THEORETICAL BACKGROUND

This section presents the related literature and studies which is relevant to the study. The
synthesis of the art, the gap to be bridged, the theoretical and conceptual frameworks, and the
operational definition of terms are likewise presented.

Related Literature and Studies

Common Factors Contributing to Unfavorable Results in the Exam

The reason why students fail the CPA Board Exam could be attributed to their poor liberal
educational background particularly English and Mathematics as mentioned by Mr. Gabino Garoy,
the former Dean of the College of Accountancy and Commerce at Saint Loius University. He said,
“Liberal Education is very important in the making of a CPA. Solid Liberal Education before
professional education, like Accountancy, is indispensable.” He also explained that if the student
is poor in English he will also have a poor comprehension, the more he can’t comprehend the
professional education like accounting which entails good understanding and a good foundation
in English, Logic and Mathematics.

In addition to poor liberal educational background, it is believed that the primary cause of students
failing the accounting examinations is bad discipline. This is according to Dean Narciso E.
Quesada of Rosebelt College. Edwin Valencia, an author of the book entitled ‘The Making of a
CPA’, interviewed Queseda who said that students simply don’t know how to study. In connection
with this, the level of preparedness, influences the chance of passing the CPA board examination
as presented in the study conducted by Estipona, et.al. (2014) entitled “Factors Affecting the
Outcome of the Certified Public Accountant Licensure Examination of Bicol University Graduates”
The relationship of the level of preparedness on the outcome in taking the CPA board examination
helps one pass the stated exam. Therefore, the reason why CPA candidates fail the CPA Board
Exam is because of inadequate preparation and lack of skill in taking the exam. This idea is
supported by Patrick R. Delaney, an Alumni Professor of Accountancy and Department Chair at
Northern Illinois University. He, together with Irvin Gleim (1997, p.8) advised that a CPA candidate
should at least attempt to recognize and correct his or her weaknesses before sitting for the CPA
Examination. Furthermore, Jon Price concluded, in his study, that confidence is the most
important factor in terms of mental preparation. Without that key element, all the other preparation
will collapse and just be put to waste. The candidates should also know how to convince
themselves to pass the exam.

According to the study of Carmen C. Herrero (2015), home or family factors, like family
support, parental involvement in studies, motivation and encouragement, highly influence the
performance of the students.

Researchers have found that people who avoid realistic challenges and fail to persist at
difficult tasks tend to have a relatively high fear of failure. Therefore, anxiety about failure is an
important determinant of achievement behaviour. People seek challenge and accomplishment
only if their motive to success is stronger than their motive to avoid failure. According to Dweck
(1988), some people are inclined to attribute failure to lack of ability rather than to lack of effort
and as a result stop trying to succeed. According to Victor Vroom’s Expectancy Theory of
Motivation, one of its beliefs is the expectancy-probability, which states that performance will
depend upon how much one has exerted effort on it. Raynor discovered that students with a high
need to achieve did best in course they thought relevant to their long term career goals, but
students low in achievement motivation performed best in courses unrelated to their long term
goals.

According to the National Association of the State Boards of Accountancy, only about 1 in
5 people who take the Uniform CPA Examination pass all four parts on the first try. Indeed, as the
AICPA reports, the passing rates for each of the four individual sections of the test typically
hovered below 50 percent; just one, Business Environment and Concepts, regularly climbed
above that mark. However, failing is just one part of the story; what comes next, according to
CPAs who’ve been there, depends on both your willingness to get back in the saddle and your
readiness to learn from your mistakes.

According to the study of Carmen C. Herrero (2015), home or family factors, like family
support, parental involvement in studies, motivation and encouragement, highly influence the
performance of the students.
Limitations or Constraints in Re-taking the BLECPA

Mustapha and Hassani (2012) stated in their study the perceptions of accounting students
on pursuing the professional examination specifically on the reasons why some BSA graduates
choose not to retake the board exam. Respondents of their study claimed financial constraints as
one of the main factors. Taking the licensure examination requires money starting from the period
of review to the fees to be paid for the actual test. Simply, the professional exam is difficult to pass
and costly as one of the respondents stated.

