PUBLIC ACCOUNTING PROFESSION Public Accounting as a Profession In our society, professions are generally recognized as elite occupational slassifications. Ernest Greenwood in his article Attributes of a Profession (1957) sets forth five major characteristics of an ideal profession. ‘These are a) systematic body of theory, (2) professional authority, (3) community sanction, (4) regulative code and (5) culture. CPAs satisfy these said attributes of a profession. ‘Systematic Theory The underlying theory of the public accounting profession consists of accounting theory - generally accepted accounting principles and practices Professional Authority Clients wito use the service of a professional often do not really understand their own needs. The professional thus determines what ic good or bad for the client and the client accedes to this professional judgment, The basis for the CPA’s authority is his expertise in the systematic theory of accounting and auditing. Community Sanction ‘Admission to the public accounting profession is controlled, To become a CPA, 2 candidate must satisfy government educational and experience requirements and pass the CPA Licensure Board Examinations.This licensing system is controlled by the Professional Regulation Commission through the Board of Accountancy. Also, although CPAs are responsible to the community for their actions, it is generally accepted that a professional’s performance should be judged by standards established by a profession itself, Regulations Code The powers and privileges granted to the public accounting profession by the community effectively constitute a monopoly. To prevent abuse of this monopoly and to discipline its members, the Rules of Professional Conduct or Code of Ethics have been promulgated and made legally binding through the Accountancy Law. A Culture The CPA is a member of a time-honored profession and the status of the profession and the responsibilities that accompany this status affect his/her behavior in society. Accounting has developed a professional culture as evidenced by such factors as the formal norms of the code of ethics, the informal rules that guide relationships among practitioners and the traditions and myths that have arisen concerning the CPA examination. The new Code of Ethics for Certified Public Accountants in the Philippines made effective on January 1, 2004 states “A profession is distinguished by certain characteristics including: © Mastery of a particular iutellectua! skill, acquired by training and education; * Adherence by its members to a common code of values and conduct established by its administering body, including maintaining an outlook which is essentially objective; and © Acceptance of a duty of society as a whole (usually in return for restrictions in use of a title or in the granting of a qualification).”Certified Public Accountant A certified public accountant (CPA) is a person who, after obtaining the required education passes an extensive examination and is licensed by the country to practice as a professional accountant. Most young professionals who want to become CPAs start their careers working. for a CPA firm. After they become CPAs, many leave the firm to work in industry, government or education. These people may continue to be CPAs but often give up their right to practice as independent auditors. CPAs who practice as independent auditors must meet registration requirements to meet their right to Practice. It is common therefore, for accountants to be CPAs who do not practice as independent auditors, Organizations that Affect Public Accounting A. Regulatory Government Agencies 1, Professional Regulation Commission (PRC) PRC administers, implements and enforces the regulatory policies of the ‘National Government with respect to the regulation and licensing of the various professions under its jurisdiction including the maintenance of professional standards and ethics and the enforcement of the rules and regulations relative thereto. This Commission has the overall jurisdiction over the regulatory boards in the Philippines among which is the Board of Accountancy. It derives its authority from the PRC Modernization Act of 2000. 2. Board of Accountancy (BOA) This board, consisting of « chairman and six members, is the agency tbat is empowered to administer the Accountancy Law. As a licensing agency of the government, the board is the only body that may issue and revoke CPA certificates and grant licenses to practice. Its functions are provided for in the Philippine Accountancy Act of 2004,3. Securities and Exchange Commission (SEC) ‘This is the government agency that regulates the registration ‘and operations of corporations, partnership and other forms of associations in the Philippines. ‘The cvcral! objective of the Securities and Exchange Commission, an agency of the national government, i 4 assist in providing investors with parable information upon which to make investment decisions. To this tad, companies planning to issue new securities tothe public must submit «registration statement to the SEC for approval. They are required to file detailed annual reports with the Commission. The Commission examines these statements for completeness and adequacy before permitting the company to sell its securities through the stock exchange The SEC has considerable influence in setting generally accepted accounting principles and disclosure requirements for financial statements ts a result of its authority for specifying reporting requirements considered necessary for fair disclosure to investors. It is represented in standard-setting bodies such as the ‘Accounting Standards Council (ASC), ‘Auditing Standards and Practices Council (ASPC) and in the Quality Review Committee created by the PRC-BOA. The SEC has power to establish rules