An external audit is an examination that is conducted by an independent Certified Public Accountant (CPA). This type of audit is most commonly intended to result in an audit opinion on the financial statements of an entity. This audit opinion is required by certain investors, lenders, regulating bodies, and other government agencies in order to gain a reasonable assurance on the financial statements of an entity.
Setting in the Philippines:
Per 2018 TRAIN Law, the Financial Statements of a taxpayer should be audited if the gross annual sales, earnings, receipts or output exceed P3,000,000 for Bureau of Internal Revenue (BIR) submission. Some businesses even if below the threshold would opt for their financial statements to be still audited to provide reasonable assurance to the users such as banks, investors, etc.
However, for corporation’s Securities and Exchange Commission (SEC) submission, financial statements should be audited by a Board of Accountancy (BOA) accredited independent Certified Public Accountant (CPA) regardless of amount set by the BIR.
In some cases, additional SEC Accreditation is required from CPAs in order to perform external audit on lending, financing and other companies that have secondary license with SEC.
Same with the requirements for Cooperatives, external audit is still required to be performed by a Cooperative Development Authority (CDA) Accredited External Auditor.
Our Firm able to provide all of these external audit services since we have accreditations from BIR as Tax Agent, BOA, CDA, and SEC (Group C).
It should be noted that if the external audit is performed and signed by a non-accredited CPA, the entity will be penalized and the CPA may be reprimanded or licensed may be revoked. Thus, the entity should exercise effort and caution that the CPA engaged is indeed, duly accredited.
If you wish to avail of this service from our Firm, please contact us at firstname.lastname@example.org, (034) 434-6963 (PLDT), 0917-183-7747 (GLOBE) or fill out the form below: