Accounting-Synthesis PDF

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ACCOUNTING SYNTHESISIn comparison to other Asian and worldwide financial crisis-affected countries, the Philippines fared better because of its better financial management structures. Furthermore, accountancy is a prestigious and well-respected career. However, according to the findings of the Asian...

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ACCOUNTING SYNTHESIS In comparison to other Asian and worldwide financial crisis-affected countries, the Philippines fared better because of its better financial management structures. Furthermore, accountancy is a prestigious and well-respected career. However, according to the findings of the Asian Development Bank study, a number of concerns must be addressed if accountancy is to keep its high standing and the Philippines is to succeed in attracting investment. There are four phases to becoming a certified public accountant (CPA) around the world: academics, experience, exams, and CPE (continuing professional education) (CPE). For academic purposes, Philippine CPAs meet international and regional standards; however, they fall short on other levels. There are three outcomes that could result from this. The International Federation of Accountants (IFAC) Compliance Committee, which was recently established, will examine whether member organizations are complying with IFAC principles and standards in the coming years. PICPA will be compelled to provide an explanation for any discrepancies. It is the job of the IFAC compliance committee to suggest disciplinary measures to the IFAC Board and Council in cases when member organizations fail to adhere to norms and rules. Second, the International Standard of Accounting and Reporting (ISAR) starts a project to compare CPA certifications from all around the world. A country's CPA qualification will be "graded" based on how well it adheres to international standards and best practices. This grading will have a significant impact on both the international status and transferability of CPA credentials. Third, IFAC member organizations are obligated to follow norms and standards as a condition of membership. IFAC has provided recommendations on the procedures to be followed when mutual recognition of qualifications is agreed upon. The Philippine WTO GATS and APEC negotiation approach appears to be to conclude Mutual Recognition Agreements in relation to accounting services (MRAs). When negotiating MRAs, member organizations are required by IFAC standards to take education, examination, and experience criteria into consideration. Philippine exports of accountancy services appear to give them an advantage in trade negotiations. Other APEC and WTO members may contest the legality of any MRAs the Philippines concludes with other ASEAN countries depending on the quality of CPA licensing procedures. The introduction of practical experience requirements for CPA licensing, a written component to the CPA licensure examination, mandatory continuing professional education as a condition of license renewal, and provisional CPA title are all recommended to create an environment where CPA licensure standards can be raised. 2. Establish an Experience Prerequisite for the CPA Title. The lack of a practical experience requirement for CPA license is contrary to international and regional standards. Accountants in the Philippines can become CPAs without ever having worked in the field. For this requirement to be implemented fairly and effectively, it will need to be implemented with great care. It is suggested that specific work experience be added to the list of requirements for earning the CPA credential. Take Care of CPA Licensing Exam Problems While international recommendations indicate that a considerable portion of a CPA exam be written, the Philippine CPA licensure examination is entirely multiple choice. Taking this strategy on purpose has proven to be incredibly effective in reducing severe "leakage" concerns during the testing process. The strain between limiting leakage and producing high-quality exams is also reflected in the quality of examination questions. Examiners each prepare a portion on their own, but the other examiners do not

look over what they have prepared. Microsoft's certification program serves as an excellent illustration of how technology may be used to maintain data integrity while putting candidates through their paces in the field. This is a new approach to the computerized CPA license exam. In order to introduce a written component into the exam and execute quality reviews over examination question setting, it is proposed that possibilities for reforming the CPA licensure examination be studied. 3. Make Continuing Professional Education (CPE) Required PICPA is in favor of making continuing professional education (CPE) requirements mandatory, as specified by international standards. It is recommended that mandatory CPE standards be imposed through enabling legislation amendments and that assistance be offered to design and execute adequate methods for monitoring CPE compliance. Currently, only the Board of Accountancy requires the CPE for accreditation. Preliminary Changes to the Accounting Profession Internationally, CPA titles are only awarded to candidates who have met all academic, practical experience, and licensure exam requirements. Provisional status is granted to accountants while they complete the academic prerequisites and wait to receive their full CPA license. Signing audit reports or engaging in certain other activities is strictly prohibited for them. It is suggested that PICPA and BOA establish a provisional CPA title for persons who have met academic qualifications and are accumulating prescribed practical experience....