Meaning of the Phrase "Independent Certified Public Accountants", as Used in Sec. 334 of the Tax Code

September 19, 1960 BIR RULING NO. 406-60 Hon. Reynaldo P. Borja Councilor City of Naga S i r : With reference to your letter dated July 12, 1960, I regret to inform you that this Office is not in a position to rule on your query as to whether or not your election to a public office will disqualify you from engaging in the practice of accounting, which subject matter is beyond our jurisdiction. It is suggested that you address your query to the Office of the President, Manila. cdll Please be informed, however, that the phrase "Independent Certified Public Accountants", as used in Section 334 of the Tax Code, as amended by Republic Act No. 658, means as follows: "An 'independent certified public accountant' is one who is in fact independent. In other words, an accountant will not be considered independent with respect to any person in whose business the accountant has any financial interest, direct or indirect, or in which he is, or was during the period of report, connected as a promoter, underwriter, voting trustee, director, officer, or employee. A certified public accountant whose work is subject to the supervision and control of the taxpayer, or who is employed to keep the books of accounts or to supervise the keeping of the said accounts, cannot audit the latter's books of accounts. He must, therefore, be employed exclusively to audit the books of accounts of the taxpayer and not for any other purpose, nor bear to him any business or professional relationship which may in any way affect the independence of his professional actuations. A firm of certified public accountants, one of the members of which is actually keeping or supervising the keeping of the books of accounts of a certain taxpayer, cannot audit or examine the said books of accounts of the later." (Sec. 1, Revenue Regulations No. V-20, dated Jan. 2, 1952) The foregoing meaning of "independent certified public accountant", as used in the law, presupposes that the certified public account concerned is qualified to engage or practice his profession as such. Very truly yours, (SGD.) MELECIO R. DOMINGO Commissioner of Internal Revenue