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, the researcher will
present statistical data concluding the relationship between the factors that are
significantly affect the performance of schools in Region III in the CPA Board
Exams.

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 used 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. Concluding - Factors Affecting the Performance of Graduates in the CPA

Board Exam among schools in Region III

The researcher collected data from five schools in Region III based on the
population of their examinees per year, the table shown below (3) it includes the
number of graduates who pass and failed in the board exam and starting 2015
until 2016 it clearly shows that the average number who pass the examination
are higher compare to those who failed. However, in 2017 it instigated to
decrease from 58.2 to 52.2 and the number who failed increases up until to in
year 2019. Based on the table above (1) it concludes that the passing rate in
national and by region are correlated to each other because the national passing
rate also affects the passing rate in Region III.

Table 3. Trends in Average Number of Passers and Failed - Schools in

Region III in past Five Years

Schools In Region III (Based on

2015 2016 2017 2018 2019
Population as of 2019)
Pass Failed Pass Failed Pass Failed Pass Failed Pass Failed

Angeles University Foundation 11 6 20 6 19 5 17 11 11 29

Baliuag University 43 26 53 44 51 91 40 69 24 135

Holy Angel University 111 54 114 25 97 44 107 38 61 85

Tarlac State University 61 66 73 53 64 51 41 42 17 16

Wesleyan University 38 31 31 39 30 43 26 44 25 73
Average Number of Passers of
52.8 36.6 58.2 33.4 52.2 46.8 46.2 40.8 27.6 67.6
Schools in Region III
 Factors Affecting Perfomance of Graduates in
CPALE in the Past Five Years
80

67.6
70

58.2
60
52.8 52.2 Pass
50 46.8 46.6 Failed
Pass
40.8
Failed
40 36.6
33.4
27.6
30

20

10

0
School Factor School Factor Student Factors BOA Factors BOA Factors
2015 2016 2017 2018 2019

School Factors. In 2015 and 2016 the average of number who passers were 52.8
to 58.2 indicated that the accounting graduate perceived the following factors to
have average influence on their performance in the CPA licensure examination:
adequacy of technology hardware and software, adequacy laboratories and
physical facilities; adequacy of laboratory equipment, supplies and materials;
adequacy of audio visual resources; adequacy of sports and recreational facilities;
availability of good accounting programs; and availability of good accountancy
faculty, staff and easy access to transportation.

Student Factors. In 2017 the average number of passers were 52.2, accountancy
graduate perceived the following factors to have high influence on the decrease
of their performance in the CPA licensure examination: interest in the course,
lack of time spent in studying lessons in preparing assignments, doing research
in the library or through Internet, active participation in review sessions
conducted by the University, active participation in review sessions conducted by
a review school, and number of hours spent in reading books and materials
related to accountancy.

BOA (Board Of Accountancy) Factors. In recent years from 2018 to 2019

number of passers were 46.6 down to 27.6, accountancy graduate perceived the
following factors to have high influence on the rapid decrease of their
performance in the CPA licensure examination: mismatched of questions in the
syllabus that was given by BOA, errors in questions the actual examination,
change of policy in using scientific calculator to basic calculator, new laws that
are included in the exam that are not discussed during their undergraduate
program.

References

Revenio, J. (2016) Performance in CPA Examination: Benchmarking for

Opportunities to Meet Market Demands [Online]. Available:
https://www.researchgate.net/publication/310245431_Performance_in_CPA_Ex
amination_Benchmarking_for_Opportunities_to_Meet_Market_Demands

Candido, P. (2015) Performance of BSA Graduates in the CPA Licensure

Examination: Basis of Enhancement [Online]. Available:
http://lpulaguna.edu.ph/wp-content/uploads/2016/08/Performance-Of-Bsa-
Graduates-In-The-Cpa-Licensure-Examination.pdf

Cruz, A. (2019) Everything You Need to Know about the CPA Board Exam
[Online]. Available: https://blog.edukasyon.ph/college-life/everything-you-need-
to-know-about-the-cpa-board-exam/http://www.pcrest2.com/fol/1_2_1.htm

Pinoy Money Talk (2019) Best CPA Accounting School in the Philippines [Online].
Available: https://www.pinoymoneytalk.com/top-accounting-schools-philippines/

Ballada, Win Lu (2008). Accounting Made Easy: Sampaloc, Manila: Dom Dane
Publishers & Made Easy Books.

Herrero, C. (2015) Influence of Selected Factors on CPA Licensure Examination

Results [Online]. Available:
https://www.ssoar.info/ssoar/bitstream/handle/document/56817/ssoar-ilshs-
2015-64-herrero-Influence_of_selected_factors_on.pdf?sequence=1