A Focus on Filipino CPAs and How They Adapt to International Standards

by | Jun 18, 2024 | Virtual Assistance

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Filipino Certified Public Accountants (CPAs) are increasingly sought after for their adaptability and proficiency in international accounting standards. The accounting profession is a vital component of any business, and both the United States and the Philippines have a significant number of skilled accountants. While there are similarities between the two, there are also notable differences in terms of education, certification, and cost. When comparing accountants in the United States and the Philippines, various factors come into play, such as education, certification requirements, job roles, salary expectations, and cultural influences. Understanding these differences can assist organizations and individuals in navigating the global financial workplace more effectively. 

Many organizations have experienced growth and success with the help of certified public accountants in the Philippines. Despite differences in accounting standards and regulations, Filipino CPAs are often preferred by organizations worldwide due to their cost efficiency and high adaptability. However, some companies may hesitate to outsource accounting roles to the Philippines because they are unfamiliar with how accounting practices in the Philippines compare to those in other major countries.

This blog explores how Filipino virtual CPAs excel in meeting the demands of the international client market, particularly in comparison to their U.S. counterparts.

Key Takeaways

Filipino CPAs are highly adaptable and proficient in international accounting standards, making them attractive for global outsourcing.

-Differences in education, certification requirements, and cultural influences shape the practices of CPAs in the United States and the Philippines.

-Both excel in diverse accounting roles but exhibit contrasting approaches in technology adoption, salary structures, and work environments.

Education and Certification

Filipino accounting graduates are ready to take on entry roles, but many of them in the Philippines choose to take a year-long review for the certified public accountant exams. There are about 200,000 certified public accountants (CPAs) as of 2023 producing an average of 8,000 accounting professionals every year. Filipino CPAs are not limited to practicing in their locality as they are recognized in the highly diverse countries of the ASEAN region, like Singapore, Thailand, Indonesia, and more. This makes Filipino accounting professionals very adaptable and quick to learn the standards and regulations of any country.

American CPAs not only have better chances of landing a job in the “Big 4” accounting firms, but they can also carry their qualifications to countries with mutual recognition agreements. CPAs from the US can practice in Canada, Mexico, Australia, New Zealand, Ireland, and Hong Kong, and vice versa. 

Background of Filipino CPAs and US CPAs
Philippine accountants earn a Bachelor of Science in Accountancy (BSA) degree over a 4-5 year college program, preparing rigorously for the Certified Public Accountant (CPA) licensure exam. Administered by the Professional Regulation Commission (PRC), the CPA exam consists of four parts that candidates must pass within 18 months, with a pass rate of around 42%. Filipino CPAs are required to engage in Continuing Professional Development (CPD) to maintain their licenses, ensuring they stay abreast of evolving industry standards and practices in the Philippines and overseas.

In contrast, U.S. accountants typically hold a bachelor’s degree in accounting, completing coursework in advanced math, economics, and business over a 4-year program. Many pursue a master’s degree in accounting or business administration to advance, specializing in accounting. CPAs must undergo continuing professional education (CPE) to maintain their licenses, with some pursuing additional certifications like the Certified Management Accountant (CMA) to be able to do private practice, which involves a 2-part exam over 2 years and requires 2 years of managerial accounting experience.

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Cost, Salaries, and Cultural Influences

In terms of salaries, there is a notable contrast between US and Philippine accountants due to differing costs of living. US accountants, according to the U.S. Bureau of Labor Statistics (BLS), earned a median annual wage of $73,560 in 2020, with potential earnings influenced by factors such as experience, location, and industry. On average, salaries hover around $69,000 annually, complemented by comprehensive benefits packages including health insurance, retirement plans, and bonuses.

Conversely, Philippine accountants receive lower salaries, reflective of the country’s lower cost of living. PayScale reports an average annual salary of approximately PHP 300,000 (about $6,000 ) for accountants in the Philippines. However, remote accountants earn an average yearly salary of roughly $29,000. This significant disparity in earnings allows businesses to realize substantial cost savings, up to 70%by outsourcing accounting functions to the Philippines. Despite lower monetary compensation, Filipino accountants employed in Business Process Outsourcing (BPO), remote virtual assistant roles, or multinational corporations benefit from competitive perks and opportunities for career advancement.

Culturally,  Filipino accountants often work in collaborative environments that value teamwork, respect for hierarchy, and strong interpersonal relationships. They are known for their dedicated work ethic, flexibility, and willingness to exceed expectations, traits highly valued in the outsourcing industry. In contrast, US accountants thrive in a professional and competitive environment emphasizing individual achievement, innovation, and ongoing improvement.  

