The significant increase in the Licensure Examination for Certified Public Accountants (CPAs) pass rate, from just over 20 percent in 2022 to more than 30 percent in 2023-2024, is a welcome and encouraging development for the accountancy profession in the Philippines. This marked improvement demonstrates the growing competency and preparedness of our aspiring accountants and ensures that a greater number of qualified CPAs are entering the workforce each year. This influx of new CPAs plays a crucial role in meeting the substantial professional demands within the country, strengthening the foundation of our financial systems, and contributing to overall economic growth and stability.
While the industry and the profession eagerly anticipate an increase in the number of CPAs in the coming licensure exam years, a pivotal announcement by the National Association of State Boards of Accountancy (NASBA) on July 1, 2024, has created a new avenue for aspiring accountants. The US CPA Exam is now available in the Philippines, providing Filipino candidates with a direct pathway to earn a US CPA license without the need to travel abroad.
With this significant development in the accountancy industry in the Philippines, it is essential to delve into the primary reasons behind this initiative and the objectives it aims to achieve.
This significant leap addresses globalization and the increasing demand for Filipino CPAs driven by economic growth. With the US CPA Exam now available in the Philippines, Filipino CPAs will become more competitive on a global scale, extending their influence far beyond the U.S. and Filipino markets. This development is poised to have a profound impact on accounting firms not only in the Philippines but also in Australia, New Zealand, and other parts of the world.
On the other hand, this development holds significant benefits for the United States, which is currently grappling with a severe accounting shortage. According to an article on the TOA Global website, several factors have contributed to this crisis. Since 2020, many accounting professionals have left, and 75 percent of US CPAs reached retirement eligibility that year. To compound the issue, enrollment in accounting programs at colleges and universities has been downward for several years.
While this development presents a tremendous opportunity for Filipino CPAs, it raises concerns about a potential shortage of accounting professionals in the Philippines. The streamlined route to work abroad, facilitated by the local availability of the US CPA Exam, is understandably exciting for many Filipino accountants. Several review centers in the Philippines have already shown interest in this initiative, with some offering or planning to offer US CPA review programs.
As the US CPA title becomes attainable without the need for international travel, we can create opportunities for US CPAs to work within the Philippines, leveraging their credentials without leaving the country. This vision is increasingly plausible through the establishment of more foreign branch offices and Business Process Outsourcing (BPO) offices in the Philippines. This development significantly advances the careers of our local CPAs and contributes to the economic growth of our country.
Absolutely, addressing sustainability impacts in the accounting profession is crucial for both opportunities and potential threats. It's important for local firms and professionals to adapt and embrace sustainability practices to stay competitive and contribute positively to the community and environment. Here's to hoping for continuous improvement and blessings for all Filipino CPAs in their endeavors!
Floyd C. Paguio, CPA, MBA is the Chairman of Paguio, Dumayas & Associates, CPAs (PDAC), the Philippine Member Firm of PrimeGlobal International and ElevateSucces, Inc, a provider of CPD Seminars for CPAs located in the southern part of Metro Manila. He is a member of the PICPA Quality Assurance Review (QAR) and Media Affairs committees. The views and opinions of the author do not reflect in any way those of these organizations.