20/01/2026
The Securities and Exchange Commission (SEC) has released Memorandum Circular (MC) No. 4, s. 2026, amending the audit requirements for corporations to ease the regulatory burden on smaller businesses.
Key Takeaways
👉 New Audit Threshold: Only stock and non-stock corporations with total assets or total liabilities exceeding Three Million Pesos (₱3,000,000) are now required to file audited financial statements.
👉 Audit Exemption: Corporations with assets or liabilities at or below the ₱3,000,000 threshold are no longer required to submit audited financial statements.
👉 New Filing Requirement: Exempt corporations must instead submit unaudited financial statements accompanied by a Statement of Management's Responsibility (SMR) signed under oath.
👉 Authorized Signatories: For standard corporations, the SMR must be signed by the Chairman of the Board, the President or CEO, and the Treasurer or CFO. For One-Person Corporations (OPCs), the SMR must be signed by the President and the Treasurer.
👉 Signatory Accountability: Those signing the SMR assume full responsibility for the accuracy and truthfulness of the financial statements.
👉 Applicability: The new threshold applies to financial statements for fiscal years ending on or after December 31, 2025.
👉 Public Interest Entities (PIEs): The audit exemption threshold does not apply to PIEs, entities classified under Group A, B, or C, or those determined to be vested with public interest. These specific entities must still provide audited financial statements regardless of their total asset or liability size.
Source: SEC website
