How to File Audited Financial Statements (AFS)
The Audited Financial Statements (AFS) is a mandatory annual filing requirement for all SEC-registered companies in the Philippines. Every corporation, partnership, and association registered with the Securities and Exchange Commission must submit their AFS to ensure transparency, accountability, and compliance with Philippine financial reporting standards. The AFS provides a comprehensive picture of a company's financial health, including its assets, liabilities, equity, revenue, and expenses, as independently verified by a certified public accountant (CPA).
Filing AFS is not just a regulatory obligation — it is a critical tool for stakeholders, investors, creditors, and government agencies to assess the financial standing and operational performance of a business entity. Non-compliance with AFS filing requirements can lead to penalties, fines, and even revocation of the company's Certificate of Incorporation or Registration.
Components of Audited Financial Statements
A complete set of AFS, as required by the SEC, includes the following components:
- Statement of Financial Position (Balance Sheet) — Shows the company's assets, liabilities, and shareholders' equity at a specific point in time
- Statement of Comprehensive Income (Income Statement) — Reports the company's revenues, expenses, and profit or loss over the reporting period
- Statement of Cash Flows — Details the cash inflows and outflows from operating, investing, and financing activities
- Statement of Changes in Equity — Shows changes in the company's equity during the reporting period, including retained earnings and capital contributions
- Notes to Financial Statements — Provides additional explanations, accounting policies, and supplementary disclosures required by applicable financial reporting standards
⚠ Filing Deadline Warning
The AFS must be filed within 120 calendar days after the end of the corporation's fiscal year. For companies with a fiscal year ending on December 31, the deadline is April 30 of the following year. Companies with a different fiscal year end must compute their deadline accordingly.
- Late filing is subject to penalties and surcharges as prescribed under SEC Memorandum Circulars
- Non-filing for consecutive years may result in the company being placed under delinquent status or having its registration revoked
- SEC Memorandum Circular No. 28, Series of 2020, and subsequent circulars provide guidelines on penalties and extensions
- The SEC may grant filing extensions through specific memorandum circulars during extraordinary circumstances (e.g., pandemic-related extensions)
- Companies under suspension or revocation proceedings may still be required to file AFS to cure their delinquency
Who Must File AFS?
All SEC-registered entities are required to file their AFS annually. The applicable financial reporting framework depends on the entity's size, public accountability, and nature of operations.
| Entity Type | Filing Requirement | Applicable Standard |
|---|---|---|
| Stock Corporations (Large) | Mandatory annual AFS filing | Full PFRS (Philippine Financial Reporting Standards) |
| Stock Corporations (SME) | Mandatory annual AFS filing | PFRS for SMEs |
| Non-Stock Corporations | Mandatory annual AFS filing | PFRS for SMEs or PFRS for Small Entities |
| Partnerships | Mandatory annual AFS filing | PFRS for SMEs or PFRS for Small Entities |
| Foreign Corporations (Branch/Rep Office) | Mandatory annual AFS filing | Full PFRS |
| One-Person Corporations (OPC) | Mandatory annual AFS filing | PFRS for Small Entities |
| Publicly Listed Companies | Mandatory annual AFS + quarterly reports | Full PFRS |
Step-by-Step Guide to Filing AFS
Follow these steps to properly prepare and file your company's Audited Financial Statements with the SEC:
Close Books and Prepare Financial Statements
At the end of your company's fiscal year, your accounting department or bookkeeper must close the books of accounts and prepare the initial draft of the financial statements. This involves:
- Recording all year-end adjusting entries (accruals, deferrals, depreciation, provisions)
- Reconciling all bank accounts and subsidiary ledgers
- Performing physical inventory count and reconciliation
- Computing and recording income tax provisions
- Preparing trial balance and preliminary financial statements
- Ensuring all transactions are properly recorded and classified according to the applicable financial reporting framework
Engage an Independent CPA or Auditing Firm
You must engage an independent Certified Public Accountant (CPA) or an auditing firm to conduct the audit of your financial statements. The auditor must be:
- A duly accredited CPA with a valid PRC license and BOA (Board of Accountancy) accreditation
- Accredited by the SEC as an external auditor (for companies with total assets of ₱50 million and above, or companies with public accountability)
- Independent of the company — the auditor must not be a stockholder, officer, or employee of the entity being audited
- Not the same auditor for more than consecutive audit periods as mandated by SEC rules on auditor rotation
Note: SEC Memorandum Circular No. 2, Series of 2019, requires SEC accreditation for external auditors of companies with total assets of ₱50 million and above. Check the SEC website for the list of accredited auditing firms.
