Last July 10-11, 2015, the undersigned and Mr. Arden James Beswayan represented the CDA-CAR and joined the National Forum of Accredited Cooperative External Auditors that was held at the Subic Bay Travelers Hotel and Event Center, Subic Freeport Zone, Olongapo City with almost half a thousand participants from all over the country. The participants comprised of duly accredited Certified Public Accountants engaged in the audit of registered cooperatives, CDA personnel responsible in the monitoring of submitted reports by cooperatives duly audited by accredited cooperative external auditors and some cooperative personnel and stakeholders.
In our observation the activity went smoothly as conceptualized by the organizers to strengthen the cooperative audit system as a strategy for improving the financial reporting system of cooperatives and their compliance to the requirements of the law. It had served its purpose to serve as venue to thresh out audit related issues and concerns affecting cooperatives and continuously build partnership. Minor hiccups were observed during the registration period but this can be attributed to the delayed confirmation and unforeseen number of walk-in registrants like us. In the opening program the organizers were kind enough to acknowledge such glitches and requested participants understanding as they addressed the issues and concerns.
Director Marieta P. Hwang of CDA-Region 3 welcomed the participants followed by a message from the CDA Chairman, Honorable Orlando R. Ravanera. In his message, Chairman Ravanera touched on the importance of cooperatives for poverty reduction and inclusive growth. He further stressed that cooperatives are instruments in bringing about lasting peace and becoming a social development force given the arrays of services provided by these entities. In his closing statements, he recognized the role of accredited cooperative external auditors and the importance of understanding the cooperative financial reporting framework that will serve as basis in installing books of accounts and auditing of cooperatives. He encouraged all stakeholders to help micro-cooperatives understand their Audited Financial Statements (AFS) and install their books of accounts.
This was followed by a presentation on the State of Philippine Cooperatives by CDA Executive Director Ray R. Elevazo. In his update, Executive Director Elevazo mentioned that there are about 24,652 registered cooperatives in the country with about P 248 billion assets based on reports of about 10,762 cooperatives. He further mentioned that cooperatives contributed about 4.5% to the Gross Domestic Product.
Taxation Applicable to Cooperatives was tackled by Atty. Francisco N. Sarmiento III, Assistant Chief Legal Division, BIR Region 4, Pampanga. He emphasized on the transaction of cooperatives with members only and with members and non-members that are covered under the Joint Circular of CDA and BIR. In his presentation, he urged all participants and stakeholders to call the attention of their respective Regional Offices in relation to issues and concerns related to taxation.
Director Fe I. Caingles of the CDA-Institutional Development Department shared on the revised IRR of RA 9520 on Cooperative Audit and related concerns. This was followed by a presentation on the Standard Presentation of AFS viz common errors. She enumerated some common observations in relation to submitted AFS duly audited by external auditors. How I wish I could enumerate them all but allow me to capture some and these include deviations on the Standard Chart of Accounts (SCA) and Audit Standards like non-disclosure of material findings/observations, errors in the allocation and distribution of net surplus, no comments on business continuity status, no details of loan receivables/investment, etc. Director Hernandez pointed out that the enumeration of such findings/observations in the reports submitted aims to serve as reminder in coming up with quality audit report that will truly reflect the financial position of cooperatives. Like in the case of scanned signatures of external auditors appearing in some AFS, CDA would like to inform and help external auditors protect their names and license not to be used by unscrupulous people. It’s not the intention of the agency to malign or underestimate the capabilities of external auditors but to remind them as partners on the possible implications of such findings in the faithful performance of duties and responsibilities contained in the professions’ code of ethics, SCA, Audit Standards and other issuances.
The two-day activity capped with the presentation of the Philippine Financial Reporting Framework for Cooperatives by Ms. Ma. Elena I. Ame and Mr. Jekel Salosagkol of PICPA. The most sought after speakers had expounded on the topic to the delight of the participants who actively participated in the open forum after each presentation. Some proposals were presented by the participants to the organizers to further improve the partnership between and among PICPA and CDA. The said framework shall be implemented by 2016 and be monitored by 2017.
Other distinguished guests present during the activity include Administrator Benjie S. Oliva and Ms. Elenita S. Mantalaba, Chair of the Committee on Cooperative Development PICPA and Ms. Melissa C. Santos, Chief of CRITD who acted as the Master of Ceremonies.
In his closing remarks, CDA Administrator Eulogio T. Castillo lauded the efforts exerted by the organizers, battery of speakers and participants in making the activity successful. As part of the centennial celebration, he challenged all stakeholders to advance the gains made by the cooperative sector especially in addressing the plight of micro cooperatives that comprise bulk of the registered cooperatives in the country. By ensuring the viability of the micro cooperatives positive changes in the lives of the marginalized sector of the society will be realized.
As a participant without accounting units, I really enjoyed the training that enriched my knowledge. It broadened my horizon especially in the appreciation of figures and aspects related to cooperative accounting. Thanks to the opportunity granted by the head of office who happened to be my partner in this column and the approval of CDA-Central Office for my participation in the said forum. It had given me the chance to witness how accredited external auditors reacted to the presented findings/observations and expressed their sentiments on issues and concerns affecting their profession. I look forward to witness similar activities with the involvement of more cooperative leaders for them to be guided in dealing with the current trends affecting the cooperative sector. To our readers, watch out for some upcoming publications under our website: www.cda.gov.ph. Also, follow and like us at