Raising the bar
- Enrico Tabag
- Jun 4
- 4 min read
THE Supreme Court recently handed down a landmark ruling affirming the authority of the Securities and Exchange Commission (SEC) to regulate certified public accountants (CPAs). The decision marked a defining moment in the continuing evolution of the accounting profession in the Philippines. While it has stirred both praise and apprehension among CPAs, it is ultimately a triumph — not only for the SEC but also public trust, investor protection and the profession itself.
Following the court's decision, the SEC promptly moved to implement its mandate. Just recently, I received official notice extending my accreditation to cover audits of 2025 financial statements — proof of the commission's renewed drive to enforce regulatory standards and safeguard the quality of financial reporting.
At the core of the Supreme Court case was a petition filed by the 1Accountants party-list, a group advocating for the rights and welfare of Filipino CPAs. The group questioned the validity of SEC Memorandum Circular 1, series of 2023, which mandated accreditation of CPAs and audit firms prior to performing audits of entities regulated by the SEC. 1Accountants argued that this measure intruded upon the authority of the Professional Regulation Commission (PRC) and the Board of Accountancy (BOA), the bodies entrusted with regulating the accountancy profession under the Philippine Accountancy Act of 2004.
The Supreme Court, however, dismissed the petition and upheld the constitutionality of the SEC's accreditation requirement. The ruling clarified a critical distinction: while the PRC and BOA oversee the practice of accountancy in a general context, the SEC is specifically mandated to ensure the reliability of financial reporting among publicly accountable entities. Accreditation, the court emphasized, is a legitimate tool by which the SEC exercises its statutory power to protect the investing public and ensure capital market integrity.
This decision affirms a vital principle: regulation and professionalism are not adversaries — they are partners. In high-stakes environments like capital markets, where public confidence rests heavily on the accuracy of financial disclosures, the role of the auditor is paramount. Holding CPAs to heightened standards is not just appropriate — it is necessary.
As a practicing CPA, I can attest that SEC accreditation is far from a mere formality. Every reaccreditation cycle comes with a fair amount of stress and uncertainty. Gathering documentation, meeting CPD requirements and undergoing quality assurance reviews and peer assessments take real time, effort, and discipline. These are not tasks that can be checked off lightly — they demand serious commitment.
There have been times, particularly close to submission deadlines, when I've found myself anxious, questioning whether every requirement has been met. But over the years, I've come to accept these challenges not as burdens, but as essential processes. This level of rigor keeps us grounded and accountable. It sharpens our competence and aligns us with evolving expectations of professionalism and transparency.
The truth is, the system is designed not to discourage us, but to elevate us. It ensures that only those who are technically competent, ethically anchored, and professionally updated are entrusted with the serious responsibility of auditing entities whose financial statements influence the decisions of investors, creditors, regulators, and the public at large.
Yes, the process is demanding, but is also necessary. It serves a higher purpose: to protect the integrity of the profession and the credibility of our work. It reassures stakeholders that our opinions are backed not only by expertise, but also by independence and adherence to high standards. Rather than viewing the Supreme Court ruling as a constraint, we should see it as a benchmark for professional excellence. Accreditation should be recognized as a badge of competence and a seal of public trust. If we are to align with international best practices, we must be ready to embrace the scrutiny and continuous improvement that come with it.
Still, regulation must be fair and inclusive. While the court upheld the SEC's authority, it also underscored the need for due process and reasonableness in the implementation of regulatory measures. This is a crucial reminder: frameworks must be clearly defined, consistently applied, and considerate of the realities faced by all practitioners — including small firms and solo CPAs.
In this regard, I urge the SEC to keep refining its accreditation process, ensuring transparency, improving clarity in guidelines and offering timely support. Perhaps a tiered or risk-based approach could help alleviate undue burdens while preserving quality. Proactive dialogue with stakeholders will also go a long way in making regulation more efficient and equitable.
Above all, this decision reminds us of what is at stake. Public trust is the accounting profession's greatest asset. It is what gives our audit reports value, what powers financial markets, and what underpins economic confidence. Accreditation, especially from a body like the SEC, is not just a requirement. It is a reflection of that trust.
Moving forward, the path must be one of collaboration. Regulators, practitioners, and professional organizations all have a role to play. The SEC must continue to listen and adapt. CPAs must rise to the challenge with integrity and dedication. And the broader profession must stand united in its commitment to high standards and public service.
The Supreme Court's ruling is not merely a legal affirmation of regulatory power — it is a moral affirmation of the responsibilities we bear as professionals. Let us meet it not with resistance, but with resolve. Let it inspire us toward deeper accountability, stronger ethics, and a renewed commitment to our role as guardians of financial truth.
For the Philippine CPA profession, one thing remains clear: excellence is not optional. It is our license to operate, our duty to uphold, and the cornerstone of the trust placed in us by the public we serve.
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Enrico D. Tabag is the managing partner of EDT & Co., CPAs and an assistant professor at the University of Santo Tomas Alfredo M. Velayo College of Accountancy. The views and opinions expressed in this article are the author's and do not necessarily reflect those of these institutions.
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