3+* +,8" Reso%#tion* 'e deferred f#rther action on the disbar)entcase #nti% after reso%#tion of the action for recon6e&ance bet'een the parties in6o%6in$

the iss#e of o'nership b& the then C0I of /a$#io. Co)p%ainant )o6ed forreconsideration on the $ro#nd that the iss#e of o'nership pendin$ 'ith the C0I 'asnot pre=#dicia% to her co)p%aint 'hich in6o%6ed an entire%& different iss#e* i.e.* the#nethica% acts of respondent as a CPA


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As a r#%e* a %a'&er is not barred fro) dea%in$ 'ith his c%ient b#t the b#sinesstransaction )#st be characteriBed 'ith #t)ost honest& and $ood faith. The )eas#reof $ood faith 'hich an attorne& is re1#ired to e(ercise in his dea%in$s 'ith his c%ient isa )#ch hi$her standard than is re1#ired in b#siness dea%in$s 'here the parties tradeat ar)s %en$th. /#siness transactions bet'een an attorne& and his c%ient aredisfa6ored and disco#ra$ed b& the po%ic& of the %a'. >ence* co#rts caref#%%& 'atchthese transactions to ass#re that no ad6anta$e is taen b& a %a'&er o6er his c%ient.This r#%e is fo#nded on p#b%ic po%ic& for* b& 6irt#e of his office* an attorne& is in aneas& position to tae ad6anta$e of the cred#%it& and i$norance of his c%ient. Th#s* nopres#)ption of innocence or i)probabi%it& of 'ron$doin$ is considered in anattorne&s fa6or.

In the case at bar* 'e cannot s#bscribe to the findin$s of the OS in its Report.These findin$s 'ere based )ain%& on the decision of the Co#rt of Appea%s in theaction for recon6e&ance 'hich 'as re6ersed b& this Co#rt in +,,9.

As to the first t'o char$es* 'e are bo#nd b& the fact#a% findin$s of this Co#rt in theafore)entioned recon6e&ance case. It is 'e%%4e rep#diated the tr#st 'hen 2he4 e(c%#dedPulong Maulap fro) the %ist of properties of the %ate Jose Napi%s#b)itted to the intestate co#rt in +,59. ( ( ((((The fact that there 'as no transfer of o'nership intended b& theparties ( ( ( can be bo%stered b& E(h. I* J and L4* 'hich she a%so add#ced in this ad)inistrati6e case*sho#%d estop respondent fro) c%ai)in$ that he bo#$ht the oran propert& for hi)se%f*and not )ere%& in tr#st for Jose Napi%.

It o#$ht to fo%%o' that respondents act of e(c%#din$ oran propert& fro) the estate'hich his %a' fir) 'as representin$ e6inces a %ac of fide%it& to the ca#se of his c%ient.If respondent tr#%& be%ie6ed that the said propert& be%on$ed to hi)* he sho#%d ha6e at%east infor)ed co)p%ainant of his ad6erse c%ai). If the& co#%d not a$ree on itso'nership* respondent sho#%d ha6e for)a%%& presented his c%ai) in the intestateproceedin$s instead of transferrin$ the propert& to his o'n corporation andconcea%in$ it fro) co)p%ainant and the =#d$e in the estate proceedin$s. Respondents)is#se of his %e$a% e(pertise to depri6e his c%ient of the oran propert& is c%ear%nethica%.

