Public Accountancy Practice: The Affirmation of the Increase in

Continuing Professional Development (CPD) Units from Sixty

(60) to One Hundred Twenty (120) Credit Units within a
Compliance Period of Three Years

The overall objective of any learning activity is the development of

competence. The International Federation of Accountants (IFAC) defines
competence as "the ability to perform a work role to a defined standard with
reference to working environments." Thus, IFAC (2010) underscores that an
individual becomes competent through learning and development. The
International Accounting Education Standards Board (IAESB) of the IFAC uses
the term learning and development to incorporate the different processes,
activities, and outcomes contributing to the achievement of competence.

The development of a professional accountant has two integral aspects:

initial professional development (IPD) and continuing professional development
(CPD). The IPD entails the earning of a tertiary education that qualifies a person
for admission to the accountancy profession. It includes general education,
professional accounting education, and practical experience before an individual
is admitted to the profession. In the IPD, the individual develops first the
competence leading to performing a role in the accountancy profession.

On the other hand, CPD refers to "learning and development that

maintains and develops capabilities to enable professional accountants to
perform their roles competently." It provides continual development of the
professional’s (a) knowledge; (b) skills; (c) values, ethics, and attitudes; and (d)
competence achieved during IPD. The requirement for CPD is suitably provided
in the Philippine Accountancy Law of 2004 which mandates certified public
accountants (CPAs) in public accountancy to undergo an accreditation process.
One of the primary requirements for such accreditation is the units or credits
earned from CPD. This poses a serious consideration because of the public
interest in the practice of public accountancy. Despite the mandate and
campaign to disseminate the CPD requirements, a number of CPAs still find it
hard to comply. The Board of Accountancy (BOA) has encountered a large
number of CPAs who are applying for practice accreditation but failed to meet the
required number of units for CPD. As a result, their practice is derailed and/or
discontinued.

Continuing professional development (CPD), before known as continuing

professional education (CPE), is described as lifelong education of professionals
on specialized knowledge, skills, attitude and ethical and moral values after the
initial registration and admission in the profession (PRC, 2008; IES 7, 2006). It is
expected to raise and enhance the professional’s technical skills and
competence required and expected by the stakeholders and the profession (IES
7, 2011; Metz and Tharenou, 2001). The thrust of CPD is to contribute to the
advancements of every professional in terms of career development, financial
income, professional networks and personal competencies. Thus, teachers,
military officers, health care professionals, lawyers, accountants and engineers
among others engage in various professional development activities.

Continuing Professional Development (CPD) Units for Certified Public

Accountants Republic Act No. 10912, otherwise known as the “Continuing
Professional Development (CPD) Act of 2016”, is an act which requires CPD as
the mandatory requirement for the renewal of Professional Identification card or
license. This CPD Act lapsed into Law on July 21, 2016 and it took effect on
August 16, 2016. The Board of Accountancy under the resolution 59, the term
Continuing Professional Development (CPD) is used in lieu of Continuing
Professional Education.

It refers to the inculcation, assimilation and acquisition of knowledge, skill,

proficiency, and ethical and moral values after the initial registration of the
Certified Public Accountant. Also, continuing professional development raises
and enhances the technical skill and competence of the Certified Public
Accountants. Under the BOA Resolution, the required units to renew CPA license
in the year 2016 is 60 credits units.

The Professional regulations commission (PRC) (2008) had strongly

directed that participation to CPD courses offered by CPD Council and PRC
accredited CPD providers be required for all registered and licensed
professionals to be in good standing and globally competitive. The mandate was
made following the liberalization in the trade of services under the fourth Protocol
of the General Agreement for Services in Trade (GATS) and the Mutual
Recognition Arrangements/Agreements (MRAs) pursued by the World Trade
Organization (WTO) and the Association of Southeast Asian Nation (ASEAN)
where Philippines is an active member.

Along this thought and direction that many organizations and practitioners
invest money, time and resources to sending their CPA employees to different
CPD activities for their professional productivity, growth and networking (Garavan
et al., 2004). Common reasons and motivations to CPD participation among
Accounting professionals include interest in lifelong learning (Metz and
Tharenou, 2001), sense of moral obligation, to maintain and improve professional
competence (Eaton et al., 2011), to facilitate career progression, to keep abreast
of new technology and practices (BOA, 2010) and to comply with professional
regulatory organizations. CPAs are also expecting that CPD will help them
become more valuable and viable to existing and potential clients or employer,
gain advantage in the highly competitive labor market and have a better career
mobility and greater earning potential (Reiling, 2011; Garavan et al., 2004).
Simply put it, lifelong education is the heart of professional development.