Another limitation is time. BLECPA is conducted semiannually every May and October.
Considering the review, a CPA candidate has to undergo another long, half-year before finally
being able to retake the said examination. The survey conducted also testified that some chose
not to pursue the title due to other opportunities laid before them. An example of these is a job
offering.

A small portion of the respondents said, however, that they did not retake the board exam
simply because it is not really their passion and that venturing into the field of accounting is not
their plan. Some pursue other line of career which they actually like in the first place. Frank Parson
theory named the Trait and Factor Theory of Occupational Choice can testify to this.

The center of Parson’s theory is the concept of matching which states that occupational
decision making occurs when people have achieved an accurate understanding of their individual
rights, a knowledge of jobs and the labor market, and have a rational and objective judgment
about the relationship between their individual traits and the labor market (Naim, 2017).

One of the underlying basic assumptions in this theory claims that every person has a
unique pattern of traits made up of their interests, values, abilities and personality characteristics;
these traits can be objectively identified and profiled to represent an individual’s potential. Thus,
it is then safe to say that the personality, interests, and skills of a person are powerful basis for
an individual’s final choice of occupation or profession.

Parson’s theory can be further supported by drive theory. Clark Hull (1943) believed that
organisms are motivated to eliminate or reduce bodily tension. Drive is the term used to define
the state of tension that occurs when a need is not met. Say for example the cases of those
students enrolled in college programs or courses which are not really their own choice. So when
they fail in that line, tendencies are these students would think that if only they aimed for what
they are really good at or what they like, they would have met better and favorable results. They
need to be into something where they can grow and thrive – a need they do not find in the
accounting field. In the end, these non-passers go for other opportunities.

Studies show that the fear of failure is another thing which holds back a person from doing
and pursuing a difficult objective (Munn et al., 1972). This makes a ground for them to just change
their aspirations and to do what they think they are at least capable of. However, fear of failure
sometimes tends to make a person passive and non-competitive.

Job Opportunities for Non Licensed CPAs

Some of the most common job opportunities that can be taken by non BLECPA passers
are as bank teller, accounting clerk, assistant product manager, data entry operator or clerk, and
financial advisor. But the scope their work is generally limited to bookkeeping, maintaining general
accounts of a business and taking care of simple tax-related matters (Roger, 2015).

The services that non-CPAs provide and the prospective upper management positions
they can move into are sometimes limited (Roger, 2015). But there are also occupations which,
although are not related to the BSA program, are still sought by many BSA graduates. Examples
of these are as call center agent, freelancer working online, and as administrative staff.

Most countries require their own licensure examination to work as a licensed accountant, so
opportunities abroad are mostly for jobs which do not require licensure. Another option would be
to take and pass the licensure exam at the country which you intend to work in.

According to Philippines Universities and Colleges Guide, when it comes to the salary
levels in the Philippines, entry level jobs for both board passers and non-board passers are more
or less the same. Starting salaries can range from 12,000php to 18,000php per month. For those
who have more experience and who passed the CPA board exam, salary can reach as high as
60,000php.

Meaning of Success: Insights from different people

The research of Jerker Denrell, an associate professor of organizational behavior,

