SEC gets final win in clearing external auditors
The Securities and Exchange Commission (SEC) realized its final victory in its legal dispute over its power to accredit external auditors.
Citing a resolution dated October 14, the commission said the Supreme Court (SC) had denied with finality the motion for reconsideration of 1Accountants Party-List Inc. This, as the latter failed to provide substantial arguments to reverse its earlier ruling.
The high court likewise noted it would not entertain additional pleadings or motions.
SEC chair Francis Lim welcomed the development, saying this “strengthens our thrust toward promoting transparency, accountability and good governance…”
“The external auditors subject to accreditation deal with corporations imbued with public interest,” he said.
“Accordingly, as the Supreme Court has noted, requiring their accreditation could help the Commission enhance its regulatory oversight, reinforce investor protection in the securities market, and promote the integrity of the financial sector,” Lim added.
The case started when the 1Accountants Party-List asked the SC to declare certain regulations and rules of the SEC covering the accreditation of external auditors as unconstitutional, arguing that the authority must be exclusive to the Board of Accountancy.
The SC was initially in favor of the other party’s position in 2022 and 2023, but the commission appealed the decision. Earlier this year, the court then ruled that the SEC’s accreditation guidelines were “valid and constitutional.”
“The Supreme Court said that the SEC, as the corporate regulator, is authorized to supervise the activities of entities it has jurisdiction over, which include juridical and natural persons, such as the external auditors, and implement the accreditation requirement,” the commission said.
