On November 17, 2020, the Securities and Exchange Commission (SEC) issued SEC Memorandum Circular No. 32, Series of 2020 (referred to herein after as “the Circular”) that provides the adoption of an industry specific framework for Bangko Sentral ng Pilipinas (BSP) Regulated Financial Institutions (BSFIs), to be referred to as the Philippine Financial Reporting Standards (PFRS), as modified by the application of the financial reporting reliefs issued by the BSP and approved by the SEC. Accordingly, BSFIs have the option to prepare their annual financial statements using the said industry specific framework or full PFRS for the duration and terms allowed by the BSP.
This Alert has been prepared by the Auditing and Assurance Standards Council (AASC) to provide guidance to external auditors who have been engaged to audit in accordance with Philippine Standards on Auditing annual financial statements of BSFIs which have been prepared using PFRS, as modified by the application of the financial reporting reliefs issued by the BSP and approved by the SEC. The succeeding sections discuss the impact on the auditor’s report and provide illustrative Opinion paragraph and Emphasis of Matter paragraph.