SYNTHESIS.docx

December 11, 2017 | Author: Mark Stanley Pangonilo | Category: Certified Public Accountant, Association Of Southeast Asian Nations, Licensure, Accounting, Accountant
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13 Pangonilo, Mark Stanley M. ACCTG. 505 (12:30-1:30 W D604) THE IMPACT OF THE ASEAN INTEGRATION TO THE ACCOUNTANCY PROFESSION IN THE PHILIPPINES As we enter the era of globalization, we often encounter difficulties in terms of adjusting to the global needs . Businesses in our country are greatly affected because they are at the forefront in the markets . Markets become interconnected, investors gain a more sophisticated worldview, and foreign investments become more expansive. Competitions are also increasing because of cross border offerings of businesses and companies situated here and abroad . Local businesses need not only think of what to offer in the local market but also think of what to offer in foreign markets, for them to penetrate and make a statement or mark in that market. And because of this, the need of one regulating body arose . The member states of the ASEAN ambitiously adopted a goal of forming the ASEAN Economic Community (AEC), similar to that of the European Union (EU) . The ASEAN Integration will take place in the latter part 2015 . The target goals of the integration were crystallized in the AEC Blueprint of 2007, signed by the Heads of the Governments of the ASEAN member countries . With this integration, member states of the ASEAN will be able to trade goods and services without barriers . In the Philippines, the K-12 program is a step being undertaken by the Department of Education to be able to keep the country’s educational program at par with that of the other member countries . Also, quality of the curriculum, the universities and colleges itself, and students in the intermediate level were also being monitored for assurance purposes . The school year of some schools, colleges and universities were also changed from June-May school year to August-July school year. In relation to the ASEAN Economic Integration, the Board of Accountancy (BOA) released a statement dated September 24, 2014 regarding the ASEAN Mutual Recognition Arrangement (MRA) on accountancy services . The MRA is an agreement among the ten ASEAN member countries to facilitate the mobility of accredited accountancy professionals within the ASEAN region . The MRA will allow Filipino accountants to practice their profession in any ASEAN member state provided certain qualifications in the MRA are met.

This is also the same case for accounting professionals from other ASEAN member-countries

wanting

to

practice

in

the

Philippines .

Should

this

be

implemented in the country, Filipino accountants in the Philippines may be exposed to additional opportunities as well as risks/threats . Aside from this, the MRA can help in maintaining open communication among ASEAN countries to promote adoption of best practice on standards and qualifications of accounting professionals . The Philippines was not able to sign the agreement on the day of the meeting but was able to sign on a later date. Because of this integration, the demand for accountants in the whole will be higher compared to the demand without the integration itself . The Board of Accountancy is strictly monitoring and implementing the guidelines for proper training and development of the profession in the country . In the Accreditation of Certified Public Accountants in Public Practice’s general assembly last June of 2014, Donnies Alas, president of the ACPAPP, said that the Filipino accountants must prepare for the integration by undergoing quality review in order to meet international standards . He cited a past study conducted by the Asian Development Bank (ADB), which showed that the quality of practice among Filipino CPAs is “below par.” Because of this, the ADB also commissioned a study on how to raise the standards of practice of Filipino CPAs . In 2005, government regulator Securities and Exchange Commission (SEC) adopted the International Financial Reporting Standards (IFRSs), which is being strictly implemented by 85 countries. Because of this adoption, Alas stated that the quality of the work of Filipino CPAs as well as their presentation will be in accordance with the standards provided for in the IFRSs . He also noted that Filipino CPAs should stay strong and competitive amid the many challenges, including the imposition of various policies by government regulators such as the SEC and the Bureau of Internal Revenue. Because of this changes, many of the Filipino CPAs are facing problems . To address this issue, the ACPAPP has been conducting regular seminars and training to help their members upgrade their skills to meet international standards . He also expressed confidence that Filipino CPAs would benefit from the impending ASEAN Integration. With the forthcoming integration, Filipino CPAs can work and practice their profession in ASEAN member countries provided they meet the international standards. That is why, Alas also added, they are conducting an upgrade in the

practice of Accountancy in the country. Filipino CPAs are of big advantage because of their fluency in speaking English, making them good communicators and also trainings in country are of good quality. Because of these trainings, some Filipino CPAs choose working abroad after finishing trainings and acquiring of required certifications. One certification a CPA in a member country must possess before practicing Accountancy in other member or host country is the ASEAN Chartered Professional Accountant (ACPA) certification. An ASEAN Chartered Professional refers to a natural person who is a national of an ASEAN member state and is assessed by the National Accountancy Body (NAB) and/or Professional Regulatory Authority (PRA). The MRA Framework on Accountancy Services Article III states that the ASEAN Member States hereby recognize that education, licenses, demonstration of competencies and experience may be the principal elements considered in granting mutual recognition. In this article, a Practicing Professional Accountant (PPA) in a member state must possess the proper education equivalent to that of the host country, the government-required licenses, competencies assuring knowledge of the

