Evolving accounting skills and competencies: A call for CPALE reformation

Position paper by the Stands for Outstanding Accountancy-inclined Concerns Movement (SOAC)

CPALE or better known as the Certified Public Accountant Licensure Examination, is the final barrier to the lucrative profession of accounting and possibly Law. CPALE is known to the public as one of the grueling licensure examinations to pass with the recent passing rate only at 22%.

This doesn’t particularly surprise the public, since the passing rates for CPALE have been declining since 2016. The American counterparts of our CPAs here in the Philippines, called the American Institute of Certified Public Accountants, have a passing rate of 50% on average. That shows a major discrepancy between the two associations of CPAs and it seems that our own CPAs are getting left behind. With these facts in mind, is it time to reform the contents of CPALE and the degree of its difficulty?

Educational institutions play a vital role in the performance of CPA examinees. The accounting programs offered by these institutions will only be effective if paired and equipped with competent faculty members who possess adequate knowledge and skills (Calubayan, 2020) about accounting and other related subject matter. However, in recent times, the quality of education is declining, especially in institutions where teachers are paid insufficient salaries. It is to say that in low-paying schools, accounting teachers or teachers, in general, make lesser efforts to fully educate and cultivate the skills of students.

The findings demonstrate that, between 2015 to 2019, public schools from the majority of the Philippine regions performed better on the CPA Licensure Exam (CPALE) than private schools (Laguador & Refozar, 2020). Demonstrating that public schools have a greater passing percentage than private institutions. According to a study by Ferrer (2017), new compensation standardization regulations have caused public school teachers’ salaries to climb significantly over the past ten years. The number of pupils who passed the CPALE was greater in public schools. While in private schools, it is 72% lower than in public schools. This suggests that teacher compensation affects the quality of education that children receive.

In line with the quality of education in the Philippines, The Board of Accountancy (BoA) should inspect and visit the schools, both public and private, which have low CPALE passing rates. As reported by The Manila Times (2022), CPALE had a countrywide passing rate of 22.29%, an increase from the CPALE’s October 2021 percentage of 15.28. However, even with these statistics, progress should still be given top priority. It is evident that the ratings for CPALE passers have been constantly fluctuating in the course of time, indicating that there is still room for improvement in both the domestic accountancy programs and the CPA license examination. The low passing rate in CPALE in the Philippines urged government institutions to propose changes, however, those improvements made are still lacking, especially in the standards of teaching and student screening. Furthermore, it is highly apparent that CPA board exam passers in the Philippines are getting left behind in comparison with other nations. With knowledge about the evident disparity in the percentage of passing the CPALE, as stated by Asadon (2022), the Board of Accountancy should start conducting school inspections, especially the schools with low or zero passing rates on the CPALE. During the inspections, BoA should regulate, review, and evaluate the performance of the faculty members as well as the accounting education being implemented.

As previously mentioned, public schools perform better on CPALE in comparison to private schools (Laguador & Refozar, 2020). With regard to this, it is evident that the quality of education schools provide to their students, whether it be private or public schools, is a driving factor to perform well in the CPALE. However, from the CPALE held last October 2021, there were no topnotchers nor top-performing schools recognized; as from the 2,367 examinees, only 361 of them were able to pass the examination (Fadzlulkarim, 2021). Thus, with this in mind, we consider the idea that the issue with the low passing rate for the CPALE may not be solely attributed to the examinees’ “incompetency” or “weakness”, rather we believe that this issue primarily emerges from the management of the CPALE. According to Kenneth Manuel, a distinguished CPA Lawyer, “the CPALE should be objectively evaluated, as it contains disparities with its backlogs, obsolete questionnaires, the new and old accounting adjustments and accumulating outdated methods.” (Fadzlulkarim, 2021). Atty. Manuel believes that the examination is in need of fixing and, as someone working in this field, they are willing to assist in fixing the examination.

However, regardless of how some distinguishable CPAs and CPA Lawyers urge commencing reforms to the CPALE, proponents of board exams oppose and claim that consumers will be at risk of harm if examinees are not required to demonstrate their competency through the board exams. According to the Senate of the Philippines’ press release (2021), Senator Joel Villanueva mentioned that board exams are the final quality control check before we allow graduates to practice a profession. He also added that he understands Secretary Bello’s sentiments that urgent reforms are needed, but he said that we cannot totally remove the certifying process.

