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SEC MC No. 26, Series of 2026

Regulatory AdvisoryIssued September 17 2026Applies for fiscal period ending on or after June 30, 2027

This circular introduces major changes to the Accreditation Guidelines of Auditing Firms and External Auditors. It raises the bar for auditor accreditation and scales up the regulatory oversight of financial reporting, prioritizing the auditing of private corporations that handle high-value government contracts or public infrastructure programs.

What the Circular Does

  • Raises the bar for auditor accreditation: Auditors must show relevant experience with large corporate clients, while serious audit violations, concealment of errors, or lack of independence can lead to denial or loss of accreditation.
  • Requires qualified auditors for major government contractors: Companies handling large government contracts must engage appropriately SEC-accredited auditors, with higher contract thresholds requiring higher-level accreditation.

Higher Experience Requirement

  • Group A Applicants: Must have 5 corporate clients with assets of ≥ ₱100 million each.
  • Group B Applicants: Must have 5 corporate clients with assets of ≥ ₱50 million each.
  • Group C Applicants: Must have 5 corporate clients with assets of ≥ ₱5 million each.

Required Auditor for Government Contractors

  • Group A: Mandatory for any corporation with a single government contract exceeding ₱750 million or cumulative contracts exceeding ₱1 billion.
  • Group B: Mandatory for corporations with a single government contract between ₱400 million and ₱750 million, or cumulative contracts between ₱500 million and ₱1 billion.

What this Means in Practice

If a corporation wins a major government contract, they can no longer retain a local auditing firm within the Group C category. They are legally forced to upgrade and engage with a larger or higher-tier, Group A or B accredited firm.

Implementation Timeline

  • Audit Provisions: Applies to all financial statement audits—both annual and interim—for fiscal periods ending on or after June 30, 2027.
  • General Provisions: Standard administrative requirements take effect 15 days after official publication.
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The advisory in seven cards

The same summary, in the form we publish on social media. Select any card to read it full size.

This advisory is a general summary and is not a substitute for professional advice. For guidance on your own situation, please consult us.

Related: AAC Tax Calendar · AAC Tax Code · All advisories

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