Conduct Audit per Philippine Standards on Auditing (PSA)
The independent auditor will conduct the audit of your company's financial statements in accordance with Philippine Standards on Auditing (PSA). The audit process typically includes:
- Planning and risk assessment — Understanding the entity, its internal controls, and identifying areas of significant risk
- Substantive testing — Performing detailed tests of transactions, account balances, and disclosures through vouching, tracing, and confirmation procedures
- Analytical procedures — Comparing financial data with prior periods, budgets, and industry benchmarks
- Verification of assets — Confirming bank balances, receivables, inventory counts, and existence of fixed assets
- Review of compliance — Ensuring the financial statements comply with the applicable financial reporting framework (PFRS, PFRS for SMEs, or PFRS for Small Entities)
- Issuance of audit report — The auditor issues an independent auditor's report expressing an opinion on the financial statements
Prepare Complete AFS Package
After the audit is completed, compile the complete AFS package for submission to the SEC. The package must include:
- AFS Cover Sheet — SEC-prescribed cover page with company details and SEC registration number
- Independent Auditor's Report — The auditor's opinion letter on the financial statements
- Statement of Financial Position (Balance Sheet)
- Statement of Comprehensive Income (Income Statement)
- Statement of Changes in Equity
- Statement of Cash Flows
- Notes to Financial Statements — Including accounting policies, breakdown of significant accounts, related party transactions, and other required disclosures
- Supplementary Schedules — Such as Supplementary Schedule of Retained Earnings, Schedule of Financial Soundness Indicators, and other schedules as required by SRC Rule 68
- Statement of Management's Responsibility for Financial Statements (SMRFS)
Important: The Notes to Financial Statements must be comprehensive and comply with all disclosure requirements under the applicable PFRS. Incomplete notes are a common reason for AFS being returned or flagged by the SEC during review.
Stamp AFS with BIR (Annual Income Tax Return)
Before submitting the AFS to the SEC, you must first file the AFS together with your company's Annual Income Tax Return (AITR) with the Bureau of Internal Revenue (BIR). The BIR will stamp the AFS as "received," which is a mandatory requirement for SEC submission.
- File your Annual Income Tax Return (BIR Form 1702 for corporations or BIR Form 1702-MX for mixed income) together with the AFS
- Pay the corresponding income tax, if applicable
- Ensure the BIR stamps the AFS with the date of receipt and the BIR Revenue District Office (RDO) number
- Keep certified true copies of the BIR-stamped AFS for your records and for SEC submission
- For companies filing via eFPS (Electronic Filing and Payment System), the eFPS filing confirmation and AFS attachment serve as proof of BIR filing
Warning: The SEC will not accept AFS submissions without the BIR stamp or proof of BIR filing. Make sure to file your AITR with BIR before the income tax deadline (April 15 for calendar year taxpayers) to obtain the BIR-stamped AFS in time for the SEC filing deadline.
Submit via SEC eFAST Portal
Submit your complete AFS package through the SEC Electronic Filing and Submission Tool (eFAST) portal. The eFAST system is the official online platform for filing annual reports, GIS, and AFS with the SEC.
- Log in to the eFAST portal at efast.sec.gov.ph using your company's registered account
- Select the filing type "Audited Financial Statements" and the applicable reporting period
- Upload the complete AFS package in PDF format (ensure all pages are clear, legible, and properly oriented)
- Upload the BIR-stamped Annual Income Tax Return
- Fill in the required financial data summary fields (total assets, total liabilities, total equity, total revenue, net income)
- Pay the applicable filing fee through the eFAST payment system (online payment via bank transfer, GCash, or other accepted payment methods)
- Review all uploaded documents and submitted data before confirming the submission
- Click "Submit" to officially file your AFS with the SEC
Receive Filing Confirmation
After successful submission through eFAST, you will receive a filing confirmation that serves as proof of your AFS filing with the SEC.
