The Securities and Exchange Commission is moving to tighten audit standards and expand regulatory oversight to include government contractors, in a bid to better protect investors and curb corruption.

In a draft memorandum circular released on April 1 for public comment, the SEC proposed amendments to its accreditation guidelines for auditing firms and external auditors under Revised Rule 68 of Republic Act No. 8799.

The proposed changes aim to strengthen the accreditation framework by raising qualification and track record requirements, introducing stricter evaluation rules, and widening coverage to include corporations with significant government contracts.

Under the draft rules, companies awarded a single government contract worth at least P100 million, or combined contracts totaling P150 million within a reporting year, will be required to hire SEC-accredited external auditors under the highest classification, Group A. These firms must retain the same auditor until project completion and submit a notarized, auditor-reviewed schedule detailing project descriptions, costs, and status.

The SEC also plans to increase experience thresholds for auditors across all accreditation groups. Applicants for Group A must now have at least five corporate clients with assets of no less than P100 million each, while higher requirements are likewise set for Groups B and C.

In addition, the proposal outlines new grounds for outright denial of accreditation, including misrepresentation of information, failure to maintain independence, and serious audit deficiencies such as multiple material findings in financial statements.

The Commission said the reforms are intended to ensure that only qualified and credible auditors handle regulated entities, while enhancing transparency and accountability, particularly in projects involving public funds.

The SEC is accepting public comments on the proposed amendments until May 15.