GUIDELINES FOR SEC SUBMISSION OF

AUDITED FINANCIAL STATEMENTS

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SEC. 143 OF THE CORPORATION CODE
Rule-making power of the Securities and
Exchange Commission
SECTION 68 OF THE SRC
SEC is empowered to issue rules and regulations
on the preparation of financial statements

SEC. 141 OF THE CORPORATION CODE

Mandatory submission of financial statements
audited by CPA

2
 COVER SHEET

AUDITORS REPORT

STATEMENT OF MANAGEMENTS RESPONSIBILITY

FINANCIAL STATEMENTS

SUPPLEMENTAL STATEMENT OF EXTERNAL AUDITORS

SPECIAL REPORT AT TIME OF FIRST FILING BY

ACCOUNTANT (IF APPLICABLE)

GENERAL FORM FOR FINANCIAL STATEMENTS (IF

APPLICABLE)
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Cover Sheet shall show the following
information:
Company Name;
Registration Number;
Complete business mailing address;
Fiscal Year (Month/day);
Form Type;
Date of annual meeting;
Reporting Period;
Department in the SEC requiring the document of report;
Total Number of Stockholders
Liabilities

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A. SRC RULE 68

1. TECHNICAL REQUIREMENTS
Auditors Report shall:
be dated;
be signed by the certifying external auditor (in the case of
auditing firm, the certifying partner shall sign his/her own
signature and shall indicate that he/she is signing for the firm,
the name of which is printed the report);
identify the financial statements covered by the report;
state the signing auditors:
PRC License;
Tax Identification Number;
PTR Number;
BOA/PRC Registration Number including expiration date;
SEC Accreditation Number including category and
expiration date;
mailing address of the client and the auditor
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2. REPRESENTATIONS AS TO THE AUDIT

Examination was made in accordance with GAAS in the

Philippines (Philippine Standards on Auditing)

3. OPINION TO BE EXPRESSED

State clearly the opinion of the independent auditor on the

fairness of presentation in conformity with GAAP (Philippine
Financial Reporting Framework) of the Financial Statements
Unqualified
Qualified
Disclaimer
Adverse

4. EXCEPTIONS

Exceptions shall be clearly identified

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B. PHILIPPINE STANDARDS ON AUDITING (PSA) NO. 700
(as redrafted)

Title of the Report

Coverage of the Examination
Managements responsibility over FS
Auditors Responsibility
Opinion
If applicable, modification paragraph in going concern issue
If qualified opinion, discussion of quantitative impact

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INDEPENDENT AUDITORS REPORT
[Appropriate Addressee]

Report on the Financial Statements

We have audited the accompanying financial statements of ABC Company, which comprise the
balance sheet as at December 31, 20X1, and the income statement, statement of changes in equity
and cash flow statement for the year then ended, and a summary of significant accounting policies
and other explanatory information.

Managements Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial
statements in accordance with Philippine Financial Reporting Standards, and for such
internal control as management determines is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or error.

Auditors Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We
conducted our audit in accordance with Philippine Standards on Auditing. Those standards require
that we comply with ethical requirements and plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free from material misstatement.

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An audit involves performing procedures to obtain audit evidence about the amounts and disclosures
in the financial statements. The procedures selected depend on the auditors judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the entitys
preparation and fair presentation of the financial statements in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the entitys internal control. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of accounting estimates made by management, as
well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinion.

Opinion

In our opinion, the financial statements present fairly, in all material respects, the financial position of
ABC Company as at December 31, 20X1, and (of) its financial performance and its cash flows for the
year then ended in accordance with Philippine Financial Reporting Standards.

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Report on the Supplementary Information Required Under Revenue Regulations 15-2010 of
the Bureau of Internal Revenue

Our audit was conducted for the purpose of forming an opinion on the basic (separate) financial
statements taken as a whole. The supplementary information on taxes and licenses in Note X to the
(separate) financial statements is presented for purposes of filing with the Bureau of Internal
Revenue and is not a required part of the basic (separate) financial statements. Such information has
been subjected to the auditing procedures applied in our audit of the basic (separate) financial
statements and, in our opinion, is fairly stated in all material respects in relation to the basic
(separate) financial statements taken as a whole.