host

country’s

regulation,

experience

requirement

needed

and

an

understanding of the International Federation of Accountants (IFAC) Standards and Guidelines. Upon qualifying, an ACPA must register to the ACPA Register (ACPAR) of the host country, provided the said ACPA paid the necessary fees. Once registered to the ACPAR, an ACPA can now practice in the host country, provided he has knowledge of the domestic regulations the said host country. Basically, almost every study conducted for the accountancy profession states that education and understanding of regulations in each country will be the key to the success of this integration, in this manner, for the accountancy profession. In an article on the Business Mirror by Eliseo A. Aurellado, he stated that “the Board of Accountancy (BOA), under the chairmanship of Joel Tan Torres, has adopted Expanding Horizons’ as its theme to engage all stakeholders in crafting an appropriate program of education and continuing professional development for the accountants. I believe that the current developments in the ASEAN region and in our own country have raised the need for greater competitiveness and collaboration. There is also clamor for good governance, transparency and accountability. The accountant of today has to be equipped with the right mind-set and the proper tools for him or her to be a relevant force in a dynamic and challenging business environment.

Mr. Torres has presented a BOA road map that lists down certain projects— strategies that are important to the development of the accountancy profession in all sectors—public practice, commerce and industry, education and government. The proposed projects/strategies in the Education sector address four categories, Blueprint (for the curriculum); Production (for the twin factors of accounting school and accounting teachers); Product (for the student); and Certification (for the Certified Public Accountant, or CPA, licensure examination). In the Education sector, it is worth defining the goal and objective in terms of the desired product that comes out of our accountancy program. Mr. Torres believe that a CPA should graduate a competent, ethically grounded and globally competitive accounting professional. Competence is something that is basic for a professional. However, there could be a mismatch between what we think he or she should be good at versus what the business community demands. Ethical behavior is the buzzword of today, given all the scams and scandals in our society. But how do we inculcate ethical behavior so that even in the face of temptation our professionals are expected to do what is right? With the advent of a borderless economy, where goods and services are beginning to enjoy free flow across international boundaries, such as what the ASEAN integration is envisioned to bring about, how do we stand in the face of such competition? Are our graduates prepared for the competition to follow? Or do we resort to protective mechanisms to shield our future professionals? I think we have to engage in a dialogue on what we want the product of our accountancy program will be and the kind of accountant he or she will become. The first project or strategy indicated in the road map concerns the Blueprint, which is a review of the accounting curriculum. The present accountancy curriculum features 210 units as a minimum requirement, but some schools offer programs that reach up to 265 units. As of this writing, the Commission on Higher Education Technical Council has crafted a proposed accountancy curriculum that has 165 units, since some business subjects have been transferred to the senior high school under the K to 12 Program. The next strategy is the Production Strategy. The first Production strategy is conducting regular assessments of accounting schools. The BOA have an obligation to regulate the conduct and to monitor the performance of accounting schools. The yardstick that we have been using all these years to gauge the performance of accounting schools is their passing rate in the CPA licensure examination. The CPA license has been the accepted mark of quality. However, given a scenario where not all accountants go for public practice, are there other criteria that can be considered to gauge the performance of accounting schools? How about the number of

graduates who land jobs in other sectors of accountancy services? What positions of responsibility are they holding? The second Production strategy is the posting of performance metrics of accounting schools. A public posting is designed to inform the hopeful student which school would be the best for him or her. But how will academe react to this move? What performance metrics would be relevant? The third Production strategy is the accreditation of accounting teachers. How do we enhance the accreditation of accounting teachers? What criteria should be followed? What kind of support is needed for accreditation? The value of having good accounting teachers cannot be underestimated, because it is a key factor in the performance of students. Following the Production Strategy is the Product Strategy. The first Product strategy is instilling in the accounting students the skills and values of ethical conduct, analytical thinking, effective communication and use of technology. While this strategy addresses the student, his or her growth and development is, in fact, a function of the curriculum and the teacher. Ethical conduct normally has its roots in kindergarten and in the elementary grades. We grew up with such slogans as “Honesty is the best policy” and “Cleanliness is next to Godliness.” These values are normally carried over into our later years. Nowadays we talk a lot about good governance and accountability. But there may be a “disconnect” between what we say and what we do. So how do we train our future accountants to behave ethically? How are these ethical values reinforced at the undergraduate level? Critical thinking is another desirable skill. While the accountancy profession lives by standards, there are gray areas that beg for critical thinking and interpretation. How do we ensure that our future accountants are equipped with the skill to analyze something objectively and come up with a reasonable response? Good communication skills, both written and oral, are important in our profession. English is still the business language spoken, and some schools have put up “English-only” zones on their campuses to force their students to speak the language

in

clear

and

grammatically

correct

sentences.

