The Increase in the Demand for Lasallian Accountants
Brought About By Economical Issues
And the Edge of DLSU
A research paper Presented to: Dr. Jose Cristina Parina
In partial Fulfillment Of the Requirements for ENGLRES Trimester (2012-2013)
Ronald Emmanuel C. Francisco, Marvin Joshua Chan November 29, 2012
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Thesis Statement: The demand for Lasallian accountants increase because of the increasing financial crisis, educational advantages of DLSU and competitiveness of being a Lasallian graduate.
Outline I. Introduction A. Background of accounting 1. Definition 2. Use of accounting B. Thesis Statement II. Increasing Financial Crisis A. Issues in Accounting 1. Inside the companies 2. Outside companies 3. Unethical behavior of accountants 4. Resolutions B. Accounting Scandals and crime 1. Robbery inside accounting firms 2. Not abiding with the law 3. Increasing complexities in tax laws 2
C. Effects 1. Need for more specialized accountants 2. Increase risk in financial institutions 3. Developing countries will need accountants 4. Increase in Demand 5. Importance of ethics III. Educational advantage of DLSU accountants A. DLSU Top accounting school 1. Experienced professors, professionals and masters 2. Organization that help future accountants 3. Teaching curriculum B. Partners with International accounting Institute 1. CIMA, International institute, team with DLSU 2. AIM, Asian Institute, team with DLSU IV. Competitiveness of being a Lasallian graduate A. Impact on accounting profession 1. Credibility 2. Job opportunities 3. Higher chances of being hired B. Board exam passing rate 1. Consistent 100% 2. DLSU tops board exams V. Conclusion 3
Accounting is known to be one of the most important departments in an entity and also serves as the backbone of most businesses. It is defined as the information system that identifies and records economic events and communicates them to interested users through financial reports. Based on the textbook, Principles of accounting, 6 th edition by K. Chalmers, the information that is needed by the users of financial information depends on the kinds of decisions made by them. Because of the differences in these decisions, the users of financial information is divided into two broad groups; Internal users of accounting information serves as the managers who plan or decide, organize and facilitate a business. These include production supervisors, marketing managers, chief financial officers and other employees. Second are the external users which have many types. One are the investors of owners which uses accounting information in making decisions whether to buy, hold or sell shares. Second are creditors such as suppliers and bankers. They use accounting information to evaluate the probable risks of giving credit or lending money to people. With that said, businesses need accountants to monitor the economic standing of an entity and interpret them properly to users. Moreover, because they are indeed helpful in an entity most specially in determining its gains which may lead to the companys success or its loses which may lead to bankruptcy, accounts have grown to be one of the most in- demand profession and most sought out course in colleges and universities. Added to that, one of the universities that offer high quality accounting course is the De La Salle University (DLSU). Thus, being true to one of the motto of the university which states that; Your future begins here, DLSU are consistently producing highly trained 4
professionals which are needed by companies not only in our country, but in the whole world. This paper seeks to provide information about the increase in the demand for Lasallian accountants because of the increasing financial crisis, educational advantages of DLSU, and the competitiveness of each Lasallian graduate. In the chapter co-authored by George A. Walker in the book "Managing Risk in the Financial System, the based committee on banking supervisions had identified a number of characteristics of the pre-crisis financial system. In the banking and financial system, there had been too much abuse, excessive debts have accumulated. The risks to reflect more cautiousness in long term objective had been managed by inadequate risk governance and weak incentives. Moreover, the compensation packages in their objectives are poorly designed. Failure to monitor systemic risks and interconnection between financial institutions was very much present. This failure aggravated conditions that are too big to fail. Because of excessive leverage, insufficient conversion of cash and poor incentives for risk taking, the banking sector was vulnerable to shocks. Supported by these issues were many unethical behaviors of accountants that lead to service crisis, as mentioned in the thesis of Ms. Marivic V. Manalo. The American International Group (AIG), Bear Sterns, World Com and the like are only a few which bring about public criticisms in business worldwide which attacked the accounting profession. In 2004, a new code of ethics was established by the Board of Accountancy with the Philippine Institute of Certified Public Accountants to address the crisis in the accounting profession caused by the scandals in some firms. Because of the corporate collapses and scandals that accounting is currently facing, the effect on 5
