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ANNEX “A”
THE LICENSURE EXAMINATION FOR CERTIFIED PUBLIC ACCOUNTANTS
(LECPA) SYLLABUS
FINANCIAL ACCOUNTING AND REPORTING
Effective October 2022 Examination
This subject covers the candidates’ ability to demonstrate understanding and application of accounting principles and standards relating to: nature and composition of accounts, initial recognition, measurement and valuation, subsequent events and transactions, subsequent measurement and recognition of losses due to impairment and other causes, related party transactions, financial statement presentation and disclosures. The candidates must have a working knowledge in the application of the various financial accounting and reporting standards relating to the above. The candidates must also be able to communicate effectively matters pertaining to the financial accounting work that will be handled. The knowledge of the candidates in the competencies cited above is that of an entry level accountant who can address the fundamental requirements of the various parties that the candidates will be interacting professionally in the future. New laws, standards and other issuances which are effective as of the date of the examination shall supersede the related topic listed in the syllabus and will be included in the examination, unless there is an advisory from the Board of Accountancy to the contrary. The examination shall have seventy (70) multiple choice questions. The syllabus for the subject is presented below. 1.0 Development of Financial Reporting Framework, Standard-Setting Bodies and Regulation of the Accountancy Profession 1.1 History, Development and Functions of the Standard-Setting Bodies 1.1.1 IASB 1.1.2 IFRIC and SIC 1.1.3 FRSC 1.1.4 PIC 1.2 Regulation and Environment of the Accounting Profession in the Philippines 1.2.1 The Professional Regulatory Board of Accountancy 1.2.2 The accredited professional organization of professional accountants in the Philippines 1.2.3 Sectors of the practice of accountancy profession and the accreditation requirements 2.0 Conceptual Framework, Accounting Process and Presentation of Financial Statements 2.1 The Conceptual Framework for Financial Reporting 2.1.1 Objective and status of the Conceptual Framework 2.1.2 Qualitative Characteristics of Useful Financial Information 2.1.3 Definition of, recognition and derecognition criteria and measurement bases for the elements of the financial statements 2.1.4 Concepts of capital and capital maintenance 2.2 The Accounting Process 2.2.1 The steps in the accounting process 2.2.2 The use of the special journals, general journal, subsidiary ledgers, and general ledgers 2.2.3 Completing the accounting cycle, including use of worksheet, adjusting entries, closing entries, and reversing entries 2.3 Presentation of the Financial Statements 2.3.1 General features 2.3.2 Statement of Financial Position
2.3.2.1 Definition of elements 2.3.2.2 Classified Statement of Financial Position 2.3.3 Statement of Comprehensive Income 2.3.3.1 Nature of expense 2.3.3.2 Function of expense 2.3.3.3 Components of profit from continuing operations 2.3.3.4 Components of discontinued operations 2.3.4 Statement of Changes in Equity 2.3.5 Statement of Cash Flows 2.3.5.1 Sections of the statement of cash flows 2.3.5.2 Preparing cash flows from operations: direct and indirect methods 2.3.6 Notes to the Financial Statements 2.3.7 Computation and Disclosures of Earnings Per Share Information 2.3.7.1 Basic EPS 2.3.7.2 Diluted EPS 3.0 Cash and other Financial Assets 3.1 Cash 3.1.1 Nature and composition of cash 3.1.2 Preparing the bank reconciliation 3.1.3 Accounting for petty cash fund 3.2 Other Financial Assets (initial recognition, basis for classification, subsequent measurement, reclassification, and presentation in the financial statements) 3.2.1 Financial assets at fair value through profit or loss 3.2.2 Financial assets at fair value through other comprehensive income 3.2.3 Financial assets at amortized cost 3.2.3.1 Trade and other receivables 3.2.3.1.1 Valuation using allowance for doubtful accounts 3.2.3.1.2 Transfer of receivables (pledging, assignment, and factoring) 3.2.3.2 Other financial assets at amortized cost (including investment in bonds) 3.2.4 