Since 2003, the Philippines have beenstriving to implement reforms aimed at improving auditquality.Oversight of the audit profession is a key controlover the financial reporting architecture of a country’sprivate sector.A Quality Assurance Review system overaudit practitioners is a subset of oversight which serves asa key monitoring control over the integrity of financialreporting. In keeping with the country’s strategic priorityof boosting private sector development by improving theinvestment climate for firms of all sizes, including greateraccess to finance, legislation was enacted to support theobjective of increasing the integrity of private sectorfinancial reporting through improved audit quality.Accordingly, the Board of Accountancy was mandated with thepower to conduct oversight into the quality of audits offinancial statements through a review of the quality controlmeasures instituted by auditors in order to ensurecompliance with the accounting and auditing standards andpractices. .However, the injunction remains in place and,accordingly, implementation of the mandated QualityAssurance Review Program may not move forward.Severalconcrete steps should be taken in order to effectively moveforward with the rollout of a comprehensive system of publicoversight including audit quality assurance in thePhilippines.These include (1) reforming the legalframework to establish an effective audit oversight systemwith sufficient legal power and authority (2) rationalizingthe statutory audit threshold to minimize the conditionscontributing to low quality audits, (3) building supportamong key stakeholder groups by properly addressing theirconcerns to the extent possible, (4) ensuring coordinationof efforts among regulators to eliminate gaps and overlapsand foster collaboration among the group, and (5)establishing a dedicated Project Management Office tooversee the rollout of a Quality Assurance Review Programover audit practitioners.
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