the reputation of the accounting profession is considered severe of facing credibility crisis. According to Ms. Manalo, the accounting profession has developed for decades the trust of the public. However, in recent years, their reputation are now dimming and becoming bad due to the different crimes and scandals that have been well-publicizes. Because of these, steps were undertaken by many accounting regulatory bodies throughout the world to ensure that the morality and behavior of Certified Public Accountants by emphasizing on the laws that will be implemented. Firms and companies also reacted to the situations and heightened their focus on hiring Certified Public Accountants to lower down expenses and gain good financial controls which require the expertise of accountants. Mastery over the hard skills like creating efficiencies in finance functions and managing the budgets and costs are more important than ever before. But to distinguish the high-functioning CPAs, soft skills such as communication and diplomacy are playing a key role. Stated by LaBrosse, Caminal ang Singh(2011), as a result of all these financial crisis and continuous insufficient options for resolving insolvent large complex financial institution, regulators and legislators in the US have passed new resolution procedures that would be applied to LCFIS. Their main goal is to: (1) Control the timing of the launching of the process of insolvency. (2) Control the allocation of losses that are realized across different creditors. (3) Control the way of disposition of assets, including the where to liquidate it in the private sector or transfer the parts into a bridge institution. (4) The management of an insolvent LCFI should be reported. Also as an act of the 6
government here in the Philippines, they implement more and increasing complexities in tax laws. They realize that ethics is always an important to every form or business. Stephen James Associates, Morgan Lloyd and A.E. Feldman in their articles presented same information that the demand for Certified Public Accountants remains high despite the current financial crisis and scandals. Although many industries are closing, the accounting industry maintains demand for jobs at the current rate and may possibly increase. However, the demand on the accounting profession continues to change unexpectedly in different ways. This unexpected change is due to the increasing regulations and complexities in tax laws but also lowers the demand because of the risks of the scandals. Although the crisis will change the conditions of the marketplace, the AICPA study finds the majority of CPA firms surveyed reported growth over the past years which are a significant increase from the previous 2006 survey. But the demand for the accounting profession increases and more things are to be expected because of the financial crisis and scandals that are going through the world, the development for the accounting education is also in demand. The accounting education serves as the stepping stone and backbone of not just the skills and knowledge of the profession but also the ethics and mindset of the accountants. In terms of the ethics, Ms. Manalo mentioned in her thesis that accountants these days need to acquire moral perspective, character and justice to pass through different situations and take stand in their works not only the technical and accounting skills. The accounting education is the foundation and basis of the competence and morality among accounting students, future accountants and professional accountants. Here in the Philippines, ethics in education and profession are in priority. De La Salle University 7
Manila (DLSU) assumes the teaching strategies that are effective in teaching business ethics to student in accounting majors. The value of incorporating ethics in education is emphasized because some scandals were caused by methodological errors and judgment errors about the application of accounting techniques. For the course to be effective, educators should be the top priority and it will be a challenge on the part of the teachers to not only develop intellect but also attitude. De La Salle University Manila focuses on transformative learning as the main teaching strategy which centers on the students as learners and teachers as facilitators on the bridge for learning, as stated by Ms. Manalo in her thesis about developing a business ethics curriculum for the Bachelor of Science in accountancy (BSA) students of De La Salle University. She added, it is also important that teaching accounting ethics should be similar to the curriculum goals of the school and accounting program; not an attempt to teach students other doctrines or any particular type of morality. Over the past few years, different teaching strategies were adopted and used in teaching ethics in education without sacrificing the technical and knowledge part of the accounting course. Institutions of higher learning across the world are responding to technological, political, social and economic pressures and prepare students for future societal roles. One of the educational advantages of Lasallian accountants is that De La Salle University partners with different International accounting institutes. According to Manila Bulletin Publishing Corporation: MANILA, Philippines Filipino management accountants will have the opportunity to boost their competitive edge both here and abroad by 8