- Download and save the eFAST filing confirmation or acknowledgment receipt
- The confirmation will include the filing reference number, date and time of submission, and a summary of the filed documents
- Keep this confirmation as proof of timely filing in case of any future disputes or inquiries
- The SEC may send an email notification confirming receipt of your AFS submission
- If the SEC finds any deficiencies in your AFS, you will be notified and given a period to submit corrections or additional documents
Documentary Requirements for AFS Filing
Prepare the following documents before filing your AFS through the SEC eFAST portal:
| # | Document | Description |
|---|---|---|
| 1 | AFS Cover Sheet | SEC-prescribed cover page containing company name, SEC registration number, TIN, fiscal year, and contact information |
| 2 | Independent Auditor's Report | Auditor's opinion letter signed by the engagement partner with CPA license number, PRC accreditation, TIN, and BIR accreditation number |
| 3 | Statement of Financial Position | Comparative balance sheet showing current year and prior year figures |
| 4 | Statement of Comprehensive Income | Income statement showing revenues, cost of sales, operating expenses, and net income/loss |
| 5 | Statement of Changes in Equity | Shows movement in capital stock, additional paid-in capital, retained earnings, and other equity components |
| 6 | Statement of Cash Flows | Cash flow statement prepared using the direct or indirect method |
| 7 | Notes to Financial Statements | Comprehensive notes including accounting policies, significant judgments, and detailed disclosures per PFRS requirements |
| 8 | BIR-Stamped Annual Income Tax Return | Copy of BIR Form 1702 (or applicable ITR form) with BIR received stamp or eFPS filing confirmation |
| 9 | Statement of Management's Responsibility | Signed statement by the President, Treasurer, and Corporate Secretary acknowledging responsibility for the financial statements |
| 10 | Supplementary Schedules (SRC Rule 68) | Schedules of retained earnings, financial soundness indicators, reconciliation of parent and subsidiary accounts, and other required supplementary information |
Applicable Financial Reporting Standards
The SEC prescribes different financial reporting frameworks based on the size and public accountability of the reporting entity. It is important to use the correct framework to avoid rejection or return of your AFS.
| Framework | Applicable To | Criteria |
|---|---|---|
| Full PFRS | Large entities with public accountability | Companies with total assets of ₱350 million and above, or entities with public accountability (e.g., listed companies, banks, insurance companies, pre-need companies) |
| PFRS for SMEs | Small and medium-sized entities | Companies with total assets between ₱3 million and ₱350 million, and total liabilities between ₱3 million and ₱250 million, without public accountability |
| PFRS for Small Entities | Small entities | Companies with total assets and total liabilities below ₱3 million, without public accountability |
| PFRS for Micro Entities | Micro entities | Companies with total assets below ₱3 million and not otherwise required to use a higher framework; may use income tax basis of accounting with SEC approval |
Note: The SEC periodically updates the threshold amounts and criteria for each financial reporting framework. Always refer to the latest SEC Memorandum Circulars and the Philippine Financial Reporting Standards Council (PFRSC) pronouncements for the most current guidelines.
AFS Filing Fees
The filing fee for AFS submission varies depending on the company's total assets. Fees are payable through the eFAST portal at the time of filing.
| Total Assets | Filing Fee | Legal Research Fee (1%) |
|---|---|---|
| Not exceeding ₱100,000 | ₱600 | ₱6.00 |
| Over ₱100,000 to ₱500,000 | ₱1,000 | ₱10.00 |
| Over ₱500,000 to ₱5,000,000 | ₱2,000 | ₱20.00 |
| Over ₱5,000,000 to ₱10,000,000 | ₱5,000 | ₱50.00 |
| Over ₱10,000,000 | Varies (per SEC fee schedule) | 1% of filing fee |
Note: Filing fees are subject to change per SEC circulars. Additional penalties and surcharges apply for late filings. Always check the latest fee schedule on the SEC website or eFAST portal.
