John Lester O. Sanchez Bsa - Iia 26 October 2019: First City Providential College

FCPC
FIRST CITY PROVIDENTIAL COLLEGE
Average Passing Rate among State Colleges

and Universities Vs. Private Colleges and Universities
in the Last 5 Years: Factors Affecting the Passing Rate
of Graduates in the CPA Board Exams in Region III
John Lester O. Sanchez
BSA – IIA
26 October 2019
AVERAGE PASSING RATE AMONG STATE COLLEGES
AND UNIVERSITIES VS. PRIVATE COLLEGES AND UNIVERSITIES
IN THE LAST 5 YEARS: FACTORS AFFECTING THE PASSING RATE
OF GRADUATES IN THE CPA BOARD EXAMS IN REGION III
by
Sanchez, J.L
BS Accountancy, 2nd Year College
San Jose Del Monte, Bulacan
Lstrolvrs [at] gmail.com
26 October 2017
Abstract: This study begins with an overview of CPA Board Examination in the
Philippines. It then takes a brief look in the Number of CPA’s and accounting
students enrolled in the program. Hence, brings the trend of the national passing
percentage in the past five years, followed with a discussion of the state of the
national passing rate in the CPA Board Exam. Moreover, in the factors that are
significantly affect the performance schools in the CPA Board Exam.
The main objective of this study is to assess the factors affecting the passing rate
of graduates in CPA Board Examination. Furthermore, this can be use to help the
Accounting Students to assess themselves through this research if all the factors
that affecting the passing rate of graduates in the CPA Board Examination is
existing in their campuses.
1. Introduction
Licensure is a one of the indication of being a professional. It is a standard that

is recognized by the government and by the public to introduce standards of
excellence, rules of behavior, guidelines of recruitment and measures of
protection of its members. It assures high sense of dedication, responsibility,
skills and quality towards ones professions, (Santos, 2003). Consequently, the
journey of becoming a Certified Public Accountant (CPA) requires a lot of
commitment and dedication. Since, it is not an easy task. In the new curriculum
after 4 years, one has to graduate with a Bachelor’s Degree in Accountancy then
pass the CPA Licensure Examination.
The practice of the accounting profession is regulated under the Republic Act
(RA) 9298, Philippine Accountancy Act, as revised and enacted in 2004, stipulates
that the Professional Regulatory Board of Accountancy (BOA), which operates
under the supervision of the Professional Regulation Commission (PRC), is
responsible for the regulation of professional accountants in the Philippines. In
accordance with the act, the practice of accountancy encompasses work in public
accountancy, commerce and industry, education/academe, and government.
The Republic Act (RA) 9298, Philippine Accountancy Act outlines the procedures
for individuals who wish to practice accountancy. Candidates must first pass a
licensure examination administered by the BOA. In order to be eligible to sit for
the examination, applicants must meet the following criteria:
(1) be a Filipino citizen;
(2) be of good moral character;
(3) be a holder of the degree of Bachelor of Science in Accountancy conferred by

a school, college, academy or institute duly recognized and/or accredited by the
Commission on Higher Education (CHED) or other authorized government offices;
and
(4) not been convicted of any criminal offense.

Upon successfully completing the exam, individuals may be registered with the
BOA and receive a Certificate of Registration from the BOA and a professional
identification card issued by the BOA and the PRC. Once registered with the BOA
as Certified Public Accountants (CPAs), individuals must join an accredited,
national professional accountancy organization of which there is only one in the
Philippines—the Philippine Institute of Certified Public Accountants (PICPA).
Finally, candidates must then complete three years of meaningful practical
experience in order to receive a Certificate of Accreditation from the BOA
permitting them to publicly practice. CPAs in Public Practice (auditors) must
renew their Certificate of Accreditation and professional identification card every
three years with the BOA and the PRC and comply with continuing professional
development (CPD) requirements.
2. CPA Board Examination in the Philippines – an Overview
According to the critiques, the CPA Licensure Examination is one of the most
difficult board examination compare to the other licensure examination. Because
it includes 6 brain-wrecking subjects, five which are 70 items and one 100-item
test. That’s more than the average number of subjects in other exams. According
to the PRC Board of Accountancy, these are the general topics you can expect in
the upcoming board exams:
(1) Financial Accounting and Reporting
(2) Advanced Financial Accounting and Reporting
(3) Management Advisory Services
(4) Auditing
(5) Taxation
(6) Regulatory Framework for Business Transactions

Since last October 2018, each of these topics has included both new and old
revisions of certain laws and standards such as the TRAIN Law, PFRS 9 on
“Financial instruments”, and the PFRS 15 on “Revenue from Contracts with
Customers.” However, by May 2020, only the new provisions will be included in
the exam. To be a certified public accountant, one must get a general average
of 75% plus no grades lower than 65% in any of the subject areas. Missing the
mark on second take, the candidate be required to enroll in a refresher
course. (A. Cruz, 2019)
3. Number of CPA’s and Accounting Students Enrolled in the Program
According to the Board of Accountancy, there are more than 175,000 CPAs or
Certified Public Accountants registered in the country as of 2019. That may
initially seem like a small number, but that only counts accountants who
religiously renew their CPA license from the Professional Regulation Commission
(PRC) every year. That figure doesn’t include yet the thousands of CPA exam
passers through the years who have decided not to renew their PRC licenses
anymore.
The total number of Filipino CPAs surely runs in the hundreds of thousands,
perhaps even in millions, considering that every year more than 125,000
students enroll in an Accountancy degree in over 520 accounting schools
nationwide.
The attrition, though, in Accountancy programs is heartbreaking. From the