On the contrary, total removal of the certifying procedure is not the aim of the call for reforming the CPALE, rather its aim is to correspond to the swift development of the skills and competencies necessitated by the accounting industry today (CCH AnswerConnect Editorial, 2022). BS Accountancy graduates are already screened through the numerous qualifying exams they go through and the retention grades they have to maintain during their college years (University of Santo Tomas, 2020). Therefore, the government must have a sense of urgency and investigate to reform the CPALE and the whole educational system if the graduates are still not able to qualify for the CPALE even after all those screening they went through.

In line with the presented claims and refutation, our organization would highly suggest that government and private educational institutions should implement a tighter and more systematic academic educational system. These institutions should provide students with appropriate and sufficient programs and a well-organized learning environment that can cultivate their knowledge and skills to attain high-quality performance for their future professions. Moreover, to improve the overall performance of schools and their students, these educational institutions should not only tend to the needs of their students but also they should be able to provide the necessities and rightful incentives for the faculty members, especially when it comes to the salaries earned. Finally, similar to the inspections made to evaluate the efficiency of school programs, especially of the accounting programs, our organization recommends that the CPALE should be examined and assessed as well. From the aforementioned data, CPAs and CPA Lawyers who are more than willing to assist in resolving this issue should be given the opportunity to analyze and amend the noticeable concerns with the framework and design of the CPALE.

In conclusion, with regard to the issue of the Philippine CPA Licensure Examination, our organization, SOAC, believes that, in order to address the trend of our country’s low passing rates for

CPA, reformation in the licensure examination as well as in the educational system should be done and prioritized by our government. As the performance of the students is highly dependent on the teachers and the quality of education they give, SOAC identified that it is obligatory for educational institutions to provide every faculty member with justifiable treatment. Incentives and reasonable salaries should be accessible to all faculty members, whether situated in public or private institutions. Then, in terms of the licensure examination, although it is true that demonstration of competency should be exhibited, conducting reformations to the CPALE does not automatically equate to the diminishment of the examinees’ competency; rather, this call for CPALE reformation is made to re-evaluate the timeliness and relevance of the topics undertaken during the examination and to conform to the changing requirements for knowledge and skills in today’s accounting industry.

The Stands for Outstanding Accountancy-inclined Concerns Movement is an organization based in the University of Santo Tomas and composed of Grade 12 students aiming to stand for the Accountancy, Business, and Management strand. SOAC envisions itself to be at the forefront when it comes to discussing and resolving accountancy-related issues and concerns. SOAC also aims to be the echoing voice of current and aspiring Certified Public Accountants (CPAs) and accountants in the country.

REFERENCES

Asadon, K. J. (2022, June 8). No joy in higher passing rate: The Manila Times.

https://www.manilatimes.net/2022/06/08/business/top-business/no-joy-in-higher-passing rate/1846501

Calubayan , M. A. C. . (2020). Performance of Southern Luzon State University – BS

Accountancy in the Board Licensure Examination: A Basis of Proposed Intervention Program. Journal of Business and Management Studies, 2(3), 35–40. https://al-kindipublisher.com/index.php/jbms/article/view/854

CCH AnswerConnect Editorial. (2022, August 17). Proposed CPA exam changes offer options for CPA candidates. Wolters Kluwer.

https://www.wolterskluwer.com/en/expert-insights/proposed-cpa-exam-changes-offer-opt ions-for-cpa-candidates

Fadzlulkarim, F. M. (2021, November 10). How Hard is CPALE | The BEACON Publications.

The BEACON Publications | Your Voice, Your Light. https://beacon.host.adzu.edu.ph/?p=8810

Laguador, J. M., & Refozar, R. F. G. (2020). Five-year declining performance of private and public schools in the Philippine certified public accountant licensure examination.

European Journal of Educational Research, 9(3), 995-1007. https://doi.org/10.12973/eu-jer.9.3.995

Senate of the Philippines. (2021, July 8). Villanueva: Pinoy professionals won’t make it local, int’l job markets without board exams. https://legacy.senate.gov.ph/press_release/2021/0708_villanueva1.asp

Torregoza, H. (2021, July 8). Without board exams, Filipino professionals cannot qualify for local.

https://mb.com.ph/2021/07/08/without-board-exams-filipino-professionals-cannot-qualify

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University of Santo Tomas. (2020). Bachelor of Science in Accountancy.

https://www.ust.edu.ph/academics/programs/bachelor-of-science-in-accountancy/