Likewise,

English

composition is a desirable output and school curricula still retain courses on this subject. But sometimes the intended communication skill is not apparent in the workplace when the accountant finds himself or herself preparing accounting

reports. How do we train our accounting students to speak and write effectively in English, our second language? Finally, on the technology aspect, it may be a crying need now for the future accountant to have a practical or working knowledge of specific accounting software products and solutions, which are regularly being used by commerce and industry. Also, knowledge in auditing software might be helpful, especially when the future accountant chooses a career in public practice. Perhaps, it may be timely for schools to include these software products and solutions in their curriculum or tie up with independent training schools to provide this working knowledge. Certainly, the future job prospects would be better if they are already skilled in the use of accounting software. The next strategic area is the engagement of students in accountancy-related issues. The Junior Philippine Institute of Accountants student organization appears to be a logical vehicle for the advancement of accounting knowledge and practices to benefit future accountants. Perhaps, the most important aspect of student engagement should be his or her apprenticeship in an accredited institution. How should this apprenticeship be institutionalized? How should commerce and industry be engaged to provide this valuable experience? In some professions, a two-year work experience is required to be able to take a licensure examination. Perhaps, in the accounting curriculum leading to public practice, the final year may include a more lengthy on-the-job training to complement the review for the licensure examination. Finally, the last strategy is the Certification Strategy. The formulation of the CPA licensure examination and its administration have been a big part of the job of the BOA. The strategies proposed are the regular review of the syllabus and the subjects to be included in the examination, and the enhancement of the administration of the examination. Understandably, many schools are dependent on the CPA licensure examination results to bolster their credibility as a learning institution. This fixation has led to scandals in the past, which hopefully has been eliminated by this time with more controls exercised at the Professional Regulation Commission. However, there are still ways of improving the conduct of the licensure examination in terms of content, technology and administration. In the middle of 2015, the BOA proposed a change of the subjects from the usual seven subjects to only six subjects. However, the BOA is still waiting for the approval of such changes from the PRC. If approved, the said changes will take place in the May 2016 examinations.

The current BOA has adopted a consultative stance in its approach to educating the future accountant. There may be a need to explore new methods of learning accountancy, given the technological developments and requirements of business enterprises. The old ways may no longer suffice. The accountancy profession may need to evolve from its traditional role of financial information processing and reporting into one that is more responsive to addressing the wider functional demands of business. All accountants in the education sector are encouraged to partner with BOA in addressing the concerns that face us as we endeavor to raise the bar in response to the evolving challenges to the profession.” As we near the integration, I think that the Filipino CPAs are in the stage of completing the preparations for the said integration. The said preparations are being undertaken by different sectors in the profession, spearheaded by the Board of Accountancy. The profession in the country will benefit from the integration because of the inflow of human resources and knowledge from other member countries to our country. It will be a good chance for the profession to uplift its standing and have benchmarking procedures to cope up and be at par of that of the other member countries in the region. I could foresee a probable change in the way we will be practicing in our country, but will still be guided by local regulations regardless of the change. The profession, however, will not be prejudiced because of the reservations stated in the MRA. References: ABARCA, Josephine (2014, February 10). One Region, One Accounting Framework. Retrieved from http://www.sgv.ph/one-economic-region-one-accounting-frameworkby-josephine-adrienne-a-abarca-february-10-2014/ ASEAN

Integration

Monitoring

Report

(2013) .

Retrieved

from

http://www.asean.org/images/resources/2014/Feb/association%20of%20southeast %20asian%20nations%20asean%20integration%20monitoring%20report%20%20a %20joint%20report%20by%20the%20asean%20secretariat%20and%20the %20world%20bank%20english.pdf ASEAN Mutual Recognition Arrangement Framework on Accountancy Services. Retrieved

from

http://www.asean.org/index.php/communities/asean-economic-

community/item/asean-mutual-recognition-arrangement-framework-onaccountancy-services-3 AURELLADO, Eliseo (2015, October 12). Expanding the horizons of the accountant. Retrieved

from

accountant-2/

http://www.businessmirror.com.ph/expanding-the-horizons-of-the-

DUEÑAS, Lorlaine (2015, February 18). Ms. Cindy Ortiz talks about the ASEAN Integration 2015. Retrieved from http://ssc .edu.ph/ssc_news/ms-cindy-ortiz-talksabout-the-asean-integration-2015/ HORARIO, Ritchie (2014, June 24). Filipino accountants gear toward ASEAN integration.

Retrieved

fromhttp://www.manilatimes.net/filipino-accountants-gear-

toward-asean-integration/106484/ MIRANDA, Wilma (2014, August 6). ASEAN INTEGRATION ON PROFESSIONAL SERVICES. Retrieved from http://anzcham.com/asean-integration-on-professionalservices/ REDOR, Melissa Anne (2014, October). ASEAN Integration and the Mutual Recognition

Arrangement

on

Accountancy

Services.

Retrieved

http://www.redoremerson.com/archives/asean-integration-accountancyservices.html

from

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