TEAM DND: CAREER RESEARCH
The career research work of LINC@Arellano students, batch 2016
REVIEW OF RELATED LITERATURE
Upon doing my preliminary research, I found out that there are no published research papers on being a CPA in the Philippines. There are a lot of blog posts and opinion pieces – but there are no recent and comprehensive theses. I did, however, find a lot of statistical data on Certified Public Accountants.
Although accounting has been practiced in the Philippines since the Spanish period and possibly even before, the seeds of Philippine accountancy as a recognized profession were planted on March 17, 1928, when Act No. 3105 was approved by the Sixth Legislature. Entitled 'An Act Regulating the Practice of Public Accounting; Creating the Board of Accountancy; Providing for Examination, for the Granting of Certificates, and the Registration of Certified Public Accountants; for the Suspension or Revocation of Certificates; and for Other Purposes,' the law paved the way for local accountants to do the work which, up to that time was performed by foreign accountants in the country. Since then, both the profession and the body that directly regulates it have grown rapidly. (Professional Regulation Commission).
From 43 registered accountants in 1923, the number of CPAs has grown to over 100,689 by 1999. Many of these professionals have distinguished themselves not only in the field of accountancy itself but in many other areas of human endeavor. To the roster of Philippine CPAs belong such luminaries, past and present, as Jaime Hernandez and Paciano Dizon, the first and second Filipino Auditor Generals of the Commission on Audit; Manuel Villar, Speaker of the House of Representatives; Washington SyCip, past president of the International Federation of Accountants, the only Asian who has held the position of Founder and Chairman of SGV & Co., the leading accountancy firm in the country; Jose W. Diokno, former Senator of the Philippines and Secretary of Justice; Wenceslao Lagumbay and Alberto Romulo, former senators; and Andres Soriano, founder of one of the country’s leading conglomerates. Many others have been cabinet members, heads of government agencies, chairmen and members of corporations and institutions, heads and professors in the academe, and entrepreneurs. (Professional Regulation Commission)
Becoming a CPA is not simple. To become a CPA one must take a CPA licensure exam and this is true not just in the Philippines but also in other countries. Below are the requirements needed for person to be able to take the Philippine CPA Licensure Exam.
No person shall be admitted to the examination unless he is:
a. a citizen of the Philippines;
b. of good moral character;
c. is a holder of the degree of Bachelor of Science in Accountancy conferred by a school, college, academy or institute duly recognized and/or accredited by the CHED or other authorized government offices; and
d. has not been convicted of any criminal offense involving moral turpitude.
Educational Qualification / Training / Experience:
a. B.S. in Accountancy or its equivalent
b. BSC, BBA, BSBA graduates as of Dec. 1994 with certificate of units earned.
The Scope of the examination and the Subjects with corresponding weight in units and the minimum hours needed each subject is provided below.
The examinations shall be in writing and shall cover the following subjects with the corresponding weight in units unless otherwise modified by the Board upon approval of the Professional Regulation Commission.
As of the moment all board subjects are given 2 units with a minimum exam hours of 3 hours each subject. Since there are 7 board exam subjects all in all a total of 14 units and 21 hours. The contents and coverage of these subjects shall be in accordance with the outline or syllabus prepared and issued by the Board of Accountancy containing the following:
Theory of Accounts – Accounting terminology, accounting principles and procedures, classification of accounts, valuation of assets and liabilities, income determination, developments in the science of accountancy, etc.
Business Law and Taxation – One-half on the subject of business law covering obligation and contracts, partnerships and corporations, negotiable instruments and other phases of the legal framework of business, and the other half on taxation dealing on income tax, business taxes, transfer taxes, and other taxes affecting accounting practice.
Management Services – Principles and procedures, methods, and techniques involved in management consulting services that may be rendered by Certified Public Accountants in areas such as managerial accounting, planning and control operations, design and appraisal of accounting systems, and financial -management related services.
Auditing Theory – Auditing concepts, auditing standards, internal control, auditing procedures and techniques, and the short-form audit report.
Auditing Problems – Problems on the application of auditing standards, techniques and procedures, preparation of working papers, completion of the audit, and preparation of audit report.
Practical Accounting I – Problems concerning financial statements and accounting for assets, liabilities and stockholder’s equity.
Practical Accounting II – Problems pertaining to partnership, joint ventures, fire insurance on the insured’s books, consignments, installment sales, agencies and branches, business combinations, cost accounting, financial analysis, and government accounting.
A candidate for the examination obtaining a general weighted average of seventy-five percent and above shall be entitled to registration as certified public accountant and as such shall receive a certificate of registration from the Board of Accountancy; Provided, That in no case should the rating on any subject be less than sixty-five percent. In the event a candidate obtains the rating of seventy-five percent and above in at least four (4) subjects having a combined weight of eight (8) units as provided for in this Act, he shall receive a conditional credit for the subjects passed; Provided, However, That such candidates shall take an examination in the remaining subjects within two years from the preceding examination; Provided further, That if the candidate fails to obtain at least a general weighted average of seventy-five percent and a rating of at least sixty-five percent in each of the subjects reexamined, he shall be considered as failed in the entire examination.
Any candidate who fails in two complete Certified Public Accountant board examinations shall be disqualified from taking another set of examination unless he submits evidence to the satisfaction of the Board of Accountancy that he has enrolled in and completed at least twenty-four units of subjects given in Certified Public Accountant Examinations.
