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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. A team-based approach defined by dedication to partner involvement in all engagements—that’s our service commitment locally and globally. An organization’s financial statements are a reference of choice for a variety of users who are required to make decisions. Whether it is a financial institution, a government agency, creditors, shareholders, or potential buyers, every one of your partners requires financial information that accurately reflects the soundness of your organization.
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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. Participants are entitled to credited units for Continuing Professional Education (CPE), which are required by the Board of Accountancy. CPE is indicative of an individual’s genuine concern for his or her continued growth as a professional. Our team can help in achieving that.
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Tax advisory
Assistance during tax audit/contesting an assessment We assist clients in handling audits by the Bureau of Internal Revenue (BIR), Bureau of Customs (BOC) and local government units (LGUs) in a systematic and efficient manner. We help evaluate the validity of assessments, determine the appropriate documents and analyses to be submitted, prepare protests, and represent clients in meetings and discussions with government agencies. With our knowledge of tax laws and audit procedures, we help safeguard the substantive and procedural rights of taxpayers and prevent unwarranted assessments. Tax opinion and studies We conduct tax studies and provide advice to clients on the tax implications of specific transactions based on relevant laws, regulations, court decisions, rulings, and other relevant issuances. We likewise provide recommendations to address or mitigate tax issues arising from said transactions. Application for tax refund/credit We help clients recover taxes that have been erroneously or excessively paid or withheld through applications for refund or tax credit certificates (TCCs). Applications for refunds or TCCs are recommended for companies that have excess income taxes paid or unutilized creditable withholding taxes as reflected in the final income tax return (ITR), excess unutilized VAT input taxes arising from zero-rated transactions or change in VAT status, unutilized advanced VAT, excise taxes paid on petroleum products sold to tax-exempt entities and international carriers, other national or local taxes erroneously or excessively paid, or penalties imposed without authority.
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Tax compliance
Tax review We evaluate clients’ overall level of compliance with existing laws and regulations; caution them on procedures and practices that expose them to potential tax liabilities; quantify tax exposures, risks and penalties; and advise them on proper course of action and alternative tax-efficient policies and procedures. Tax due diligence review is particularly recommended for companies that are contemplating expansion, mergers and consolidation, acquisitions, change in ownership, or public listing. Expatriate tax services We ensure the proper and efficient compliance of expatriates with their Philippine income tax obligations. Our services include registration and application for Taxpayer Identification Number (TIN), preparation and filing of annual Philippine income tax return, and payment of tax due in the proper venue and within the allowed period. As a value-added service, we respond to Correspondence Audits/Inquiries by the BIR regarding information declared in the tax return. If desired by clients, we also conduct arrival or departure briefings and interviews to apprise the expatriate of his Philippine tax liabilities. Upon a company’s request, we can compute, on an annualized basis, the total withholding tax due from its expatriate during the taxable year and prepare tax equalization and reimbursement calculations in accordance with company policies.
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Corporate services
Assistance for incentives availment We help clients evaluate their qualification for incentives under the Board of Investments, the Philippine Economic Zone Authority, the Subic Bay Metropolitan Authority or other special laws. If clients are qualified, we assist them in applying with the concerned government agency for such incentives. Our assistance covers filing of the application and supporting documents, monitoring the progress of the application, meeting/discussion issues, if any, with regulatory authorities, and securing the approval for such incentives. At the clients’ request, we may also assist in ascertaining their compliance with regulatory requirements (to ensure the continued entitlement to incentives), or in justifying the entitlement to such incentives in the event of a challenge by the BIR or other regulatory agencies. Corporate organization and registration 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. We help set up the business and register it with concerned government regulatory agencies, such as the Securities and Exchange Commission, the Bureau of Internal Revenue, the Local Government Unit, the Social Security System and the Bangko Sentral ng Pilipinas. We also assist in notifying and/or securing necessary approvals from government regulatory agencies when there are changes in business activities, business status, or tax-type registration.
