ADOPTION OF THE RULES AND REGULATIONS ON ADVERTISING FOR THE PHILIPPINE ACCOUNTANCY PROFESSION

WHEREAS, the Philippine Accountancy Act of 2004, Article II Section
9(f) empowers the Board of Accountancy “to prescribe and/or adopt a Code
of Ethics for the practice of accountancy” and Section 9(g) provides
that the Board of Accountancy shall “monitor the conditions of
accountancy and adopt such measures, including promulgation of
accounting and auditing standards, rules and regulations and best
practices as may be deemed proper for the enhancement and maintenance of
high professional, ethical, accounting and auditing standards xxx”

WHEREAS, all Professional Accountants must adhere to the Revised Code
of Ethics for Professional Accountants in the Philippines which governs
their relations to the public in general, their co-professionals, their
clients and the State of the practice of the Accountancy profession in
the Philippines;

WHEREAS, any advertising by professional accountants beyond their
name, address, telephone number and membership in professional
organizations has been traditionally considered unethical in the
Accountancy Profession;

WHEREAS, the reasons for not allowing advertisement include: (a)
advertising can lead to undue competition between and among
practitioners, and thus may cause a decline in the quality of service;
(b) advertising would encourage a more commercial approach within the
profession thus reducing clients’ trust in CPAs and also increasing the
likelihood of CPAs neglecting their ethical duties; (c) the cost of
advertising would outweigh any savings which might result from
competition, and it would be borne ultimately by clients; and (d) small
or new practitioners would be unlikely to have the financial resources
to match the advertising of larger or more established practices.

WHEREAS, the rationale behind t he prohibit ion of certain kinds
of advertising or advertisement is to lend dignity to the profession
which, unlike ordinary services and merchandise, should not be peddled
in the market place through touting and self- laudatory means;

WHEREAS, due to the expansion of the services provided by the
professional accountants and the inclusion of a provision in the Revised
Code of Ethics for Professional Accountants of the International
Federation of Accountants (IFAC) which the Board of Accountancy and
the Professional Regulation Commission have adopted, allowing
advertising to the extent that this provides the public with necessary
information about the sole practitioners or professional partnerships
and the services they offer to their clients;

WHEREAS, Section 250 on Marketing Professional Services of the
Revised Code of Ethics for Professional Accountants in the Philippines
provides that

1. When a professional accountant in public practice solicits new
work through advertising or other forms of marketing, there may be
potential threats to compliance with the fundamental principles. For
example, a self-interest threat to compliance with the principle of
professional behavior is created if services, achievements or products
are marketed in a way that is consistent with that principle.

2. A professional accountant in public practice should not bring
the profession into disrepute when marketing professional services. The
professional accountant in public practice should be honest and truthful
and should not:

• Make exaggerated claims for services offered, qualifications possessed or experience gained; or
• Make disparaging references to unsubstantiated comparisons to the work of another.

If the professional accountant in public practice is in doubt
whether a proposed form of advertising or marketing is appropriate, the
professional accountant in public practice should consult with the
relevant professional body.”

WHEREAS, with this new development, the Board of Accountancy deems it
necessary to adopt rules and regulations covering advertising so as to
protect the public interest. Such rules shall define the parameters
within which advertising and promotion may be considered ethical and
hence, permissible.

WHEREAS, an official implementation of the provisions of the Revised
Code of Ethics for Professional Accountants governing the practice of
the accountancy profession specifically the provision on advertising
would assist in the enhancement of high professional and ethical
standards and avoid confusion which might diminish the integrity and
dignity of the accountancy profession.

NOW, THEREFORE be it RESOLVED, as it is hereby RESOLVED, to adopt
the following rules and regulations on advertising and promotion for
the practice of accountancy in the Philippines:

1. Generally, advertising and publicity in any medium are acceptable provided:

a. It has as its objective the notification to the public or such
sectors of the public as are concerned, of matters of fact (e.g., name,
address, contact numbers, services offered) in a manner that is not
false, misleading or deceptive;

b. It is in good taste;

c. It is professionally dignified; and

d. It avoids frequent repetition of, and any undue prominence
being given to the name of the firm or professional accountant in public
practice.

