1. Mutual Recognition Arrangement for Accountancy Services Background and what CPAs should do to Prepare for this 3A series release 1 December 2015 BoA Chairman Joel L. Tan-Torres

2. Accountancy Profession Profile October batch: 258July batch: 289 NCR: 46.1% -Over 170,000 CPAs registered -Over 520 accounting schools -Over 132,000 enrolees to BSA each year -Over 11,000 accountancy graduates each year -Over 20,000 CPA examinees each year -About 7,000 CPA passers each year -Over 5,800 CPAs in public practice -Board of Accountancy is the regulator, educator, licensor, rule maker, etc. all rolled into one Administers 3 Licensure examinations every year Accredits CPAs in public practice and in education Conducts inspections of schools & businesses establishments Issues AAS & PFRS Administers CPD Program

3. Accountancy Profession Profile October batch: 258July batch: 289 NCR: 46.1% Functions of Board of Accountancy (continued): Issues STPs for foreign accountants to work in the Philippines Oversees the investigation of erring accountants Oversees the APO and the 4 sectoral organizations Reviews the Accountancy Program with CHED Conducts the search for the most outstanding CPA and APO Implements the ASEAN MRA for Accountancy Services Provides oversight over government accounting matters Attends to PRC matters Attends to international accounting activities

4. Background on the ASEAN Mutual Recognition Arrangement (MRA) on Accountancy Services

5. OBJECTIVES OF MRA 1. Facilitates mobility of accountants within ASEAN 2. Enhances exchange of information or networking 3. Promotes adoption of best practices on standards and qualifications 4. Provides opportunities for capacity building and training

6. Major events on the MRA  Signing of the General Agreement on Trade in Services in 1994  Signing of the ASEAN Framework Agreement on Services in 1995  Convening of the ASEAN Coordinating Committee on Services (to date has concluded 82 meetings)

7. Time line of the MRA on Accountancy services  2009 start of discussions  Bi-annual meetings thereafter  17 th meeting of the Accountancy Experts Group on May 2015 in Cambodia  Signing of the MRA by the 10 countries last November 2014  1 st meeting of ASEAN CPA Coordinating Committee last September 2015

8. Key Features of MRA on Accountancy services  Follows template of 5 MRAs that have earlier been approved and implemented  Has undergone extensive discussion by the Experts Group coming from the ten ASEAN countries  MRA has provisions to safeguard the interest of the local practice

9. Basic Features of MRA on Accountancy services  Objectives and Definition of Terms  Scope (with limitation on independent auditor and collaboration requirement)  Qualifications and eligibility (first phase)  Evaluation and assessment (second phase)  Permit to practice in host country (third phase)  Monitoring of practice (Last phase)

10. Basic Features of MRA on Accountancy services  Provides for registration as ASEAN Accountant (ACPA) in the ASEAN Accountant Register  Various bodies involved in implementation:  National accountancy body (PICPA)  Professional Regulatory Authority (BoA)  Monitoring Committee  ASEAN Chartered Accountant Coordinating Committee (ACPACC) 

11. Safeguards to protect the local public practice  Limits practice to collaboration  Does not allow public practice  Does not allow practice in the form of partnership or corporate form  Requires similar competency, assessment, minimum work experience, continuing professional development requirements for foreign accountant  Requires the issuance of STP

12. Moving forward  Setting up Monitoring Committee, Secretariat and Technical Working Group  Finalization of Assessment Statement (AS)  Conduct of awareness and information campaign to have country CPAs to register for ASEAN CPAs (ACPA) and registered Foreign Professional Accountant(RFPA)  Training and development to prepare Filipino CPAs for foreign accountants entry to the Philippines and Filipino CPAs to ASEAN countries

13. ASEAN MRA Development Roadmap Milestones 2016 Q4AAS approval by ACPACC 2017 Q1 ACPA Application and Assessment 2017 Q4ACPACC Approval of ACPA applications 2017 Q2ACPA Register (National Country Level) 2017 Q3ACPA Register (ASEAN level) 2019 Q3RFPA registration

14. Food for thought  Era of protectionism is over…liberalization is the name of the game  Filipino accountants have a comparative advantage over their ASEAN neighbors  However, Filipino accountants should be ready to take advantage of opportunities and address the threats

15. Food for thought  Be aware…be informed…be prepared….MOVE  BoA will provide leadership in efforts  Information Campaign—social network, 3A series  Streamlining regulatory framework—Accountancy Curriculum, Licensure Examination, CPD, QAR, Accreditation, Standards, Regulatory mechanisms and structure  Emphasis on quality, governance, ethics, effective regulation  PICPA and sectoral organizations should be pro-active  Conduct CPD sessions on MRA, quality, governance, ethics, regulatory  Adopt KPIs for chapters to benchmark

16. Food for thought  ALL ACCOUNTANTS SHOULD DO THEIR SHARE  Have the initiative to know what are the developments in the profession  Be involved in PICPA and sectoral organization initiatives  If sole practitioner, explore consolidation/merger opportunities  Be aware of local and ASEAN opportunities in various sectors  Grab these opportunities  Be aware of local and ASEAN threats in various sectors  Individually, as a sector, and as a profession, work hand and hand to handle the threats and benefit from the opportunities