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Tax education and advocacy
Tax advocacy We actively participate in consultation and public hearings conducted by the Bureau of Internal Revenue on proposed tax rules and regulations, serving as a bridge between our clients and the BIR. Our advocacy work focuses on clarifying the interpretation of laws and regulations, suggesting measures to increasingly ease tax compliance, and protecting taxpayer’s rights. Tax seminars and training We offer seminars and training on tax-related developments and special issues of interest to taxpayers. Upon request, we provide customized in-house tax training – designed jointly by P&A and the client – that directly addresses the specific issues of the client’s industry and the training needs of its personnel.
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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. We can also take over your IA function altogether or work alongside you to create more value for your organization. On a higher level, our Enterprise Risk Management methodology can help your organization identify vital strategies and action plans that address key business risks, thereby enabling you to achieve your overall objective of value creation for stakeholders.
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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 efficiencies, and beef up controls. This can include analyzing your information technology (IT) applications and infrastructure in order to improve IT governance and strategy, strengthen security, and/or assess business risks and controls related to the use of IT.
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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. We are one of the few companies accredited by the Philippine Stock Exchange for the conduct of valuation and issuance of fairness opinions. Our consortium with another Grant Thornton office and a Philippine law office is also one of the fourteen (14) members of the panel of transaction advisers of the Public-Private Partnership Center of the Philippines.
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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
Accounting services Many multinational companies are setting up their accounting offices in the Philippines. These businesses realize that accounting functions can be standardized across companies around the world and handled by an office halfway across the globe for a fraction of the amount needed to maintain an in-house accounting division. 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, such as
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Staff augmentation services
Staff Augmentation Services It is a familiar enough scenario: A company suddenly has an urgent need for personnel on a short term, project basis to do accounting or accounting-related work. Considering the short-term nature of the work, it becomes very difficult to find interested candidates. Moreover, companies do not need just anybody, but people with sufficient technical accounting skills. P&A Grant Thornton has a pool of skilled accounting specialists who can fill the gap for companies in such situations. We offer Staff Augmentation services where our staff, under the direction and supervision of the company’s officers, perform accounting and accounting-related work. We have a long list of clients that have benefited from our assistance with the following activities: · Migration from one accounting system to another accounting system · Bank reconciliation for several bank accounts that have not been reconciled for years · Data cleansing, such as reconciliation of balances in subsidiary ledgers of receivables and payables with the general ledger balances · Physical counts of inventories and reconciling the results of the physical count with the accounting records · Count of property and equipment; tagging and reconciliation of the count with the accounting records; and properly setting up the property ledgers · Preparation of schedules and documentary supports and requirements during audits by internal and external parties, including government agencies · Preparation of statements of accounts for certain customers · Acting as accounting personnel while regular accounting staff are on leave This is just a sampling of the services we offer, and we can provide more short-term accounting services on short notice. We can adjust the schedules of our people to fit your work hours and we guarantee high-quality service: Our team is made up of technically competent and properly trained people who are prepared to handle your needs.
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Payroll Processing
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. Payroll processing may look simple, but the process can get complicated, especially as a business expands its manpower. A payroll accountant has to make sure that correct taxes as well as loans of their employees are properly deducted, update the tax status of employees (single, married, no. of dependents, etc.) on a regular basis; monitor work activities during the payroll period (overtimes, sick leaves, vacation leaves, etc.); know which income accounts are taxable or not (de minimis, bonuses within the P82,000 limit, etc.); know the rules and regulations and the latest updates of relevant government agencies (BIR, SSS, Pag-IBIG, PhilHealth, etc.); and ensure that payroll processing and payouts are done on time to avoid employee complaints or dissatisfaction. In addition, the payroll accountant has to ensure that contributions to various government agencies are properly posted to the accounts of the employees. In some companies, payroll processing consumes a significant part of management time: The highest finance or HR officer in the company oftentimes handles management or executive payroll. If payroll is outsourced, the executive officer has better use of his or her time than reviewing or processing the payroll. Moreover, there is the issue of confidentiality – some employees may inadvertently gain access to confidential payroll information when data are lying around during the payroll processing period. Another issue that business owners must watch out for with regard to payroll is fraud. Since the processing of payroll is handled by just one or two trusted persons, oversight may be lax and review may not always be conducted thoroughly, thus fraud happens. P&A Grant Thornton can handle your payroll processing needs so that your management team can focus on your core competencies, enabling you to concentrate on what’s really important to your business . Our team of well-experienced and properly trained professionals can handle your payroll requirements whether you have 10 or 10,000 personnel. In addition to the computation of employees’ pay, P&A Grant Thornton can also provide the following functions under our payroll processing services: Maintain bank accounts exclusively for payroll and payroll-related disbursements Prepare schedules of statutory and internal contributions and obligations File and pay statutory contributions and obligations, manually or electronically Annualize employees’ income tax Provide secure online payslips through our ePayroll facility Handle administration of benefits that needs coordination with government agencies
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Our values
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Our people tell us that our global culture is one of the biggest attractions of a career with Grant Thornton.