Of its own accord, the Continuing Professional Development (CPD)

however, does not provide absolute assurance that all members will provide high
quality professional service all the time nor will every person who participates in
CPD programs and activities obtain its full benefits because of variances in
personal and professional efficacy and motivation along with the individual’s
commitment and capacity to learn (IES 7, 2006). Taylor and Francis (2012) also
argued that current policies, regulations and practices in continuing professional
development are frequently based on unexamined assumptions and discounted
functions of the complexities and contingent nature of actual practice.
Nonetheless, despite its inherent limits and constraints, CPD requirement, with
its objectives and mechanisms, is but imperative to maintaining public reliance
and confidence to the professional’s credibility and work quality.

However, this exemption is applied only to the renewal of CPA license and
not for the purpose if accreditation to practice the accountancy profession. A
CPA shall be temporarily exempted from the compliance with the CPD
requirements under the following circumstances: a. The CPA is working or
practicing the profession or furthering studies abroad; b. The exemption is for the
duration of stay abroad; c. The CPA has been out of the country for at least two
years immediately prior to the date of renewal of license and accreditation.

With this being said, it is important because it ensures one continue to be

competent in one’s profession. It is an ongoing process and continues throughout
a professional’s career. The ultimate outcome of a well-planned continuing
professional development is that it safeguards the public, the employer, the
professional and the professional’s career. Well-crafted and delivered continuing
professional development is important because it delivers benefits to the
individual, their profession and the public.

The environment within which the accounting professional functions is

more dynamic and demanding today than ever before. The profession is
characterized by explosion of relevant knowledge and skills due to advancing
technology, globalization of commerce, increasing specialization, burgeoning
regulations, and the complex nature of business transactions (Udani, 2002;
AICPA, 1992). These conditions and developments require a renewed emphasis
on the continuing professional development among accounting professionals
within and beyond.

The importance of continuing professional development should not be

underestimated – it is a career-long obligation for practicing professionals.

Sometimes, it is mandated by professional organizations or required by

codes of conduct or codes of ethics. But at its core, it is a personal responsibility
of professionals to keep their knowledge and skills current so that they can
deliver the high quality of service that safeguards the public and meets the
expectations of customers and the requirements of their profession.
 The thrust of CPD is to contribute to the advancements of every
professional in terms of career development, financial income, professional
networks and personal competencies. Thus, teachers, military officers, health
care professionals, lawyers, accountants and engineers among others engage in
various professional development activities. Univ. of Min. Intl. Mult. Res. Jour.
2016, 1(2), 63-75 64 This study is anchored on the idea that CPD is essential to
all CPAs in order to enrich and refine the professional knowledge, skills and
ethics earned by the time of qualification (IES 7, 2006; PRC, 2008). Certified
Public Accountant (CPA) is an individual who holds a valid certificate issued by
the Board of Accountancy (BOA) to practice Accounting profession whether in
public practice, commerce and industry, government or academe.

The following are some of the advantages of the increasing required units
of CPD:

 CPD ensures ones capabilities keep pace with the current standards of
others in the same field.

 CPD ensures that one can maintain and enhance the knowledge and
skills that are needed to deliver professional service to the customers,
the clients and the community.

 CPD ensures one that the knowledge will stay relevant and up to date.
The paces of change are probably faster than it’s ever been – and this
is a feature of the new normal that all lives and work in. If one stand
still one will get left behind, as the currency of ones knowledge and
skills becomes out-dated.

 CPD helps continue to make a meaningful contribution to ones team.

One can become more effective in the workplace. This assists to
advance in career and move into new positions where one can lead,
manage, influence, coach and mentor others.
  CPD helps stay interested and interesting. Experience is a great
teacher, but it does mean that one tend to do what one have done
before. Focused CPD opens one up to new possibilities, new
knowledge and new skill areas.

 CPD can deliver a deeper understanding of what it means to be a

professional, along with a greater appreciation of the implications and
impacts of your work.

 CPD helps advance the body of knowledge and technology within ones
profession.

 CPD can lead to increased public confidence in individual

professionals and their profession as a whole

 Depending on the profession – CPD contributes to improved protection

and quality of life, the environment, sustainability, property and the
economy. This particularly applies to high risk areas, or specialized
practice areas which often prove impractical to monitor on a case by
case basis.

