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SEC Released Amended SRC Rule 68

SEC Released Amended SRC Rule 68

 

This Accounting Alert aims to provide summary of the significant changes made in the Amended Securities Regulation Code (SRC) Rule 68 issued by the Philippine Securities and Exchange Commission (the SEC or the Commission) last October 20, 2011.  SRC Rule 68 (the Rule) defines the specific requirements of the SEC regarding financial reporting of entities registered with the SEC.  The  changes in the amended Rule may pertain to newly added rules and requirements already prescribed by the existing SEC Circulars which are incorporated herein.

Overview
SRC Rule is the implementing rules and regulations (IRR) of Republic Act No. 8799 otherwise known as the Securities Regulation Code of 2000.  SRC Rule 68 is the IRR that specifically deals with the financial reporting requirements of entities registered with the SEC.

The Rule is previously divided into two sections, Rule 68 governing non-publicly listed entities and Rule 68.1 applicable for public companies in the Philippines as set forth in Section 17.2 of the SRC. 

The Rule is now consists of Part I - General Financial Reporting Requirements and Part II - Additional Requirements for Issuers of Securities to the Public.

Summary of Significant Changes and Updates
The significant changes and updates in the Rule included and summarized in this Accounting Alert cover the the following areas:

  • Financial reporting framework applicable for particular class or group of entities
  • Statement of management responsibility
  • Reportorial requirements on audit findings for regulated entities
  • Guidance on the reporting of independent auditor when an entity incurred capital deficiency
  • Implication of auditor’s opinion on financial statements other than qualified
  • Re-issuance of the financial statements
  • Rotation of external auditors
  • Other supplemental documents to be filed together with the audited financial statements
  • Additional requirements for entities filing consolidated financial statements
  • Significant additional or updated disclosure requirements for public companies

Effectivity
The Rule is effective for audited financial statements covering periods ending ended December 31, 2011 and onwards, and for interim financial statements starting the first quarter of 2012, and thereafter.