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Comparative Analysis of Accounting Education across ASEAN: A Case Study of Philippines and Singapore

Aborje, Mia Rose Lim, Narchel M. Torres, Maria Pamela

Abstract The accounting education vary widely across ASEAN member countries. This paper presents an analysis of accounting education in two ASEAN' countries- Singapore and Philippines. These analysis reveals that these two countries were under colonial rule for centuries. Therefore, it provides a review of influence by their colonial powers in accounting education. As evidenced however, both countries have moved away from colonial system. This paper uses a comparative framework to highlight the similarities and differences of accounting education between the two countries. This study finds that the current state of accounting education in these two countries, is significantly different but both countries have made a much greater progress in the field of education and training of accountants.

Introduction Many developing countries including the Association of South East Asian Nations (ASEAN) have shown signs of erosion from colonial influences, two of these countries are the Philippines and Singapore. In the early years of colonial period, trade and investment in these countries were set up by British and US investors. Therefore, the law

enforcement, government administration as well as the education in both countries were developed under the direct control of such colonial powers. In recent years, however, there has been tremendous interest in improving the accounting profession in both countries mainly due to its impact on economic development. In these countries, accounting was introduced not because it was needed tor development, but because it was needed to facilitate the accounting and reporting requirements of Western corporations operating in those countries. The objective of the study was to examine the past and current state of accounting education system in Philippines and Singapore to determine their similarities and differences. This paper also provides insight on the qualifications on how to be an accountant in these countries. The research is based on the data collected through internet research.

Results This chapter explains the general framework for accounting education in Singapore and Philippines and the pathway to become a chartered accountant (CA) of Singapore and a Certified Public Accountant (CPA) in the Philippines. Accounting has always been an integral part of an ever-changing business world. As such, accounting education is dynamic and requires constant review to match social expectation. The chapter discusses the accounting education curriculum for accredited degree programs offered by Singapore and Philippine universities. To be an accountant in Singapore, besides going the traditional route of diploma or degree, you can opt for professional qualifications such

as ACCA. ACCA is a leading international accountancy body. It is a globally recognized qualification that can open a lot of doors. ACCA involves a total of 14 papers: 9 fundamental and 5 professional. ACCA has 4 exam sittings in a year: March, June, September, December. In the Philippines, the Bachelor of Science in Accountancy is a four-year degree program that is primarily concerned with the effective management of a person’s, group’s, or company’s financial resources including the proper ways of monitoring and documenting the flow of money or goods within the system and the applicable laws related to it. Graduates of BS Accountancy are required to pass the Licensure Examination for Certified Public Accountant (CPA) to be able to practice their profession.

Discussion SINGAPORE Singapore was colonized by the British for one and a half centuries until 1959. Hence, their education from primary to university level was greatly influenced by the British system. The British system of accounting education was imposed on Singapore during the colonial period in a number of ways: the export of British accounting personnel to Singapore, the export of British accounting qualifications, the establishment of British professional accounting bodies' examination centers, the involvement of British experts in the planning, directing, organizing, teaching and providing assistance in one form or another in the development of academic institutions in Singapore and the general British

influence upon the business, education and administrative environments in the early days of Singapore. Pre-war accountancy education was either complicated or expensive. The few who could afford to go to England to do chartered accountancy did so. Those who could not took the route of part-time studies, working with an accounting firm and getting certification as an accountant. During the pre-war era, Singapore did not have any program of studies leading to a local qualification in accounting. The only accounting education available was through the examinations conducted by professional accounting bodies in the UK and Australia. As such, a foreign professional accounting qualification was the only avenue through which a person could expect an accounting job in the public sector. Given the large number of Chinese businesses in Singapore, it was fitting that the Chinese-language Nanyang University was the first to introduce an undergraduate accountancy course. The first local accounting program leading to a Bachelor of Commerce with specialization in accounting was launched in 1956. In the following year, the Department of Commerce at the Singapore Polytechnic was established to offer, among other courses, a full-time course leading to the College Diploma in accounting. In 1958, the Department of Commerce at the Singapore Polytechnic was replaced by the Department of Accountancy with the objective of offering both full-time and part-time courses leading to a Professional Diploma in Accounting. After gaining political independence, the authorities in Singapore realized the importance of producing accountants through their own higher educational institutions without depending on foreign accounting bodies and what was perceived to be outdated education systems. Consequently, the professional accounting diploma awarded by the Singapore