To )ae )atters 'orse* respondent* thro#$h his acco#ntin$ fir)* char$ed the t'o%oans of P-!*"""."" and P5!*"""."" as %iabi%it& of the estate* after said %oans 'ereobtained b& respondent for the p#rchase and reno6ation of the propert& 'hich hec%ai)ed for hi)se%f. Respondent sees to e(c#%pate hi)se%f fro) this char$e b&disc%ai)in$ no'%ed$e or pri6it& in the preparation of the %ist of the estates %iabi%ities.>e theoriBes that the inc%#sion of the %oans )#st ha6e been a )ere error or o6ersi$htof his acco#ntin$ fir). It is c%ear that the infor)ation as to ho' these t'o %oans sho#%dbe treated co#%d ha6e on%& co)e fro) respondent hi)se%f as the said %oans 'ere inhis na)e. >ence* the s#pposed error of the acco#ntin$ fir) in char$in$ respondents%oans a$ainst the estate co#%d not ha6e been co))itted 'itho#t respondentsparticipation. Respondent 'anted to ha6e his cae and eat it too and s#bordinatedthe interest of his c%ient to his o'n pec#niar& $ain. Respondent 6io%ated Canon +5 ofthe Code of Professiona% Responsibi%it& 'hich pro6ides that a %a'&er o'es fide%it& tohis c%ients ca#se and en=oins hi) to be )indf#% of the tr#st and confidence reposed onhi).

As re$ards the third char$e* 'e ho%d that respondent is $#i%t& of representin$conf%ictin$ interests. It is $enera%%& the r#%e* based on so#nd p#b%ic po%ic&* that anattorne& cannot represent ad6erse interests. It is hi$h%& i)proper to represent bothsides of an iss#e. The proscription a$ainst representation of conf%ictin$ interests findsapp%ication 'here the conf%ictin$ interests arise 'ith respect to the sa)e $enera%)atter and is app%icab%e ho'e6er s%i$ht s#ch ad6erse interest )a& be. It app%iesa%tho#$h the attorne&s intentions and )oti6es 'ere honest and he acted in $ood faith.>o'e6er* representation of conf%ictin$ interests )a& be a%%o'ed 'here the partiesconsent to the representation* after f#%% disc%os#re of facts. Disc%os#re a%one is noteno#$h for the c%ients )#st $i6e their infor)ed consent to s#ch representation. The

%a'&er )#st e(p%ain to his c%ients the nat#re and e(tent of conf%ict and the possib%ead6erse effect )#st be thoro#$h%& #nderstood b& his c%ients.


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In the case at bar* there is no 1#estion that the interests of the estate and that of itcreditors are ad6erse to each other. Respondents acco#ntin$ fir) prepared the %ist ofassets and %iabi%ities of the estate and* at the sa)e ti)e* co)p#ted the c%ai)s of t'ocreditors of the estate. There is c%ear%& a conf%ict bet'een the interest of the estate'hich stands as the debtor* and that of the t'o c%ai)ants 'ho are creditors of theestate. In fact* at one instance* respondents %a' fir) 1#estioned the c%ai)s of creditorAn$e% Napi% a$ainst the estate.

To e(c#%pate hi)se%f* respondent denies that he represented co)p%ainant in theintestate proceedin$s. >e points o#t that it 'as one Att&. Perci6a% Cendaa* fro) his%a' fir) Car%os J. Va%des : Associates* 'ho fi%ed the intestate case in co#rt. >o'e6er*the fact that he did not persona%%& fi%e the case and appear in co#rt is beside the point.As estab%ished in the records of this case and in the recon6e&ance case* respondentacted as co#nse% and acco#ntant of co)p%ainant after the death of Jose Napi%.Respondents defense that he resi$ned fro) his %a' and acco#ntin$ fir)s as ear%& as+,5@ 2or t'o &ears before the fi%in$ of the intestate case4 is #n'orth& of )erit.Respondents c%ai) of resi$nation fro) his %a' fir) is not s#pported b& an&doc#)entar& proof. The doc#)ents on record on%& sho' respondents resi$nationfro) his acco#ntin$ fir) in +,53 and +,5@. E6en these doc#)ents re6ea% thatrespondent ret#rned to his acco#ntin$ fir) on J#%& +* +,5- and as of +,58* theintestate proceedin$s for the sett%e)ent of Joses estate had not &et been ter)inated.It does not escape #s that 'hen respondent transferred the oran propert& to hiscorporation on 0ebr#ar& +9* +,58* the intestate proceedin$s 'as sti%% pendin$ in

co#rt. Th#s* the s#ccession of e6ents sho's that respondent co#%d not ha6e beentota%%& i$norant of the proceedin$s in the intestate case.

