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College of Business and Accountancy

The Declining Performance of CPALE Takers in the Philippines

In Partial Fulfillment of the Requirement in

Arts & Humanities Elective

Garces, Kristine Caye D.

Garcia, Aldrich C.
Grimaldo, Ellise Shane G.
Guinto, Siren April S.
Rosales, Francis Angelo D.

November 2019
 Becoming a Certified Public Accountant is one of the most prestigious profession that

one could attain. According to Banaria (as cited in Jalagat, 2016), the demand for accountants in

education, government, and all related sectors had significantly increased over the years which

makes it one of the most sought out professions of this generation. Unfortunately, its licensure

exam is considered to be one of the hardest exams to pass not just in the Philippines but also

globally. Just how hard is the CPALE? With more than the average number of subjects

compared to other licensure examinations, the Philippine CPA Board exam exhibits a 6-subject

exam, five of which are 70 items and one 100-item test. To be a CPA, an examinee must get a

general average of 75% plus no grades lower than 65% in any of the subject areas, failure to

achieve these ratings will result to the examinee being marked as failed and would opt to retake

the exam the following year, if ever you miss the mark on your second take, you'll be required to

enroll in a refresher course (The Philippine Accountancy Act, 2004). The Professional

Regulation Commission (PRC) conducted the second CPA licensure exam (CPALE) this year in

the cities of Manila, Baguio, Cagayan de Oro, Cebu, Davao, Iloilo, Legaspi, Lucena, Tacloban,

and Tuguegarao last October 5, 6 and 12. PRC announces that 2,075 out of 14,492 (14.32%)

passed the CPALE given by the Board of Accountancy with AUF registering a rate of 25.93%,

the lowest in the past 5 years of the exam (PRC Board, 2019). Combining the October 2019

results and the results 5 years ago, the average passing rate of the board exam is 30.30% which is

very low if we take in to account the number of people who took these exams. With the latest

results of the CPALE board exam, the new passing rate reflects the underperformance of CPALE

takers in the Philippines.

In the Philippines, there are three standard-setting and interpretation organizations in the

accountancy and auditing. These three organizations are Financial Reporting Standards Council
(FRSC), Auditing and Assurance Standards Council (AASC), Philippine Interpretations

Committee (PIC), which are mandated under Accountancy Law and the implementing rules to

recommend to the Board of Accountancy the standards and interpretations, for BOA approval

(Funa, 2018). First one, Financial Reporting Standards Council (FRSC) which was established

by the Professional Regulatory Commission under the Implementing Rules and Regulations of

the Philippine Accountancy of Act of 2004 in order to assist the Board of Accountancy in

carrying out its power and function to promulgate accounting standards in the Philippines. Its

main function is to establish generally accepted accounting principles in the Philippines. Second,

the Auditing and Assurance Standards Council (AASC) is the body authorized to establish and

promulgate generally accepted auditing standards (GAAS) in the Philippines. The main objective

of the AASC in adopting IAASB standards and practice statements is to attain uniformity of the

local GAAS with the IAASB pronouncements. This harmonization is expected to enhance the

reliability and acceptability of audited financial statements of the companies in the Philippines.

Its objectives, organization and working procedures are set out in the preface to Philippine

Standards on quality control, auditing, review, and other assurance and related services. Lastly,

the Philippine Interpretations Committee (PIC) which was formed by FRSC in August 2006 in

order to assist the FRSC in establishing and improving financial reporting standards in the

Philippines. Its main role is to principally issue implementation guidance on PFRS. These three

standard-setting and interpretation organizations adopt the accounting standards from the

International Financial Reporting Standards issued by the International Accounting Standards

Board (IASB). The IFRS is a set of accounting standards that are recognized by at least 120

countries including the Philippines and provides a guide on how particular types of transactions

and other events should be reported in financial statements. The rationale for using the
IFRS/Philippine Financial Reporting Standards (PFRS) is to ensure consistency and uniformity

in recording, recognizing and measuring financial transactions, which, if followed properly, will

ensure stability and transparency throughout the financial reporting process of the company.

These standards are not enforceable as compliance is voluntary. After a series of public

meetings and consultations around the country, in June 2015, the Board of Accountancy (BOA)

revised the subjects covered by the CPA Licensure Examination to the set presently in place, and

four different related accounting programs at the bachelor level were established. The revised BS

in Accountancy for the CPA tracks are BS in Management Accounting for the management

accounting track, BS in Internal Audit for the governance, risk, and compliance track, and BS in

Accounting Information Systems for the information and technology track. Two levels of tests

will be added in the future licensure examination. Graduates of any of these accounting programs

will need to take up the first level which is Certified Accountant (CA) examination. This

examination consists of five core accounting subjects, which financial accounting reporting,

advanced financial accounting reporting, management advisory services, taxation, and regulatory

framework for business transactions. Certified Accountants are authorized to work in the

government, public practice and private sector, except to sign auditor’s certifications and to teach

as accounting educators. The second level which is the Certified Public Accountant (CPA) or

Certified Professional Accountant examination can be completed only after three years of

meaningful work experience. Examinees who passed this examination can now be signatories of

the external audit certification, while passers of the Certified Professional or Public Accountant

exams can qualify as accounting teachers (BusinessMirror, 2018).

