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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
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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Many Grant Thornton member firms provide a range of inspirational and generous services to the communities they serve.
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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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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.
FOR THE PAST few days, we have seen once again the spectacle of candidates filing their candidacy for elective posts in the 2019 mid-term elections. The faces and surnames of most of the serious candidates are familiar to us. This spectacle shows the same people who keep on coming back for reelection, including a few of them who had been indicted for misuse of money. It also made manifest the recycling of family members into elective posts: son or daughter in place of a parent or vice versa; a spouse for the other spouse; a sibling in place of another sibling; several members of the family running simultaneously for elective posts. And the most shameful of all: close relatives running for No. 1 and No. 2 positions in the same political jurisdiction.
Some people say there is nothing wrong with that. Any qualified person has an inherent right to run for public office. This kind of thing happens also in highly developed countries.
The situation, in our case, is not a question of right, which should have been modified in the first place as required in the existing Constitution. It is a question of effectiveness in governance over the long term.
It may be true that similar things happen in highly developed countries. But not to the very wide extent that we do. We have allowed political dynasties to be the norm, not the exception. Moreover, our social and economic settings and the scruples of local politicians are far different from those in developed countries.
Let us take the United States, a country familiar to many of us, for example. Edward Kennedy and John McCain were long-serving senators representing their respective states, but I do not think their past record of recurring reelection was brought about by their respective family’s political power. It was brought about by their own effectiveness and outstanding abilities as political leaders. Kennedy was not succeeded by another Kennedy, and I do not think McCain will be succeeded by another McCain. As far as I know, during the last decade or so, no state governor in the 50 states was succeeded by a close relative. Both a father and his son became US presidents in just two instances (Adams, Bush) and these happened far between in time — by about 200 years. Theodore Roosevelt, a famous and respected former president, lost when he ran for president again after four years; former Vice President Richard Nixon lost when he later ran for governor in his native state.
Even in Western Europe, where election is considered highly free, no top political leader was succeeded by a close relative during the last several decades. It is even safe to say that there is no existing political dynasty in Western Europe. There are strong and famous political leaders, of course: Churchill, Thatcher, Adenauer, Kohl, de Gaulle. But they had not created a political dynasty, because doing so was not possible in their respective geographies; not by law, but by the prevalence of a reasonably informed electorate and by their countries’ strong ethical culture.
The situation in the Philippines is far, far different. There is a widespread prevalence of voters made captive by political dynasties through the use of tax money and corruption money. A good example is the so-called pork barrel. No matter how it is described or masked, it represents a very large sum of people’s money identified for each legislator that is used to capture votes for the legislator and, when their election rotation comes, for members of the legislator’s family. In local governments, misuse of public funds and corruption are known to be widespread. These activities are used to accumulate funds, partly or wholly, to acquire votes in the next election. Just look at the poor quality of the infrastructure that had been built, and the lack of very much-needed infrastructure in the rural areas, even low-cost things such as a short pedestrian bridge to span a narrow river that the children can conveniently cross when going to school. All these are happening under a situation where these local governments receive 40 percent of national tax collections, on top of their own local tax revenue.
Political dynasties have cleverly exploited over time the poverty of our people and their lack of informed judgement brought about by insufficient education and inadequate understanding of the language that government and media use in presenting, reporting, and discussing government and political affairs. These dynasties make the poor dependent on them for doleouts. During election time, they buy votes, the price of which, I understand, is now P1,000 per vote. (You ask a vote seller why he sells his vote and the answer that you will usually get is a very candid one: “Kasi ho, maski sa isang araw man lang, fiesta ho kami.” Or something to that effect.)
The presence of political dynasties has been in our political system for a long time now and, sad to say, has continued to expand during the past decades to such a wide extent that we have now. I believe there is a political dynasty in every province and chartered city. If so, we have close to 100 families, mini monarchies, governing us continuously for a very long time now. Occasionally, a dynasty drops out and a new one emerges to replace it. In this respect, we are still living in the Middle Ages.
