SEC refutes WB report on RP’s accounting practices

The Securities and Exchange Commission (SEC) said yesterday that contrary to a World Bank report, the corporate regulator has in fact been actively pursuing reforms to upgrade the country’s accounting and auditing practices to align them with global standards.

"While I have not seen the World Bank report, it is important to understand that even before that report came out, the SEC has been collaborating with both the Accounting and Auditing Councils, the bodies responsible for nationally setting the standards precisely because we want to align our local practices with the global standards at the soonest possible time," associate commissioner Jesus Martinez said.

In a recent report, the multilateral funding agency expressed concern over the poor auditing practices in the Philippines, partly blaming the regulators, which includes the SEC, basically on problems in implementation and enforcement.

Martinez said that as the WB speaks, the SEC has approved the initial adoption of the International Accounting Standards or IAS and has been trying to develop a better, more "air-tight" set of auditing standards and practices since the Securities Regulation Code (SRC) took effect in August 2000.

He said while it may take some time to fully align the country’s accounting and auditing standards, the SEC’s initial adoption of the IAS set by the London-based International Accounting Standards Council and used by the most developed countries worldwide is a decisive step in favor of more professional, globally acceptable financial reports preparation and presentation.

"If as quoted in the news, the WB report expressed support for reforms such as the adoption of the IAS, then I think SEC is moving exactly in that direction, an assurance that the overhauling of the accounting and auditing systems in our country have in fact been going on for quite some time now," Martinez said.

Although the WB did not cite any particular case, those implied in the process included sugar firm Victorias Milling Co. and Pilipino Telephone Corp. (Piltel), in both cases of which were dragged in controversy over poor accounting practices several years back.