Complete Example: XYZ Services Corp Files Their Annual AFS
Let's walk through a complete example of how a medium-sized company files their Audited Financial Statements with the SEC.
Company Profile: XYZ Services Corp
- Company Name: XYZ Services Corp
- SEC Registration No.: CS202012345
- TIN: 123-456-789-000
- Fiscal Year End: December 31
- Total Assets: ₱25,000,000
- Total Liabilities: ₱10,000,000
- Net Income: ₱3,500,000
- Number of Employees: 45
- Applicable Framework: PFRS for SMEs
Timeline of AFS Preparation and Filing:
January 2 - January 31: Year-End Close
XYZ Services Corp's accounting team closes the books for the fiscal year ended December 31. They record all adjusting entries, reconcile bank statements, perform inventory count, and compute the income tax provision. The preliminary financial statements are prepared and reviewed by the controller.
February 1 - February 15: Engagement of Auditor
The company engages ABC Auditing Firm, an SEC-accredited auditing firm, to conduct the audit. The engagement letter is signed, and the audit plan is prepared. The audit fee is ₱150,000 for the engagement.
February 16 - March 15: Audit Fieldwork
ABC Auditing Firm conducts audit fieldwork at XYZ Services Corp's office. The audit team performs substantive testing, sends bank confirmations, verifies receivables and payables, reviews contracts and agreements, and tests internal controls. The auditor identifies minor adjusting entries which are posted by the company.
March 16 - March 31: Audit Report Issuance
After completing the audit, ABC Auditing Firm issues an unmodified (clean) audit opinion on the financial statements. The complete AFS package is prepared, including the auditor's report, financial statements, notes, and supplementary schedules. The Statement of Management's Responsibility is signed by the President and Treasurer.
April 1 - April 15: BIR Filing
XYZ Services Corp files their Annual Income Tax Return (BIR Form 1702) together with the AFS through the BIR eFPS. The income tax due of ₱875,000 is paid online. The eFPS filing confirmation is saved as proof of BIR filing. The company also submits a physical copy to their RDO for stamping.
April 16 - April 28: SEC eFAST Filing
The company logs in to the SEC eFAST portal and uploads the complete AFS package:
- AFS Cover Sheet (PDF)
- Independent Auditor's Report and Financial Statements (PDF, 85 pages)
- BIR-stamped AITR with eFPS confirmation
- Statement of Management's Responsibility
- Supplementary Schedules per SRC Rule 68
The filing fee of ₱2,000 plus ₱20.00 legal research fee (total: ₱2,020) is paid online through the eFAST payment gateway.
April 28: Filing Confirmation Received
XYZ Services Corp receives the eFAST filing confirmation with reference number EFAST-AFS-2025-0012345. The filing was completed within the 120-day deadline (April 30), and no penalties are incurred. The company saves the confirmation for their compliance records.
Frequently Asked Questions (FAQ)
Q: What are the penalties for late filing of AFS?
A: Late filing of AFS is subject to penalties as prescribed by SEC Memorandum Circulars. The penalty amount depends on the number of days of delay and the company's total assets. For corporations with total assets not exceeding ₱500,000, the basic penalty starts at ₱1,000. For larger companies, penalties can range from ₱2,000 to ₱20,000 or more, plus a daily surcharge for each day of delay. Continuous non-compliance for three or more consecutive years may result in the SEC initiating revocation proceedings against the company.
Q: Can we change our external auditor? What are the rules on auditor rotation?
A: Yes, you can change your external auditor at any time. In fact, the SEC requires auditor rotation for certain types of entities. Under SEC rules, the engagement partner must be rotated every five (5) years with a cooling-off period of two (2) years. For public interest entities (PIEs), the auditing firm itself must be rotated every seven (7) years with a cooling-off period of five (5) years. When changing auditors, the company should notify the SEC and ensure proper transition and handover of audit documentation.
Q: Why is the BIR stamp required on the AFS?