The following however shall not be allowed:

a. Self-laudatory statements

b. Discrediting, disparaging, or attacking other firms or CPA practitioners

c. Referring to, using or citing actual or purported testimonials by third parties

d. Publishing and comparing fees with other CPAs or CPA firms
or comparing those services with those provided by another firm or CPA
practitioner

e. Giving too much emphasis on competitive differences

f. Using words or phrases which are hard to define and even more difficult to substantiate objectively

g. Publishing services in billboard (e.g., tarpaulin, streamers, etc.) advertisements

2. The use of the name of an international accounting firm
affiliation/correspondence other than a notation that it is a
“member/correspondent firm of that foreign firm” shall not be allowed so
as to imply that the foreign firm is practicing in the Philippines.

3. No firm or CPA practitioner shall identify the name of a client
or items of a client’s business in advertising, public relations or
marketing material produced to promote his practice provided that the
client gives its written consent.

4. No firm or CPA practitioner shall use the term “Accredited” or
any similar words or phrases calculated to convey the same meaning if
the claimed accreditation (BOA, SEC, BSP or IC) has expired.

5. All advertisements must have prior review and approval in
writing by the Risk Management Partner and Managing Partner or their
equivalents.

6. The following examples are illustrative of circumstances in
which publicity is acceptable and the matters to be considered in
connection therewith subject always to the overriding requirements
mentioned in the preceding rules.

a. Awards

It is in the interests of the public and the accountancy
profession that any appointment or other activity of a professional
accountant in a matter of national or local importance, or the award of
any distinction to a professional accountant, should receive publicity
and that membership of the professional body should be mentioned. However, the professional accountant should not make use of any of the
aforementioned appointments or activities for personal professional
advantage.

b. Professional Accountants Seeking Employment or Professional Business

A professional accountant may inform interested parties through
any medium that a partnership or salaried employment of an accountancy
nature is being sought. The professional accountant should not, however, publicize for subcontract work in a manner which could be interpreted
as seeking to procure professional business. Publicity seeking
subcontract work may be acceptable if placed only in the professional
press and provided that neither the accountant’s name, address or
telephone number appears in the publicity. A professional accountant may
write a letter or make a direct approach to another professional
accountant when seeking employment or professional business.

c. Directories

A professional accountant may be listed in a directory. Entries
may include name, address, telephone number, professional description,
services offered and any other information necessary to enable the user
of the directory to make contact with the person or organization to
which the entry relates.

d. Books, Articles, Interviews, Lectures, Radio and Television Appearances

Professional accountants who author books or articles on
professional subjects, may state their name and professional
qualifications and give the name of their organization but shall not
give any information as to the services that firm provides. Similar
provisions are applicable to participation by a professional accountant
in a lecture, interview or a radio or television program on a
professional subject. What professional accountants write or say,
however, should not be promotional of themselves or their firm but
should be an objective professional view of the topic under
consideration. Professional accountants are responsible for using their
best endeavors to ensure that what ultimately goes before the public
complies with these requirements.

e. Training Courses, Seminars, etc.

A professional accountant may invite clients, staff or other
professional accountants to attend training courses or seminars
conducted for the assistance of staff. Other persons should not be
invited to attend such training courses or seminars except in response
to an unsolicited request. The requirement should in no way prevent
professional accountants from providing training services to other professional bodies, associations or educational
institutions which runs courses for their members or the public. However, undue prominence should not be given to the name of a professional
accountant in any booklets or documents issued in connection therewith.

f. Booklets and Documents Containing Technical Information

Booklets and other documents bearing the name of a professional
accountant and giving technical information for the assistance of staff
or clients may be issued to such persons, other professional
accountants or other interested parties.

g. Staff Recruitment

Genuine vacancies for staff may be communicated to the public
through any medium in which comparable staff vacancies normally appear. The fact that a job specification necessarily gives some details as
to one or more of the services provided to clients by the professional
accountant in public practice is acceptable but it should not contain
any promotional element. There should not be any suggestion that the
services offered are superior to those offered by other professional
accountants in public practice as a consequence of size, associations,
or for any other reason.