for any CPA ‘associated with audited financial statements submitted to the Commission. Because large CPA firms usually have clients that must file accounting reports and the rules and regulations affecting filings with the SEC are Guremely complex, most CPA firms have specialists who spend a large portion of their time ensuring that their client satisfy all SEC requirements. . ; 4. Commission on Audit (COA) This is the agency that audits or determines whether government units handle their funds according to existing laws and whether their programs are being conducted efficiently and economically.B. Professional Organizations Philippine Institute of Certified Public Accountants (PICPA) PICPA is the accredited national professional organization of CPAs. It serves all members in the different sectors of the accounting profession, namely, public practice, education, government and commerce and industry, through a set of technical and social services. Year-round professional development programs (seminars, technical sessions, symposium and dialogues) and regular fellowship and sport activities are sponsored by the association for its members. . PICPA publishes the Accountants Journal that contains technical and formal papers, bulletins and pronouncements released by the Financial Reporting Standards Council (FRSC) and the Auditing and Assurance Standards Council (AASC). . Sectoral Organizations The other professional organizations that complement PICPA’s objectives and provide the specific professional development and other requirements of CPAs in the different sectors are: 1. Association of CPAs in Public Practice (ACPAPP) 2. Association of CPAs in Education (ACPAE) 3. Association of CPAs in Commerce and Industry (ACPACI) 4. Government Association of CPAs (GACPA) C. Standard - Setting Bodies 1 Financial Reporting Standards Council ‘The Commission upon the recommendation of the Board shall within ninety (90) days from the effectivity of the IRR to R.A. 9298, create an accounting standard setting body to be known as the Financial Reporting Standards Council (FRSC) to assist the Board in carrying out its powers and functions provided in Rule Il, Section 9(g). The FRSC shall be composed of fifteen (15) members with Chairman, who had been or presently a scaior accounting practitioner in any of the scope of accounting practice and fourteen (14) representatives from the following:(a) Board of Accountancy (b) Securities and Exchange Commission (c) Bangko Sentral ng Pilipinas (@) Bureau of Internal Revenue (©) A major organization composed of preparers and users of financial statements 1 (®) Commission on Audit (g) Accredited National Professional Organization of CPAs Public Practice Commerce and Industry Academe/Education Government sty Total 4 ers 2. Auditing and Assurance Standards Council (AASC) ‘The Commission upon the recommendation of the Board shall withir ninety (90) days from the effectivity of the IRR to R.A. 9298, create an auditing standard setting body to be known as the Auditing and Assurance Standards Council (AASC) to assist the Board in carrying out its powers and functions provided in Rule II, Section 9 (g). ‘The ASC shall be composed of fifteen (15) members with a Chairman, who bad born or presently a senior prectitioner in public accountancy and fourteen (14) representatives from the following: (a) Board of Accountaney 1 (b) Securities and Exchange Commission 1 (c) Bangko Sentral ng Pilipinas 1 (@) Commission on Audit 1 (f) An association or organization of CPAs in active publio practice of accountancy 1 (g) Accredited National Professional Organization of CPAs Public Practice Commerce and Industry ‘Academe/Education Government Total De ees leAuthority Attaching to Philippine Standards on Auditing (PSAs), Interpretations and Statements In the Preface to PSAs and Related Services, the authority attaching to PSAs, Interpretations and Statements are set forth as follows: As set forth in the ASPC’s Rules of Procedures, the PSAs and Interpretations issued by the Council apply whenever an independent examination of financial statements of any entity, Whether profit-oriented or not, and irrespective of size or legal form, when such examination is conducted for purpose of expressing an opinion thereon. The PSAs and Interpretations may also have application, as appropriate, to other related activities of auditors, PSAs contain basic principles and essential procedures (identified in bold type black lettering) together with related guidance in the form of explanatory and other material. The basic principles and essential procedures are to be interpreted in the context of the explanatory and other material that provide guidance for their application, To understand and apply the basic principles and essential Procedures together with the related guidance, it is necessary to consider the whole text of the PSA including explanatory and other material contained in the PSA not just that text which is black lettered. In exceptional circumstances, an auditor may judge it necessary to depart from a PSA in order to more effectively achieve the objective of an audit. When such a situation arises, the auditor should be prepared to justify the departure. PSAs need only be applied to material matters, Any limitation of the applicability of a specific PSA is made clear in the introductory paragraphs to that PSA. From time to time, when deemed necessary, the ASPC will develop auditing interpretations covering implementation issues relating to final PSAs, or emerging issues relating to an existing PSA not considered when the PSA was issued The Interpretations will have the same authority as the PSAs.