A: The BIR stamp (or eFPS filing confirmation) is required because it serves as proof that the company has filed its Annual Income Tax Return and has attached the same AFS with the BIR. This ensures consistency between the financial statements submitted to the SEC and those filed with the BIR for tax purposes. The SEC implemented this requirement to prevent companies from submitting different sets of financial statements to different government agencies.
Q: Are there any exemptions from AFS filing?
A: Generally, all SEC-registered entities are required to file AFS. However, certain exemptions may apply: (1) Companies that have been officially dissolved and received their Certificate of Dissolution are exempt from filing AFS for periods after dissolution. (2) Companies that have been approved for voluntary dissolution under a shortened process may have reduced filing requirements. (3) The SEC may issue specific exemptions or extensions through memorandum circulars during extraordinary circumstances, such as natural disasters or public health emergencies. Note that even dormant or inactive companies that have not been formally dissolved must continue to file AFS.
Q: Should we file consolidated or separate AFS if we have subsidiaries?
A: If your company has subsidiaries, you are generally required to prepare and file consolidated financial statements in addition to the parent company's separate (standalone) financial statements. Under PFRS 10 (Consolidated Financial Statements), a parent company must consolidate the financial statements of all its subsidiaries. Both the consolidated AFS and the separate AFS of the parent company must be filed with the SEC. Each subsidiary that is separately registered with the SEC must also file its own standalone AFS independently.
Q: Can AFS be filed manually instead of through eFAST?
A: The SEC has progressively mandated the use of the eFAST portal for AFS filing. As of the latest SEC circulars, all companies are required to file their AFS electronically through the eFAST system. Manual filing at SEC offices is generally no longer accepted for AFS submissions unless there are specific technical difficulties with the eFAST system, in which case the SEC may issue advisories allowing temporary manual filing. Companies that have difficulty accessing eFAST should contact SEC's eFAST helpdesk for assistance.
Important Reminders
- Always file your AFS within 120 calendar days after the end of your fiscal year to avoid late filing penalties and surcharges
- Ensure that the AFS submitted to the SEC is the same version as the one filed with the BIR together with the Annual Income Tax Return — any discrepancies may trigger a review or investigation
- The Independent Auditor's Report must include the auditor's CPA license number, PRC accreditation number, TIN, BIR accreditation number, and SEC accreditation number (if applicable)
- Use the correct financial reporting framework (Full PFRS, PFRS for SMEs, or PFRS for Small Entities) based on your company's size and public accountability — using the wrong framework is a common reason for AFS rejection
- The Notes to Financial Statements must be comprehensive and include all required disclosures — incomplete or missing notes are the most common deficiency found by the SEC in AFS submissions
- Maintain proper records and file copies of your AFS, BIR-stamped ITR, and eFAST confirmation for at least 10 years — these may be required for future SEC examinations, BIR audits, or legal proceedings
- If your company undergoes a change in fiscal year, you must notify the SEC and file a transitional AFS covering the short period from the old fiscal year end to the new fiscal year end
- Companies that have been placed under delinquent status by the SEC for non-filing must file all outstanding AFS and pay all applicable penalties before they can be restored to good standing
- For companies with related party transactions, ensure full disclosure in the Notes to Financial Statements as required by PAS 24 (Related Party Disclosures) — the SEC closely monitors related party transactions
- Register your company's eFAST account early — new registrations may take several business days to be approved, and you do not want to miss the filing deadline due to account registration delays
Need Help?
SEC Contact Information
- SEC Hotline: (02) 8818-0921
- SEC Main Office: SEC Building, EDSA, Greenhills, Mandaluyong City
- Email: missd@sec.gov.ph
- Office Hours: Monday to Friday, 8:00 AM to 5:00 PM
eFAST Portal Support
- eFAST Portal: efast.sec.gov.ph
- eFAST Helpdesk: (02) 8737-8888 local 8247
- Email Support: efast.helpdesk@sec.gov.ph
- User Guide: Available on the eFAST portal login page
Disclaimer
This guide is provided for general informational purposes only. The requirements, steps, fees, and procedures mentioned here may vary depending on the SEC office you visit. We recommend visiting your nearest SEC office first to confirm the specific requirements and process before preparing your documents.