suggests that studying successes without also looking at failures tends to create a misleading —
if not entirely wrong — picture of what it takes to succeed (Krakovsky, 2004).
 Success is about happiness, not wealth (Smith, 2014). As defined in the Merriam Webster
Dictionary, it is the fact of getting or achieving wealth, respect, or fame. But a new survey
from Strayer University suggests that it may be time to update the dictionary's definition according
to Jacquelyn Smith (2014). The institution recently released findings from its national "Success
Project Survey," which was conducted to determine what success means to Americans today. A
whopping 90% believe that success is more about happiness than power, possessions, or
prestige. Dr. Michael Plater, a president of Strayer University, said that it indicates a clear change
in the way Americans are thinking about their personal journey. He also added that it is no longer
about the possessions, instead people are focused on leading a fulfilling life, whether that means
finding a better career, achieving a personal goals, or spending more time with family. The survey,
which was conducted by Ipsos on behalf of Strayer, interviewed 2,011 Americans ages 18 and
up and found that 67% of surveyed Americans associate success with achieving personal goals;
66% cited "good relationships with friends and family"; and 60% said "loving what you do for a
living." Meanwhile, just one in five respondents said monetary wealth is what defines success
(Smith, 2014). Plater thought that people will be surprised to hear that the vast majority no longer
views traditional wealth- and fame-based notions of success as having ‘made it. He explains his
team's goal in conducting this survey was to spark a much-needed national conversation about
success and how there's no "one size fits all" definition. He also explained that it is challenging to
quantify and pinpoint what defines success, since every individual has his or her own view and
personal experience. He says one big takeaway from the study is that success today is much
more about setting personal goals and achieving them, than anything else. "It's the feeling you
get when you reach a new physical activity goal, connect with friends you haven't seen in a while,
see your child succeed, ace a job interview, and many other small but incredibly significant life
moments. It's the feeling that you have accomplished something bigger and better than yourself."
Plater attributes the universal shift in what is valued in the US to economic, social, and cultural
changes (Smith, 2014). He also said that with the prolonged challenges they experienced in their
economy, and the social-cultural shifts that are brought about by today’s lightning quick
developments in technology, he believed that Americans are taking a close look at their individual
situations and priorities and creating new, personalized definitions of success for themselves.
Plater says so many Americans are now focusing on their well-being, rather than just
"conventional or textbook meanings" of success. "Through this redefinition, individuals are also
finding that multiple paths to success do exist." (Smith, 2014).
 Everyone has different priorities and are driven to feel successful by different facets of
their life. As success cannot be quantified and defined, it is boundless and open to interpretation.
When someone stops worrying about other’s decisions and focus on his goals, plan of action and
accomplishments that is when he will feel more satisfied. However, many people who define
themselves as successful, have mastered the art of protecting and maximizing their time. They
view each second as an opportunity to move towards their goals and set guidelines that help them
stay on track with their plan of action throughout the day (Ramkumar, 2016).

Pursuing and enjoying values is the meaning of a successful human life (Jahrling, 2015).
Success is definitely not measured by money, nor against the accomplishments and
achievements of others. It is merely about pursuing worthy or rational goals, and doing so with
honesty, enthusiasm, honor and pride. However, according to self-actualization theory, a person
defined their own success. They pursue their passion and set their priorities in alignment with
their self-determined ethics.

But there is a study conducted by Career Builder to determine the amount of money that
a person needs to earn to feel successful. An online survey conducted, within U.S. by Harris Poll
on behalf of Career Builder wherein they asked 3,372 workers and 2,188 hiring and human
resource managers regarding the study. A majority (55%) said less than $70,000 a year, which
is fairly realistic when considering the average American salary is $46,000. CareerBuilder broke
the results down and found that 63% of women and 47% of men who participated in the survey
said they could earn $69,999 a year or less and still consider themselves to be successful (Smith
and Gould, 2014).

Rosemary Haefner, vice president of human resources at CareerBuilder, said that, usually
workers believed that what they need to earn to feel successful either aligned with what they
currently make or were just one step above what they currently make. She also added that career
success is not necessarily associated with a particular dollar amount and it is relative to where a
person is and how he or she progress along with his or her career paths. Haefner also stated that
making ends meet is clearly important, but people who go to work every day out of intrinsic
motivation-for the love of the job- are far less likely to associate success with salary. "Feelings of
success originate in a variety of ways: meeting personal goals, receiving positive feedback from
customers or management, or simply the belief that what you do makes a difference," she said.
The higher the income, the less relevant the income becomes for well-being (Frey and Stutzer,
2002).
 The incredibly successful people have their own definition of success wherein they
associate it with their life experiences. Here is how they define success. Huffington Post founder
Arianna Huffington says that money and power aren't enough (Baer, 2014). She also said that we
need a third metric to live the lives we want and deserve and not just the lives we settle, and a
third measure of success that goes beyond money and power, and consists of four pillars which
are the well-being, wisdom, wonder, and giving. This is the same contention with Bill Gates and
Warren Buffet, in which they believe that success has nothing to do with wealth. They cited that
the measure is whether the people close to you are happy and love you." In addition to making
sure the loved ones in his life are happy and cared for, the second critical component of success
to Gates is making the world a better place (Clifford, 2017). Wendy Bruce-Martin (2006), also
believes that success is not about the money or things she has but about the opportunities she
takes and achievements she makes. On the other hand, the legendary basketball coach John
Wooden says it's a matter of satisfaction (Baer, 2014). He defined success as a peace of mind
which is a direct result of self-satisfaction in knowing you did your best to become the best you
are capable of becoming. His definition signifies that it is more about the competing with your own
self than against other person.