© PAPSs are issued to provide practical assistance to auditors in implementing the PSAs or to promote good practice. These Statements are not intended to haye the authority of the PSAs. The pronouncements of the AASC shall be in the form of: Philippine Standards on Quality Control (PSQCs) ilippine Standards on Auditing (PSAs) Philippine Standards on Review Engagements (PSREs) Philippine Standards on Assurance Engagements (PSAEs) Philippine Standards on Related Services (PSREs) ilippi iting Practice Statements (PAPSs) pine Review Engagement Practice Statements (PREPSs) Philippine Assurance Engagement Practice Statements (PAEPSs) Philippine Related Services Practice Statements (PRSPSs) |. International Federation of Accountants (IFAC) IFAC was formally approved in Munich in 1977 and has as its mission the development and enhancement of the profession to enable it to provide services of consistently high quality in the public interest. It is a non- profit, non-governmental, non-political international organization of accountancy bodies, Membership in IFAC is open to accountancy bodies recognized by law or general consensus within their countries as substantial national organizations of good standing within the accountancy profession (e.g. PICPA), Membership in IFAC automatically includes membership in the International Accounting Standards Committee (IASC). The Assembly, consisting of one representative from cach member accountancy body elects the members of Council. The work programs of the Council are implemented primarily by smaller working groups, or standing technical committees which include Education Ethies Financial and Management Accounting Information Technology International Auditing Practices ) The engagement quality control review has been completed before the report is issued; and (c) The reviewer is not aware of any unresolved matters that would cause the reviewer to believe that the significant judgments the engagement team made and the conclusions they reached were not appropriate. Monitoring The firm should establish policies and procedures designed to provide it with reasonable assurance‘that the policies and procedures relating to the system of quality control are relevant, adequate, operating effectively and complied with im practice. Such policies and procedures should include an ongoing consideration and evaluation of the firm’s system of quality control, including a periodic inspection of a selection of completed engagements. The purpose of monitoring compliance with quality control policies and procedures is to provide an evaluation of:(a) Adherence to professional ‘standards and regulatory and _leyal requirements; (b) Whether the quality control system has been appropriately designed and effectively implemented; and (©) Whether the firm’s quality control policies and procedures have been appropriately applied, so that reports that are issued by the firm or engagement partners are appropriate in the circumstances. ‘The firm entrusts responsibility for the monitoring process to a partner or partners or other persons with sufficient and appropriate experience and authority in the firm to assume that responsibility. Monitoring of the firm’s system of quality control is performed by competent individuals and covers both the appropriateness of the design and the effectiveness of the operation of the system of quality control. Ongoing consideration and evaluation of the system of quality control includes ‘matiers such as the following: © Analysis off — New developments in professional standards and regulatory and legal requirements, and how they are reflected in the firm’s policies and procedures where appropriate; Written confirmation of compliance with policies and procedures on independence; = Continuing professional development, including training: and = Decisions related to acceptance and continuance of client relationships and specific engagements. ‘© Determination of corrective actions to be taken and improvements to be made in the system, including the provision of feedback into the firm's policies and procedures relating to education and training. © Communication to appropriate firm personnel of weaknesses identified in the system, in the level of understanding of the system, or compliance with it. Follow-up by appropriate firm personnel so that necessary modifications are promptly made to the quality control policies and procedures.The inspection of a selection of completed engagements is ordinarily performed on a cyclical basis. Engagements selected for inspection include at least one engagement for each engagement partner. over an inspection cycle, which ordinarily spans no more, than three years. The manner in which the inspection cycle is organized, including the timing of selection of individual engagsments, depends on many factors, including the following: © The size of the firm. ‘© The number and geographical location of offices. © The results of previous monitoring procedures. © The degree of authority both personnel and offices have (for example, whether individual offices are authorized to conduct their own inspections cor whether only the head office may conduct them). © The nature and complexity of the firm’s practice and organization. «The risks associated with the firm’s clients and specific engagements ‘The inspection process includes the selection of individual engagements, some of which may be selected without prior notification to the engagement team: Those inspecting the engagements are not involved in performing the engagement or the engagement quality control review. In determining the scope of the inspections, the firm may take into account the scope or conclusions of an independent external inspection program. However, an independent external inspection program does not act as a substitute for the firm’s own internal monitoring program. Small firms and sole practitioners may wish to use a suitably qualified external person or another firm