Investment in associates and joint venture 4.0 Non-financial Assets 4.1 Inventories 4.1.1 Nature 4.1.2 Capitalizable cost at initial recognition 4.1.3 Inventory cost flow assumptions 4.1.4 Subsequent measurement at lower of cost or estimated selling price less cost to complete and sell 4.1.5 Estimation procedures – gross profit and retail inventory method 4.2 Property, plant, and equipment 4.2.1 Nature 4.2.2 Capitalizable cost at initial recognition 4.2.3 Borrowing costs 4.2.4 Subsequent expenditures 4.2.5 Subsequent measurement 4.2.5.1 Cost method 4.2.5.1.1 Depreciation 4.2.5.1.2 Depreciation methods 4.2.5.1.3 Changes in useful life and depreciation methods 4.2.5.2 Revaluation 4.2.6 Impairment 4.2.7 Retirement and disposals 4.3 Investment property 4.3.1 Nature 4.3.2 Capitalizable cost at initial recognition 4.3.3 Measurement subsequent to initial recognition 4.3.3.1 Cost method 4.3.3.2 Fair value method
8.2.2.1 Direct finance lease 8.2.2.2 Manufacturer’s or dealer’s lease 8.2.2.3 Operating lease 8.2.3 Sale-leaseback 8.3 Income Tax 8.3.1 Accounting profit and taxable profit 8.3.2 Book basis and tax basis 8.3.3 Computation and accounting for current income tax and deferred income tax, deferred tax liability (asset) and current income tax liability (asset) 8.3.4 Financial statement presentation and disclosure 8.4 Employee benefits 8.4.1 Nature and classification 8.4.2 Recognition and measurement of employee benefit costs under defined benefit plan and defined contribution plan 8.4.3 Presentation and disclosures 8.5 Interim Reporting 8.5.1 Purpose and components of interim financial reports 8.5.2 Recognition of income, expenses, assets, and liabilities for interim reporting 8.6 Operating segments 8.6.1 Identifying operating segments 8.6.2 Reporting segment information 9.0 Other Reporting Frameworks 9.1 Applicability and salient differences from PFRS of the following reporting frameworks 9.1.1 PFRS for SMEs 9.1.2 PFRS for Small Entities 9.1.3 Reporting for microenterprises
THE LICENSURE EXAMINATION FOR CERTIFIED PUBLIC ACCOUNTANTS
(LECPA) SYLLABUS
ADVANCED FINANCIAL ACCOUNTING AND REPORTING
Effective October 2022 Examination This subject covers the candidates’ knowledge of the concepts and principles in advanced financial accounting and reporting and the application of these accounting concepts including techniques and methodology to problems likely to be encountered in practice. Candidates should know and understand problems involving accounting of special transactions and their effects and presentation in the financial statements including among others: accounting for partnerships, corporate liquidation, joint arrangements, revenue recognition, home office, branch and agency transactions, business combinations, separate and consolidated financial statements, foreign currency transactions and translations, not for-profit organizations, including government and cost accounting. Also, a working knowledge of the standards related to these special topics on insurance contracts, service concession arrangement and derivatives are expected of the candidates. The candidates must also be able to communicate effectively matters pertaining to these special accounting topics and the related work that will be handled. The knowledge of the candidates in the competencies cited above is that of an entry level accountant who can address the fundamental requirements of the various parties that the candidates will be interacting professionally in the future. New laws, standards and other issuances which are effective as of the date of the examination shall supersede the related topic listed in the syllabus and will be included in the examination, unless there is an advisory from the Board of Accountancy to the contrary. The examination shall have seventy (70) multiple choice questions. The syllabus for the subject is presented below. 1.0 Partnership Accounting
1.1 Nature, scope, and objectives
1.1.1 Differentiate from single proprietorship and corporation accounting 1.1.2 Concepts, principles, rules, practices, and procedures
1.2 Formation
