Travails of CPA studies and licensures

Published July 5, 2022, 10:10 AM

by Dr. Cesar Mansibang

Studying for the CPA profession is regarded as one of the toughest journeys many budding students avoid. For an ambitious student aiming at a good career and a good life for himself and for his family in the future, becoming a CPA is an excellent choice. Over five years, he has to have ample self-inspiration and profuse perspiration to achieve it. But the journey does not end here.

Passing the licensure examinations is the final imprimatur and awaiting results is full of tensions and nerve-wracking that his painstaking efforts would finally yield fruit that rewards him and his parents’ labors and sacrifices. However this expectant hope could turn to disappointment if the decades-long dismal percentage of passing runs through its observed pattern.

Accounting is mythically viewed by some as numbers-crunching and bean counting one has to be good at or a wizard of mathematics to crack it. This “myth” leads to fear and aversion for many who dislike math. Ironically, the same myth I also had in my mind as a student. But with some stroke of luck, diligence and basic intellectual and mathematical skills, I made the grade.

My two-year meaningful business experiences in actual practice before I took the licensure debunked the myth of high mathematics of debits and credits. It actually provided me with a critical and strategic mindset on how accounting in real world situations is actually applied. Textbook accounting problems, contrived and theoretical, were more complicated and more difficult than real accounting problems in the workplace. The usual drills were reading thick accounting textbooks, solving accounting problems, and memorizing solutions of the teacher as templates. But to the student’s confusion, this “template” way of solving problems oftentimes are inapplicable to specific and variegated nature of examination questions.

As a long-time graduate professor of finance and accounting, literacy and problem solving skills do not end in knowledge and memory work. Bloom’s taxonomy of learning behaviors are a hierarchy that is very useful in helping the student improve his remembering, understanding, applying, analyzing, evaluating and creating skills. Rote memorizing while important is insufficient. Without disparaging their technical skills, some accounting teachers are “accidental teachers” who comfortably style their methods after their accounting teachers’ delivery methods and their materials. There is a compelling need to raise the students’ skills up the hierarchy of the learning taxonomy considering the changing ecosystems of the accounting profession where critical, strategic thinking and problem solving skills are necessary.

This paradigm shift is crucial to take a serious study why the casualty of about 20% is disappointingly dismal over more than 9 decades since. Some reputable schools have performed better than national average at 40-60% but it is no cold comfort. The vast majority of schools’ performance raises serious concern about their quality of delivery and whether licensure questions notably match what they teach.

US AICPA examinees are highly successful at 45-60% passing rate. While the comparison is sometimes odious, our performance is meager considering that our local CPA profession, course and examinations are similarly patterned after the US practice. In fact, American textbooks, accounting pronouncements and examination questions are significantly used in classes and in examinations. Some American universities, University of Pennsylvania, Rice University, University of Texas, Brigham University, and Wake Forest University have outstanding identical pass rate of 90%.  Are American students taught and prepared better than our students here? Or are they better students than Filipino students? These are arguable questions requiring a serious reflection of our accounting education system and its various ecosystems, quality of teaching, delivery techniques and teaching incentives and licensures.

One stark difference between the Philippines and AICPA is that our CPA candidates must pass six subject areas (FAR, AFAR, MAS, AUDITING, TAXATION, RFBT) but AICPA examinees only sit for 4 subject areas (FAR, AUDITING & ATTESTATION, BUSINESS ENVIRONMENT & CONCEPTS, & REGULATIONS). This is intriguing as it is bewildering that we have stricter hurdles considering the huge disparity in national economic incomes of our two countries. Why is this so? This dismal performance is costly to individuals, their families, to the stakeholders and to national development in general.

In assessing this challenge, the needs of the public practice, commerce and industry, education and government sectors as pillars of economic development should be considered. The accounting education sector is the feeder of talents to these sectors. Thus, a multi-stakeholders’ strategic vision applying the  “supply and value chain analysis” framework that identifies strengths, weaknesses, opportunities and threats to enable long-term integrated and actionable strategies is compelling. “Band-aid” solutions do not solve problems, systemic solutions do.

Dr. Cesar A Mansibang is a professional CPA, management practitioner and professor.

The views expressed here are those of the author himself and does not reflect PICPA’s view.