THE Filipino accountant, in general, constantly faces the challenge of keeping up with the latest trends in the practice of accountancy in the country.
There are 13 emerging trends for 2022 and beyond, softwaresuggest.com said in a blog published last Dec. 8, 2021. These are automated accounting processes, cloud-based accounting, data analytics and forecasting tools, the rise of accounting software solutions, blockchain, forensic accountancy, advisory services, the role of artificial intelligence in accounting, big data, remote work, outsourcing of accounting functions, dynamic standards of accounting and workplace wellness.
Many small-time practitioners will agree that most remain mere terminology. The public, meanwhile, may not clearly see that there is an existing gap between big public accounting firms and those striving to sustain their small-scale practice, particularly in the provinces.
Based on the 2020 list of establishments published by the Philippine Statistics Authority, there are a total of 952,969 registered businesses operating in the country, of which 99.51 percent are MSMEs (micro, 88.77 percent; small, 10.25 percent and medium, 0.49 percent). Large enterprises comprise only 0.49 percent of the total.
In my 22 years in the practice, I can safely say that not even half of those registered micro entities understand the need to engage professional accountants and therefore do accounting, tax and other business compliances on their own.
Based on the latest number of Philippine Institute of Certified Public Accountants (CPAs) members in good standing, there were only 28,642 as of June 30, 2021. I can only imply that most of these members in good standing are into public practice (partners of big and small firms and sole practitioners) and the rest from the academe.
Doing the math, this means that an actively engaged Filipino CPA, on average, can provide services to at least 15 of these entities. In reality, however, the size of the firm is dictated by the number of existing clients and potential customers that it can attend to in the future.
Of the 13 listed emerging trends in accounting, only one stands out as practicable for both big and small public accounting firms: outsourcing of accounting functions.
The gap between David and Goliath could be closed if we can start to change the public practice culture to complementary from competitive. Big firms could collaborate with small practitioners on activities such as the performance of non-assurance services under independent contracts.
Also, the recent SEC requirement to accredit only partnerships for audit engagements will greatly impact the practice of sole practitioners by 2026, thereby reducing opportunities to serve the public in terms of assurance services.
Let us also not forget that bookkeeping is an essential component of business, which entrepreneurs belonging to micro and small industries are now starting to appreciate due to the increased chance for office audits by the BIR.
With the recent shortage of entry-level accountants in big firms, it may be good to consider exploring the possibilities of engaging small partnerships and sole practitioners to perform tasks that would otherwise be handled by the newbies.
Maybe by collaborating, we can all learn the emerging trends and leave no Filipino accountant behind. We are not in business, after all. We are in the practice of a profession.
Merilyn Gomez-Cheng, CPA and MBA, is the managing owner of Merilyn Gomez-Cheng Accounting Office and a member of the Acpapp. The views expressed here do not necessarily reflect the opinion of these institutions.