In the Philippines, Section 32, Article IV of Republic Act No. 9298,

otherwise known as the Philippine Accountancy Act of 2004 provides the rules
and regulations in the implementation of CPD for CPAs in the practice of
accounting. The Professional Regulations Commission (PRC) (2008) had
strongly directed that participation to CPD courses offered by CPD Council and
PRC accredited CPD providers be required for all registered and licensed
professionals to be in good standing and globally competitive. The mandate was
made following the liberalization in the trade of services under the fourth Protocol
of the General Agreement for Services in Trade (GATS) and the Mutual
Recognition Arrangements/Agreements (MRAs) pursued by the World Trade
Organization (WTO) and the Association of Southeast Asian Nation (ASEAN)
where Philippines is an active member.

In line with this, the CPD Professional Regulatory Commission’s (PRC)

Continuing Professional Development (CPD) Act of 2016 “declares the policy of
the State to promote and upgrade the practice of professions in the country”, by
sanctioning professionals to be involved in competence and qualifications
development programs such as seminars in order to renew their licenses every
three years. The expected end result is for them to grow vertically in their
respective professions.

To prevent the stagnation of licensed professionals and their work, having

them attend seminars, enroll in post baccalaureate studies, or increase their
productivity through publications and researches are needed. This also ensures
the continuous growth and advancement of one’s own field.

Even before the implementation of requiring CPD units, professionals,

especially those who work in the government, already have the incentive to earn
as many certificates as they can in hopes of increasing their ranks come
promotion period.

Certified Public Accountants (CPAs) are now required to comply with the
new continuing professional development (CPD) requirement to renew their
license. Many were shocked with the sudden increase, from the previous 60-unit
requirement to the 120-unit requirement, prescribed by the Board of Accountancy
(BOA) Resolution 358-2016 as a result of Republic Act 10912, otherwise known
as the CPD Act of 2016.
 The requirement to comply with the 120-unit of CPD over a period of three
years is a requirement of International Education Standard 7 (IES 7). As a
member of the International Federation of Accountants, the global accounting
community, all Filipino CPAs are required to comply with this requirement. IES 7
prescribes for:

1. Completion of at least 120 hours (or equivalent learning units) of relevant

professional-development activity in each rolling three-year period, of
which 60 hours (or equivalent learning units) shall be verifiable;

2. Completion of at least 20 hours (or equivalent learning units) of relevant

professional-development activity in each year; and

3. Measurement of learning activities to meet the above requirements.

BOA Resolution 254-2017 provided additional clarification and information

on the implication of this new CPD requirement. The highlights of this resolution
are:

1. The 120-hour CPD requirement is being rolled out over a period of three
years with the following staggered adoption:

Basically, 40 percent of the total CPD requirements can be

obtained from sources other than the CPD providers. These can be self-
directed learning and/or lifelong learning, which generally can be anything,
the January-to-June 2017 cycle limits these to 20 flexible hours.

2. The CPD hours are generally flexible, except for 40 credit units that must
be in the following CPD learning areas:
 Other than the above minimum 40 units, which are required to be
within the learning areas to be taken from accredited CPD providers, the
remaining CPD units are considered flexible CPD units.

On top of the increase in the CPD unit requirements, additional changes

and improvements include:

 Change of the five thematic to three competence areas to align with

international standards. The new areas are technical competence,
professional skills and professional values, ethics and attitudes.
 Further expansion of the technical competence to three areas, which
are standards applicable to practice, laws, rules and regulations
affecting professional practice and environment of the practice.
 Encouragement of self-directed learning that may include attending
short-term postgraduate programs and writing of books, articles and
papers related to accounting profession are convertible to CPD.
 Establishment of the non-verifiable CPD, which are professional
learning other than those covered by PRC Resolution 774, such as
mentorship and research.
 Implementation of the monitor system for classroom-type CPD
courses, workshops and conventions.
 Mandatory requirement for a CPA to comply with CPD requirements
during license renewal.

Under Republic Act No. 10912 "CPD Law", professionals are required to
present earned CPD units before the renewal of Professional Identification Cards
or license ID. PRC said that professionals renewing their professional ID cards
must provide the original and photocopy of certificates of credit units earned.
 The role of CPD in the possible protection of the public interest rests on
the public being able to trust the authority of accounting knowledge and the
judgment of accountants, sometimes referred to as the profession’s knowledge
mandate (Sikka et al., 1989). It further rests on the ethical framework that
underpins the accountancy profession’s claim to professional status. These two
aspects are often regarded as being key elements in distinguishing professions
from other occupational groupings (Willmott, 1986). Yet, just as there is
considerable debate about the precise definition of the public interest, so there
remains considerable debate about the definition of a profession. Following
professional formation in the nineteenth century, there has been widespread
agreement that accountancy is considered to be a profession (Annisette and
Kirkham, 2007, Burchell et al., 1980, Carr-Saunders and Wilson, 1933, Kaidonis,
2008, Millerson, 1964, Willmott, 1986) but the precise nature of a profession
remains disputed. The concept of a profession has been theorized over time in a
variety of ways, including from a functionalist, interactionist and critical
perspective (Willmott, 1986).

