SEC welcomes SC resolution on CPA accreditation

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December 17, 2025 | 12:00am

MANILA, Philippines — The Securities and Exchange Commission (SEC) welcomed a Supreme Court resolution upholding with finality the commission’s authority to accredit certified public accountants serving as external auditors of its covered corporations.

The SEC said the Supreme Court en banc, in a resolution, denied with finality the motion for reconsideration of 1Accountants Party-List Inc., noting that it had failed to raise substantial arguments that would warrant the reversal of its previous ruling in favor of the SEC.

In upholding the commission’s authority to facilitate the accreditation of external auditors of covered entities, the Supreme Court said that the SEC, as the corporate regulator, is authorized to supervise the activities of entities it has jurisdiction over, which include juridical and natural persons, such as the external auditors, and implement the accreditation requirement.

“We welcome the decision of the Supreme Court, which we believe further strengthens our thrust toward promoting transparency, accountability and good governance, in general, both in the private and public sectors,” SEC chairperson Francis Lim said.

“The external auditors subject to accreditation deal with corporations imbued with public interest. Accordingly, as the Supreme Court has noted, requiring their accreditation could help the commission enhance its regulatory oversight, reinforce investor protection in the securities market and promote the integrity of the financial sector,” he said.

The case stemmed from a petition by the 1Accountants Party-List to declare as unconstitutional SEC regulations and guidelines about the accreditation of external auditors of its covered entities.

In its petition, the 1Accountants Party-List argued that the SEC exceeded its mandate with the issuance of the regulations, as the Board of Accountancy has supervision, control and regulation over external auditors of corporations.

It also claimed that the additional accreditation requirements imposed by the SEC restrict certified public accountants from practicing their profession.

The Supreme Court, in its initial decision in 2022 and a subsequent resolution in 2023, favored the 1Accountants Partylist, declaring the rules issued by the SEC on the accreditation of external auditors by its covered entities as invalid and unconstitutional.

Following the SEC’s appeal, the high court issued a resolution in January 2025, reversing and setting aside its earlier findings of invalidity. The court declared the accreditation guidelines and requirements valid and constitutional.

“The SEC remains unwavering in its commitment to uphold transparency, ensure integrity and promote accountability in the corporate sector as these are crucial in building public trust and confidence in the capital market and the country’s overall business environment,” Lim said.