obtaining their international qualifications without leaving Manila as UK- based chartered institute of Management accountants(CIMA) teams up with two of the most prestigious institutions in the Philippines to offer its professional qualifications here in the country. CIMA added: We are very pleased to partner with the 2 best universities in the Philippines. CIMA hopes to work closely with both institutions to train more management accountants who in return will help their companies to grow and boost the countrys economy, according to Prof. Dr. Robert Jelly, Executive Director for education at CIMA Global In one forum in Pinoy Exchange under Campus chat and De La Salle University, it was discussed that De La Salle University has top accounting education and good university partners which is very much reflected in the professional lives of these accountants. DLSU had the 3 rd time for the last 3 years to have 100% board passing rates for accountants. There had been a low passing rate in May 2009 which was only 78% and in October 2009 which was 85% but DLSU managed to increased the rate of passers, Board exam rate for May 2010 was 98% and for October 2010 was 100%. There was a significant increase in the passing rates of Lasallian accounting graduates. Moreover, the rate was retained high until 2012 and ranges from 97% to 100%. People from forums discussed things about tha passing rate and mentioned that even though the number of takers is low, DLSU prefers quality over quantity. Takers who didnt pass the board exam means that they do also not 9
deserve to graduate the course itself. Some others mentioned about the credibility and job opportunities of DLSU graduates. Lasallian accountants are credible in their job because the school teaches the students proper values and the proper etiquette in the business. They also have better job opportunities not only because they are a graduate of a prestigious school but because of their knowledge and attitude in the workplace of accounting. Cynthia P. Cudia presented in her scholarly journal, Factors that influence the final grades of students in Managerial Accounting Course in De La Salle University, that accounting can be considered as one of the specialty courses of De La Salle University. This statement is supported by experienced accounting professors who thoroughly discuss each and every detail an accounting student has to know, bountiful resources offered to students like accounting books, an organization which help the student in their exams, and various activities where an aspiring accountant continue to grow as a professional. Of course failing is not an option; DLSU makes sure that all accounting students really acquire the skills that an accountant should have and they test these skills through qualifying exams, and most importantly a minimum grade of 2.0 in their accounting subjects. Truly, it is a survival of the fittest, and most dedicated. Higher batches of accounting students usually say that out of 8 blocks of freshman BSA students, only 2 classes survive until the end. With all of these intense training, rigorous analysis of business transactions, it is safe to say that Lasallian graduates of accounting course are competitive, strong and dedicated. Because of the hardships, trials, and obstacles that they have conquered, they have learned how to be a competitive person, competing against themselves and the stress brought about by accounting. 10
Graduating from De La Salle University opens the door to many opportunities. Students are not anymore worried about where they will work after graduating instead, banks or firms will be the one who calls you from time to time and encourage you to work for them. In short there are many job opportunities given to a LaSalle graduate and DLSU gives the student an edge in terms of the hiring process of some banks or firms. However, there are still some banks in the Philippines which does not take into consider the university or school that an applicant came from; one of which is the Bank of the Philippine Islands(BPI). BPI has known to be one of the top banks in the Philippines and throughout the years, BPI have scattered all over the country and proven themselves as one of the best and we are lucky enough to conduct an interview on Ms.Jhoanna V. Cruz who is under the human resources department of BPI-Philam life assurance Corporation. We asked questions like Does being a La Salle graduate give the applicant an advantage in the hiring process? ,In general, what can you say about Lasallian accountants? According to Ms. Cruz, their hiring decisions do not include the university that they graduated from or school where they came from. However we also asked them what their qualifications in hiring accountants are and these are the exact words that they said through e-mail: Candidate must possess at least a Bachelor's/College Degree in Finance/Accountancy/Banking or equivalent. Required skill(s): Working knowledge in MS Office applications especially in Excel Preferred skill(s): Patient, Keen sense for details, Analytical and with good customer service skills, Fast Learner, Willing to work long hours 11
Required language(s): English, Filipino Even though they do not consider the university as a factor, their qualifications for the job also seem to be high and requires an applicant to be competent, dedicated and has mastery about their chosen field. Yes, being a Lasallian gives applicants an edge but sometimes, that edge does not only dwell on the name rather it dwells on the values that he or she has, and the skills he/she obtained as a Lasallian. We need not to proclaim that we ourselves are graduates of La Salle, what we should do is that we should humbly show them what we are capable of and prove to them that it is not only the name that is great, but also the people behind it is great. Banks and firms have different ways and qualifications in hiring accountants. There are banks that take in to consider the university that an applicant graduated from and Rizal Commercial Banking Corporation (RCBC) is one of those banks. RCBC is also known as one of the biggest banks in the country and we are thankful that we got the chance to interview Ms. Denise Donato, Relationship Manager, Treasury Department of RCBC. Her answers give proof that being a graduate from La Salle gives an advantage to the applicant because of various reasons. First question that we asked her is what their qualifications in hiring accounts are. They said Work experience, educational background, personality during interview We then asked if they consider the college that an applicant graduated from and according to them, it would be a plus if they came from top schools. Next question that we asked is, Does being a La Salle graduate give the applicant an advantage in the hiring process? They answered, that it would help them be considered for the position. We asked what the characteristics that gave Lasallians the advantage were. Their exact words were: 12