The functionalist perspective builds on the idea of the professions having

a functionalist relationship with society that includes the professional’s obligation
to operate in the public interest by utilizing a complex body of knowledge which
they are expected to combine with the exercise of judgment in order to offer
advice with professional authority (Greenwood, 1957, Hughes, 1958, Millerson,
1964, Parsons, 1939). The initial evidence of knowledge and competence comes
via IPD, the training stage that typically comprises a mix of professional
accountancy examinations and work-experience and culminates in the
accountant’s admission to membership of a professional accountancy body. The
continuing evidencing of knowledge and competence comes via CPD, the
updating and learning that is undertaken post-qualification. IPD and CPD both fit
within the functionalist perspective by evidencing the initial acquisition and
subsequent maintenance and development of a body of knowledge and skills.
However, the distillation of the nature of a profession into a set of functional
characteristics is fundamentally problematic because not all professions
recognised as such may possess all features while many occupations not readily
recognised as professions may possess some of them (Abbott, 1988, Klegon,
1978, Sciulli, 2005).

Attention therefore shifted to other explanations, with a focus on viewing

professions as interest groups that strive to convince society of the legitimacy of
their professional claim based on their interactions with society (Roth,
1974, Saks, 2010, Willmott, 1986). Emphasising the professionalisation process
(Wilensky, 1964), the creation of knowledge monopolies (Freidson,
1970a, Freidson, 1970) and a gatekeeping function (Brint, 1993), professions can
be characterised as organisations that harness a body of knowledge and protect
it, thereby allowing the professional to act as an agent of formal knowledge. CPD
can be viewed in this light, being a mechanism whereby formal knowledge can
be continually updated in order to continue to confer legitimacy to the
professional’s claim.

More recently, a focus on the Weberian-informed concept of social closure

has shifted attention to the ways in which interest groups seek to control the
market for their services by restricting access through educational requirements
(O’Regan, 2008, O’Regan, 2010, Parkin, 1979, Saks, 1983, Saks, 2010) which
form part of a credentialist ideology (Saks, 2012). Larson (2013) argues that the
professional project is concerned, first, with the establishment of monopoly over
the professional market and, second, with cognitive exclusiveness over an
abstract body of knowledge. The functionalist, interactionist and critical
approaches to the concept of a profession therefore each take a different starting
premise but all focus on the use of education as either a feature of a profession
or a legitimating tool or an element of social closure. IPD begins this process
while CPD continues it.

Like knowledge mandates, the ways in which ethics have been

constructed and discussed in relation to the accountancy profession displays
contradictions. The accountancy profession’s actions in historic instances such
as bank failures and world wars has not always lived up to the values espoused,
leading Neu and T’Aerien (2000, p. 205, 209) to argue that, ‘whilst the notion of
ethics has a reassuring sound to it’ and ‘ethical discourses reassure us of the
moral superiority of accounting practitioners’, ‘claims to public service ring
hollow’. They claim that the interests of manufacturing capital did not always
align with the interests of soldiers in the field and that there was a certain
circularity regarding assertions of fair and honorable dealings because it was
those members who defined what was fair and honorable. Hence, the view was
promoted that accountants were ethical because they were professional and
hence must be professional because they were ethical.

But there are challenges in these CPD initiatives. The CPAs, especially
the small- and medium-sized practitioners, are concerned with the additional
costs associated with the increased CPD units requirements.

Improving your skills and knowledge through Continuing Professional

Development is the responsibility of every professional across all industries.
When completing CPD it is important to keep a record of the training completed
each year, what learning objectives have been met, and what skills will be put
into practice to improve and increase proficiency; you can track these with your
CPD points, units or credits. The training record kept by an individual is typically
called a CPD portfolio.
 Pruning existing CPD providers matched with increased barriers to entry
for new CPD providers would be crucial to provide quality updates to our
professionals. Further, the BOA has to do more work delivering thought
leadership through free webinars and courses to ensure a consistent message is
sent across the profession, instead of relying too much on the accredited
professional organization to deliver.

Earning the remaining 60 percent of the required CPD, through CPD

providers, is considered a financially burdensome process for CPAs. While I
recognize the potential opportunity for cost issues to diminish with quality online
CPD providers, this will take time before contents are made available and for
prices to become competitive.