And the Asean CPA is born

By the stroke of their pens, the leaders of the 10 member states of the Association of South East Asian Nations (Asean) have created and bestowed upon Certified Public Accountants (CPA) in the Philippines and the rest of the region the title, ‘the Asean Chartered Professional Accountant’ or ACPA.

Under the Asean Mutual Recognition Agreement (MRA) on Accountancy Services signed in November 2014, CPAs in the Philippines may be recognized as such in other countries in the region, namely: Brunei Darussalam, Indonesia, Malaysia, Singapore, Thailand, Vietnam, Lao PDR, Burma and Cambodia. Thus, a Filipino CPA may qualify to provide and render accountancy services beyond Philippine borders and across the Asean region.

To get the ACPA title, the provisions of the recognition agreement state that Filipino CPAs have to undergo initial qualification and eligibility screenings through the local Board of Accountancy (BoA) and/or the Philippine Institute of CPAs and then the ACPA Coordinating Committee would make the final approval.

Upon successful approval, the Filipino CPA will acquire the ACPA title and be accorded as a Registered Foreign Professional Accountant (RFPA) who then can, in all other nine Asean member states: (1) work as consultant or employee of commercial, industrial or educational entities, or (2) work as external auditor but in collaboration with designated external auditing firms in the host country. Note that the signing of an independent auditor’s report that requires licensing is not allowed under the present MRA, unless there is an additional bilateral and/or multilateral MRA for this purpose that will be entered into by two or more member states.

Despite the opportunities that the MRA could offer, there hardly has been any buzz about it among Filipino CPAs, and they have not shown real enthusiasm for it. A year after the signing, the MRA has not stirred Filipino CPAs to aspire to become ACPAs or RFPAs. Maybe there are already a number of Filipino CPAs who are employed and engaged in other Asean member states either as an accountant, bookkeeper, accounting manager, finance officer, university professor or even as a bona fide CPA practitioner collaborating with other audit firms in the region.

Thus, these opportunities and offerings under the MRA are already being enjoyed by Filipino CPAs elsewhere in Asean. Hence, until a Filipino CPA has shown a desire to apply for an ACPA title next to his name and/or until his present employer or the accountancy regulator in the Asean member state makes it mandatory for him to be an RFPA, the current situation renders the MRA insignificant and irrelevant to him.

Notwithstanding this lack of enthusiasm by some local CPAs, the accounting regulatory bodies, including mainly the BoA, should still promote and create awareness as there are worthy objectives of the MRA, namely: (1) to facilitate mobility of professionals across Asean member states; (2) to enhance the current regime for the provision of accountancy services in the Asean member states; and (3) to exchange information in order to promote the adoption of best practices on standards and qualifications. In short, this is not just about the jobs of the Filipino CPAs but about the accountancy profession as a whole.

There is no doubt that our Filipino CPAs are among the best in the field of accountancy. The above-stated objectives may help address further their professional developments when they compete in the wider and promising Asean market even as they face differences in tax laws and in the level of adopting the International Financial Reporting and the Auditing Standards in each of the Asean countries. Of course, the MRA will naturally foster communication and coordination and will break cultural barriers.

There are fears locally that the MRA will further contribute to the migration of Filipino CPAs out of the country resulting in the continuing ‘brain-drain’ situation that the country has been experiencing over the past decade. Will the title of ACPA add credential to the local CPAs wanting to work abroad? On the other hand, will there be an influx of Asean CPAs into the Philippines? Unless the MRA is pushed further by the member states of Asean, we will not know the answers. What we know is that there are trends toward globalization of markets, constantly shifting demands and needs, and changing regulations and standards and; we need to embrace MRA. Besides, being called “Asean CPA” is already an honor and . . . I consider it “cool.”

Jun Cuaresma is the Managing Partner & COO, and Audit & Assurance Division Head of P&A Grant Thornton. P&A Grant Thornton is one of the leading Audit, Tax, Advisory, and Outsourcing firm in the Philippines, with 20 Partners and over 700 staff members.

As published in The Manila Times dated 02 March 2016