By Alexandria Grace C. Magno, Reporter
THE Securities and Exchange Commission (SEC) is moving to tighten accreditation rules for external auditors, including limiting its Group A classification to those with no findings of material deficiency from the regulator’s Office of the General Accountant (OGA).
SEC Commissioner Rogelio V. Quevedo discussed the planned changes on Monday in response to a question about the regulator’s oversight of auditors involved in issues concerning the Maria Francesca Tan (MFT) Group of Companies and Villar-led companies.
“We are also now in the process of issuing new rules on the accreditation of the auditors, such that those who will be allowed Group A accreditation are those who have no findings of any material deficiency,” Mr. Quevedo said at a press conference.
“In such a way that an accreditation by the SEC will serve as the seal of good housekeeping,” he added.
The accreditation of external auditors is part of the SEC’s existing regulatory oversight. Under the SEC’s 2022 Citizen’s Charter, the OGA handles the accreditation of external auditors and auditing firms, which the regulator describes as a quality-control or quality-assurance mechanism intended to impose higher standards on qualifications and audit quality and help ensure the reliability and integrity of financial reports submitted by covered companies.
The Supreme Court in April 2025 upheld the SEC’s authority to require accredited auditors for companies issuing registered securities, saying the requirement serves as a quality-control mechanism over audit work and provides an additional layer of supervision over external auditors.
Current SEC rules already subject Group A and Group B applicants to a review of audit quality. Under Securities Regulation Code Rule 68, audit work is considered acceptable if there is no material disclosure deficiency or material misstatement in the audited financial statements of reviewed clients. The rules allow conditional accreditation in certain cases involving material deficiencies or misstatements.
The SEC had also released for public comment in April draft amendments seeking broader changes to accreditation standards, including higher track-record requirements and additional grounds for denying accreditation.
Mr. Quevedo said the SEC was tightening its oversight of accredited auditors through the OGA.
“We are very strict now in the accreditation of these accountants,” he said.
“As I mentioned, Group A classification for auditors will be limited only to those who have shown that our OGA has found no material deficiency.”
MFT GROUP
Mr. Quevedo said the SEC had filed criminal charges against two partners of Isla Lipana & Co., an affiliate of PricewaterhouseCoopers (PwC), in connection with the MFT Group.
He said he had learned that the two partners had offered to become state witnesses after they were removed from the firm and forfeited their retirement benefits.
“There have been moves by the partners because I have learned that the partners to whom we filed criminal charges before the DoJ have offered to become state witnesses because they have been removed from the firm, with forfeiture of retirement benefits,” he said.
Mr. Quevedo said the SEC was negotiating with them to testify against key officers of the MFT Group.
“And we are negotiating with them so that they can become witnesses against the key officers of the MFT group of companies because I have noted that the CFO was not included among those indicted,” he said.
“And I believe that the CFO should properly be indicted also. And I will probably need the operation of the external auditors.”
Mr. Quevedo also said imprisonment as a criminal penalty could only be imposed on natural persons, while juridical entities could be fined.
Isla Lipana had earlier denied the allegations and said it would fully cooperate with the Department of Justice (DoJ) investigation.
In June, the SEC said the International Criminal Police Organization (Interpol) had issued a red notice against Maria Francesca Tan following the regulator’s request to bring the businesswoman before Philippine courts over her alleged role in a fraudulent investment scheme.
VILLAR-LED COMPANIES
Mr. Quevedo also cited Punongbayan & Araullo in discussing the auditing of Villar-led companies.
“We have also noted that Punongbayan refused to sign the audited financial statements of the Villar group companies until the company agreed to the lowering of the value from P1.8 trillion to P200 billion,” he said.
Mr. Quevedo did not specify what the P1.8-trillion value represented or which particular Villar-led company or companies were covered by the valuation.
Separately, six Villar-led companies were among 11 listed firms penalized by the Philippine Stock Exchange (PSE) for late quarterly reports.
In a notice last week, the PSE said the companies failed to submit, or timely submit, compliant SEC Form 17-Q reports for the quarter ended June 30, 2026, by the extended Aug. 19 deadline.
The Villar-led firms were AllDay Marts, Inc. (ALLDY), AllHome Corp. (HOME), Villar Land Holdings Corp. (VLC), Vista Land & Lifescapes, Inc. (VLL), Vistamalls, Inc. (STR), and VistaREIT, Inc. (VREIT).
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