If the members of these dynasties are the saviors of the people, what exactly have they accomplished to improve the general welfare, especially that of the poor? From my perspective, none. The country just moves on its own momentum along with the rhythm of global development. Politically, we have not matured; the political system has remained mediocre or even primitive. Political parties have become weaker since the time of Quezon to such an extent that they now do not even make any difference at all. A newly elected president, who usually comes from a dynasty, does not have sufficient political following at the time of his election to push his legislative agenda. But by the time he takes his oath of office, suddenly, traditional politicians of all stripes rally around him. When he leaves office, the alliance breaks up and the players surround the new power. This zarzuela goes on every six years. It shows very obviously that almost all our elected officials, if not all, are motivated by self-interest.
Nowadays, no major political party can even field a whole slate of 12 senatorial candidates in an election. The party does not have much say about who its candidates shall be for the House and local government positions. Whoever candidate is more powerful gets his way; if he doesn’t, he switches to another party. There is clearly no intra-party competition that chooses the better candidate.
When the new Senate and House convene, either chamber does not have a majority party. The chamber members have to organize themselves, of course, to elect the chamber leaders. But they do so not based on party alliances, but by the individual member’s choice. The motivation becomes the pursuit of self-interest and not of ideology, which only a better organized, well-meaning political party can embrace and pursue.
Since after Cory Aquino, the declared winning candidate did not carry the people’s majority vote. He/She was declared winner with just a minority vote. We have never been able to require a second presidential election round to elect as president the candidate who carries the people’s majority vote, very much unlike in many countries. It is quite likely that, had we required a second round, the winner would have been a different person in some of the previous five presidential elections.
Any attempt to amend the Constitution creates a ruckus, because vested interests, members of political dynasties, want to be in control of the process. As a result, the likely outcome is either an adoption of an inferior new Constitution or the country remaining to float motionless in time.
Economically, we have continuously slid down the list among our neighbors. We used to be No. 2 in the-Asia Pacific, but now, even among ASEAN countries alone, we are even lower than Thailand and Indonesia in per capita income (GDP), and it appears that we will continue to slide further down. Vietnam and Myanmar are clearly rising economically and are on the path to overtake us.
At the time I became a new professional, the population of the Philippines was 25 million, and the majority of them were not poor by the measurement standards of the time. Now, at least 30% of our people are poor, equivalent to over 30 million people — more than the entire population of 60 years ago. How did this happen? Something is terribly wrong! We have been utterly unable to stop the continuing increase in the number of poor people in our midst. This doesn’t make sense at all.
To make another comparison, China was a very poor country sixty years ago and was struggling hard to recover and emerge from a very devastating civil war. Today, it has two-and-a-half times our per capita income. Its poverty rate is much lower than ours (in fact, its extreme poverty rate is expected to drop to 1 percent in 2018, according to the World Bank).
True, we are currently growing at a respectable rate, driven by OFW remittances and foreign jobs moved to Philippine shores — a global development that matches the Philippine condition of excess labor and low economic value. It is a convergence of global development that does not help the Philippine poor, because they do not possess the appropriate education and skills, and a local condition that ironically, but certainly, we do not want to be stuck in if we want to be a reasonably developed economy.
Political dynasties supply the people who continuously have held the power to carry out the responsibility to steer the course of the country’s development. But they are conflicted to be able to carry out successfully the task to achieve the long-delayed betterment of our country and people. Obviously, we urgently need a change. We need to get rid of the dynasties in our political system or at least limit them to a minimum where they can no longer block the path to progress. Unfortunately, the political dynasties themselves constitute the decision makers who can make that change happen. A change that is absolutely necessary, similar to taking away the political power from the monarchies of old. But a change that, sadly, appears to be an anathema to the decision makers worse than the devil.
We are trapped!
So, what shall we do?
Benjamin R. Punongbayan is the founder of Punongbayan & Araullo, one of the Philippines’ leading auditing firms.
As Published by BusinessWorld dated 24 October 2018