125,000 enrolled Accounting students, only 14,000 actually get to graduate per
year. Resulting to 11% of the total students that enrolled in the Accounting
program during their first year.
On the other hand, in the CPA Board Examination the average number of passers
is 8,200 each year. That means just one out of 3 Accountancy graduates get to
pass the CPA Licensure Exam, (Pinoy Money Talk, 2019).
4. Trends and State of the National Passing Rate – for the past five
years
The demand of Accountants have increased significantly in any field of practice whether
in education, government sector, practice, and other related field (Banaria, 1986).
However, it is observed for the past five years specifically school years 2014 to 2019
that, the national passing performance in the board examinations were unstable from
increasing percentage from July 2014 to May 2016 then decreasing percentage starting
October 16 until to the recent CPA board examination held on May 2019 which has the
lowest percentage in the past five years based on consensus, most of the schools and
universities did not get 100% passing percentage especially the top performing schools
such as the University of the Philippines, De La Salle University, University of San Carlos,
etc. Comparing the average rating for the 11 examinations from July 2014 to May 2019
(refer Table 1) of 32% this result is far below the other profession’s board examinations
of at least 42% passing percentage. This causes the closure of the many colleges and
universities nationwide because the allowable passing percentage per school did not
reach the threshold, a dilemma for most colleges in accrediting the program (Salon
2003). Based on the data provided by the Professional Regulation Commission, the trend
in the board examination performance for the past five (5) years from July 2014 to May
2019 with (11) board examinations conducted by the Commission showed low
performance as summarized in table 1.
Table 1. Trends in National Passing Percentage for the Past Five years (11
board examinations from October 2014 to May 2019
Exam Date Total Examinees Total Passers National Passing Rate
May-19 10,319 1,699 16.46%
Oct-18 14,358 3,616 25.18%
May-18 9,830 2,843 28.92%
Oct-17 14,816 4,511 30.45%
May-17 9,645 3,389 35.14%
Oct-16 14,390 5,249 36.48%
May-16 6,925 2,967 42.84%
Oct-15 13,317 5,468 41.06%
May-15 5,959 2,132 35.78%
Oct-14 11,137 4,123 37.02%
Jul-14 5,540 1,107 19.98%
Table 2. Descriptive Statistics
Mean 10,567 Mean 3,373 Mean/Average 32%
Median 10319 Median 3,389 Median 35%
Mode #N/A Mode #N/A Mode #N/A

Standard Standard Standard
3408.1039 1405.28 0.084422951
Deviation Deviation Deviation
Sample Sample Sample
11615172.49 1974809.891 0.007127235
Variance Variance Variance
Sum 116,236 Sum 37,104
In view of this situation, the main objective of the study is to assess the factors
affecting the performance of graduates in the CPA board examination for the past
five years. With the aim of producing globally competitive accountants and
acquire workplace competencies, the first step is to pass and even top the
national board exam (Ballada, 2008).
5. Factors Affecting the Performance of Graduates in the CPA

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FCPC

FIRST CITY PROVIDENTIAL COLLEGE

Average Passing Rate among State Colleges

John Lester O. Sanchez

Licensure is a one of the indication of being a professional. It is a standard that

(2) be of good moral character;

(3) be a holder of the degree of Bachelor of Science in Accountancy conferred by

(4) not been convicted of any criminal offense.

2. CPA Board Examination in the Philippines – an Overview

(1) Financial Accounting and Reporting

(2) Advanced Financial Accounting and Reporting

(3) Management Advisory Services

(6) Regulatory Framework for Business Transactions

3. Number of CPA’s and Accounting Students Enrolled in the Program

The attrition, though, in Accountancy programs is heartbreaking. From the

Exam Date Total Examinees Total Passers National Passing Rate

May-19 10,319 1,699 16.46%

Oct-18 14,358 3,616 25.18%

May-18 9,830 2,843 28.92%

Oct-17 14,816 4,511 30.45%

May-17 9,645 3,389 35.14%

Oct-16 14,390 5,249 36.48%

May-16 6,925 2,967 42.84%

Oct-15 13,317 5,468 41.06%

May-15 5,959 2,132 35.78%

Oct-14 11,137 4,123 37.02%

Jul-14 5,540 1,107 19.98%

Table 2. Descriptive Statistics

Mean 10,567 Mean 3,373 Mean/Average 32%

Median 10319 Median 3,389 Median 35%

Mode #N/A Mode #N/A Mode #N/A

5. Factors Affecting the Performance of Graduates in the CPA

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