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Audit approach overview
Our audit approach will allow our client's accounting personnel to make the maximum contribution to the audit effort without compromising their ongoing responsibilities
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Annual and short period audit
At P&A Grant Thornton, we provide annual and short period financial statement audit services that go beyond the normal expectations of our clients. We believe strongly that our best work comes from combining outstanding technical expertise, knowledge and ability with exceptional client-focused service.
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Review engagement
A review involves limited investigation with a narrower scope than an audit, and is undertaken for the purpose of providing limited assurance that the management’s representations are in accordance with identified financial reporting standards. Our professionals recognize that in order to conduct a quality financial statement review, it is important to look beyond the accounting entries to the underlying activities and operations that give rise to them.
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Other Related Services
We make it a point to keep our clients abreast of the developments and updates relating to the growing complexities in the accounting world. We offer seminars and trainings on audit- and tax-related matters, such as updates on Accounting Standards, new pronouncements and Bureau of Internal Revenue (BIR) issuances, as well as other developments that affect our clients’ businesses.
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Tax advisory
With our knowledge of tax laws and audit procedures, we help safeguard the substantive and procedural rights of taxpayers and prevent unwarranted assessments.
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Tax compliance
We aim to minimize the impact of taxation, enabling you to maximize your potential savings and to expand your business.
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Corporate services
For clients that want to do business in the Philippines, we assist in determining the appropriate and tax-efficient operating business or investment vehicle and structure to address the objectives of the investor, as well as related incorporation issues.
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Tax education and advocacy
Our advocacy work focuses on clarifying the interpretation of laws and regulations, suggesting measures to increasingly ease tax compliance, and protecting taxpayer’s rights.
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Business risk services
Our business risk services cover a wide range of solutions that assist you in identifying, addressing and monitoring risks in your business. Such solutions include external quality assessments of your Internal Audit activities' conformance with standards as well as evaluating its readiness for such an external assessment.
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Business consulting services
Our business consulting services are aimed at addressing concerns in your operations, processes and systems. Using our extensive knowledge of various industries, we can take a close look at your business processes as we create solutions that can help you mitigate risks to meet your objectives, promote efficiency, and beef up controls.
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Transaction services
Transaction advisory includes all of our services specifically directed at assisting in investment, mergers and acquisitions, and financing transactions between and among businesses, lenders and governments. Such services include, among others, due diligence reviews, project feasibility studies, financial modelling, model audits and valuation.
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Forensic advisory
Our forensic advisory services include assessing your vulnerability to fraud and identifying fraud risk factors, and recommending practical solutions to eliminate the gaps. We also provide investigative services to detect and quantify fraud and corruption and to trace assets and data that may have been lost in a fraud event.
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Cyber advisory
Our focus is to help you identify and manage the cyber risks you might be facing within your organization. Our team can provide detailed, actionable insight that incorporates industry best practices and standards to strengthen your cybersecurity position and help you make informed decisions.
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ProActive Hotline
Providing support in preventing and detecting fraud by creating a safe and secure whistleblowing system to promote integrity and honesty in the organisation.
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Accounting services
At P&A Grant Thornton, we handle accounting services for several companies from a wide range of industries. Our approach is highly flexible. You may opt to outsource all your accounting functions, or pass on to us choice activities.
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Staff augmentation services
We offer Staff Augmentation services where our staff, under the direction and supervision of the company’s officers, perform accounting and accounting-related work.
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Payroll Processing
Payroll processing services are provided by P&A Grant Thornton Outsourcing Inc. More and more companies are beginning to realize the benefits of outsourcing their noncore activities, and the first to be outsourced is usually the payroll function. Payroll is easy to carve out from the rest of the business since it is usually independent of the other activities or functions within the Accounting Department.
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Our values
Grant Thornton prides itself on being a values-driven organisation and we have more than 38,500 people in over 130 countries who are passionately committed to these values.
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Global culture
Our people tell us that our global culture is one of the biggest attractions of a career with Grant Thornton.
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Learning & development
At Grant Thornton we believe learning and development opportunities allow you to perform at your best every day. And when you are at your best, we are the best at serving our clients
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Global talent mobility
One of the biggest attractions of a career with Grant Thornton is the opportunity to work on cross-border projects all over the world.
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Diversity
Diversity helps us meet the demands of a changing world. We value the fact that our people come from all walks of life and that this diversity of experience and perspective makes our organisation stronger as a result.
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In the community
Many Grant Thornton member firms provide a range of inspirational and generous services to the communities they serve.
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Fresh Graduates
Fresh Graduates
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Students
Whether you are starting your career as a graduate or school leaver, P&A Grant Thornton can give you a flying start. We are ambitious. Take the fact that we’re the world’s fastest-growing global accountancy organisation. For our people, that means access to a global organisation and the chance to collaborate with more than 40,000 colleagues around the world. And potentially work in different countries and experience other cultures.
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Experienced hires
P&A Grant Thornton offers something you can't find anywhere else. This is the opportunity to develop your ideas and thinking while having your efforts recognised from day one. We value the skills and knowledge you bring to Grant Thornton as an experienced professional and look forward to supporting you as you grow you career with our organisation.