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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 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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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.
Love fessons from Accounting
12 Dec 2017WHEN I was still in college, I had always thought of love and accounting as two opposite poles (accounting is boring and love is exciting… or is it the other way around?) and mutually exclusive energies (one cannot coexist with the other). As most dictionaries would define, “Accounting is a systematic process of identifying, recording, measuring, classifying, verifying, summarizing, interpreting, and communicating financial information.” At first, I thought accounting is a science when, in fact, it is not. Accounting is an art. Love, on the other hand, is defined as “an intense feeling of deep affection.” If accounting is an art, then love is a mystery. How then is love related to accounting?
For so many years, I have read various accounting books and most of the accounting standards adopted in the Philippines. So far, none was mentioned about love. In the Philippine Financial Reporting Standards, we have accounting for inventories, revenues, property, plant and equipment, and even agriculture… but accounting for love? Never. It makes me wonder, if love is an asset, how do we account for love? How do we record it in our books of accounts called life? Is it similar to how we account for goodwill, patents, computer licenses, and other intangibles? Does love qualify as an intangible asset, or is it another kind of asset yet to be developed in the accounting world?
I have finally realized that love and accounting are not two different worlds. Accounting is love and love is accounting. I have always fancied love as the twin brother of accounting – similar, but not entirely the same. Finally, I share with you some of the love lessons I learned from love’s equally good-looking brother, accounting.
The asset recognition principle in accounting requires that an asset be recognized in the balance sheet only when it is probable that the future economic benefits will flow to the entity and that the asset has a cost or value that can be measured reliably. Can love be considered an asset (or a liability)? Can one value his/her feelings for another person? If love is an asset, it might be considered the most undervalued asset in the balance sheet. There are times when people do not value the feelings of other people. We do not see a person’s true worth. You cannot capitalize something that you do not expect to generate profits in the future or has no probable future use. There is no point in recognizing this asset if the fair value is zero (or worse, negative and only contributes losses and negativities in your life). These kinds of feelings do not pertain to love (or do they?), as these only hurt us repeatedly and will only promote negativity. Why not write off these feelings entirely? How I wish it is just that easy… but it is not and never will. Moving on is difficult and painful. Why not just provide allowance for impairment of feelings? Maybe it is not as savage as a write-off, but it only implies that you are still hoping that you can still “collect” the feeling of being loved from the other person when, in fact, chances are slim. Can we love without expecting to be loved in return? In such a case, love takes the form of a donation, which is unconditionally given, and not an asset.
In our relationships, we make decisions, exercise judgments, and take risks, just like how businesses face risks daily. In accounting parlance for instance, we define credit risk as the risk that a counterparty may fail to discharge an obligation. Loving someone, in the same way, also involves credit risk. There is always a risk that someone you love may not love you back. They may not reciprocate the feelings you have. Unlike banks and other financial institutions that extends credit to borrowers, in love, there are no collaterals. A relationship is something that is built on trust and confidence. It is not about you alone, but about the two of you. “Everybody in this world is scared… and sometimes, it takes two scared souls to do one brave thing: to fall in love.”