In publications such as those specifically directed to schools
and other places of education to inform students and graduates of career
opportunities in the profession, services offered to the public may be
described in a business likeway.

More latitude may also be permissible in a section of a newspaper
devoted to staff vacancies than would be allowed if the vacancy
appeared in a prominent position elsewhere in a newspaper on the grounds
that it would be most unlikely that a potential client would use such
media to select a professional adviser.

h. Publicity on Behalf of Clients

A professional accountant in public practice may publicize on
behalf of clients, primarily for staff. However, the professional
accountant in public practice should ensure that the emphasis in the
publicity is directed towards the objectives to be achieved for the
client.

i. Brochures and Firm Directories

A professional accountant in public practice may issue to clients or, in response to an unsolicited request, to a non-client:

a. A factual and objectively worded of the services provide; and

b. A directory setting out names of partners, office addresses and names and address of associated firms and correspondents.

j. Stationery and Nameplates

Stationery of professional account ants in public practice
should be of an acceptable professional standard and comply with the
requirements of the law and of the member body concerned as to names of
partners, principals and others who participate in the practice, use of
professional descriptions and designatory letters, cities or countries
where the practice is represented, logotypes, etc. The designation of
any services provided by the practice as being specialist nature should
not be permitted. Similar provisions, where applicable, should apply to
nameplates.

k. Announcements

Appropriate newspapers or magazines may be used to inform the
public of the establishment of a new practice, of changes in the
composition of a partnership of professional accountants in public
practice, or of any alteration in the address of a practice. Such
announcements should be limited to a bare statement of facts and
consideration given to the appropriateness of the area of distribution
of the newspaper or magazine and number of insertions.

l. Inclusion of the Name of the Professional Accountant in Public Practice in a Document Issued by a Client

When a client proposes to publish a report by a professional
accountant in public practice dealing with the client’s existing
business affairs or in connection with the establishment of a new
business venture, the professional accountant in public practice should
take steps to ensure that the context in which the report is published
is not such as might result in the public being misled as to the nature
and meaning of the report. In these circumstances, the professional
accountant in public practice should advise the client that permission
should first be obtained before publication of the document.

Similar consideration should be given to other documents proposed
to be issued by a client containing the name of a professional
accountant in public practice acting in an independent professional
capacity. This does not preclude the inclusion of the name of a
professional accountant in public practice in the annual report of a
client.

When professional accountants in their private capacity are
associated with, or hold in, an organization, the organization may use
their name and professional status on stationery and other documents.
The professional accountant in public practice should ensure that this
information is not used in such a way as might lead the public to
believe that there is a connection with organization in an independent
professional capacity.

m. Anniversaries

A professional accountant’s press and other media releases or
announcements or newspaper supplements, or other similar publications,
or other commemorative media, or the holding of media covered events
undertaken only to commemorate their anniversaries in public practice by
informing the public of their achievements or accomplishments in
contributing towards nation building and in international understanding
goodwill, or relationship or enhancing the image or standards of the
accounting profession do not violate the rules on advertising and solicitation provided that such announcements or undertakings
contains only factual matters without detailed listing of services. Such
undertaking should be done only every five years of celebration.

n. Websites

A professional accountant may develop and maintain a website in
the Internet in such suitable length and style which may also include
announcements, press releases, publications and such other necessary and
factual information like firm’s name, partners/principals’ name and
brief description of their educational attainment, brief listing of
services, postal address, telephone, fax and e-mail addresses. Such
website should adhere to the rules mentioned above.

7. These rules and regulations shall be effective fifteen (15)
days after publication in the Official Gazette or in any newspaper of
general circulation.

Adopted: 07 July 2008

(SGD.) EUGENE T. MATEO Chairman
(SGD.) JOHN S. BALA Vice Chairman
(SGD.) FROILAN G. AMPIL Member	(SGD.) MA. ELENITA B. CABRERA Member
Attested:
(SGD.) CARLOS G. ALMELOR Secretary, Professional Regulatory Boards
Approved:
(SGD.) LEONOR TRIPON-ROSERO Secretary
(SGD.) RUTH RAÑA- PADILLA Commissioner	(SGD.) NILO L. ROSAS Commissioner