The Philippines is committed to adopting the international accounting standards (IAS) by 2005. The IAS is a set of globally recognized accounting standards and procedures relating to the presentation of financial statements.
The adoption of the IAS is expected to enhance the comparability, understandability and reliability of financial statements; boost the country’s global competitiveness; and promote greater investor protection.
It is also expected to help avert accounting scandals similar to that of WorldCom and Enron.
According to the SEC, the 2005 timetable should provide the agency with enough incentives and momentum to secure improved accounting standards.
The SEC is studying whether new rules are needed to bring existing ones in line with emerging international best practices, including the latest principles of auditor oversight and auditor independence as stated by the International Organization of Securities Commissions (IOSCO).
It is working with the Bureau of Internal Revenue, Board of Accountancy (BOA), and the Professional Regulation Commission as well as other professional associations in attaining a high quality and independent audit environment.
SEC Chairperson Lilia R. Bautista said the SEC, the Philippine Institute of Certified Public Accountants (PICPA), BOA, and PRC must collectively meet the need for a strong investigatory and disciplinary body that will established standards, oversee the accounting profession, and impose substantive penalties to encourage quality work and ethics.
In spite the many well-known cases of poor quality of audited financial statements associated with losses for investors, no auditors has been sanctioned by SEC or PICPA.
One emerging area where coordinating among these institutions is needed involves the updating of the Code of Ethics for Certified Public Accountants to bring it in line with the International Federation of Accountants (IFAC) standard, the SEC said. – Zinnia dela Peña