Diagnostic Study of Accounting and Auditing Practices in
II.
Accounting and Auditing in the Philippines
T
his chapter presents an overview of Philippine accounting and auditing arrangements. It provides context for the following chapters on professional infrastructure, accounting and auditing standards, accounting and auditing training, and government budgeting and accounting arrangements. The chapter comprises eight sections, as follows: Part One: Accounting 1 – Introduction – identifies historical factors that have influenced accounting arrangements. 2 – The “Philippine Accounting System – describes accounting arrangements. These include the regulatory and organizational framework, accounting bases and accounting information systems. 3 – Financial Reporting – describes financial reporting and disclosure requirements. 4 – Quality of Financial Reporting – reviews evidence regarding compliance with disclosure requirements and the quality of Philippine financial reporting. Part Two: Auditing 5 – Governing Laws and Regulations – describes the laws that govern Philippine auditing practices and audit requirements. 6 – Philippine Auditing Practices – examines Philippine auditing practices by comparing these to regional norms and international best practices. 7 – Public Accounting and Auditing Firms – describes the presence of domestic and international accounting firms in the Philippines. 8 – Issue Synopsis: Accounting and Auditing – summarizes the issues identified in this chapter.
29
DIAGNOSTIC STUDY OF ACCOUNTING AND AUDITING PRACTICES IN THE PHILIPPINES
Part One.
Accounting
1. Introduction26 Philippine accounting practices date back to the pre-Spanish period, when Filipinos conducted business with Chinese, Indians and Malays from neighboring countries. These trading activities forced Filipinos to prepare crude accounting records that were based mainly on cash receipts and payments. The Philippines has, for a significant part of its recent history, been exposed to many foreign cultures and
Accounting and Auditing in the Philippines
T
his chapter presents an overview of Philippine accounting and auditing arrangements. It provides context for the following chapters on professional infrastructure, accounting and auditing standards, accounting and auditing training, and government budgeting and accounting arrangements. The chapter comprises eight sections, as follows: Part One: Accounting 1 – Introduction – identifies historical factors that have influenced accounting arrangements. 2 – The “Philippine Accounting System – describes accounting arrangements. These include the regulatory and organizational framework, accounting bases and accounting information systems. 3 – Financial Reporting – describes financial reporting and disclosure requirements. 4 – Quality of Financial Reporting – reviews evidence regarding compliance with disclosure requirements and the quality of Philippine financial reporting. Part Two: Auditing 5 – Governing Laws and Regulations – describes the laws that govern Philippine auditing practices and audit requirements. 6 – Philippine Auditing Practices – examines Philippine auditing practices by comparing these to regional norms and international best practices. 7 – Public Accounting and Auditing Firms – describes the presence of domestic and international accounting firms in the Philippines. 8 – Issue Synopsis: Accounting and Auditing – summarizes the issues identified in this chapter.
29
DIAGNOSTIC STUDY OF ACCOUNTING AND AUDITING PRACTICES IN THE PHILIPPINES
Part One.
Accounting
1. Introduction26 Philippine accounting practices date back to the pre-Spanish period, when Filipinos conducted business with Chinese, Indians and Malays from neighboring countries. These trading activities forced Filipinos to prepare crude accounting records that were based mainly on cash receipts and payments. The Philippines has, for a significant part of its recent history, been exposed to many foreign cultures and