Honest CPAs needed

STORY-TELLERS: Many people are afraid of accounting, but when I explained to them that it is just a form of story-telling, their fears are converted into enthusiasm. Accountants are indeed story-tellers, and they do their “essay” with the use of numbers. Business “stories” are based on the equation: “all that you own, are always equal to all that you owe”. In technical terms, all your assets are equal to your combined liabilities and your equity.

When a businessman puts in capital, he is in effect “lending” his money to his business. The invested money becomes an asset of the business. When said money is used to buy goods for resale, the transaction is a conversion from one form of asset (Cash) to another (Merchandise). There may be a need to borrow for use as additional capital. Such borrowing is recorded as an Accounts Payable – to recognize the liability to a third party.

EDITORS: The accountants’ stories must be edited – to check if the style of story-telling is compliant with “standards”, and whether the reported transactions were executed under a properly controlled environment (internal control). The “editors” are called auditors. Internal auditors are company-employed but somehow insulated from management control for purposes of independent evaluation.

External auditors are CPAs in public practice. Technically, their employers are not their clients – but rather “public interest”. They are accredited by regulators and mandated to pass upon transactions and attest as to the fairness of the financial reporting by taxpayers. External auditors lament the fact that public practitioners need multi-accreditations (from): BOA-PRC, BIR, SEC, BSP/PDIC and CDA.

ASEAN: Ten (10) countries now compose the Association of Southeast Asia Nations. Possible next member is Timor Leste which recently became independent from Indonesia. With Brunei, Singapore and Malaysia being classified as progressive economies, five others are considered as favorites of global investors: Indonesia, Philippines, Thailand, Vietnam, and lately Myanmar (Burma). Still left behind – but not too far out, are Laos and Cambodia.

The Philippine investment rating has been upgraded to just one notch below investment grade. Positive observations include improved tax collections compared with GDP, and streamlining of new business licenses. Also coming into the picture is the Filipinos’ capability to handle English reports. Global investors await the further systematization of financial reporting and possible ownership of business locations by foreigners.

THAILAND: The trip of airline travelers from Bangkok’s plush airport terminal is facilitated by the well-paved elevated highway. However, once the vehicles converge within the main commercial district – the old Bangkok traffic jams come into the fore. Without bias, we say the “no left turn” policy in Metro-Manila’s main highways really prevents road overloads. If our drivers can practice voluntary discipline, our traffic problems can be eased further.

Filipino shoppers in Thailand are now few. Since the Thailand baht is now worth 1.34 pesos – buying Thai merchandise for possible resale in the Philippines is now a losing proposition. Most of the cheap goods sold in Thailand are mostly imported from China. The peso costs of purchases in Thailand are turning out to be higher than potential selling prices if the goods will be brought to the Philippines. It is always better to shop first in Manila before going abroad.

WISDOM: Our Lord gives us temporary problems to prepare us for bigger challenges in our life.