Given that La Salle is known to produce good accountant graduates, the fact the applicant graduated from the course means they underwent rigorous training and education. Im aware of the modular system and the high grade standard required to stay in the course. They also said that they have seen graduates from La Salle who rise up the ranks, moreover, she said Lasallian accountants are flexible, and able to take on job requirements that are not even related to accounting and they do not hove regrets in hiring the,. Lastly, we asked in general, what they can say about Lasallian accountants. She replied, They are well rounded. They are able to deliver on any given task you require and meet deadlines on time. They also team players. Based on the answers of Ms. Donato, being a Lasallian really has an impact in the process of hiring an applicant. It would give them an advantage because of the credibility that De La Salle University has. Through the years, DLSU has proven themselves that they can produce high quality accountants that a bank can trust and depend on. It only goes to show that being a Lasallian gives the student an edge not only because of the name that it gives or the popularity of the University but most importantly, because of the skills, training, and values a Lasallian graduate has which is what banks or firms are looking for. In these cases, the competitiveness of a Lasallian graduate takes place which is one of the reasons why they are in demand today. This paper tackled the increasing demand for accountants despite of all the issues that are currently raising in the economy specifically the increase in the demand of Lasallian accountants which was discussed and studied thoroughly with 13
the help of the resources that we found. It had also shown the educational advantages of De La Salle University and the competitiveness of a Lasallian graduate by putting statements of one of the best accounting professor in DLSU and by mentioning the partnerships of DLSU to different international accounting institutions. The demand also increases because of the increase in financial crisis of the countrys economy and there is a need for the businesses and firms to hire high quality accountants to monitor their economic standing. Even with the different issues in accounting scandals and crimes, Lasallian accountants can still cope with the difficulties in the economy because of the superb training of accountants offered by the De La Salle University. Up to this period in time, DLSU continues to produce successful accountants for the future of our economy which has given them the credibility and trust that the public truly needs. Being a La Salle graduate truly gives the accountant an edge not only because of the standing of the university and the name it gives to its students but most importantly because of the excellence in education that It gives to each of its students from the moment each student become a part of De La Salle University up to the time when they grab their diploma and apply what they have acquired in serving our country which also means responding to the call of their duties.
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Reference List Chalmers, K., Mitrione, L., Yuen, S., Fyfe, M., Weygandt, J. J., Kieso, D. E., et al. (2010). Principles of accounting. Milton : John Wiley & Sons Australia,Ltd. (Original work published 2007) LaBrosse, J. R., Caminal, R. O., & Singh, D. (2011). Managing risk in the financial system. Cheltenham, UK: Edward Elgar. Cudia, C. P. (2009). Factors that influence the final grades of students in Managerial Accounting Course in De La Salle University. Journal of International Business Research , 8, p39-59. Manalo, M. V. (2011). Developing a business ethics curriculum for the bachelor of science in accountancy (BSA) students of de la sale university (DLSU)-manila. Journal of Modern Accounting and Auditing. 100 percent passing - cpa board exam may 2012." PinoyExchange - The Biggest Pinoy Online Community. N.p., n.d. Web. 9 Dec. 2012.<http://www.pinoyexchange .com/forums/showthread.php?t=571604>. "CIMA partnerships with AIM, DLSU to upgrade accountants' competitiveness. The Manila Bulletin Newspaper Online. 28 Nov. 2012. <http://www.mb.com.ph/node/29 2225/cima-partner#.ULYP_uTOkxE>.
"Demand for Accountants to Remain Strong in 2009 - A.E. Feldman." A.E. Feldman: 15
Executive Recruiting Firm Blog and Executive Search Firm Blog. 28 Nov. 2012. <http://blog.aefeldman.com/2009/01/12/demand-for-accountants-to-remain- strong-in-2009/>. James Associates. (2012, May 8). Demand for Accountants Grows . Accounting & FinanceRecruiters | Stephen James Associates. Retrieved October 6, 2012, from http://www.stephenjames.com/about-us/press-release-10379.news Morgan, Lloyd. " Demand for Accountants to rise by more than 4 percent." N.p., n.d. Web. 6 Oct. 2012 <http://www.lloydmorgan.com.au/news/2010/2/5/demand-for- accountants-to-rise-by-more-than-4-percent/?493>. Cruz, Jhoanna V. Human Resources, BPI-Philam Life Assurance Corporation Donato, Denise, Relationship Manager, Treasury Department, Rizal Commercial Banking Corporation