Zappos CEO Tony Hsieh says success is about living in accordance with your values.
"Your personal core values define who you are, and a company's core values ultimately define
the company's character and brand," Hsieh writes in "Delivering Happiness," his memoir about
building Zappos. "For individuals, character is destiny," he says. "For organizations, culture is
destiny." (Baer, 2014)

Acclaimed author Maya Angelou believed success is about enjoying your work. The late,
great poet Laureate, who passed away at 86, left behind stacks of books and oodles of aphorisms.
Her take on success is among the best: "Success is liking yourself, liking what you do, and liking
how you do it." (Baer, 2014)

British politician Winston Churchill thought that success is being relentless. At the prime
of his political career — from 1929 to 1939 — Churchill was kept out of office, in a period historians
call "the wilderness." Yet he stayed publically active, and in 1939, the then-Prime Minister asked
him to serve as First Lord of the Admiralty as Hitler's Germany rose (Baer, 2014). Churchill said
that success is going from failure to failure without losing enthusiasm. It signifies that his definition
of success result from those frustrating years.
 Billionaire Richard Branson, UK billionaire behind the Virgin Empire of brands, believes
success is about engagement. He said that the more a person practically and actively engaged
with the work, the more he or she becomes successful. While the spiritual teacher Deepak Chopra
believes success is a matter of constant growth, she defined success as continued expansion of
happiness and the progressive realization of worthy goals which is written in ‘The Seven Spiritual
Laws of Success’. The popular author Stephen Covey said that the definition of success is deeply
individual. "If you carefully consider what you want to be said of you in the funeral experience," he
told the New York Times, "you will find your definition of success." (Baer, 2014) While Sara
Blakely quoted that her definition of failure became not trying not the outcome. It is technically
signifying the definition of failure, it’s the crux of what success is: to try and try and not be afraid
of failure. Success comes to those who are willing to try and risk and fail and stand up to do it all
over again (Toren, 2014).

Inventor Thomas Edison recognized that success is a grind. So naturally his definition of
success is equally ambitious: “Success is 1% inspiration and 99% perspiration.” As contradiction
to this contention, Albert E.N. Gray said that hard work is not the real secret for success, though
in most cases it might be one of the requirements. The common denominator of success lies in
the fact that the person formed the habit of doing things that others don’t like to do. It means that
success is something which is attained by the minority of people and is therefore unnatural and it
is not achieved by just pursuing what they normally like and don't like, nor by being guided by
natural preferences and prejudices.

The way that success is defined, shapes our working lives. It affects how organizations
perform, who progresses within them and how power is exercised. It is a brutal fact that fewer
women than men are recognized as successful based on current standards and value judgements
(Bostock, 2014). But in the study conducted by Iraj Mahdavi from National University, he
concluded that the majority of the respondents, men and women, considered themselves
successful can be interpreted at least in two ways, either receiving university education is highly
associated with success both in life and at work, or the more successful alumni of the university
are more likely to respond to the survey. Definition of success by women and men seem to follow
more or less the same pattern and the source of such definitions has found negligible differences
between the two genders.

One cannot enjoy outstanding success in life without power, and can never enjoy power
without sufficient personality to influence other people to cooperate with you in a spirit of harmony
(Hill, 1928). He defined power as of two classes in which one is developed through co-ordination
of natural physical laws, and the other one is developed by organizing and classifying knowledge.
Power growing out of organized knowledge is the more important because it places in man's
possession a tool with which he may transform, redirect and to some extent harness and use the
other form of power (Hill, 1928). But according to DeVon Franklin, a best-selling author and
renowned as motivational speaker, success isn’t about money, fame or power. In fact, DeVon
Franklin says, it resides in one’s very core.