Respondent c%ai)s that co)p%ainant ne' that his %a' fir) Car%os J. Va%des :Associates 'as the %e$a% co#nse% of the estateand his acco#ntin$ fir)* C.J. Va%des :Co.* CPAs* 'as the a#ditor of both the estate and the t'o c%ai)ants a$ainst it. Thefact* ho'e6er* that co)p%ainant* as ad)inistratri(* did not ob=ect to the sete is s#spended fro) the practice of %a' for a period of one 2+4 &eareffecti6e fro) receipt of this Decision* 'ith a 'arnin$ that a si)i%ar infraction sha%% bedea%t 'ith )ore se6ere%& in the f#t#re.

Let copies of this Decision be f#rnished a%% co#rts* as 'e%% as the Inte$rated /ar of thePhi%ippines and the Office of the /ar Confidant.SO ORDERED.

Reised Code o& 4thics &or $ro&essional Accountants inthe $hili%%ines, $RC 5A Resolution !o. 1'6(

Adertising &or $hili%%ine Accounting $ro&ession, $RC5A Resolution !o. 1'06(


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Mansibang, Ch. '


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WEEK 2.

1. O#a( r"#"&t2. Sa("! n-o#"?. P'r#%a!" or,"r. o'#%"rJ. Ar6a$ b((Q. D"&o!t S(&

. Ban/ !tat"m"nt. C%"#/. Pa$!(&1.Prom!!or$ not"11.G"n"ra( o'rna(12.G"n"ra( L",)"r1?.C%art of A##o'nt!1.Prom!!or$ Not"1J.Tra( Ba(an#"1Q.Wor/!%""t1.Ba(an#" S%""t1.In#om" Stat"m"nt1.Stat"m"nt of C%an)" n O6n"r:! E7't$2.Ca!% F(o6 Stat"m"nt21.Not"! to Fnan#a( Stat"m"nt!22.Stat"m"nt of Mana)"m"nt:! R"!&on!b(t$2?.A',tor:! R"&ort


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WEEK ?.

III. BASIC ACCOUNTINGa. DEFINITIONb. NATURE* PURPOSE* FUNCTION#. BASIC ACCOUNTING CONCEPTS,. BOOKS OF ACCOUNTS". ACCOUNTING METHODS AND PERIODS

f. ACCOUNTING DIFFERENTIATED1. AS TO BOOKKEEPING2. AS TO AUDITING?. AS TO FINANCE. AS TO COST ACCOUNTINGJ. AS TO TAV ACCOUNTINGQ. AS TO LEGAL ACCOUNTING

I. ACCOUNTING E0UATIONa. ASSETSb. LIABILITIES#. OWNER:S E0UITY,. DEBIT* CREDIT* TACCOUNT". ACCOUNTING METHODS AND PERIODS

. FINANCIAL STATEMENTSa. STATEMENT OF FINANCIAL POSITIONb. INCOME STATEMENT#. STATEMENT OF CHANGES IN OWNER:S E0UITY,. STATEMENT OF CASH FLOWS". NOTES TO FINANCIAL STATEMENTS


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WEEK .

I. ACCOUNTING CYCLEa. OURNALIXINGb. POSTING TO THE GENERAL LEDGER#. TRIAL BALANCE PREPARATION,. WORKSHEET PREPARATION

". ADUSTING THE BOOKSf. PREPARING FINANCIAL STATEMENTS). CLOSING THE BOOKS%. PREPARING POSTCLOSING TRIAL BALANCE. REERSING ENTRIES

LEGACC Midterms Reviewer

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