1.2.1 Initial capital contribution 1.3 Operation/Dissolution/changes in ownership interest 1.3.1 Admission of a new partner 1.3.1.1 By purchase of interest 1.3.1.2 By investment 1.3.2 Withdrawal, retirement, or death of a partner 1.3.3 Incorporation of a partnership 1.4 Liquidation of partnership 1.4.1 Lump – sum method 1.4.2 Installment method 2.0 Corporate Liquidation 2.1 Statement of Affairs 2.2 Statement of Deficiency 2.3 Statement of Realization and Liquidation 2.4 Determination of the order of priority of claimants of company assets subject to liquidation 3.0 Joint Arrangements (PFRS 11) 3.1 Joint Operations 3.1.1 Nature and scope 3.1.2 Differentiate from business combination
8.0 Consolidated Financial Statements (PFRS 10) 8.1 Consolidation procedures 8.1.1 Net income, dividends, amortization, and impairment of goodwill 8.1.2 With intercompany transactions (Inventories, land, and depreciable assets) 8.1.3 Determination of: 8.1.3.1 Net Income/ Other Comprehensive Income/ Equity 8.1.3.1.1 Attributable to Equity Holders of Parent/ Controlling or Parent’s Interest 8.1.3.1.2 Non-controlling Interest 8.1.3.1.3 Consolidated/ Group 8.1.3.2 Retained Earnings/ Common Share / Dividends 8.1.3.2.1 Attributable to Equity Holders of Parent / Controlling or Parent’s Interest/ Consolidated / Group 9.0 Derivatives and Hedging Accounting (PFRS 9) 9.1 Accounting for Derivatives 9.1.1 Recognition and Derivatives 9.1.2 Types of Derivatives 9.1.2.1 Forwards and Futures 9.1.2.2 Options 9.2 Hedging Activities: Hedging Foreign Currency Exposures 9.2.1 Foreign Currency Forward Contracts 9.2.1.1 Hedges that does not requires a Hedge Accounting (undesignated hedges) 9.2.1.1.1 Exposed Asset (Import) or Liability (Export) Position 9.2.1.1.2 Speculation 9.2.1.2 Hedges that requires a Hedge Accounting: 9.2.1.2.1 Fair value hedge 9.2.1.2.1.1 Hedge of a Firm Commitment (purchase or sale transaction) 9.2.1.2.2 Cash flow hedge 9.2.1.2.2.1 Hedge of a Firm Commitment (purchase or sale transaction) 9.2.1.2.2.2 Hedge of a Forecasted Transaction (purchase or sale transaction) 9.2.1.2.2.3 Hedge of a net investment in foreign entity 10.0 Translation of Foreign Currency Financial Statements (PAS 21/ PAS 29) 10.1 Translation from the Functional Currency into the Presentation Currency (Closing/ Current Rate Method) 10.2 Translation into the Functional Currency (Remeasurement from a Foreign Currency Financial Statements to the Functional Currency) 10.3 Restatement of Financial Statements (Functional Currency of a Hyperinflationary Economy) 11.0 Not-for-Profit Organizations 11.1 Voluntary health and welfare organizations (VHWO) 11.2 Hospitals and other health care organizations 11.3 Colleges and Universities 11.4 Other not-for-profit organizations such as churches, museums, fraternity, association, etc. 12.0 Government Accounting – General Fund 12.1 Basic Concepts in Government Accounting 12.2 Budget Process 12.3 Government Accounting Manual (GAM) 12.4 Journal Entries – Books of National Government Agency 13.0 Cost Accounting 13.1 System of Cost Accumulation or Costing System
13.1.1 Comparison between Actual Costing, Normal Costing and Standard Costing 13.2 Job-order Costing System 13.2.1 Journal Entries 13.2.2 Preparation of Statement of Goods Manufactured and Sold 13.2.3 Accounting for scrap, waste, spoilage, and rework 13.2.4 Cost Accumulation Procedures – materials, labor and overhead 13.3 Process Costing System 13.3.1 Journal Entries 13.3.2 Preparation of Cost of Production Report 13.3.2.1 First-in, first-out method 13.3.2.2 Average method 13.3.3 Accounting for Lost Units 13.3.3.1 Normal lost units – end of process 13.3.3.2 Abnormal lost units 13.3.4 Cost accumulation procedures – materials, labor and overhead 13.4 Backflush Costing System (JIT System) 13.4.1 Journal Entries 13.4.2 Cost accumulation procedures – materials, labor and overhead 13.5 Activity-Based Costing System (ABC System) 13.5.1 Allocation of Costs: Traditional Costing versus ABC System 13.5.2 Determination of Total Product Cost: Traditional Costing versus ABC System 13.5.3 Activity levels (unit-level, batch-level, product-level, and facility level), cost pools and activity drivers 13.5.4 Determination of cost pool rates and application of overhead costs 13.6 Accounting for Joint and By-Products 13.6.1 Methods of allocating joint costs to products 13.6.1.1 Market (sales) Value Method 13.6.1.1.1 Market value at split-off point approach 13.6.1.1.2 Hypothetical market value approach