[Auditors signature]
[Date of the auditors report]
[Auditors address]

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Report on other legal and regulatory requirements

Our audit was conducted for the purpose of forming an opinion on the basic financial
statements as a whole. The supplementary information shown on Schedules A, B, C, D, E,
F, G, H and I is presented for purposes of additional analysis and is not a required part of
the basic financial statements. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our opinion, is
fairly stated in all material respects in relation to the basic financial statements taken as a
whole
i. The financial statements of the following corporations
shall be audited by an Independent Certified Public
Accountant registered with the Board of Accountancy:

Stock Corporations with paid-up Capital of PhP50,000.00 or

more;
Non-stock Corporations with Annual Gross receipts of
PhP100,000.00 or more, or a total assets of PhP500,000.00
or more;
Branch Office of Stock Foreign Corporations with assigned
Capital of PhP1,000,000 or more;
Branch Office of Non-stock Corporations with total assets in
the equivalent amount of PhP1,000,000.00 or more;
Regional operating headquarters of Foreign Corporations with
total revenues in the equivalent amount of PhP1,000,000.00
or more.

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i. The financial statements of the following corporations
shall be audited by an Independent Certified Public
Accountant accredited by the SEC:
Group A
Issuers of registered securities which have sold a class of
securities pursuant to a registration under section 12 of the
Securities Regulation Code (SRC) except those issuers of
registered timeshares, proprietary and non-proprietary
membership certificates which are covered in Group B.
Issuers with a class of securities listed for trading in an
Exchange;
Public companies or those Companies which have total
assets of at least fifty million pesos (PhP50,000,000.00) or
such other amount as the Commission shall prescribe and
having two hundred (200) or more holders each holding at
least one hundred (100) share of a class of its equity
securities.

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Group B
Issuers of Registered timeshares, proprietary and non-
proprietary membership certificates;
Investment houses;
Brokers and dealers of securities;
Investment companies;
Government securities eligible dealers;
Universal Bank Registered as underwriters of securities;
Investment Company advisers;
Clearing agency and clearing agency as depository;
Stock and securities exchanges;
Special Purpose Vehicles registered under the Special
Purpose Vehicle Act of 2002;
Special Purpose Corporations registered under the
Securitization Act of 2004 and its implementing rules;
Such other corporations which may be required by law to
be supervised by the Commission.
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Group C
Financing Companies;
Lending Companies;
Transfer Agents.

Group D
Registered Corporations which are mandated by other
regulatory agencies to have an external auditor accredited by
the Commission.

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REQUIREMENT ON EXTERNAL AUDITOR
FOR LARGE OR PUBLICLY ACCOUNTABLE ENTITIES
COVERED BY FULL PFRS

Those with total assets of more than BOA - Registered External

P350 Million or total liabilities of more Auditors
than P250 Million

Required to file financial statements Group A SEC-Accredited

under SRC Rule 68.1 OR In the External Auditors
process of filing their financial
statements for the purpose of issuing
any class of instruments in a public
market

Holders of secondary licenses issued Group B, C or SEC-accredited

by regulatory agencies (SEC, BSP, IC) and/or accredited by BSP or IC
for banks or insurance
companies

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REQUIREMENT ON EXTERNAL AUDITOR
FOR SMALL AND MEDIUM ENTITIES AND MICRO
ENTITIES

Small and medium entities BOA - Registered

External Auditors

Micro entities BOA - Registered

External Auditors

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 Independent Auditors or in the case of an
audit firm, the signing partner, of the
regulated entities shall be rotated every after
(5) years of engagement. Two-year cooling
off period shall be observed.
FINANCIAL STATEMENTS SUBMITTED WITH THE
COMMISSION ARE PRIMARILY THE
RESPONSIBILITY OF THE MANAGEMENT OF THE
REPORTING COMPANY

Accordingly fairness of the representations made

therein is an implicit and integral part of the
Managements Responsibility

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 SMR Should be signed by the following:

CHAIRMAN OF THE BOARD

CEO/PRESIDENT
CFO/TREASURER
RESIDENT AGENT

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 The financial statements have been prepared in conformity
with PFRS/other framework
Management maintains a system of accounting and reporting
which provides for necessary internal controls
Board of Directors has reviewed the financial statements
Independent auditors were appointed by the stockholders.

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Statement of Managements Responsibility of
Ordinary Corporations are not required to be
notarized.

Statement of Managements Responsibility of

Corporations covered by Part II of SRC Rule 68
are required to be presented under oath.