to carry out engagement inspections and other monitoring procedures. Alternatively, they may wish to establish arrangements to share resources with other’ appropriate organizations to facilitate monitoring activities. ‘The firm should evaluate the effect of deficiencies noted as a result of the monitoring process and should determine whether they are either: (a) Instances that do not necessarily indicate that the firm’s system of quality control is insufficient to provide it with reasonable assurance that it complies with professional standards and regulatory and legal requirements, and that the reports issued by the firm or engagement partners are appropriate im the cireumstances; or(b) Systemic, repetitive or other significant deficiencies that require prompt corrective action. The firm should communicate to relevant engagement partners and other appropriate personnel deficiencies noted as a result of the monitoring process and recommendations for appropriate remedial action, The firm’s evaluation of each type of deficiency should result in recommendations for one or more of the following: (a) Taking appropriate remedial action in relation to an individual ‘engagement or member of personnel; (b) The communication of the findings to those responsible for training and professional development; (©) Changes to the quality control policies and procedures; and (d) Disciplinary action against those who fail to comply with the policies and procedures of the firm, especially those who do so repeatedly. Where the results of the monitoring procedures indicate that a report may be inappropriate or that procedures were omitted during the performance of the engagement, the firm should determine what further action is appropriate to comply with relevant professional standards and regulatory and legal requirements. It should also consider obtaining legal advice. At least annually, the firm should communicate the results of the monitoring of its quality control system to engagement partners and other appropriate individuals within the firm, including the firm's chief executive officer or, if appropriate, its managing board of partners. Such communication should enable the firm and these individuals to take prompt and appropriate action where necessary in accordance with their defined roles and responsibilities. Information communicated should include the following: (a) A description of the monitoring procedures performed. “ (b) The conclusions drawn from the monitoring procedures. (©) Where relevant, a description of systemic, repetitive or other significant deficiencies and of the actions taken to resolve or amend those deficiencies.‘The reporting of identified deficiencies to individuals other than the relevant engagement partners ordinarily does not include an identification of the specific engagements concerned, unless such identification is necessary for the proper discharge of the responsibilities of the individuals other than the engagement partners. Some firms operate as part of a network and, for consistency, may implement some or all of their monitoring procedures on a network basis. Where firms within a network operate under common monitoring policies and procedures designed to comply with this PSQC, and these firms place reliance on such a monitoring system: (a) At least annually, the network communicates the overall scope, extent and results of the monitoring process to appropriate. individuals within the network firms; (b) The network communicates promptly any identified deficiencies in the quality control system to appropriate indiyiduals within the relevant network firm or firms so that the necessary action can be taken; and (c) Engagement partners in the network firms are entitled to rely on. the results of the monitoring process implemented within the network, unless the firms or the network advises otherwise. Appropriate documentation relating to monitoring: (a) Sets out monitoring procedures, including the procedure for selecting completed engagements to be inspected; (b) Records the evaluation of: (@ Adherence to professional standards and regulatory and legal requirements; (ii) Whether the quality control system has been appropriately designed and effectively implemented; and (iii) Whether the firm's quality control policies and progedures have been appropriately applied; so that reports that are issued by the firm or engagement partners are appropriate in the circumstances; and (c) Identifies the deficiencies noted, evaluates their effect, and sets: out the basis for determining whether and what further action is necessary.Complaints and Allegations The firm should establish policies and procedures designed to provide it with reasonable assurance that it deals appropriately with: (a) Complaints and allegations that the work performed by the firm fails to comply with professional standards and regulatory and legal requirements; and (b) Allegations of non-compliance with the firm's system of quality control. Complaints and allegations (which do not include those that are cleacly frivolous) may originate from within or outside the firm. They may be made by firm personnel. clients or other third parties. They may be received by engagement team members or other firm personnel. As part of this process, the firm establishes clearly defined channels for firm personnel to raise any concerns in a manner that enables them to come forward without fear of reprisals. The firm investigates such complaints and allegations in accordance with established policies and procedures. The investigation is supervised by a pariner with sufficient and appropriate experience and authority within the firm but ho is not otherwise involved in the engagement, and includes involving legal counsel as necessary. Small firms and sole practitioners may use the