or Approximated net realizable value approach or Net realizable value method 13.6.1.1.3 Average units (production output) method 13.6.1.1.4 Weighted average method 13.6.2 Methods of allocating joint costs to by-products 13.6.2.1 No joint costs allocated to by-products 13.6.2.2 With joint costs allocated to by-products 13.6.3 Treatment of by-products 13.7 Service Cost Allocation 13.7.1 Direct method 13.7.2 Step-down method 13.7.3 Reciprocal method 14.0 Other Special Topics (Basic Knowledge) 14.1 Accounting for insurance contracts by insurers (PFRS 17) 14.1.1 Types of Insurance Contracts 14.1.2 Changes in Accounting Policies 14.1.3 Recognition and measurement of insurance and reinsurance contracts 14.2 Service Concession Arrangement – Accounting for Build, Operate & Transfer (PFRIC 12) 14.2.1 Two Types of Service Concession Arrangement 14.2.1.1 Financial Asset 14.2.1.2 Intangible Asset
1.2.3.2 Direct material variance (quantity, price usage, purchase price, mix and yield) 1.2.3.3 Direct labor variance (efficiency, rate, mix and yield) 1.2.3.4 Factory overhead variance – two-way method (controllable and volume); three-way method (spending, variable efficiency, and volume); four-way method (variable spending, fixed spending, variable efficiency, and volume) 1.2.4 Variable vs. Absorption Costing 1.2.4.1 Distinction between product cost and period cost 1.2.4.2 Inventory costs between variable costing and absorption costing 1.2.4.3 Nature and treatment of fixed factory overhead costs 1.2.4.4 Reconciliation of operating income under variable costing and absorption costing 1.2.5 Financial planning and budgets 1.2.5.1 Definition and coverage of the budgeting process 1.2.5.2 Master budget and its components (operating and financial budgets) 1.2.5.3 Types of budgets (static, flexible, zero-based, continuous) 1.2.5.4 Budget variance analysis (static and flexible) 1.3 Management accounting concepts and techniques for performance measurement 1.3.1 Responsibility accounting and transfer pricing 1.3.1.1 Concepts of decentralization, segment reporting, goal congruence and motivation 1.3.1.2 Controllable and non-controllable costs, direct and common costs 1.3.1.3 Type of responsibility centers (cost, revenue, profit, and investment centers) 1.3.1.4 Preparation of segmented income statement 1.3.1.5 Performance margin (manager vs. segment performance) 1.3.1.6 Return on investment (ROI), residual income and economic value added (EVA) 1.3.1.7 Rational and need for transfer price 1.3.1.8 Transfer pricing schemes (minimum transfer price, market-based transfer price, cost-based transfer price and negotiated price) 1.3.2 Balanced scorecard 1.3.2.1 Nature and perspectives of balanced scorecard 1.3.2.2 Financial and non-financial performance measures (productivity, cycle efficiency and throughput measures) 1.4 Management Accounting Concepts and Techniques for Decision Making 1.4.1 Relevant costing and differential analysis 1.4.1.1 Definition and identification of relevant costs 1.4.1.2 Concept of opportunity costs 1.4.1.3 Approaches in analyzing alternatives in non-routing decisions (total and differential) 1.4.1.4 Types of decisions (make or buy, accept, or reject special order, continue or drop/shutdown, sell or process further, best product combination, pricing decisions) 1.4.1.5 Probability analysis (expected value concept) 1.4.1.6 Decision tree diagram 1.4.1.7 Linear programming (graphic method; algebraic method) 2.0 Financial Management 2.1 Objectives and scope of financial management 2.1.1 Nature, purpose, and scope of financial management 2.1.2 Role of financial managers in investment, operating and financing decisions 2.2 Financial Management Concepts and Techniques for Planning, Control & Decision Making 2.2.1 Financial statement analysis 2.2.1.1 Vertical analysis (common-size financial statements) 2.2.1.2 Horizontal analysis (trend percentages and index analysis) 2.2.1.3 Cash flow analysis (interpretation of cash flows including free cash flow concept)