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The management of (name of reporting company) is responsible for all information and
representations contained in the financial statements for the year (s) ended (date), in accordance
with the prescribed financial reporting framework indicated therein. This responsibility includes
designing and implementing internal controls relevant to the preparation and fair presentation of
financial statements that are free from material misstatement, whether du to fraud or error, selecting
and applying appropriate accounting policies, and making accounting estimates that are reasonable
in the circumstances.

The Board of Directors or Trustees reviews and approves the financial statements and submit the
same to the stockholders or members.

(name of auditing firm), the independent auditors and appointed by the stockholders, has examined
the financial statements of the company in accordance with Philippine Standards on Auditing and
has expressed its opinion on the fairness of presentation upon completion of such examination.
Signature______________________
Name of the Chairman of the Board ___________________
Signature ______________________
Name of Chief Executive Officer ______________________
Signature ______________________
Name of Chief Financial Officer ______________________

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FS SHOULD BE IN ACCORDANCE WITH THE
PHILIPPINE FINANCIAL REPORTING
FRAMEWORK

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 Other
PFRS for
Full PFRS Acceptable
SMEs
Basis

Small and
Large medium-sized Micro entities
Corporations
entities

Publicly Micro
Accountable
Entities Entities that
opted to adopt
this framework
SMEs
exempted
from PFRS for
SMEs

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Large or publicly accountable entities are:

Those with total assets of more than P350 Million or total

liabilities of more than P250 Million; or

Required to file financial statements under Part II ofSRC Rule

68 as follows: listed companies, issuers of securities to the
public, mutual funds; or

In the process of filing their financial statements for the

purpose of issuing any class of instruments in a public market;
or

Holders of secondary licenses issued by regulatory agencies.

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SMALL AND MEDIUM ENTITIES

Small and medium-sized entities (SMEs) are those that meet ALL of the
following criteria:

With total assets of between P3M to P350 Million or total liabilities

of between P3M to P250 Million. If the entity is a parent company,
the said amounts shall be based on the consolidated figures;

Are not required to file financial statements under Part II of SRC

Rule 68 as follows: listed companies, issuers of securities to the
public, mutual funds;

Are not in the process of filing their financial statements for the
purpose of issuing any class of instruments in a public market;
and

Are not holders of secondary licenses issued by regulatory

agencies.

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MICRO ENTITIES
Micro entities are those that meet ALL of the following criteria:

Total assets and liabilities are below P3 Million;

Are not required to file financial statements under Part II of

SRC Rule 68 as follows: listed companies, issuers of securities
to the public, mutual funds;

Are not in the process of filing their financial statements for

the purpose of issuing any class of instruments in a public
market;

Are not holders of secondary licenses issued by regulatory

agencies.

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A set of financial reporting framework other
than the full PFRS may be allowed by the
Commission for certain sub-class (e.g.,
banks, insurance companies) of publicly
accountable entities upon consideration of
the pronouncements or interpretations of
the Bangko Sentral ng Pilipinas, Insurance
Commission, Financial Reporting Standards
Council

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EXEMPTIONS FROM THE MANDATORY
PFRS FOR SMES

BY REASON OF GROUP REPORTING

1) An SME which is a subsidiary of a parent company

reporting under the PFRS;

2) An SME, either as a significant joint venture or associate, is

part of a group that is reporting under the PFRS;

3) An SME which is a subsidiary of a foreign parent company

which will be moving towards International Financial
Reporting Standards (IFRS) pursuant to the foreign
countrys published convergence plan;

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Exemptions from PFRS for SMEs

4) An SME which is a subsidiary of a foreign parent

company and has been applying the standards for a non-
publicly accountable entity for local reporting purposes.
It is considering moving to PFRS instead of the PFRS for
SMEs in order to align its policies with the expected move
to full IFRS by its foreign parent company pursuant to its
countrys published convergence plan;

5) An SME which is a branch office or regional operating

headquarter of a foreign company reporting under the
IFRS;

6) An SME (parent company) which has a subsidiary that is

mandated to report under the PFRS.
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BY REASON OF BUSINESS PLANS

An SME which has a short term projection that show that

it will breach the quantitative thresholds set in the criteria
for an SME. The breach is expected to be significant and
continuing due to its long-term effect on the companys
asset or liability size;

An SME which has a concrete plan to conduct an initial

public offering within the next two (2) years.