There are underlying theories that will be associated with the word ‘success’. According
to Steve Mueller (2017), an iceberg can be an excellent metaphor for a successful person. The
iceberg theory of success, which is one of the well-known theories, state that all the efforts of a
successful person lie beneath the surface. The hidden part of the iceberg stands figuratively for
the perseverance, hard work and enthusiasm of a person. The only thing that everyone sees on
a successful person is the accomplishments and achievements of this person whereas, the efforts
and hardships that were exerted remain unnoticed. This theory will make everyone realize that
every incredibly successful person put an extraordinary effort on work until this person achieved
his goals.

Behind every success story is an embarrassing first effort, a stumble, a setback or a radical
change of direction (Crawford, 2013). “When you see someone who’s very successful, you almost
imagine that it was a foregone conclusion, that they’re a genius, that they were destined for great
things,” says Fiegerman. He is fond of biographies and soliciting interviews with musicians and
writers he admired. Through this, he learned that success was less a matter of innate talent and
more the product of perseverance, a willingness to stumble and stand-up again and again
(Crawford, 2013). But some people are afraid to fail and they got stuck up living with their
weaknesses. They are afraid to improve something that they are not good. According to Napoleon
Hill (1928), author of ‘The Law of Success' the most successful men and women on earth have
had to correct certain weak spots in their personalities before they began to succeed. The most
outstanding of these weaknesses which stand between men and women and success are
intolerance, cupidity, greed, jealousy, suspicion, revenge, egotism, conceit, the tendency to reap
where they have not sown, and the habit of spending more that they earn. The road to success
is paved with multiple failures and one must recognize these failures a feedback from efforts
(Adeyemi, 2004).Making adjustments and responding positively to failures may lead someone
one step closer to success.
 There is a story that is usually told about extremely successful people, a story that focuses
on intelligence and ambition. But according to the book ‘Outlier’, Gladwell (2008) argues that the
true story of success is very different, and that if we want to understand how some people thrive,
we should spend more time looking around them-at such things as their family, their birthplace,
or even their birth date. And according to the website of Gladwell, Gladwell presents a fascinating
and provocative blueprint for making the most of human potential in revealing that hidden logic.
There are some books he wrote in which he makes people change on how they perceive things.
In the book ‘The Tipping Point’ he change the way everyone perceives the world while in his book
entitled ‘Blink’ he change how everyone thinks about thinking. In his book ‘Outliers’ he transforms
the way people understand success. According to one dictionary definition, an outlier is
'something that is situated away from or classed differently from a main or related body'. But
Gladwell uses the word with more metaphorical flexibility. For him, an outlier is a truly exceptional
individual who, in his or her field of expertise, is so superior that he defines his own category of
success. Bill Gates is an outlier and so are Steve Jobs of Apple, Robert Oppenheimer and many
others Gladwell speaks to or writes about as he seeks to offer a more complete understanding of
success (Cowley, 2008).

Abraham Maslow who is a psychologist wrote a paper entitled “A Theory of Human

Motivation”. Alongside with his study about motivation, he conceptualized the Hierarchy of needs
wherein ‘self-actualization’ is at the peak of the ladder. He described a set of universal needs and
arranged them into a handy diagram, with a pyramid shape because they depended one upon
the other (Perlman, 2015). This diagram shows that there are more basic needs to be met before
the higher ones, which is the self–actualization, could meet. That is, someone without access to
food, water, or shelter will pursue those needs before pursuing education or self-actualization
(Oddo, 2015). One of them has to do with the search or drive for success. Seeking success is not
frivolous, it’s natural and essential. It's a building block towards the highest goal of self-
actualization (Perlman, 2015). As noted in an article on Simply Psychology, “Every person is
capable and has the desire to move up the hierarchy toward a level of self-actualization.
Unfortunately, progress is often disrupted by failure to meet lower level needs. Life experiences
including divorce and loss of job may cause an individual to fluctuate between levels of the
hierarchy”. But according to Maslow, one in a hundred people become fully self-actualized
because the society rewards motivation primarily based on esteem, love and other social needs
(Oddo, 2015). He also observed that many people reach the area of stability but never continue
of becoming a self-actualized person. However, he recognized that the highest state of fulfilment
comes from continual self-improvement and growth (Oddo, 2015). At some point, this theory
encourages everyone to continue learning and grow over the course of life.