services of a suitably qualified external person or another firm to carry out the investigation. Complaints, allegations and the responses to them are documented. Where the results of the investigations indicate deficiencies in the design or operation of the firm's quality control policies and procedures, or noncompliance with the firm’s system of quality control by an individual or individuals, the firm takes appropriate action as discussed in paragraph 83. Documentation The firm should establish policies and procedures requiring appropriate documentation to provide evidence of the operation of each element of its system of quality control.How such matters are documented is the firm’s decision. For example, large firms may use electronic databases to document matters such as independence confirmations, performance evaluations and the results of monitoring inspections. ‘Smaller firms may use more informal methods such as manual notes, checklists and forms. Factors to consider when determining the form and content of documentation evidencing the operation of each of the elements of the system of quality control include the following: © The size of the firm and the number of offices. ‘© The degree of authority both personnel and offices have. The nature and complexity of the firm’s practice and organization. ‘The firm retains this documentation for a period of time sufficient to permit those performing monitoring procedures to evaluate the firm’s compliance with its system of quality control, or for a longer period if required by law or regulation. Effective Date Systems of quality control in compliance with PSQC 1 are required to be established by June 15, 2006. Firms consider the appropriate transitional arrangements for engagements in process at that date. B. Quality Control for Audits of Historical Financial Information Quality Control Policies and Procedures at Individual Audit Level In addition to the aforementioned quality control policies and procedures at audit firm level, the auditor should implement those quality control procedures which, in the context of the policies and procedures of the firm are appropriate to the individual audit. PSA 220 (Revised) establishes standards and provides guidance on specific responsibilities of firm personnel regarding quality control procedures for audits of historical financial information, including audits of financial statements. This PSA is to be read in conjunetion with Parts A and B of the Code of Ethies for Professional Accountants in the Philippines (Philippine Code).The engagement team should implement quality control procedures that are applicable to the individual audit engagement. Engagement teams have the responsibility to: (@) implement quality control procedures that are applicable to the audit engagement; (b) provide the firm with relevant information to enable the functioning of that part of the firm’s system of quality control relating to independence; and (c) are entitled to rely on the firm’s systems (for example in relation to capabilities and competence of personnel through their recruitment and formal training; independence through the accumulation and communication of relevant independence information; maintenance of client relationships through acceptance and continuance systems; and adherence to regulatory and legal requirements through the monitoring process), unless information provided by the firm or other parties suggests otherwise. LEADERSHIP RESPONSIBILITIES FOR QUALITY ON AUDITS, ‘The engagement partner should take responsibility for the overall quality on each audit engagement to which that partner is assigned. The engagement partner sets an example regarding audit quality to the other members of the engagement team through all stages of the audit engagement. Ordinarily, this example is provided through the actions of the engagement partner and through appropriate messages to the engagement team. Such actions and messages emphasize: (@) The importance of: (@ Performing work that complies with professional standards and regulatory and legal requirements; Gi) Complying with the firm's quality control policies and procedures as applicable; and (iii) Issuing auditor's reports that are appropriate in the circumstances: and (b) The fact that quality is essential in performing audit engagements.ETHICAL REQUIREMENTS The engagement partner should consider whether members of the engagement team have complied with ethical requirements. Ethical requirements relating to audit engagements comprise Parts A and B of the Philippine Code. The Philippine Code establishes the fundamental principles of professional ethics, which include: (a) Integrity (b) Objectivity: (c) Professional competence and due care; (@) Confidentiality; and (e) Professional behavior. The engagement partner should form a conclusion on compliance with independence requirements that apply to the audit engagement. In doing so, the engagement partner should: (a) Obtain relevant information from the firm and, where applicable, network firms, to identify and evaluate circumstances and relationships that create threats to independence; (b) Evaluate information on identified breaches, if any, of the firm's independence policies and procedures to determine whether they create @ threat to independence for the audit engagement; (c) Take appropriate action to eliminate such threats or.reduce them to an acceptable level by applying safeguards. The engagement partner should promptly report to the firm any failure to resolve the matter for appropriate action; and (d) Document conclusions on independence and any relevant discussions with the firm that support these conclusions. ACCEPTANCE AND CONTINUANCE OF CLIENT RELATIONSHIPS AND. SPECIFIC ‘AupiT ENGAGEMENTS The engagement partner should be satisfied that appropriate