Adaptability and Expertise

Filipino accountants are recognized for their adaptability, quickly mastering diverse accounting standards and regulations worldwide, making them a preferred choice for global outsourcing. They are proficient in both US accounting standards such as Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS), enhancing their suitability for servicing US-based clients.

Conversely, while technology adoption in the Philippines is growing, it may not be as advanced as in the US. Nevertheless, Filipino accountants are increasingly utilizing software such as SAP, Oracle, and other cloud-based tools, particularly within the BPO sector. Many Philippine firms prioritize training programs to equip accountants with the latest technologies, fostering competitiveness in the global market.

In the United States, accountants lead in adopting cutting-edge technologies and methodologies like QuickBooks, Xero, and ERP systems, bolstering efficiency and accuracy in financial operations. There’s a strong emphasis on continuous learning and adapting to new financial technologies and regulatory updates, ensuring professionals stay ahead in a dynamic industry.

Job Roles and Responsibilities

Filipino accountants enjoy versatile career opportunities across public practice, commerce and industry, government sectors, and education. The Philippines has emerged as a significant outsourcing hub, with many accountants employed in numerous BPO firms and remote virtual assistant agencies catering to global clients. Typical responsibilities that are outsourced include basic bookkeeping, but other financial accounting duties can also be delegated, such as:

-Auditing
-Managing accounts payable and receivable
-Overseeing cash flow
-Handling financial controller duties
-Collecting and analyzing financial data
-Conducting financial forensics
-Processing payroll
-Managing tax filing and reporting

Philippine accountants adhere to regulatory frameworks established by the Financial Reporting Standards Council (FRSC) and the Professional Regulation Commission (PRC).
Filipino CPAs should be members of the Philippine Institute of Certified Public Accountants (PICPA). PICPA is a reputable organization that’s been a member of the International Federation of Accountants (IFAC) since 1977 to maintain international standards of financial reporting and transparency.

Similarly, in the United States, accountants have diverse career paths, specializing in areas such as public accounting, management accounting, government accounting, and internal auditing. They leverage advanced technologies like AI, blockchain, and cloud computing to improve efficiency and accuracy in financial operations. U.S. accountants also navigate a complex regulatory landscape governed by entities like the Securities and Exchange Commission (SEC) and the Financial Accounting Standards Board (FASB), ensuring compliance with stringent standards.

CPAs as Remote Professionals

A lot of business leaders outsource their financial reporting and analysis tasks to a team of virtual CPAs in the Philippines, these remote professionals deliver high-quality outputs while reducing overhead costs. Filipino CPAs working remotely maintain high credibility due to several factors:

Professional Standards: Remote Filipino CPAs adhere to the same professional standards and ethics as their counterparts in traditional office settings. They are committed to upholding integrity, confidentiality, and accuracy in financial reporting and compliance.

Technological Integration: Virtual Filipino CPAs leverage advanced technologies for secure data handling, ensuring client information remains protected and compliant with international data privacy regulations (e.g., GDPR, HIPAA).

Efficiency and Flexibility: Remote Filipino CPAs contribute to operational efficiency and flexibility for U.S. clients by offering round-the-clock services across different time zones. This enables timely financial reporting and decision-making processes.

Growth in Remote Work: According to a survey by FlexJobs, remote work in the Philippines has grown significantly, with a notable increase in professionals, including CPAs, opting for remote opportunities.

Cost Savings: Businesses outsourcing to remote Filipino CPAs report cost savings of up to 70% compared to hiring locally in the U.S., without compromising on service quality 

Client Satisfaction: A study by Deloitte found that 85% of U.S. businesses outsourcing accounting functions to the Philippines are satisfied with the quality of services provided by Filipino CPAs, emphasizing their reliability and expertise.

Accounting Across Borders

Filipino CPAs represent a pivotal force in the global accounting workspace due to their adaptability and expertise in international standards. While they share common ground with their U.S. counterparts in delivering essential accounting services, the nuances in education, regulatory frameworks, and cultural influences distinguish their practices. Businesses looking to capitalize on global talent and achieve cost-efficiency should consider the unique strengths and contributions of Filipino CPAs in meeting their financial needs effectively. As the demand for remote accounting services grows, Filipino CPAs continue to demonstrate their credibility and proficiency, underscoring their role as valuable assets in the international client market.

Whether you’re hiring for a remote accountant or looking to understand international accounting practices, appreciating these nuances is crucial for success. For organizations that need additional support in dealing with numbers and finance, finding the right partner who has tapped the market of qualified remote professionals in the Philippines, like Kayana, can ensure that the CPA talent aligns with your company’s needs, vision, and culture.

You can discuss with us your needs by scheduling a FREE Strategy Call with us to find the true expert that best fits your organization.

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