Accountancy Then and Now

By Christine Bernette C. David

What does it take to be a Certified Public Accountant (CPA)? Being a CPA requires more than just the four
to five years stay in college to study accounting, the countless number of quizzes, exams, and retention
requirements, and the months of review for the board exam. Yearly, thousands of hopefuls take the CPA board
exam, yet only 30% to 40% pass the exam and qualify to get the certification. Through such tough regulatory
measures, those who pass are expected to be competent enough to uphold values of integrity, objectivity,
professional competence and due care, confidentiality, and professional behavior. Such professionals are expected
to provide excellent, qualitative service to the country through their knowledge in services such as Audit, Taxation,
and Advisory, among others. But when did the accountancy profession start in the Philippines?

The Philippine public accounting practices originated in the 1700s, but it was on March 17, 1923, that the
accounting profession was formally recognized by the Philippine government. Such formalization served as an
initial move towards the growing accountancy profession in the country, and was written through Act No. 3105.
Through such Act, the Board of Accountancy was created and vested with the authority to issue certificates to
qualified applicants. Such certificate serves as a tangible proof of passing the rigorous process of being a CPA,
which includes passing the CPA board exam among others; it is a symbol of years of hard work and perseverance,
and finally, a fruit of one’s labor.

Through the years of development in the accounting profession, several changes have occurred with Act
No. 3105. Some of the many changes in the 1923 law include: (1) the CPA examination scope, (2) the qualification
to apply, and (3) the rating required to pass.

(1) The CPA examination scope. Back in 1923, the scope of the CPA board exam consisted of only four
subjects, namely Theory of Accounts, Practical Accounting, Auditing, and Commercial Law. Today, the theoretical
and computational parts are already combined in related subjects. The CPA board exam is now composed of six
subjects, namely Financial Accounting and Reporting, Advanced Financial Accounting and Reporting, Management
Advisory Services, Audit, Taxation, and Regulatory Framework for Business Transactions. (2) The qualification to
apply. Today, in order to qualify as a CPA board examinee, the applicant must be a Filipino citizen; of good moral
character; with a Bachelor of Science degree in Accountancy; not have been convicted of any criminal offense
involving moral turpitude; and with no minimum age requirement. Back in 1923, an applicant must be over
twenty-one years of age, and there was nothing explicitly requiring a Bachelor’s degree in Accountancy. (3) The
rating required to pass. Back in 1923, a general average rating of 75% or over meant a passing rate. Today, in
addition to the general average of 75%, the applicant must not have had any grade below 65% in any subject.

From only having forty-three registered accountants in 1923, the number of Certified Public Accountants
has increased to hundreds of thousands. With the world’s growing need to understanding the language of business
comes the increasing demand as well for accountants who are expected to know and give sense of the figures in the
financial statements. The Philippine law on accountancy recognizes the importance of accountants in nation
building and its development. The revisions in the accountancy law prove how the accounting profession continues
to develop and move forward, and more revisions are expected in the future.

Christine Bernette C. David is a Cum Laude graduate from the University of the Philippines, Diliman, with a Bachelor of
Science degree in Business Administration and Accountancy. She is a Certified Public Accountant currently working as
a tax associate in Reyes Tacandong & Co. She is also a member of the International Honor Society of Phi Kappa Phi.
This column accepts contributions from accountants, especially articles that are of interest to the accountancy
profession, in particular, and to the business community, in general. These can be e-mailed to
boa.secretariat.@gmail.com.