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BY REASON OF STATUS

An SME which has been preparing financial

statements using PFRS and has decided to
liquidate;

BY DECLARATION OF THE COMMISSION

Such other cases that the Commission may

consider as valid exceptions from the mandatory
adoption of PFRS for SMEs.

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APPLICABLE FINANCIAL REPORTING FRAMEWORK

PFRS FOR SMES Full PFRS

Section 1 Small and Medium-sized Entities PAS 1 Presentation of Financial Statements

Section 2 Concepts and Pervasive Principles Framework for the Preparation and
Presentation of Financial Statements
Section 3 Financial Statement Presentation PAS 1 Presentation of Financial Statements

Section 4 Statement of Financial Position PAS 1 Presentation of Financial Statements

Section 5 Statement of Comprehensive Income and Income PAS 1 Presentation of Financial Statements
Statement

Section 6 Statement of Changes in Equity and Statement of PAS 1 Presentation of Financial Statements
Income and Retained Earnings
Section 7 Statement of Cash Flows PAS 7 Statement of Cash Flows

Section 8 Notes to Financial Statements PAS 1 Presentation of Financial Statements

Section 10 Accounting Policies, Estimates and Errors PAS 8 Accounting Policies, Changes in Accounting
Estimates and Errors
Section 32 Events After the End of Reporting Period PAS 10 Events After the Reporting Period

Section 33 Related Party Disclosures PAS 24 Related Party Disclosures

Section 31 Hyperinflation PAS 29 Financial Reporting in Hyperinflationary

Economies

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As to Business Combinations
and Group Financial Statements

PFRS FOR SMES Full PFRS

Section 19 Business combinations PFRS 3 Business combinations
and Goodwill

Section 9 Consolidated and PAS 27 Consolidated and Separate

Separate Financial Financial Statements
Statements Consolidation Special
SIC 12 Purpose Entities

Section 15 Investments in Joint PAS 31 Investments in Joint

Ventures Ventures

Section 14 Investments in PAS 28 Investments in Associates

Associates

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As to Elements of Financial Position
PFRS FOR SMES Full PFRS
Section 17 Property, Plant and Equipment PAS 16 Property, Plant and Equipment

Section 16 Investment Property PAS 40 Investment Property

Section 18 Intangible Assets other than Goodwill PAS 38 Intangible Assets

Section 20 Leases PAS 17 Leases

Section 27 Impairment of Assets PAS 36 Impairment of Assets

Section 13 Inventories PAS 2 Inventories

Section 29 Income Taxes PAS 12 Income Taxes

Section 22 Liabilities and Equity PAS 32 Financial Instruments: Presentation

Section 11 Basic Financial Instruments PAS 39 Financial Instruments: Recognition and Measurement
Section 12 Other Financial Instruments Issues PAS 32
PFRS 7

Section 26 Share-based Payment PFRS 2 Share-based Payment

Section 21 Provisions and Contingencies PAS 37 Provisions , Contingent Liabilities and Contingent Assets

PAS 19 Employee Benefits

Section 28 Employee Benefits
PAS 41 Agriculture
Section 34 Specialized Activities
IFRS 6 Exploration for and Evaluation of Mineral Resources
IFRIC 12 Service Concession Arrangements
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As to Elements of Statement of Comprehensive Income

PFRS FOR SMES Full PFRS

Section 23 Revenue PAS 18 Revenue
PAS 11 Construction
Contracts
Section 30 Foreign Currency PAS 21 The Effects of
Translation Changes in Foreign
Exchange Rates

Section 25 Borrowing Costs PAS 23 Borrowing Costs

Section 24 Government Grants PAS 20 Accounting for

Government Grants
and Disclosure of
Government
Assistance
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 Micro entities have the option to use as financial reporting
framework either any of the following:
Income tax basis
Accounting standards in effect as of December 31, 2004
PFRS for SMEs

PROVIDED however, that the financial statements shall at least consist

of the Statement of Managements Responsibility, Auditors Report,
Statement of Financial Condition, Statement of Income and Notes to
Financial Statements, all of which cover the two-year comparative
periods, if applicable.