Overview of Profile of a Successful Non-CPA

Given the objective of the study to do a profiling of the successful non-CPAs, the
respondents will be questioned about their whereabouts and how they end up being in that state.
According to Malcolm Gladwell (2008), in his book entitled the “Outliers: The Story of Success”,
the question that everyone always asks about successful people is, what are they like- what kind
of personalities they have, or how intelligent they are, or what kind of lifestyles they have, or what
special talents they might have been born with. And everyone assumes that it is the personal
qualities that explain how individual reached the top. He theorizes that people don’t rise from
nothing and everyone owes something to parentage and patronage. The culture where one
belongs to and the legacies passed down by the forebears shape the patterns of one’s
achievement. It is not enough to ask what successful people are like. Just by asking where they
are from, the logic behind determining the successful people will be unraveled (Gladwell, 2008).
One interesting theory is a phenomenon called “nominative determinism,” which states that your
name can actually influence which way your life goes and which profession you choose
(Grimminck, 2015). But that there is a contention that notion about success are not only intensely
personal, but also shape and are shaped by the organizations within which one live and work.
The story one tells about success send messages about who and what he or she values. They
have the potential to limit what an organization or individual is capable of or to create the
conditions for them to excel (Bostock, 2014).

Here is the excerpt of the success story of Paul Joseph B. Morales CMA, MBA, who
graduated from PSBA manila with a degree in BS Accountancy. He also obtained his Master’s in
Business Administration at the Ateneo Graduate School of Business and is currently working as
a senior customer care analyst in a large accounting/IT software company in Makati.

“Challenges, we all have a handful. Belonging to the working class presents so many
challenges and to add up working on a night shift makes it almost impossible to accomplish
anything. But this wasn’t my dream,” Morales quoted. It always been his goal to himself with
intangible things and empower himself with something that cannot be taken away from him.

After graduating college for more than a decade ago he took a chance on taking the CPA
licensure exam but he was not as fortunate as his colleagues. After failing the board exams he
decided to work to death and let time take its natural course. He did not have an opportunity for
growth for his career since he considered himself as an “underboard” individual. Then one fine
day, he was encouraged by his aunt to take up Master’s degree since he already given up on
becoming a CPA. It took him four and a half years to finish it at Ateneo Graduate School of
Business. He realized that new opportunities and career growth have been open up for him, thus
his journey to seek new knowledge has begun.

After finishing Master’s degree, he decided to retake the board exam but his friends go
against his decision for it wouldn’t be an advantage to take the licensure exam since he might not
be able to practice it on the first place. According to him, working in big auditing firms has been
his dream but he’s already in a different route now. Instead, it was suggested to him to take the
CMA, CFA, CIA or CISA certification. After much deliberation, he came up with the decision to
pursue the CMA certification since it made more sense with the work he has. He is dealing more
on the ERP industry, project management, budgeting and forecasting software, thus this would
be the best option for him. He decided to enroll for the program at Insights Financial Review and
it entailed a huge investment. This was when sleepless and social deprivation days and nights
began. Juggling work and review was really tough and he had to ensure that he gave at least 3-
4 hours every day just to study and catch up with the lecture. He felt the undue pressure not to
be left out, given the fact that his classmates were mostly CPAs and fresh graduates. He also had
a review session during weekdays together with his friend to catch up with the lesson. There were
instances where a decent sleep was nowhere to be found.

He took up the first part of the exam on June and it was mind blogging. Despite the difficult
and nerve wracking exam, he was able to qualify the examination. After that, he took the second
part of the exam but unfortunately, he was not able to make it. But he never gave up his dream,
he kept on reminding himself that failures are just a test of how strong a person is and you will
never know your strength unless you experience defeat. He decided to retake the examination
and just keep on sailing. After how many sleepless nights social deprivation, God had finally gave
him his heart’s desire.
 At the end of the day, he realized that it was not all about the credentials, position and
power that define someone’s success. Instead, it is about the hard work despite the road blocks,
persistence in times of difficulty, perseverance in achieving a dream, humility in knowing when to
accept help and being grateful to the people who help.