Proposed Revisions in the Philippine CPA

ExaminationsPrepared by

Ferdinand C. Importado CPA, MBABased on the

Meet the ExaminersAugust 20, 2015

University Theater, University of the East, Manila

Contents

• Background or rationale for the revision.• Old subjects (seven subjects).• Highlights of the revisions.• Conceptual representation of the revisions.• Proposed revised subjects (six subjects).• Suggested subject clustering.• Observations on the proposed revisions.• Issues on the proposed revisions.• Next steps for the Board of Accountancy.

Background

• The Philippine CPA Licensure Examination (PCPALE) has not been changed over the past 40 years.

• On June 20, 2015, The Board of Accountancy (BOA) proposed to the Professional Regulatory Commission (PRC) the revision of the PCPALE.

• Section 15 of Republic Act 9298 (The Accountancy Law) allows amendments the PCPALE by the BOA subject to the approval of the PRC.

• Effective May 2016.

Old Subjects

• Theory of Accounts• Practical Accounting Problems 1• Practical Accounting Problems 2• Management Services• Auditing Theory• Auditing Problems• Business Law and Taxation

Revisions

• Reduction of the subjects from 7 to 6 subjects.• Merging auditing theory and practice.• Merging accounting theory and practice.• Distributing Theory of Accounts (TOA), Practical

Accounting Problems 1 and 2 (Prac. 1 & 2) between Financial Accounting and Reporting (FAR) and Advanced Accounting.

• Segregating Business Law and Taxation (BLT) into Taxation and Regulatory Framework for Business Transactions.

• Renaming Management Services (MS) to Management Accounting and Control.

Conceptual RevisionsTheory of accounts

Practical Accounting Problems 1

Practical Accounting Problems 2

Management Services

Auditing Theory

Auditing Problems

Business Law and Taxation

Financial Accounting and Reporting

Advanced Accounting

Management Accounting and Control

Auditing

Taxation

Regulatory Framework for Business Transactions

Revised Subjects

• Financial Accounting and Reporting• Advanced Accounting• Management Accounting and Control• Auditing• Taxation• Regulatory Framework for Business Transactions

Suggested Subject Clustering

• Financial Accounting and Reporting• Financial Accounting Part I – Accounting for assets

• Financial Accounting Part II – Accounting for liabilities and equity

• Financial Accounting Part III – Financial statements and other special topics

Suggested Subject Clustering

• Advanced Accounting• Advanced Financial Accounting Part I – Accounting for partnerships, corporations and revenue recognition

• Advanced Financial Accounting Part II – Accounting for agency, head office and business combinations

• Advances Financial Accounting Part III – government accounting and other specialized industries

Suggested Subject Clustering

• Management Accounting and Control• Management Accounting Part I and II• Management Advisory Services• Cost Accounting Part I – Job order costing• Cost Accounting Part II – Process costing

Suggested Subject Clustering

• Auditing • Auditing, assurance and attestation (auditing theory)

• Auditing practice (auditing problem)

• Taxation• Taxation I – Income taxation• Taxation II – Business and Transfer taxes

Suggested Subject Clustering

• Regulatory Framework for Business Transactions

• Law on obligations and contracts• Law on partnerships and corporations• Negotiable instruments law• Sales, agency and bailments• Pertinent provisions of SEC, BSP, COA, Insurance Commission, BOA*

Observations on the Revisions

• 100% mapping (matching) – All subjects currently prescribed under the BSA Program will be covered by the new six subjects.

• The previous seven subjects were just reclassified into the new six subjects representing a rationalized and integrated version of the old for a better linkage between theory and practice.

• This is in conformity with the new outcomes-based approached in education.

Issues on the Revisions

• Who are conditional examinees? – The Board of Accountancy will issue clarificatory statements before October 2015.

• Re-take of conditional examinees – examinees who became conditional before May 2016 has 2 years (4 exams) to pass the exam using the old format (seven subjects).

• E.G. Conditional on October 2015 has until October 2017 for completion using the seven-subject format.

• If the examinee fails to complete the conditioned subjects within the time allotted, the examinee shall take the six-format subject on the next take of the exam.

Issues on the Revisions

• If the examinee fails to complete the conditioned subjects within the time allotted, the examinee shall take the six-format subject on the next take of the exam.

• E.G. Examinee was conditioned last May 2015. The examinee has until May 2017 to complete the exam. If it turns out the examinee fails on May 2017 upon taking the necessary refresher’s course, the examinee will now be subjected to the new six-subject format.

Next Steps for BOA

• Prepare the PRC resolution for the revision.• Finalize the syllabus and Table of Specifications (TOS).• Coordinate with the appropriate offices in the PRC to

implements the changes.• Prepare testbank for the six subjects.• Address transitory requirements (existing testbank,

conditioned exminees and others).• Conduct public awareness (CHED, Accounting schools

and students, JPIA, PICPA, review centers and others).