2.2.1.4 Gross profit variance analysis (price, cost, and volume factors) 2.2.1.5 Financial ratios (liquidity, solvency, activity, profitability, growth, and other ratios; Du Pont model) 2.2.1.6 Financial forecasting using additional funds needed (AFN) 2.2.2 Working capital management 2.2.2.1 Concepts and significance of working capital management 2.2.2.2 Working capital investment and financing policies (conservative, aggressive and the hedging/moderate approach) 2.2.2.3 Cash and marketable securities management (cash conversion cycle, optimal cash balance, collection and disbursement float, cash management system) 2.2.2.4 Receivables management (average balance of and investment in accounts receivable, incremental analysis and evaluation of discount, collection, and credit policies) 2.2.2.5 Inventory management (carrying, ordering and stock-out costs, inventory control system including EOQ model, safety stock, re- order point) 2.2.2.6 Sources of short-term funds (trade credit, bank loans, commercial papers, receivable factoring credit lines and revolving credit) 2.2.2.7 Estimating cost of short-term funds (annual cost of trade credit, effective and nominal annual rate of short-term funds) 2.2.3 Capital budgeting 2.2.3.1 Capital investment decision factors (net investment for decision making, cost of capital, cash, and accrual net returns) 2.2.3.2 Non-discounted capital budgeting techniques (payback period, accounting rate of return on original and average investment, bail- out payback, and payback reciprocal) 2.2.3.3 Discounted capital budgeting techniques (net present value, internal rate of return, profitability index, equivalent annual annuity, fisher rate/NPV point of difference) 2.2.3.4 Project screening, project ranking and capital rationing (independent and mutually exclusive capital investment projects) 2.2.3.5 Sensitivity analysis (effects of changes in project cash flow, tax rates and other assumptions) 2.2.4 Risks and leverage 2.2.4.1 Types of risks (business/operating, financing) 2.2.4.2 Measures of risks (coefficient of variation and standard deviation) 2.2.4.3 Degree of operating, financial and total leverage 2.2.5 Capital structure and long-term financing decision 2.2.5.1 Basic concepts and tools of capital structure management 2.2.5.2 Sources of intermediate and long-term financing (including hybrid financing) 2.2.5.3 Cost of capital (cost of long-term debt, cost of preferred shares, cost of equity, weighted average cost of capital, marginal cost of capital) 2.2.6 Financial markets 2.2.6.1 Money markets 2.2.6.1.1 Types of money market instruments 2.2.6.2 Capital market 2.2.6.2.1 Fixed income market 2.2.6.2.1.1 Types/examples of fixed income instruments 2.2.6.2.1.2 Basic valuation 2.2.6.2.2 Stock market 2.2.6.2.2.1 Types/examples of equity instruments 2.2.6.2.2.2 Basic valuation 3.0 Economic concepts essential to obtaining an understanding of entity’s business and industry
THE LICENSURE EXAMINATION FOR CERTIFIED PUBLIC ACCOUNTANTS
(LECPA) SYLLABUS
AUDITING
Effective October 2022 Examination This subject covers the candidates’ knowledge of the principles and concepts of auditing and attestation and the practical application of these principles and concepts. There shall be two parts of this subject: Theory on Auditing and Attestation Services and Auditing Practice. THEORY ON AUDITING AND ATTESTATION SERVICES This part covers the candidates’ conceptual knowledge and understanding of auditing and attestation services performed by professional accountants. Candidates should know and understand auditing and attestation services, with emphasis to: independent audits of financial statements or against related standards, assertions or applicable criteria; professional, ethical, quality management and governance responsibilities; the use of risk-based audit process in planning, responding to risks and reporting thereon. In all the areas included, the candidate shall apply the appropriate standards on auditing and attestation, quality management, ethical and governance standards, and other regulatory laws and regulations, issued by Philippine and professional standard-setting and regulatory bodies in effect at the time of examination. AUDITING PRACTICE This part covers the candidate’s proficiency in applying risk-based audit and quality management standards, techniques, and procedures to a typical independent audit of a medium-sized service, trading or manufacturing concern, that use either a manual or automated business process, or a combination of both. Candidates shall be able to