Is love really like double-entry accounting? A debit always goes with a credit. When you debit love as an asset, do you credit income or liability? Crediting income is probably the most convenient thing to do, but I believe that a liability is more appropriate in general. You cannot give something that you do not have. It always takes two to tango: one to give and another one to receive. The feeling is mutual and so is the responsibility. When you are in a relationship with someone, you are committed to that person. Love requires effort. The other person expects you to recognize a provision equivalent to a reasonable portion of your time for them. Love as an asset is volatile in a way that the fair value of love may increase in the same way that its carrying value may also depreciate over time. It will depend on how you give premium and importance to the relationship that you have and ultimately to the other person that you are saying you love. I have read a quote that goes: “Without communication, there is no relationship. Without respect, there is no love. Without trust, there is no reason to continue.”
Entering into a romantic relationship with someone is like entering into a lease agreement. You are giving the other person the right to occupy your life. In the case of love, personal judgment may also be exercised by the lessor (“the giver”) to distinguish the relationship as either likened to a finance lease (risks and benefits incidental to ownership of the leased item is transferred) or an operating lease (ownership is not transferred). Are you really committed to love the other person, or are you just temporarily using them to your advantage as the lessee (“the receiver”). Love is far deeper than a lessor-lessee relationship. There is an element of intimacy. A lease in accounting is lifeless, but love is full of emotions waiting to explode.
Going concern is a basic underlying assumption in accounting. The assumption is that an entity will be able to continue operating for a period that is sufficient to carry out its business. In the same way, a relationship continues to exist, unless there is an intention to liquidate (i.e., to cease the relationship). If there are events or conditions identified that may cast significant doubt on the ability of the relationship to continue as a going concern, necessary actions should be carried out to address these events or conditions. These conditions may be as simple as a petty misunderstanding, differences in views, external conflicts (third party perhaps?) and even the extent of falling out of love (the spark is gone or is it?).
A relationship is like the financial results of the business. There are times when you make a decent profit. There are also times that you incur losses. As the writer Susan Gale says, “Life is like a ferris wheel. One minute you’re on top, the next you’re at the bottom. Just stay in your seat, enjoy the ride, and hang on until you reach the top again.” There will always be challenges to test the relationship in the same way as businesses encounter problems and difficulties in their operations. When you are still young and starting, it is expected that you encounter some struggles. This is what we call the adjustment period. You have to reconcile the differences (remember, in your trial balance, debits should always equal the credits). You make adjustments for a relationship to last, just like how you make adjustments in your financial statements for it to be fairly stated. Sometimes you have to compromise. There are no strict rules.
Love, and even life in general, is not entirely likened to a book of accounts. When you commit mistakes, there are times when it is not as easy as posting a correcting entry. Sometimes, the effect can be irreversible. There is no going back; you have to face it no matter how dark the road ahead may seem. Trust, when broken, is very difficult to restore (allowance for the cost of dismantling and restoring the leased properties to their original condition will not be enough). Love yourself first. As the saying goes, it is better to have loved and to be hurt than to have never loved at all.
We learn from our mistakes. Nobody is perfect. Even big companies have misstatements in their financials in one way or another, may it be unintentional (referred to as an “error” in accounting) or intentional (“fraud”). What is important are the steps we make to go about and correct these misstatements. We have to be responsible and accountable for our own actions and decisions.
In the corporate world, we follow accounting standards but, in real life, in our relationships, we follow our own instincts, we live through our own experiences. There is no such thing as black and white when it comes to love. What may be right for you may not be right for another. Follow your heart and allow it to lead you to the right path. No standards can dictate how you handle your relationships…use your own judgment, weigh your options, and live the life you want.
Mr. Mamacus is a manager of Audit & Assurance, P&A Grant Thornton, a leading audit, tax, advisory, and outsourcing company in the Philippines with 21 partners and over 850 staff members. It is present in Makati, Cavite, Cebu and Davao. For comments on this article, please email raymond.mamacus@ph.gt.com.
As published on Mindanao Times dated 12 December 2017.
