CHAPTER 1

INTRODUCTION

A. BACKGROUND AND RATIONALE

Accounting professionals have many significant career opportunities, making it one of

the most in demand profession in the field of business. In general, accounting field is

about recording and analyzing business activities. Accountants keep records and

produce financial reports of the organizations to make an effective decision.

Accounting professionals also help to ensure that business is running ethically and

efficiently. There are two main career areas within the field of accounting: public and

private.

In this study, we will give emphasis on the factors why an accountant prefers working

in a public practice rather than private or vice versa. Whether you’re a new graduate

or looking to change gears in your career, you’ve likely considered the choice: Public

practice or Private practice?

Practice of Public Accountancy shall constitute a person, be it his/her individual

capacity, or as a partner or staff member in an accounting or auditing firm, holding

out himself/herself as one skilled in the knowledge, science and practice of

accounting, and as a qualified person to render professional services as a Certified

Public Accountant. (Salosagcol, 2014) It is a career open to firms and individual CPA

who offers to the public, expert services like bookkeeping, auditing, accounting, tax

and financial planning. (Cruz-Manuel, 2014) Big Four (Deloitte, Ernst and Young,

KPMG and PWC) are the largest accounting firms in the world. Accountants who

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work in a public accounting practice normally interact with a wide range of clients to

review and prepare important financial statements that is required to disclose to the

public.

Practice in Commerce and Industry (also called Private Accounting) shall constitute

in a person involved in decision making requiring profession knowledge in the

science of accounting, or when such employment or position requires that the holder

thereof must be a Certified Public Accountant. (Salosagcol, 2014) It is another career

field that is concerned with the inner working of businesses, governments and

agencies. Accountants are employed as financial accountant, budget officer, internal

auditor, electronic data processing or cost accountants. Private accountants deal with

the information of a single company they're employed by, usually preparing or

analyzing reports for the internal manager. Although having a CPA license can give a

leg-up in their career, it is more valuable to public accountants than in private.

The accounting industry is incredibly dynamic, so those working within the

profession have to be able to adapt to change and stay up-to-date with changes in

rules and procedures. But despite all of the hardships, a career in accounting has the

potential to be incredibly rewarding: it could give you the chance to work in virtually

any industry and could open up doors to more opportunities in the world of business.

B. RESEARCH PROBLEM

This study aims to compare the work experience as perceived by the CPAs in the

public practice as well as the private practice working in different companies in Metro

Manila.

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 C. OPERATIONAL DEFINITION OF VARIABLES

1. Public Practice or Public Accounting – provides accounting services to

other firms. This usually pertains to, but is not limited to, audit.

2. Private Practice or Private Accounting – provides accounting services

exclusively to one client

3. Work Environment – includes the company culture, as well as one’s

relationship with co-employees

4. Job Satisfaction - positive emotional state from the evaluation of one’s job or

experience

5. Professional Advancement – education and training opportunities provided

by the company in the workplace to continually improve and increase

capabilities of its employees as well as their career path

6. Compensation –remuneration of employees for the services they have

provided to the organization

7. Retention – stay of the employee of its engagement to the organization

D. SIGNIFICANCE OF THE STUDY

Generally, the result of the study will provide accounting professionals a

comprehensive analysis regarding their career options or preferences. This study will

also provide information about the factors affecting the accountants to switch working

from a public accounting firm to a private company and vice versa. At the end of the

study, this can serve as a guide for CPAs to assess their career areas within the field of

accounting.

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Specifically, the result of the study will be of great benefit to the following:

Accountancy Students including Fresh BSA Graduates

The study will help the students compare the career paths of a public accountant and

a private accountant. This will serve as a guide for them to choose whether to work

in a public accounting firm or in a private company.

Certified Public Accountants Working in Public Accounting Firms

This study will help the accountant evaluate the merits of engaging in a public

accounting firm. Also, it will help them decide whether it will be best for them in the

long-term. On the other hand, they might also consider transferring to another

company particularly the private ones. At the end of the study, this will help them

explore the benefits and consequences of engaging in a public or private company.

Certified Public Accountants working in Private Companies

Like those said at CPAs in public accounting firms, the study will allow accountants

of private companies to take an evaluation of whether or not it is more beneficial and

flexible to work in that particular industry. The comparative study will contribute to

their decision regarding their possible long-term employment in the company. And

also, this study will make them consider the merits of working in a public accounting

firm that they can't have while working in a private company.

Public Accounting Firms

As it is said that in public accounting firms are where most accountants begin their

careers, this study will encourage them to continue the varied and diverse experience

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that they are offering to their CPA employees. The study provides the factors that

can help them to further enhance their working environment and advancements

available to their accountants. At the top of this, they will know how to satisfy the

needs of their CPA employees.

Private Companies

The study will help private companies to know the factors that affect the working

efficiency and satisfaction of the CPAs working with them. This can serve as their

guide to build a strong relationship with the accountants and make them stay in their

company for a long time. Aside from these, they will also know why most public

accountants eventually work in private sectors. After this study, private companies

might consider adding benefits and privileges for the satisfaction of the accountant

employees.

Future Researchers

The ideas presented in this study may be used as reference data in conducting new

researches or in testing the validity of other related findings. This study will serve as

a cross-reference that will give them a background or an overview of the comparative

analysis of working experience of CPAs in public and private companies.

E. OBJECTIVES OF THE STUDY

Specifically, this study aims to compare the perceived value of work experience of

CPAs in the public practice as well as the private practice.

1. Determine the deciding factor of the CPAs on engaging in their chosen fields

particularly in the specified companies.

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 2. Differentiate the work experience of CPAs in the two fields on the basis of

work environment, employee job satisfaction, professional advancement,

compensation and retention.

3. Identify reasons of retention of CPAs in the chosen sector.

F. SCOPE AND LIMITATION OF THE STUDY

This study covers only the CPAs working in companies in Metro Manila offering

public or private accounting. The respondents in public practice are from

Deloitte, SGV and PricewaterCooper while the respondents in private practice are

from Firefly, Schenker Philippines and Teleperformance.

This study will focus on investigating the variables namely work experience,

public practice, private practice and CPAs in Metro Manila.

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