Atty. Gregorio B. Austral, CPA
A regulatory overreach
The Supreme Court has recently settled the issue of regulating the accountancy profession. There is no dispute that the conduct of the CPA Licensure Examination and the issuance of the licenses fall within the regulatory powers of the Professional Regulation Commission through the Professional Regulatory Board of Accountancy. In the public practice of accountancy, however, other government agencies like SEC, BSP, Insurance Commission, BIR, and CDA, prescribe their own set of accreditation guidelines before accountants and their clients can submit reports bearing the accountant’s signature.
In the case of SEC vs. 1-Accountants Party-List, Inc., the high tribunal ruled that only the Board of Accountancy can regulate the practice of accountancy in the Philippines.
In striking down the Securities Regulation Code (SRC) Implementing Rules and Regulations imposing accreditation requirements for auditors of public companies and publicly-listed companies, the SC ruled that the SRC provisions relied upon by SEC flow from its jurisdiction over corporations and cannot be made to apply to individual CPAs. While the SEC may regulate corporations and the securities market, such regulation does not extend to an authority to restrict, even in the slightest degree, the practice of accountancy. The accreditation requirement imposed by the SEC amounts to a licensing requirement that curtails the right of CPAs to practice their profession. CPAs are burdened with the accreditation requirement that imposes fines for violation. CPAs need not go through the accreditation process because such is part of the practice of accountancy for which their CPA license already suffices.
Finally, the high tribunal said that the power to supervise the accounting profession and to impose regulations on CPAs is exclusively delegated to the Professional Regulatory Board of Accountancy and cannot be delegated to SEC and other government agencies pursuant to the legal maxim, “delegata potestas non potest delegari” or what has been delegated by Congress could no longer be further delegated or redelegated by the original delegate to another.
The above-mentioned case is proof that a regulatory overreach happens. In an attempt to regulate persons and entities, some government agencies exceed the limits of their power. Although these may have good intentions, a regulation that exceeds the limits of an agency’s power to regulate is unconstitutional.