If an entity uses a basis of accounting other than the PFRS for

SMEs in the preparation of its financial statements, its
management shall assess the acceptability of such basis of
accounting in the light of the nature of the entity and the
objective of the financial statements, or the requirements of
the law or regulators.
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 Transition to PFRS for SMEs
Capital Deficiency

Deposit for Future Subscription

Sufficiency of Disclosures

Reconciliation of Retained Earnings

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Transition to PFRS for SMEs

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 Accounting period begins on a date other that
January 1, 2010
Size criteria AFS for the immediately preceding fiscal
year

SME breaches the floor /ceiling of the size

criteria at the end of the accounting period
Event that caused the change is considered significant
and continuing - transition to the applicable accounting
framework
Not considered significant and continuing continue to
use the same financial reporting framework

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 Management Judgment taking into consideration
the quantitative and qualitative impact

20% rule will be considered significant

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 Subsidiaries that qualify as SME may use PFRS
for SMEs even if the parent company use full
PFRS;
Appropriate adjustments should be made in the
preparation of consolidated financial statements;

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Discussion of the facts supporting the
Companys adoption of Full PFRS instead of
PFRS for SMEs in the notes to Financial
Statements should be made

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 A schedule showing the nature and amount
of each items comprising the total receipts
and disbursements according to sources and
activities
 A sworn statement of the foundations
President and Treasurer on the following:

1. Specific sources of Funds;

2. Application of Funds with the following
information on activities accomplished, on
going and planned:
Complete name, address and contact number of
project officer-in-charge;
Complete address and contact number of project
office.
3. As supporting documents to the
aforementioned information, copies of the
certification from the Office of the Mayor or
the Head of either the DSWD or DOH, on the
existence of the subject program or activity
in the locality on which it exercises
jurisdiction.
 Reconciliation of RE available for dividend
declaration which shall present the prescribed
adjustments (Annex 68-C)
 A schedule showing financial soundness
indicators in two comparative periods, as follows:
1. Current/liquidity ratios;
2. Solvency ratios;
3. Debt-to-equity ratios;
4. Asset to equity ratios;
5. Interest rate coverage ratios;
6. Profitability ratios;
7. Other relevant ratios as the Commission may consider
necessary.
This schedule shall be submitted with the annual AFS and
if applicable, with the Companys Interim AFS.
 A schedule showing the following information
two comparative periods:
Ratio or percentage of total real estate investments
to total assets
Total receivables to total assets;
Total DOSRI receivables to net worth;
Amount of receivables from a single corporation to
total to total receivables.

This schedule shall be submitted with the annual AFS

and if applicable, with the companys interim FS
 Schedule showing the following information if
two comparative periods:
Percentage of investment in a single enterprise to net
asset value;
Total investment of the fund to the outstanding
securities of an investee company
Total investments in liquid or semi-liquid assets to total
assets;
Total operating expenses to total net worth
Total assets to total borrowings.

This schedule shall be submitted with the annual AFS and

if applicable, with the companys interim FS
 Schedules showing the following information:
Details (per issue) of underwriting activities for the year
Name of the issuer-client;
Nature of commitment;
Amount of issue;
Underwriting and other fees generated;
Basis of computation for each.
Transaction with DOSRI
Name of related party;
Description of transaction;
Total volume/amount of transaction for the year;
Terms and conditions, such as maturity date, security, mode
of payment
If secured, carrying amount of assets used as collateral
 A map showing the relationships between
and among the company and its ultimate
parent company, middle parent, subsidiaries
or co-subsidiaries, and associates
 A schedule showing the following amounts:
Gross and net proceeds as disclosed in the final
prospectus;
Actual gross and net proceeds;
Each expenditure item where the proceeds was
used;
Balance of the proceeds as of end of reporting
period.

This schedule shall be submitted with the annual AFS

and if applicable, with the companys interim FS
 A schedule, in table format, showing in the
first column a list of all the effective
standards and interpretations under the PFRS
as of year end, and an indication opposite
each in the second column on whether it is
Adopted, Not adopted or Not applicable
1. The additional components that are submitted
with the companys financial statements,
should necessarily be covered by the Statement
of Managements Responsibility (SMR ).

Thus, the first paragraph of the SMR must partly read

The management of (name of reporting company) is
responsible for the preparation and fair presentation of
the financial statements for the year (s) ended (date),
including the additional components attached therein x
x x.
REPORTORIAL
REQUIREMENT

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An external auditor of a company which has incurred a capital
deficiency, shall provide in the audit report an emphasis
paragraph indicating the following information:

The fact that the company has incurred a capital deficiency

that raises an issue on its going concern status;

A brief discussion of a concrete plan of the company to

address the capital deficiency and reference to the note to
financial statements that provides a complete disclosure of
the said plan;

A statement that the auditor conducted sufficient audit

procedures to verify the validity of the aforementioned plan.

