AS the Philippine Institute of Certified Public Accountants (PICPA) observed nationwide the Accountancy Week from July 16 to 22, questions were raised about the profession due to the restatement of the financial statements of logistics giant 2GO Group Inc. and the P900-million fraud committed by a senior officer of Metropolitan Bank and Trust Company, the country’s second biggest bank.
In the case of 2GO, Sycip Gorres Velayo & Co. restated the financial statements of the company, previously audited by KPMG through its local partner, R.G. Manabat & Co. While the latter firm stood by its audit, SGV revealed among others, “differences in 2GO’s equity, which stood at P3.66 billion in the first quarter of 2017 from that previously stated at P6.59 billion. 2GO’s profit was adjusted lower by almost P1 billion to P330 million in 2016 and P97 million in 2015.”
In Metrobank, its head office vice president for corporate services, Maria Victoria Lopez, was arrested for defrauding the bank of P900-million by making loans using fake accounts in the name of a legitimate client, Universal Robina Corp. How she was able to circumvent the bank’s strict processes and escape the attention of both the internal auditors as well as external auditors should be exposed once the case will be heard in court.
Through the financial statements, stockholders, investors, directors and the public can get an overview of the financial health and viability of a profit company. The Bureau of Internal Revenue depends on these documents in the collection of the correct taxes due the government. The role of the external auditor is to issue an opinion on whether the information presented in the financial statements is correct and free from material misstatements. The internal auditors, on the other hand, assure that an organisation’s risk management, governance and internal control processes are in place and functioning effectively.
I started my professional career as an internal auditor and later as director of Deloitte in its Cebu operations. The auditor’s work is tedious, and requires not merely understanding the principles of accountancy and adopting procedures in audit but also relating to the people you interact with. And there is the pressure in field work and report writing. Auditors are not detectives but one may stumble upon fraud in the conduct of the audit.
The theme of the new leadership of PICPA this year is SHINE (Service, Honesty, Innovation and Nation-building through Education) with a declaration that “we (CPAs) are called upon to be exemplars, not only of ethical behavior and professional competence, but also of inclusive, intelligent and proactive service for our country, our companies and our community.”
The debacles in 2GO and Metrobank pose a challenge to the profession. Hopefully, it can indeed shine as a vanguard of businesses, the government and the community.