ACCOUNTANTS are very keen on details, especially numbers. The recent Certified Public Accountants Licensure Examination's (CPALE) national passing rate of 22.29 percent is 7.01 percentage points higher than the October 2021 CPALE's 15.28 percent. The improvement, however, doesn't change the fact that reforms are needed.
To compare, the American Institute of Certified Public Accountants, the national professional organization of CPAs in the United States, had overall first-quarter 2022 CPA exam pass rates of 46.35 percent, 57.33 percent, 44.95 percent and 60.03 percent or a total estimated average passing rate of 52.16 percent if combined.
Does the Board of Accountancy (BoA) want to convey that it is stricter and serious about producing top-notch CPAs or is our passing rate an implication that the quality of the education students are receiving is diminishing? There are lots of factors that need to be considered to properly resolve issues in the quality of the domestic accountancy program and the CPA licensure examination.
In October 2016, the CPALE national passing rate was 42.84 percent and in the eight board examinations after that (May 2017 up to May 2022), we averaged 23.51 percent. The highest was last October 2017, which was 35.14 percent.
We have already at least 468 schools offering Bachelor of Science in Accountancy (BSA) degrees all over the country. Based on the May 2019 CPALE, 65 percent of these are below the national passing rate. Some 38 percent or 180 out of 468 have zero passing rates.
The BoA or its representatives should pay a visit to schools with low, minimal, or zero passing rates. It should impose sanctions or penalties, perhaps by suspending or terminating low passing rate BSA programs. This might sound harsh but those schools will be forced to periodically review their programs as well as evaluate faculty and staff performance.
This is a very big challenge for the BoA, which supervises, controls and regulates the practice of accountancy in the Philippines. For the academe, standardization and regulation of accounting education will help every accounting student keep a burning desire and passion for the field they have chosen.
The last couple of years' low passing rates (except from May 2020 to May 2021) should be a wake-up call for aspiring CPAs. Acquiring that three-letter extension to one's name is not just a piece of cake. It takes a lot of sacrifice, challenges and character development. Don't wish that the licensure exam will be easy because it will not and never will be. Instead, wish to become a bigger person, one who can outplay the test.
The board exam will test your competency and analytical and technical skills. It will test your patience, how composed you are under time pressure, and how quickly you can formulate strategies. The exam is based on the standard applicable to the given period. Its complexity depends on how prepared you are. This preparation should not start after finishing school or during your review center days. It should start from the time you have fully decided — repeat, fully decided — to take up accountancy.
The low passing rate is also a wake-up call to schools, colleges and universities about the need to raise their standards of teaching and student screening. Schools must be fully aware that they are the training grounds of "soon-to-be" conquerors of the corporate world. What they teach their students will become their shields and weapons.
Ken John B. Asadon, CPA, CTT, is the tax partner of Paguio, Dumayas and Associates, CPAs (PrimeGlobal Philippines) and a member of the Association of CPAs in Public Practice. The opinion of the writer does not reflect in any way those of these institutions.