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CAPITAL DEFICIENCY occurs when the amount
of accumulated deficit of a company is greater
that the amount of its paid-in capital stock.

This also happens when the amount of total

liabilities is higher than the total assets.

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The requirement shall not apply to a company that incurred a capital
deficiency due to any of the following reasons:

The entity is at pre-operating stage and has incurred capital

deficiency due to higher pre-operating expenses than its initial
capitalization. Projected financial statements indicate that it will
generate net income once it starts commercial operations;

Significant losses incurred in prior years but has generated positive

results (net income) from operations over the current period due to
developments in the business or regularization of its operation;

An entity has incurred capital deficiency during the current period

only due to a significant adjustment arising from the adoption of
new financial reporting framework or occurrence of non-recurring
transaction for the period.

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 The provisions regarding capital deficiency,
shall not be applicable to non-stock and
non-profit organizations with negative fund
balance.
 Any company with a capital deficiency shall
provide in Note 1 of its audited financial
statements a discussion on its going
concern issue and concrete plan to address
the same.

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Conditions for Recognition as an Equity &
Consequence of Non-Compliance

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 Insufficiency of unissued authorized capital stock
to cover the amount of deposit

Board of Directors approval on the proposed

increase in authorized capital stock (for which a
deposit was received by the company)

Stockholders approval of said proposed increase

Filing of application with SEC for the approval of

the proposed increase

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 The amount received should be treated as
mere advances and should be recorded under
liabilities

Corresponding increase in debt/equity ratio

If not treated as a liability, it is considered as a

misstatement of the financial statements

66
67
Applicable if listed company or the
corporation has excess RE over Paid-in capital
stock

68
 Companies with no
operation but are covered
under SRC Rule 68
 If no operation only for one (1) year: a complete set
of audited financial statements must be submitted
by the company despite its non-operation

If no operation for the last two (2) years: The

Income Statement need NOT be included in the
audited financial statements
Statement of Managements
Responsibility
 For issuers of securities to the public, the SMR
shall be attached to both the consolidated financial
statements and the parent companys financial
statements for filing with the Commission.

Paragraph (iv) of Part I (2)(B)(iv) of the Rule is also

applicable to representative offices established in
the Philippines. Thus, the SMR shall be signed by
its local manager or chief representative in the
Philippines.

If the financial statements for filing are

comparative, the SMR has to be comparative, even
if the independent auditors for the comparative
periods are different.
(name of audit firm) and (indicate prior year auditor), the
independent auditors appointed by the stockholders for the period
December 31, 2011 and 2010, respectively, have examined
the consolidated financial statements of the company in
accordance with Philippine Standards on Auditing, and in their
reports to the stockholders (or members), have expressed their
opinion on the fairness of presentation upon completion of such
examination.
Small and Medium-sized
Entities (SMEs)
Certain types of SMEs may be exempted from the
mandatory adoption of the Philippine Financial
Reporting Standard (PFRS) for SMEs and may
instead apply, at their option, full PFRS. SMEs that
availed of the exemption and applied the full PFRS
are not considered as large and/or publicly-
accountable entities, and therefore are not required
to file the tabular schedule of all effective
standards and interpretations
Micro Entities
 Micro entities which have previously adopted full PFRSs in
accordance with SECs Notice of Implementation Guidelines
on PFRS for SMEs dated February 9, 2010 are allowed to
continue the use of full PFRS. Nevertheless, micro entities
may also choose to change their financial reporting
framework to one of the options made available under the
Rule. Such change should be accounted for in accordance
with PAS 8, Accounting Policies, Changes in Accounting
Estimates and Errors.

Micro entities are not required to disclose in the notes to the

financial statements their rationale for choosing a particular
financial reporting framework available to them.

Micro entities that continue to use full PFRS are not required
to file the tabular schedule of all the effective standards and
interpretations under the PFRS as of year-end as required
under Part I (4)(J) of the Rule.
 Revised Guidelines on
Implementation of PFRS 9
 Mandatory effective date of PFRS 9
01/01/15

Restatement of prior periods

Additional required disclosures on

Transition from PAS 39 to PFRS 9
What are material information?
When sufficient?

