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Financial Reporting Regulations in Philippines Get Boost from New Council

The Financial and Sustainability Reporting Standards Council (FSRSC) has been established to assist the Board of Accountancy (BOA) in promulgating accounting standards in the Philippines. This new council is a significant development, building upon the legacy of the Accounting Standards Council (ASC), which was established in 1981.

Responsibilities and Mandate

The FSRSC has taken over the responsibility of establishing generally accepted accounting principles in the country. It is also responsible for converging Philippine accounting standards with international accounting standards issued by the International Accounting Standards Board (IASB). This convergence will ensure that financial reporting practices in the Philippines align with global best practices.

Support and Monitoring

The FSRSC receives financial support from the PICPA Foundation and monitors the technical activities of the IASB. The council invites comments on exposure drafts of proposed International Financial Reporting Standards (IFRSs) and adopts them as Philippine Financial Reporting Standards (PFRSs) when finalized.

Stakeholders in Financial Reporting

The following stakeholders are involved in the financial reporting process:

  • Preparers: companies that prepare financial reports
  • Auditors: professionals who audit financial statements
  • Regulators: government agencies responsible for overseeing financial markets and institutions
  • Investors: individuals or organizations that invest in companies
  • Advisors: experts who provide guidance on financial reporting matters
  • General Public: consumers of financial information

Composition of the Council

The FSRSC consists of a chairman and members appointed by the BOA, representing various sectors, including:

  • Securities and Exchange Commission
  • Bangko Sentral ng Pilipinas (Central Bank of the Philippines)
  • Bureau of Internal Revenue
  • Insurance Commission
  • Commission on Audit
  • Financial Executives Institute of the Philippines
  • Philippine Institute of Certified Public Accountants (PICPA)

Philippine Interpretations Committee

The council has also established the Philippine Interpretations Committee (PIC) to assist in establishing and improving financial reporting standards. The PIC issues implementation guidance on PFRSs and replaces the former Interpretations Committee created by the ASC.

Conclusion

With its new mandate, the FSRSC is poised to play a crucial role in ensuring transparency and accountability in the country’s financial reporting system. The council’s efforts will help promote consistency, comparability, and reliability of financial reports, ultimately benefiting investors, stakeholders, and the general public.