The Securities and Exchange Commission (SEC) issued SEC Memorandum Circular No. 18 Series of 2024 which requires public interest entities to disclose the fees paid or payable to their external auditors.
It covers public interest entities such as listed companies, issuers which have sold a class of its securities, and public companies or firms with assets of at least P50 million and have 200 or more holders of at least 100 shares of a class of equity securities each.
The guidelines aim to improve accountability and transparency in the reporting of financial and operational results. It will apply to the annual financial statements (AFS) of companies for the period ending 31 December 2024 and thereafter. Covered companies are mandated to present in two-year comparative format specific fee-related information as a supplement to their AFS.
Failure to comply with the guidelines would result in the imposition of penalties as prescribed under Rule 68 of the Revised Securities Regulation Code and the applicable consolidated scale of fines and penalties.
