2026 Guide to Audited Financial Statements for Companies and Taxpayers

Calendar Year Ended 2025 | SEC and BIR Compliance (Philippines)

As we enter 2026, companies and taxpayers in the Philippines must prepare for the submission of Audited Financial Statements (AFS) for the calendar year ended December 31, 2025.

With new and reinforced regulations from the Securities and Exchange Commission (SEC) and the Bureau of Internal Revenue (BIR), compliance is now more structured, digital, and strictly enforced.

This guide explains:

• Who is required to submit AFS

• Who must engage an SEC-accredited CPA

• Which entities are exempt

• How to comply with SEC and BIR filing rules in 2026

Why Audited Financial Statements Matter in 2026

Audited financial statements are a core regulatory requirement used by the SEC and BIR to:

• Ensure corporate transparency and accountability

• Validate income tax filings and declared revenues

• Monitor compliance with the Revised Corporation Code

• Enforce penalties for late or incorrect submissions

With electronic filing systems now mandatory and higher penalties for non-compliance, businesses must treat AFS preparation as a priority—not an afterthought.

SEC Requirements for Audited Financial Statements

Who Is Required to Submit AFS to the SEC?

The following entities are generally required to submit audited financial statements to the SEC:

• Stock corporations meeting SEC financial thresholds

• Non-stock corporations exceeding revenue limits

• Foreign corporations with Philippine branches, ROHQs, or representative offices

• Financing, lending, investment, and holding companies

• Corporations classified as Public Interest Entities (PIEs)

AFS must be filed annually through the SEC Electronic Filing and Submission Tool (eFAST), following the official SEC filing schedule for 2026.

SEC-Accredited CPA Requirement (Very Important)

Companies Required to Engage an SEC-Accredited CPA

Financial statements required to be submitted to the SEC must be audited by an SEC-accredited Certified Public Accountant (CPA).

This requirement applies to:

1. Public Interest Entities (Regardless of Size)

• Listed and publicly-held companies

• Banks, insurance, and pre-need companies

• Financing, lending, investment, and holding companies

• Other entities vested with public interest

2. Companies Exceeding SEC Financial Thresholds

A company is required to submit audited financial statements and engage an SEC-accredited CPA if it meets any one of the following:

• Total assets of PHP 500,000,000 or more, or

• Total liabilities of PHP 500,000,000 or more, or

• Revenues or gross sales exceeding SEC-prescribed thresholds

Meeting just one of the above criteria triggers the audit and filing requirement.

Important: AFS audited by a non-SEC-accredited CPA may be rejected, resulting in delayed filing and penalties.

Companies NOT Required to Submit AFS to the SEC

The following entities are generally not required to submit audited financial statements, provided they are not public interest entities and do not meet SEC thresholds:

• Dormant corporations with no operations

• Corporations with assets and liabilities below PHP 500 million

• Companies with minimal or no revenues

• Certain small non-stock corporations

However, these entities may still be required to submit:

• Unaudited financial statements

• Certificates of Inactivity

• General Information Sheets (GIS)

BIR Requirements for Taxpayers

Who Is Required to Submit Audited Financial Statements to the BIR?

For tax purposes, audited financial statements are required if:

• Gross sales, receipts, or revenues exceed PHP 3,000,000 for the year, or

• The taxpayer is otherwise required under BIR rules

AFS are submitted as attachments to the Annual Income Tax Return (AITR).

Mandatory Electronic Submission via BIR eAFS

For 2026 filings, the BIR requires that:

• Attachments to electronically filed AITRs be submitted via the eAFS system

• Manual submission is allowed only if the BIR declares system unavailability

Failure to properly submit AFS and attachments may result in:

• Penalties and surcharges

• Disallowance of expenses

• Increased audit risk

Taxpayers NOT Required to Submit Audited FS to the BIR

The following are generally not required to submit audited financial statements:

• Businesses with gross revenues of PHP 3,000,000 or below

• Certain individual taxpayers not engaged in business

They are still required to submit:

• Unaudited financial statements

• Other applicable attachments

Common Compliance Mistakes to Avoid

• Using a non-SEC-accredited CPA

• Assuming exemption without verifying thresholds

• Late electronic submission due to system congestion

• Missing signatures or required schedules

• Treating SEC and BIR filings as the same requirement

About the Auditor

Atty. Yasser Aureada, CPA is a BIR-, Board of Accountancy (BOA)-, and SEC-accredited Class C Auditor, authorized to audit and sign financial statements for companies required to submit audited financial statements to the SEC and BIR, subject to applicable accreditation scope and regulations.

As a dual-qualified Certified Public Accountant and Attorney, he provides audit, tax, and regulatory compliance services to corporations, partnerships, and taxpayers across various industries.

Final Thoughts

Not all companies are required to submit audited financial statements, but every registered company or taxpayer has reporting obligations.

Understanding SEC thresholds, CPA accreditation rules, and BIR electronic filing requirements is essential to staying compliant in 2026.

Early preparation, proper classification, and professional guidance can help businesses avoid penalties and ensure smooth regulatory compliance.