Polytechnic was recognized in 1963 as a sufficient qualification for admission to provisional membership of the Singapore Society of Accountants (SSA). The SSA was the local professional accounting body established by the government for the purposes of registering professional accountants and regulating the practice of the profession of accountancy in Singapore. During the 1965-66 academic year, the Department of Accountancy at the Singapore Polytechnic was renamed the School of Accountancy and the accountancy program was upgraded from a diploma to a university degree to signifying the transformation of the polytechnic to a university college. As a result of negotiations between the college and the University of Singapore, the latter agreed to award its accounting degree to students of the Singapore Polytechnic. In 1969, the consolidation of the School of Accountancy with the Department of Business Administration of the University of Singapore represented another milestone in the historical development of an independent accounting education system in Singapore. During the merger, the School of Accountancy was relocated to the University of Singapore campus. As a further development in 1971, the Bachelor of Commerce major in Accountancy program offered by Nanyang University also received its professional recognition, subject to practical training, from the SSA. In 1978, joint courses in accounting were introduced by the Nanyang University and the University of Singapore. The two schools of accountancy merged in 1980 to form the School of Accountancy at the National University of Singapore. After the recognition of the Singaporean university system through the formation of the National University of Singapore and the Nanyang Technological Institute, the country's accounting education system achieved its highest growth rate. The School of

Accountancy of the National University of Singapore was physically relocated at the Nanyang Technological Institute in 1987 and the School of Accountancy was renamed the School of Accountancy and Business in 1990. In 1991, the Nanyang Technological Institute became a full-fledged university and is now named the Nanyang Technological University (NTU). The School of Accountancy and Business of this university has gained a reputation today as the leading center for undergraduate and post graduate accounting education in Southeast Asia. The bachelor of accounting degree awarded by the Nanyang Technological University is based on a 3-year full-time program of study. In addition to its Bachelor of Accountancy degree program, it also offers professional post-graduate programs in Accounting. These accounting degrees are recognized by the Institute of Certified Public Accountants of Singapore (ICPAS) for admission to its membership, subject to approved practical experience. The Bachelor of Accountancy program of NTU, at its various stages of development, has produced nearly 10,000 accounting graduates. By the end of 1992, 7442 of these graduates had become professional accountants by obtaining the ICPAS membership. Since its inception, the Singapore professional accounting body, initially as the Singapore Society of Accountants in 1963 and later as the Institute of Certified Public Accountants of Singapore in 1987, has maintained a close relationship with the university's School of Accountancy. This intermediary is evidenced by the fact that the Institute was consulted at each stage of the transition of the School from the Singapore Polytechnic to the present Nanyang Technological University. A representative of the School of Accountancy and Business is appointed by the Minister of Finance as a statutory member of the Council of the ICPAS. Through various committees, the School

of Accountancy and Business also maintains close rapport with the professional accounting body, business community and other professional organizations to ensure the continuing relevance of its degree programs. It appears that during the postindependence period as a booming economy, Singapore has been able to consider their national goals, political climate, economic environments and efficiency in utilizing educational resources including universities and technical colleges in order to develop a system of accounting education and training more suitable to their local conditions. Today, there are many channels for getting accountancy training in Singapore. There are also numerous opportunities for someone trained in accountancy in the profession, in industry and management at all levels. Today’s accountants operate in a global environment that is charged with opportunity, constant change and risk with tremendously huge stakes. They perform oversight and gate-keeping roles in a complex world governed by a plethora of ever-increasingly tough legislation to bolster confidence in the high-stakes capital markets. For accounting firms to stay on top of new trends in business and industry in order to perform proper audits, continuing professional education and a good code of conduct and ethics are crucial. The public practice of Accountancy in Singapore is governed by the Accountants’ Act of 2004. As per this law, getting into the public practice does not require earning a bachelor’s degree in Accountancy. Here are the qualifications for registration: any person, who is at least 21 years old, has practical experience, and is a member of any professional accounting body.

PHILIPPINES The Philippine accounting system is strongly influenced by US and international practices. The governing legislative and institutional framework is comprehensive. The components of a developed and robust framework are readily identifiable. In common with the US model, these arrangements reflect a mixture of government intervention and self-regulation. Accounting was legally recognized as a profession in the country way back in 1923 when the sixth Philippines Legislature approved Act No. 3105 on March 17, 1923. This law created the Board of Accountancy vested with authority to publish rules and regulations, to set professional standards for the accounting profession practice and to issue certified public accountant certificates to those who have qualified in accordance with the requirements of the law. The Board then was composed of a chairman and two members. The first Board of Accountancy was composed of Chairman W. W. Larkin, and, Domingo Dikit and Felix Tiongson, as members. The Accountancy Act 1967 replaced the Accountancy Act 1923. It governed the standardization of accounting education, stipulated the examination process for CPA registration, and regulated the practice of accountancy. The Act allowed only Philippine citizens, and citizens of foreign countries extending similar privileges to Philippine citizens with respect to the practice of accountancy, to take the CPA exam and to practice accountancy. The Revised Accountancy Act 1975, which replaced the Accountancy Act 1967, remained in force and was the key piece of legislation that governed accounting and auditing arrangements. Philippine accounting and auditing moved away from US influences to international practices in the 1990s. For instance, International Accounting Standards became the