On Nov. 26, 2020, the Senate approved on third and final reading Senate Bill 1357, otherwise known as the Corporate Recovery and Tax Incentives for Enterprises (CREATE) bill, which seeks to reduce the corporate income tax rate and rationalize the current fiscal incentives by making them time-bound, targeted and performance-based. This was done in an attempt to revitalize the slowing economy, as it is predicted that the measure will bring in more foreign investments like never before.
The House of Representatives, which already passed their counterpart measure in September 2019, informed the Senate on Dec. 15, 2020 that the former have designated members for the Bicameral Conference Committee. This means that a bicameral conference will be held to reconcile disagreeing provisions on the two versions of the bill.
The proposed law will be submitted to the President of the Philippines for his approval into law only after the reconciled version of the measure is ratified by both houses of Congress in plenary.
The Bicameral Conference Committee only approved the reconciled version of the CREATE on Feb. 1, 2021 and was subsequently ratified by both houses of Congress on that same week. It now only needs the signature of the President for it to become a law.
Raising questions
Since the passing of the CREATE bill into law did not happen before Dec. 31, 2020, some questions regarding its provisions in connection to financial reporting arise. In Philippine Interpretations Committee Questions and Answers 2020-07 (PIC Q&A 2020-07) dated Jan. 29, 2021, some issues found were: The date of the bill’s substantive enactment; whether the subsequent enactment of the CREATE bill will be considered an adjusting event; and the impact on the calendar year (CY) 2020 and CY 2021 financial statements of companies covered by the reduced income tax rates, in case the CREATE bill (with retroactive effect in 2020) will be passed into law after the reporting period of an entity.
While we are still awaiting the law’s passage, a quick review of the facts, which are also spelled out in the PIC Q&A 2020-07, will certainly help. These are the conditions existing as of Dec. 31, 2020:
• Congress as the legislative body and the President representing the executive body of the government are separate and independent from each other;
• The bill is still pending with the Bicameral Conference Committee, and consequently not yet submitted to the President of the Philippines;
• Upon submission to the President of the Philippines, he may either approve it or exercise his veto power to stop the enactment of the subject bill; and
• In case the bill is vetoed by the President, Congress may not be able to garner the required two-thirds vote to overturn the presidential veto.
Given these circumstances, the CREATE bill is not considered substantively enacted as of Dec. 31, 2020.
Moreover, under paragraph 22h of the Philippine Accounting Standards 10, Events after the Reporting Period, if the bill is passed into law after the balance sheet date (i.e., Dec. 31, 2020) but before the issuance of the audited financial statements, it is treated as a non-adjusting event. Disclosure of the nature of changes and impact to the financial statements will also be required if the impact is expected to be significant.
Impact to financial statements
Based on the consensus raised by the PIC, there will be considerable impact on both the CY 2020 and CY 2021 financial statements.
For CY 2020 financial statements, current and deferred taxes will still be measured using the applicable income tax rates as of Dec. 31, 2020 since the CREATE bill was not yet enacted/substantively enacted as of such date. This will result in a difference between the provision for current income tax that is reported in the financial statements and the amount of income tax due in the corresponding 2020 income tax return (ITR).
If the CREATE bill is enacted prior to the CY 2020 audited financial statements issue date and before the actual filing of the CY 2020 ITR, this will be treated as a non-adjusting event but significant effects of changes in tax rates on current and deferred tax assets and liabilities should be disclosed. Since the CREATE bill is already a law at this point, Companies will already compute for the current and deferred taxes based on the adjusted tax rates to determine the amount of taxes due.
If the CREATE bill is enacted after the CY 2020 audited financial statements issue date but before the actual filing of the CY 2020 ITR, this is no longer a subsequent event that will require a disclosure, but companies may consider disclosing the general key features of the proposed bill and the expected impact in its audited financial statements.
On the other hand, CY 2021 financial statements will entail that the components of tax expense (income) may include “any adjustments recognized in the period for current tax of prior periods” and “the amount of deferred tax expense (income) relating to changes in tax rates or the imposition of new taxes.” An explanation of changes in the applicable tax rate(s) compared to the previous accounting period is also required to be disclosed.
Hence, the provision for current income tax for CY 2021 will include the difference between the income tax in the CY 2020 financial statements and CY 2020 ITR.
Deferred tax assets and liabilities as of Dec. 31, 2021 will be remeasured using the new tax rates. The impact of remeasurement is recognized in profit or loss (i.e., provision for/benefit from deferred income tax), unless it can be recognized in other comprehensive income or another equity account.
Any movement in deferred taxes arising from the change in tax rates that will form part of the provision for/benefit from deferred taxes will be included as well in the effective tax rate reconciliation.
Hope for the future
The pandemic may have battered and beat down our economy, but the government has offered the recalibrated provisions of the CREATE bill with the intention of having a law that is relevant and responsive to the needs of the business community that is being negatively affected by the pandemic. Hopefully, we will be seeing the Philippine economy and business landscape prosper soon.
Mabel Comedia is a partner of the Audit and Assurance and Head of Technical Standards & Quality Control Divisions of P&A Grant Thornton. P&A Grant Thornton is one of the leading audit, tax, advisory, and outsourcing firms in the Philippines with 22 Partners and more than 900 staff members. We’d like to hear from you! Tweet us: @GrantThorntonPH, like us on Facebook: P&A Grant Thornton, and email your comments to mabel.comedia@ph.gt.com or pagrantthornton@ph.gt.com. For more information, visit our website: www.grantthornton.com.ph
As published in The Manila Times, dated 10 February 2021