p regarding the acceptance and continuance of client relationships and specific auditengagements have been followed, and that conclusions reached in this regard are __ appropriate and have been documented. Where the engagement partner obtains information that would have caused the firm to decline the audit engagement if the information had been availabte earlier, the engagement partner should communicate that information promptly to the firm, so that the firm and the engagement partner can take the necessary action. ASSIGNMENT OF ENGAGEMENT TEAMS. ‘The engagement partner should be satisfied that the engagement team collectively has the appropriate capabilities, competence and time to perform the audit engagement in accordance with professional standards ond regulatory and legal requirements, and to enable an auditor’s report that is appropriate in the circumstances to be issued. ENGAGEMENT PERFORMANCE. The engagement partner should take responsibility for the direction, supervision and performance of the audit engagement in compliance with professional standards and regulatory and legal requirements. and for the auditor’s report that is issued to be appropriate in the circumstances. Before the auditor’s report is issued, the engagement partner, through review of the audit documentation and discussion with the engagement team, should be satisfied that sufficient appropriate audit evidence has been obtained to support the conclusions reached and for the auditor’s report to be issued. Consultation The engagement pariner should: (a) Be responsible for the engagement team undertaking appropriate consultation on different or contentious matters; (b) Be satisfied that members of the engagement team have undertaken appropriate consultation during the course of the engageinent, both within ‘the engagement team and between the engagement team and others at the appropriate level within or outside the firm;(c) Be satisfied that the nature and scope of, and conclusions resulting from, stich consultations are documented and agreed with the party consulted; and (d) Determine that conclusions resulting from consultations have been implemented. Differences of Opinion Where differences of opinion arise within the engagement team, with those consulted and, where applicable, between the engagement partner and the engagement quality control reviewer, the engagement team should follow the firm’s policies and procedures for dealing with and resolving differences of opinion. Engagement Quality Control Review For audits of financial statements of listed entities, the engagement partner should: (a) Determine that an engagement quality control reviewer has been appointed; (b) Discuss significant matters arising during the audit engagement, including those identified during the engagement quality control review, with the engagement quality control reviewer; and (c) Not issue the auditor's report until the completion of the engagement quality control review. ‘An engagement quality control review should include an objective evaluation of: (a) The significant judgments made by the engagement team; and (b) The conclusions reached in formulating the auditor's report. MONITORING ‘The engagement partner considers the results of the monitoring process as evidenced in the latest information circulated by the firm and, if applicable, other network firms. The engagement partner considers: (a) Whether deficiencies noted in that information may affect the audit ” engagement; and (>) Whether the measures the firm took to’rectify the situation are sufficient in the context of that audit.A deficiency in the firm’s system of quality control does not indicate Sana) particular audit engagement was not performed in accordance with professions! standards and regulatory and legal requirements, or that the auditor’s report was not appropriate. PRC-BOA Requirements Relative to Quality Control Policies ‘As a condition to Registration / Renewal thereof for the Individual CPAs and Firms or Partnerships of CPAs engaged in the practice of Public Accountancy. PRC-BOA Resolution No. 69, Series of 2002, Article IV, Section 14 requires that “The individual CPAs, Firms or Partnership of CPAs to undergo quality reviews in such manner as the Board may specify, provided, however, that any such treatment shall include reasonable provision for compliance by a registrant showing that he/she/it has undergone a satisfactory quality review performed for other purposes which is substantially equivalent to quality reviews and shall be applicable to all individual CPAs, Firms or Partnerships.” : The application for registration or renewal of registration submitted to the PRC- BOA shall be accompanied by: (1) A copy of the internal quality review procedures being implemented to ensure compliance with the professionel, ethical and technical standards required to the practice of public accountancy. If the individual CPA Firm or Partnership had undergone quality assurance review by the Board or its duly authorized representative, or in any manner pursuant to the “Quality Review Requirement”, a certified copy of the report of such review shall be attached to the application for registration. (2) Sworn statement by the individual CPA, sole proprietor of the firm and managing partner of the partnership that the CPA and his staff had = meaningful participation in their respective internal quality review process . and had undergone adequate and effective training on all the current accounting and auditing standards, code of ethics, laws and the implementing rules and regulation, circulars, memoranda, code of good governance and other related docurnents, supported with certified copies of certificates of attendance or any proof of meaningful participation in and proof of adequacy and effectiveness of such training.