Professional Responsibility of Certified Public Accountants in the Preparation of Audited/Published Financial Statements

January 4, 1982 REVENUE MEMORANDUM CIRCULAR NO. 02-82 SUBJECT : Professional Responsibility of Certified Public Accountants in the Preparation of Audited/Published Financial Statements TO : All Internal Revenue Officers and Others Concerned For the information and guidance of all concerned, No. 9 of Letter of Instructions No. 1107 dated 16 February, 1981 is hereby reproduced: casia "9. The Professional Regulation Commission shall see to it that Certified Public Accountants auditing the books of commercial paper issuers comply with the highest standards of the auditing profession and shall adopt such disciplinary measures as may be found appropriate in cases where misrepresentations exists in the audited/published financial statements." FEATURES : 1. Certified Public Accountants (CPA) are subject to administrative disciplinary action by the Professional Regulation Commission for any misrepresentation in the financial statements prepared and audited by them. 2. All BIR personnel concerned are hereby directed to report all misrepresentations uncovered or found in any audited financial statement to the Tax Fraud Division for evaluation and confirmation of the misrepresentation. In case evidence of misrepresentation is strong, a complaint shall be filed with the Professional Regulation Commission against the CPA concerned so that the appropriate disciplinary measure may be imposed. 3. Reports of misrepresentations shall not be limited to financial statements of commercial paper issuers; all cases of misrepresentations by CPA's shall be fully investigated and duly reported to the Professional Regulation Commission. 4. The following formal requirements for financial statements shall likewise be verified: a) The auditor's report should be properly dated and manually signed; casia b) The coverage of the financial report should be identified; c) There must be a statement certifying to the accountant/s Professional Tax Receipt (PTR) Number; d) The complete mailing address of both the client and the auditor must be clearly indicated; e) If the certification is made under a firm name, the name of the certifying partner must be stated; f) The report should bear the dry seal of the certifying accountant, the auditor's board certificate number, and the date and place of issuance of the PTR. The financial statement shall be returned for completion if any omission of any of the foregoing requirements is noted. All internal revenue officers and others concerned shall give this circular as wide a publicity as possible. (SGD.) RUBEN B. ANCHETA Acting Commissioner