THE Securities and Exchange Commission (SEC) is pushing for stricter compliance with audit quality and financial reporting amongst firms as a part of efforts to enhance governance within the local corporate sector.
“The SEC stays steadfast in its commitment to be certain that firms strictly comply with accounting policies and uphold audit quality because it continues to advertise good governance in the company sector,” SEC Chairperson Emilio B. Aquino said in an e-mail statement on Thursday.
During a March 5-7 inspection workshop in Mauritius by the International Forum of Independent Audit Regulators (IFIAR), SEC Oversight Assurance Review (SOAR) Inspection Team Leader Guada May S. Preciados and SOAR Deputy Inspection Team Leader Rizzo D. Tarroza highlighted auditing and financial reporting challenges within the Philippines.
These include instances of firms misapplying accounting policies, particularly in recognizing and measuring revenue, in addition to auditors failing to judge whether the appliance of accounting policies complies with local reporting standards.
“These challenges in financial reporting underscore the necessity for stricter oversight and enhanced auditor training to be certain that auditors exercise a heightened level of skilled skepticism and due care when assessing the appropriateness of revenue recognition practices,” the SEC said.
“Establishing robust consultation policies and procedures inside audit firms can also be vital to enabling auditors to hunt guidance and challenge complex accounting treatments effectively,” it added.
The IFIAR inspection workshop gathered greater than 100 audit regulators from 56 member countries to exchange insights on improving global audit oversight and regulatory best practices.
It’s an annual event hosted by a member country, with its inspection workshop working group currently led by the Auditor Oversight Body of Germany. — Revin Mikhael D. Ochave