Certified Public Accountant Licensure Exam (CPALE) establishes and evaluates the

eligibility and skills of the potential candidates for the title Certified Public Accountant.
Preparing for the board exams takes place even before graduating the course. Reviewing is the

most essential part of taking a board exam. According to Nipas (2019), who topped the CPALE

2016, explained that every one of us has distinctive study styles and you should attempt to know

which strategies and methods work best for you. What works for another person may not work

similarly for you so it is smarter to initially get yourself and trial on potential choices until you

locate your optimal study habit. There are factors that affect your review, it may be internal or

external. Personal factors can really attest to the examiner’s capability on how to handle several

things internally. It depends on the mindset of every aspiring CPA. In agreement with Cura

(2019), it is all in the mind whether you pass or fail. The first step to have a fruitful and effective

review is, to do it for the right reasons. Reevaluating the goal, purpose, and motivation. Second,

managing the studying time. Preparing and planning from the very start even before graduating

the course. Review means to re-view the lessons not to study it for the first time. Invest and

retain what is taught in class. Being productive and dividing the study time can really increase

the probability that the potential CPA would pass. In line with Dr. Meier (2019), he illustrates on

how to self-study and review for the CPA Board Exams, one of which is to have the right study

tools. Buying books and practice exam sets with different authors can help one to see several

perspectives and could practice for the real exams. In the modern world today, an online

reviewer is easily accessible to everyone. Using an online reviewer will allow you to focus on

weak areas or subjects and to study at your own pace or comfort. Most of the examiners would

not rely on just self-study, they tend to find an external factor that would review them effectively

and efficiently. According to Matt (2019), At the School’s Curriculum, Professors would teach

the same thing based on the book. In Review Centers, they would teach every strategy and

technique to reduce time in solving a particular set of problems. The instructors would give the
trend questions and most likely questions that will appear in the exams. The Review Center

would show several shortcuts and mnemonics for the formula and terms so that it could be easily

remembered. In choosing the right review centers, consider the passing rates of each review

center and what others recommend the most. Second, Pick the Review center with decades or

years of history because they are in the field and area in many years and have the most

experienced. And lastly, consider the distance between your home and the review center, it is

more suggested to rent an apartment or dorm to lessen the travel time. In compliance with Cueva

(2018), Always choose trusted review centers. Enrolling in a review center is a decent factor to

get a higher score in board test. It does not have assurance, however, it will doubtlessly support

you to concentrate better. Listening in to talks and taking notes will assist you with retaining the

exercises at the forefront of your thoughts. Aside from the exercises instructed in reviews, you

will meet various understudies with a similar objective and perspective. You can learn from one

another and borrow each other’s notes from previous schools. Benefits are countless but review

centers are expensive.

The environment where learning takes place is one of the factors that influence the

proficiency learning of a student (Mondal, n.d.). This can be divided into two elements: natural

surroundings and social surroundings. Under natural surroundings, climatic and atmospheric

conditions, noise, and lighting are involved (Jain, n.d.; Zav, n.d.). Jain (n.d.) claimed that high

temperature and humidity can be endured for a shorter time but it can’t be tolerated if drawn out.

Thus, it lowers the mental proficiency of a student. He also said that persons who reside in hot

areas tend to have low intellectual productivity and innovativeness. In addition, according to De

Andrade (2016), what hinders the viable learning of a student is the noise inside the classroom

due to lack of acoustics (as cited in Wits University, 2016). Moreover, Wits University (2018)
states that noise could turn out into a student’s lack of motivation and a more significant level of

nuisance because it influences complex understanding and the student’s capabilities in learning.

Apart from this, Order Out Of Chaos (2015) said that the brain’s capability to concentrate is

through lighting – a major factor. It also claimed that students who get high scores tend to be in

well-lit surroundings. On the other hand, under social surroundings includes the social

expectations and parents, teachers and peer’s relationship to the students. Legacy Posts (2016),

argued that students can achieve more with the help of high expectations and boosts their

confidence. However, Finkel (2018) claimed that persons tend to get worried about what others

might say and possibly give up when they fail to meet high expectations. Thus, social

expectations can either have a positive effect on students to strive harder to attain one’s goals or

a negative effect which leads students to stress, anxiety, and depression. In addition, Henderson

and Berla (1996) and Kellaghan, Sloane, Alvarez, and Boom (1993) said that the student’s

relationship with parents is a major factor that has an impact to student’s school accomplishment

(as cited in Mo & Singh, 2015). Parents’ love becomes their foundation when faced with certain

situations especially in school-related challenges, thus helping them to grow stronger and better.

In addition, friends too, have a great impact on students’ learning. According to Borukhov (n.d.),

students may perform well academically if the people they hang-out with have a good influence

on them (as cited in Mehta, 2013). If they see their friends striving hard in school to get good

grades, they might push themselves to do better so that they can be equal to their friends.

However, if students who have a negative social life or those peers who do not value school,

chances are they would chill out and be lazy to prioritize school. Thus, one should choose the

people who will inspire them to strive harder.

 To sum it up, Certified Public Accountant Licensure Examination (CPALE) is one of the

most difficult board exams to take. The result from the recent October 2019 CPALE reflects the

underperformance of CPALE takers. With this, the conclusion is that the standards of Board of

Accountancy (BOA), the curriculum for accountancy, the qualifying exams, as well as the

personal and learning environment might be the factors that affect the learning of students. In

order to overcome these factors, the curriculum must be improved to meet the standards of BOA.

In line with this, takers must prioritize all the topics on the board exam. They should help

themselves to strive harder as helping oneself is a major factor towards the achievement of one’s

goals. They must set their minds that they can pass the exam but they should never put too much

pressure on themselves. Lastly, takers should remember that failing isn’t their fault if they have

given their best. Not everyone can pass on their first take on Board exams, take a leap of faith

and the rest will go on. The declining passing rates do not mean the examiners are the problem

nor the BOA or Curriculum alone. It is the combination of all the aspects that affect the rates of

the Board Exams.

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