The Philippine Securities and Exchange Commission announced that the Supreme Court has finally affirmed the SEC’s authority to accredit certified public accountants who may serve as external auditors of covered corporations, including issuers of registered securities and holders of secondary licences. In an October 14 resolution, the Court En Banc denied with finality 1Accountants Party-List, Inc.’s motion for reconsideration and ordered the immediate entry of judgment. The challenge targeted SEC rules and guidelines on external auditor accreditation, including Rule 68, paragraph 3 of the Implementing Rules and Regulations of the Securities Regulation Code and SEC Memorandum Circular No. 13, Series of 2009 on revised accreditation guidelines. While earlier Supreme Court rulings in 2022 and 2023 had found the SEC’s accreditation rules invalid and unconstitutional, a January 2025 resolution reversed those findings and held the guidelines and requirements valid and constitutional. The Court held that, as corporate regulator, the SEC may supervise entities and persons under its jurisdiction, including external auditors, and implement accreditation, while the Board of Accountancy remains the main regulator of the accountancy profession, and Rule 68 limits SEC accreditation to CPAs acting as independent auditors of covered entities.
Philippine Securities and Exchange Commission 2025-12-16
Philippine Securities and Exchange Commission authority to accredit external auditors upheld with finality by Supreme Court
The Philippine SEC's authority to accredit certified public accountants as external auditors was affirmed by the Supreme Court. The final ruling on October 14 upheld the SEC's accreditation rules, reversing previous decisions that deemed them unconstitutional. The SEC can now supervise external auditors of covered corporations, while the Board of Accountancy remains the primary regulator of the accountancy profession.