basis for Philippine accounting standards in 1996. In the wake of the 1997-98 Asian financial crisis, attention has focused on accounting and auditing arrangements. While the Philippines overcome the crisis better than its neighbors, foreign direct investment levels have fallen substantially in the past 3 years. The world economic slowdown is reinforcing this trend. Among an array of options to make the Philippines a more attractive destination for FDI, one of the more effective choices is to adopt best-practice accounting and auditing standards, and to ensure that these standards are rigorously monitored and enforced. The increasing complexity of professional regulation and the developments in the practice of Accountancy have caused the expansion of the Board of Accountancy from three members (president and two members) under Act No. 3105 in 1923, through six (chairman and five members) under Republic Act No. 5166('The Accountancy Act of 1967') in 1967, to seven (chairman and six members) under Presidential Decree No. 692 (The Revised Accountancy Law) in 1975. Under the management of the Professional Regulatory Comission, the Board of Accountancy discharges its mandate of supervising, controlling and regulating the practice of accountancy with authority and distinction. But over and above its regular functions of standardizing and regulating accounting education, conducting examinations for registering CPAs, and maintaining the rules of the practice, the Board has taken the lead in raising the standards of the profession to a high level of excellence through the development of the following: full computerization of CPA licensure examinations, upgrading of the quality of accounting education, regulation of CPA firms and partnerships, requirement of CPAs in civil service, initiating the Expanding Horizon initiative in 2014.

Part of the Expanding Horizon Strategic Plan was the proposed revisions of the Board to the Accountancy law. The revisions were submitted to the Congress last 2016. The Board of Accountancy proposed new tracks for the accountancy profession. The new tracks start with the taking of any of the four accounting programs in college. The accounting courses that were made available by school year 2018-2019 included BS Accountancy, BS Management Accounting, BS Internal Auditing and BS Accounting Information System. In addition to the changes in accounting education, there was also a proposed change in the examination process. The licensure examination of the future will include two levels of tests. The graduates of the four accounting programs will have to take the first-level Certified Accountant (CA) examination. This examination consists of five core accounting subjects, to include financial accounting reporting, advanced financial accounting reporting, management advisory services, taxation and regulatory framework for business transactions. The examinees will have to pass this CA examination to work or practice accountancy. The passers of the CA examination will be authorized to work as accountants in the government, public practice and private sector, except to sign auditor’s certifications and to teach as accounting educators. While those who want to pursue auditing or teaching will have to pass the second-level Certified Public Accountant (CPA) or Certified Professional Accountant (CPA) examination, depending on their educational specialization or attainment. There will be a CPA examination for each of the four accountancy courses or specialization. There will be a CPA examination dwelling for each of the accountancy specialization of auditing, management accounting and accountancy information system. The CPA examination can be taken optionally after three years of meaningful work experience. Once the examinees have passed the CPA

exam, they can now be signatories of the external audit certification, while passers of the Certified Professional or Public Accountant exams can qualify as accounting teachers. This new process is expected to be implemented in 2023. The changes are intended to address the demands and requirements of industry and the accountancy profession of having accounting professionals. There is now the need for accountants to have specialized skills and a more practical experience and mindset. It will also provide more focused options for those aiming to pursue accountancy education and careers. Unlike the present situation where there is only one option of taking the BS Accountancy course as the first step in being an accountant, the academic and licensure track of the future will present more options to cater to the interest and competence of the future accountant. The Bachelor of Science in Accountancy was prescribed by the CHED in January 2007 in CHED Memorandum Order (CMO) 03 Series of 2007. It has been over 10 years since the BSA was first offered. Presently, there are over 500 schools offering the Bachelor of Science in Accountancy. Over 125,000 students enroll each year in the BSA program. About 21,000 BSA graduates take the Certified Public Accountant Licensure Examination each year and more than 8,500 pass these Board Examinations to become CPAs each year.

Conclusions The Republic of the Philippines and, the Republic of Singapore, member States of the Association of South East Asian Nations, recognizing the objectives of the ASEAN Framework Agreement on Services (AFAS), which are to enhance cooperation in

services amongst ASEAN Member States in order to improve the efficiency and competitiveness, diversity, production capacity, and supply and distribution of services of their services suppliers within and outside ASEAN; to eliminate substantially restrictions to trade in services amongst ASEAN Member States; and to liberalize trade in services by expanding the depth and scope of liberalization beyond those undertaken by ASEAN Member States under the General Agreement on Trade in Services (GATS) with the aim to realizing a free trade area in services, are desiring to provide a Mutual Recognition Arrangement Framework (hereinafter referred to as “MRA Framework”) on Accountancy Services to facilitate the negotiations of MRAs in the Accountancy Services among ASEAN Member States as well as promoting the flow of relevant information and exchanging expertise, experiences and best practices suited to specific needs of each ASEAN Member State. The objective of this MRA Framework is to exchange information in order to promote and take into consideration the development of the best practices on standards and qualifications in the accountancy profession.

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