assess risk, develop a plan and perform an audit, analyze data for possible errors and irregularities or nonconformance to standards, assertions or criteria, perform root cause analysis, perform other procedures, obtain evidence and formulate adjusting entries, prepare audit working papers, communicate results of audit, prepare audit reports, and complete the audit. In all the areas included, the candidate shall apply the appropriate standards on auditing and attestation, quality management, ethical and governance standards, and other regulatory laws and regulations, issued by Philippine and professional standard-setting and regulatory bodies in effect at the time of examination. Candidates should be able to demonstrate awareness- or proficient-level knowledge of the competencies cited above. Entry level professional accountants should be able to address the fundamental requirements of the various parties that the candidates will be interacting professionally in the future. The candidates must also be able to communicate effectively such matters pertaining to the audit work. New laws, standards and other issuances which are effective as of the date of the examination shall supersede the related topic listed in the syllabus and will be included in the examination, unless there is an advisory from the Board of Accountancy to the contrary. The examination shall have seventy (70) multiple choice questions. The syllabus for the subject is presented below. 1.0 Theory on Auditing and Attestation Services 1.1 Fundamentals of Auditing and Assurance Services 1.1.1 Introduction to assurance engagements 1.1.1.1 Nature, objective, and elements
1.1.1.2 Types of assurance engagements (audits, reviews, other assurance engagements) 1.1.2 Introduction to auditing 1.1.2.1 Nature, philosophy, and objectives 1 .1.2.2 Types of audit 1.1.2.2.1 According to nature of assertion/data (financial statements audit, operational audit, and compliance audit) 1.1.2.2.2 According to types of auditor (external independent financial statements audit, internal audit, and government audit) 1.2 The Risk-based Financial Statement Audit – Client Acceptance, Audit Planning, Supervision and Monitoring 1.2.1 Overview of the risk-based audit process 1.2.2 Pre-engagement procedures 1.2.3 Scope and purposes of audit planning 1.2.3.1 Essential planning requirements 1.2.3.1.1 Knowledge of the business 1.2.3.1.2 Preliminary analytical procedures 1.2.3.1.3 Materiality 1.2.3.1.4 Assessing and managing audit risks 1.2.3.1.5 Overall audit plan and audit program (experts, internal auditor, other independent auditors) 1.2.4 Direction, supervision, and review 1.3 Understanding the Entity and its Environment including its Internal Control and Assessing the Risks of Material Misstatement 1.3.1 Industry, regulatory and other external factors, including the applicable financial reporting framework 1.3.1.1 Nature of the entity 1.3.1.2 Objectives and strategies and related business risks 1.3.1.3 Measurement and review of the entity’s financial performance 1.3.2 Internal Control 1.3.2.1 Basic concepts and elements of internal control 1.3.2.2 Consideration of accounting and internal control systems 1.3.2.2.1 Understanding and documentation 1.3.2.2.2 Assessment of control risks 1.3.2.2.2.1 Test of controls 1.3.2.2.2.2 Documentation 1.3.3 Assessing the risks of material misstatement 1.3.3.1 Fraud and errors 1.3.3.2 Risk assessment procedures 1.3.3.3 Discussion among the engagement team 1.3.3.4 Significant risks that require special audit consideration 1.3.3.5 Risks for which substantive procedures alone do not provide sufficient appropriate audit evidence 1.3.3.6 Revision of risk assessment 1.3.4 Communicating with those charged with governance and management 1.4 Audit Objectives, Procedures, Evidences and Documentation 1.4.1 Nature and significance 1.4.2 Evidential matters 1.4.3 Audit procedures/techniques, including audit selection 1.4.4 Audit working papers 1.5 Completing the Audit/Post-Audit Responsibilities 1.5.1 Completing the audit and audit report preparation 1.5.1.1 Analytical procedures for overall review 1.5.1.2 Related party transactions 1.5.1.3 Subsequent events review 1.5.1.4 Assessment of ongoing concern assumption 1.5.1.5 Obtaining client’s representation letter 1.5.1.6 Evaluating findings, formulating an opinion, and drafting the audit report