For purposes of this Law, the examinations in which the candidate was conditioned together with the removal examination on the subject in which he failed shall be counted as one complete examination. (Tapangan)
Simply put, to become a Certified Public Accountant in the Philippines, one must complete a college course in Business Accountancy (or its equivalent) and pass the licensure exam.
EDUCATION
FIGURE 1: STUDENT RETENTION FOR BATCH 2013 AND 2014 (ENROLLED 2009 AND 2010) FOR JOSE RIZAL UNIVERSITY AND UNIVERSITY OF SAN CARLOS
No other 4-year course compares to Accountancy when it comes to attrition rate. This phenomenon is caused by several factors. The first is the competitive nature between schools to yield a high passing rate. Since the passing rate of a school is the major factor that affects parents’ decision to enroll their children, school officials will naturally want to keep this figure as high as possible. Deans and professors undergo several processes to ensure that the seniors they permit to take the licensure exam have a high chance of becoming CPAs. Some of these methods are as follows. (Lyceum of the Philippines)
• Higher minimum passing grade for major subjects
• Higher minimum GPA (zero-based; non-transmuted)
• Entrance tests upon reenrollment
• Mock licensure exams after the Junior year and Senior year
• Requirement to enroll in review centers
These measures can be seen as overly strict and limiting, but there’s no denying its results. The more strategies a university implements to ensure the dedication and consistency of its students, the higher its passing rate will be. (Adamson University)
FIGURE 2: MOST POPULAR SEARCH RESULTS WHEN THE KEYWORDS 'BACHELOR OF SCIENCE IN ACCOUNTANCY PHILIPPINES’ ARE USED BASED ON GOOGLE ANALYTICS.
REVIEW CENTERS
After obtaining the required college degree, it is common practice for fresh graduates to enroll in CPA Review Centers before attempting the board exam. While there are a lot to choose from, the following are the most common and popular review centers in Manila.
• CPAR (CPA Review School of the Philippines)
• ReSA (Review School of Accountancy)
• PRTC (The Professional Review and Training Center)
• CRC-ACE
FIGURE 3: TUITION FEE FOR A 6-MONTH COURSE COVERING 7 SUBJECTS - CASH BASIS
Aside from regular courses, each review center offers refresher courses, which are for those who were unable to pass the licensure exam twice. They also allow enrollees to choose particular subjects, which is good because these centers have different strengths and weaknesses when it comes to subjects.
FIGURE 4: BEST REVIEW CENTERS PER SUBJECT (SOURCE: PINOYEXCHANGE.COM)
Aside from considering the cost of getting a Bachelor’s Degree, prospective students should also factor in the cost of enrolling in a review center. Based on a 2012 study conducted by the National Federation of Junior Philippine Institute of Accountants, attending any review center will increase the probability of passing by approximately 70%.
FIGURE 5: RESULTS OF THE 80-PERSON SURVEY CONDUCTED BY NFJPIA ON THE EFFECTIVENESS OF REVIEW CENTERS (2012).
BEING A CPA ABROAD
One problem currently being faced by CPAs who want to work abroad is integration. First world countries, such as the United States, Australia, and Japan, don’t recognize the Philippine licensure exam as an equivalent counterpart to their respective CPA programs. That’s because of the differences in General Accepted Accounting Principles (GAAP) between countries. To be a practicing CPA in other countries, one must undergo a bridging course and complete that particular nation’s CPA program. This means that you have to take their licensure test and abide by the results, despite having already passed the board exam in the Philippines. (Members)
However, since the Securities and Exchange Commission (SEC) adopted the International Financial Reporting Standards (IFRS) back in 2005, we are slowly making our way to full integration, which is likely to take place in 2016. (Alas) The IFRS is currently being used by 85 countries around the globe. To ensure that the quality of practice of Filipino CPAs is above par, he Accreditation of Certified Public Accountants in Public Practice (ACPAPP) has been conducting regular seminars and training to help their members upgrade their skills to meet international standards. (Horario)
For now, one must undergo complete training abroad in order to be a practicing CPA in that particular country.
Almost every college or university in the Philippines, especially in Manila, offer a Bachelor’s Degree in Accountancy. Therefore, when choosing a school, people usually look for the ones with the highest passing rates in the licensure exams.
Based on the average passing rate of first-time takers, the following are the top 5 schools in the Philippines that offer a Bachelor’s Degree in Accountancy. It is worth noting that the national passing rate is 35.78%. (TheSummitExpress)
1. University of the Philippines Diliman (99% passing rate)
2. University of San Carlos (93% passing rate)
3. University of Saint La Salle (92% passing rate)
4. Notre Dame of Marbel University (89% passing rate)
5. De La Salle University Manila (88% passing rate)
De La Salle University Dasmariñas (88% passing rate)
University of Nueva Caceres (88% passing rate)
Cagayan State University - Andrews Caritan Campus (88% passing rate)
(FindUniversity.ph)
Another important statistic to consider is the retention of students who sign up for the course. While the ability for schools to churn out board passers is a huge factor for their success, retention of students within accounting programs during their studies, and to completion, is a separate and equally critical issue. Accountancy attrition has become gradually more significant in higher education. In this study, the term attrition is used to refer to a student dropping out completely, transferring to a different college, or changing their major.
According to the enrolment statistics of Jose Rizal University (53% passing rate), as much as 98% of freshman Accountancy students will either drop out or change their majors, thus disqualifying them from even attempting the licensure exam. (Saba and David) However, such a statistic can be considered as an isolated case. In the case of University of San Carlos (93% passing rate), only 38% of freshman Accountancy students were unable to take the licensure exam from 2009 to 2013. (University of San Carlos)
