Quality of accounting graduates also deteriorating, lawmaker says

A lawmaker raised concerns yesterday over the seemingly "deteriorating" quality of licensed accountants in the Philippines, following recent statistics showing that only one of four accounting students pass the board examinations.

Rep. Joseph Santiago, a certified public accountant and lawyer by profession, said most accounting students flunk the eligibility tests for CPAs, even if there are more than enough competent schools that offer such courses.

"Of the 5,318 accounting graduates that took the licensure examinations for CPAs earlier this month, only 1,253 or 23.5 percent made the grade, according to the Professional Regulation Commission," the congressman for the lone district of Catanduanes disclosed.

Santiago revealed this figure is "even worse" if compared to the licensure tests in October 2005, where more accounting students became licensed accountants, as "1,675 or 25.1 percent of the 6,651 (accounting) candidates passed."

"Don’t get us wrong. We have a number of excellent accounting schools that produce outstanding graduates. But overall, many schools, over the years, have apparently neglected the need to continuously upgrade the quality of their instruction," Santiago pointed out.

He warned that such a decline, if left unchecked, "could handicap the country’s ability to carve a larger niche in the thriving global market for outsourced financial and accounting (F&A) services, which is expected to reach $25 billion in 2009.

"Both government and the private sector should collaborate and quickly find ways to reinforce the quality of accounting instruction in the country. Otherwise, we risk losing huge opportunities to expand our share of the lucrative market for outsourced F&A services."

Santiago said the situation is "very unfortunate" because the country needs a "steady supply of highly qualified accounting professionals," especially since several global financial and business service providers are "relegating" such tasks to "remote, lower-cost locations."

In the US alone, research departments of large stockbrokerage firms and investment banks are entrusting auxiliary activities to offshore business process outsourcing (BPO) providers that specialize in F&A services, according to Santiago.

"This is why in India, for instance, a number of BPO providers have been posting help wanted ads for accountants, mathematicians, statisticians and graduates of related fields," the opposition lawmaker said.

International Business Machines Corp. and Hewlett-Packard Co., two of the world’s largest BPO providers, have also started offshoring the customized delivery and management of client mission-critical finance and accounting functions. — Delon Porcalla, Sandy Araneta