2.1.4 Regulatory requirements related to the practice, accreditation and regulation of public accounting and auditing services 2.2 Planning the Audit and Performing Risk Assessment Procedures 2.2.1 Risk-based audit – overview 2.2.2 Risk assessment – overview 2.2.3 Preliminary activities 2.2.3.1 Engagement acceptance and continuance 2.2.4 Planning the audit 2.2.4.1 Overall audit strategy 2.2.4.2 Determining and using materiality 2.2.4.3 Audit team discussions 2.2.4.4 Understanding and auditing business processes 2.2.4.4.1 Order to cash 2.2.4.4.2 Purchase to pay 2.2.4.4.3 Plan to inventory 2.2.4.4.4 Hire to retire 2.2.4.4.5 Acquire to retire 2.2.4.4.6 Record to report 2.2.4.4.7 Close, consolidate and report 2.2.4.4.8 Financial planning and analysis 2.2.4.4.9 Other business processes 2.2.5 Performing risk assessment procedures – entity wide and business process level 2.2.5.1 Identification and assessment of inherent risks 2.2.5.2 Identifying objectives and key risks 2.2.5.3 Understanding internal control 2.2.5.4 Evaluating internal control 2.2.5.5 Communicating deficiencies in internal control 2.2.5.6 Concluding the risk assessment phase 2.3 Risks Response 2.3.1 Risk response – overview 2.3.2 Developing the risk-based audit plan 2.3.3 Determining the extent of testing 2.3.4 Documenting work performed 2.3.4.1 Preparation of audit working papers 2.3.4.2 Preparation of analysis worksheets 2.3.4.3 Formulation of adjusting and correcting entries 2.3.5 Written representations 2.3.6 Engagement supervision and consultation 2.4 Audit Communication and Reporting 2.4.1 Reporting – overview 2.4.2 Evaluating audit evidence 2.4.3 Communicating results 2.4.3.1 Criteria and quality of communications 2.4.3.2 Disseminating results 2.4.3.3 Communicating with those charged with governance 2.4.4 Preparing the audit report 2.4.4.1 Modifications to the auditor’s report 2.4.4.2 Emphasis of matter and other matter paragraphs 2.4.4.3 Comparative information 2.4.5 Monitoring and closing the engagement
THE LICENSURE EXAMINATION FOR CERTIFIED PUBLIC ACCOUNTANTS
(LECPA) SYLLABUS
REGULATORY FRAMEWORK for BUSINESS TRANSACTIONS Effective October 2022 Examination This subject covers the candidates’ knowledge of the regulatory framework governing business transactions and business organizations/associations, and of business laws including their legal implications. Candidates should know and understand the pertinent legal provisions, general principles, concepts, and underlying philosophy of the laws applicable to commerce and business. The candidates must have sufficient knowledge to enable them to recognize the legal implications of business situations or transactions and to know when to seek legal counsel or recommend that it be sought. The candidates must have a working knowledge to apply the various regulatory framework measures and the pertinent provisions of the law relative to particular business scenarios. The candidates must also be familiar with clients’ rights and remedies, with the handling of disputes on regulatory issues. They must know the various regulatory offices that they will be interacting with and the basic regulations that they will derive benefits from. The candidates must also be able to communicate effectively matters pertaining to the regulatory work that will be handled. The knowledge of the candidates in the competencies cited above is that of an entry level accountant who can address the fundamental requirements of the various parties that the candidates will be interacting professionally in the future. . New laws, standards and other issuances which are effective as of the date of the examination shall supersede the related topic listed in the syllabus and will be included in the examination, unless there is an advisory from the Board of Accountancy to the contrary. The examination shall have one hundred (100) multiple choice questions. The syllabus for the subject is presented below. 1.0 Law on Business Transactions 1.1 Obligations 1.1.1 Definition 1.1.2 Sources of obligations and their concepts 1.1.2.1 Law 1.1.2.2 Contracts 1.1.2.3 Quasi-contracts 1.1.2.4 Delicts 1.1.2.5 Quasi-delicts 1.1.3 Kinds of Obligations 1.1.3.1 Pure/Conditional/Obligation with a Term 1.1.3.2 Solidary /Joint Obligations 1.1.3.3 Alternative/ Facultative Obligations 1.1.3.4 Divisible/ Indivisible Obligations 1.1.3.5 Obligation with a Penal Clause 1.1.4 Specific circumstances affecting obligations in general 1.1.4.1 Fortuitous Events 1.1.4.2 Fraud 1.1.4.3 Negligence 1.1.4.4 Delay 1.1.4.5 Breach of contract 1.1.5 Nature and Effects of Obligations 1.1.5.1 Concurrent Obligations in obligations to give a specific/determinate thing 1.1.5.2 Obligations to do or not to do
