Thinking about starting an accounting practice?

IN recent years, the Department of Science and Technology (DoST) and the Department of Trade and Industry (DTI) have been promoting startup businesses to encourage young professionals to become entrepreneurs rather than seek employment. In the Philippines, white-collar jobs are preferred over blue-collar jobs primarily due to prestige and stable income flows. Unlike in other countries, there are a lot of jobs that offer higher compensation due to the skills required.

With the advancement in technology, coupled with the coronavirus disease 2019 (Covid-19) pandemic that has wrought the whole world for over a year now, the opportunities to start new businesses became a fad. DoST, DTI and the Technical Education and Skills Development Authority intensified their campaign to alleviate the unabated unemployment brought about by the pandemic. Although not considered a business but a practice of profession, many certified public accountants (CPAs), especially those who are employed in various industries or those who teach in colleges and universities, joined the bandwagon.

Areas of practice

Starting a professional practice is akin to starting a new business. There are requirements that need to be satisfied and complied with. The common areas that a prospective accounting practitioner can initially embark on as a startup are the following: taxation, financial accounting, bookkeeping, auditing and consultancy.

Many of the CPAs who thought of starting their own accounting firms have the basic skills on the abovementioned areas of expertise brought about by their past and/or current employment in the four sectors of the profession namely: commerce and industry, education, government and public practice. A lot of CPAs also pursued higher education and certifications at this time of the pandemic due to the accessibility of online education at their convenient schedules. These credentials made them more motivated and qualified to venture into public practice.

Qualifications

The practice of accountancy profession is regulated by the Professional Regulatory Board of Accountancy (PRBOA), one of the 64 professions under the Professional Regulation Commission (PRC). The other regulatory bodies like the Securities and Exchange Commission, Bureau of Internal Revenue, Bangko Sentral ng Pilipinas, Insurance Commission, National Electrification Administration and Cooperative Development Authority, among others, have their own accreditation requirements for the CPAs and firms doing their attest functions. The requirements can be viewed on the websites of these government agencies.

Continuing professional development

One of the requirements for both the renewal of the PRC license and the accreditation of the practice of the accountancy profession with the PRBOA is the continuing professional development (CPD). For CPAs in the public practice and education sectors, 120 CPD hours are required for a period of three years. For the other CPAs who are not in those sectors, 15 CPD hours are required.

Conclusion

As explained at the outset, if one has the abovementioned skills and expertise to venture into the practice of accountancy profession and the commitment to pursue quality by complying with the continuing education and accreditation requirements, as applicable, one has to secure a professional tax receipt or PTR from the local government unit and which is due every January of the year.

Active membership in professional organizations like the Association of CPAs in Public Practice (Acpapp) and Philippine Institute of Certified Public Accountants (Picpa) is encouraged as these organizations provide the necessary training needs of professionals as well as the guidance and regulations for a successful and sustainable practice of accountancy profession.

Raymundo G. Talimo Jr. is a past national director of Picpa, a member of Acpapp, and the founder of Talimio, Caragos-Talimio (TCT) and Associates, CPAs. The opinion of the writer does not reflect in any way the opinion of these institutions.