80
 All information required to be disclosed under
the applicable financial reporting framework

All information which if disclosed may

materially affect the readers economic
decision towards the company

All information which involved a significant

account using the 10% and 5% threshold of
the SEC

81
 All material information are disclosed in
the financial report

Information are not misleading

Information are presented in a fair and

balance manner

82
 The auditor should undertake the audit procedures deem
necessary, such as the following:

Obtain a certification from the issuers corporate

secretary on the number of stockholders and their
corresponding shareholdings;
Inspect the stock and transfer book and conduct the tests
needed to validate their entries and balances.

Applicable only to Stock Corporations

83
Statement Required by Rule 68, Section 3.d,
Securities Regulation Code (SRC), as amended on October 25, 2005

To the Board of Directors and Stockholder of

(Company)
(Address)

We have audited the financial statements of __________ (the Company) for the four month period
ended December 31, 2010, on which we have rendered the attached report dated ________. In
connection with our audit, we obtained a certification from the Companys corporate secretary on the
number of stockholders and their corresponding shareholdings, performed reasonableness tests of
the capital stock balance as of December 31, 2010 in relation to the certification issued by the
corporate secretary, and conducted certain tests necessary to validate the Companys related entries
and balances.

In compliance with SRC Rule 68 and based on the certification received from the Companys
corporate secretary and the results of our work done, the Company has ______ (_) stockholders
owning 100 or more shares as of December 31, 2010.

[Auditors signature]
[Date of the auditors report]
[Auditors address]

84
 The auditor shall represent that:
HE/SHE IS IN THE ACTIVE PRACTICE OF THE ACCOUNTING
PROFESSION AND DULY REGISTERED WITH THE BOARD OF
ACCOUNTANCY (BOA);
THE FINANCIAL STATEMENTS ARE PRESENTED IN
CONFORMITY WITH GENERALLY ACCEPTED ACCOUNTING
PRINCIPLE;
HE/SHE SHALL FULLY MEET THE REQUIREMENTS OF
INDEPENDENCE AS PROVIDED UNDER THE CODE OF
PROFESSIONAL ETHICS FOR CPAS;
IN THE CONDUCT OF THE AUDIT, HE/SHE SHALL COMPLY
WITH THE GENERALLY ACCEPTED AUDITING STANDARDS
PROMULGATED BY THE BOARD OF ACCOUNTANCY;

85
 The auditor shall represent that:
HE/SHE SHALL COMPLY WITH THE APPLICABLE RULES AND
REGULATIONS OF THE SECURITIES AND EXCHANGE
COMMISSIONS IN THE PREPARATION AND SUBMISSION OF
FINANCIAL STATEMENT
THAT RELATIVE TO THE EXPRESSION OF MY OPINION ON
THE SAID FINANCIAL STATEMENTS, HE/SHE SHALL NOT
COMMIT ANY ACTS DISCREDITABLE TO THE PROFESSION AS
PROVIDED UNDER THE CODE OF PROFESSIONAL ETHICS FOR
CPAS

86
PAPER SIZE: A4

PRINT: BLACK PRINTING ON WHITE

UNGLAZED PAPER, ONION SKIN OR CARBON
COPIES ARE NOT ALLOWED, ONLY ONE FACE
OF THE PAPER SHALL BE USED;

FINANCIAL STATEMENTS SHOULD BE

STAMPED "RECEIVED" BY THE BUREAU OF
INTERNAL REVENUE.
87
 FINANCIAL STATEMENTS THAT SHOW ANNUAL GROSS
SALES /GROSS REVENUE OF AT LEAST PHP5,000,000.00
SHALL BE SUBMITTED IN ELECTRONIC FORMAT
(GFFS/SFFS), WITHIN 30 DAYS AFTER THE DUE DATE OF
SUBMISSION OF AFS. THE ELECTRONIC FORMAT SHALL
BE ACCOMPANIED BY A TREASURERS CERTIFICATE
(ANNEX A) CERTIFYING THAT

except for certain details/breakdowns required in the General

Form for Financial Statements and Special Form for Financial
Statements, the Generally Accepted Accounting Principles or
Philippine Financial Reporting Standards prescribed accounts
and figures provided in electronic documents are based on the
contents of the FS submitted to the SEC

88
89