2.1 Requisites to be liable under BP 22 2.1.1 Checks without insufficient funds 2.1.2 Evidence of knowledge of insufficient funds 2.1.3 Duty of Drawer 2.1.4 Credit Construed 2.2 Comparison with Estafa (Art. 315 {2] (d) 3.0 Consumer Protection 3.1 Consumer Product Quality and Safety 3.2 Deceptive Sales Acts and Practices 3.3 Product Service and Warranty 3.4 Labelling and Packaging 3.5 Consumer Rights 3.5.1 Price Tag Act 3.5.2 Lemon Law 4.0 Financial Rehabilitation and Insolvency 4.1 Definition of Terms 4.2 Suspension of payments 4.3 Rehabilitation 4.3.1 Types 4.3.2 Commencement order 4.3.3 Stay or suspension order 4.3.4 Rehabilitation receiver 4.3.5 Management committee 4.3.6 Rehabilitation plan 4.3.7 Cram down effect 4.4 Liquidation 4.4.1 Types 4.4.2 Conversion of rehabilitation to liquidation proceedings 4.4.3 Liquidation order 4.4.4 Rights of secured creditors 4.4.5 Liquidator 4.4.6 Determination of claims 4.4.7 Liquidation of Plan 5.0 Philippine Competition Act 5.1 Definition and scope of application 5.2 Prohibited acts 5.2.1 Anti-competitive agreements 5.2.2 Abuse of dominant position 5.2.3 Prohibited mergers and acquisitions 5.2.4 Exceptions 5.3 Covered transactions 5.3.1 Thresholds for compulsory notification 5.3.2 Notifying entity 5.3.3 Period of notifications 5.3.4 Exceptions 6.0 Government Procurement Law 6.1 General principles 6.2 Scope and application 6.3 Definition of terms 6.4 Procurement procedures 6.4.1 Preparation of bidding documents 6.4.2 Invitation to bid 6.4.3 Receipt and opening of bids 6.4.4 Bid evaluation 6.4.5 Post-qualification 6.4.6 Award, implementation, and termination of the contract 6.5 Disclosure of relations
6.6 Alternative methods of procurement 7.0 Law on Business Organizations 7.1 Partnerships 7.1.1 Nature and as distinguished from corporation 7.1.2 Kinds of partnerships 7.1.3 Formalities required 7.1.4 Rules of management 7.1.5 Obligations of partners 7.1.5.1 To the partnership and to the partners 7.1.5.2 To third persons 7.1.6 Rights of a partner 7.1.7 Sharing of profits and losses 7.1.8 Dissolution and winding up 7.1.9 Limited Partnership 7.2 Corporations 7.2.1 Definition of corporation 7.2.2 Classes of corporations 7.2.3 Nationality of corporations 7.2.3.1 Control test 7.2.3.2 Grandfather rule 7.2.4 Corporate juridical personality 7.2.4.1 Doctrine of separate juridical personality 7.2.4.1.1 Liability for tort and crimes 7.2.4.1.2 Recovery of damages 7.2.4.2 Doctrine of piercing the corporate veil 7.2.4.2.1 Grounds for application of doctrine 7.2.4.2.2 Test in determining applicability 7.2.5 Capital structure 7.2.5.1 Number and qualifications of incorporators 7.2.5.2 Subscription requirements 7.2.5.3 Corporate term 7.2.5.4 Classification of shares 7.2.5.4.1 Preferred shares versus common shares 7.2.5.4.2 Scope of voting rights subject to classification 7.2.5.4.3 Founder's shares 7.2.5.4.4 Redeemable shares 7.2.5.4.5 Treasury shares 7.2.6 Incorporation and organization 7.2.6.1 Promoter 7.2.6.2 Subscription contract 7.2.6.3 Pre-incorporation subscription agreements 7.2.6.4 Consideration for stocks 7.2.6.5 Articles of Incorporation 7.2.6.5.1 Contents 7.2.6.5.2 Non-amendable items 7.2.6.6 Corporate name; limitations on use of corporate name 7.2.6.7 Registration, incorporation, and commencement of corporate existence 7.2.6.8 Election of directors or trustees 7.2.6.9 Adoption of by-laws 7.2.6.9.1 Contents of by-laws 7.2.6.9.2 Binding effects 7.2.6.9.3 Amendments 7.2.6.10 Effects of non-use of corporate charter 7.2.7 Corporate powers 7.2.7.1 General powers; theory of general capacity 7.2.7.2 Specific powers; theory of specific capacity 7.2.7.3 Power to extend or shorten corporate term 7.2.7.4 Power to increase or decrease capital stock or incur, create, increase bonded indebtedness
