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Dec 02nd
Home Columns Op-Ed Page The Philippine CPA-Reciprocity Crabs
The Philippine CPA-Reciprocity Crabs PDF Print E-mail
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Columns - Op-Ed Page
Monday, 14 July 2008 05:56

Last April, the accountancy boards of the countries of Mexico, Canada, Australia and Ireland renewed their five-year trilateral mutual-recognition agreements with the American Institute of Certified Public Accountants (AICPA) and the National Association of State Boards Accountancy (NASBA). Mutual recognition means the CPAs of these countries are given reciprocal accounting practice rights in all the 50 U.S. States.  This also means that U.S. CPAs can conduct equivalent practice in these foreign countries.

As a Philippine-licensed CPA, I find this interesting and feel jealous about this reciprocal right of these few very countries. The Philippine Institute of CPAs, (PICPA), the only accountancy Board in our country, cannot forge with the United States such an agreement because we do not have a General Agreement on Tariff and Services (GATS) with it. One part of me feels outraged at our leaders who are so shortsighted when it comes to international business relations. The world as we know it is getting “flattened” everyday (no border or boundaries) as international commerce and global-business relations between and among countries continue to evolve.


It is not that PICPA-Philippines was unfamiliar with this reciprocal privilege right offered by the United StatesPhilippines in its long history happens to be a long-time friend of the United States but our country has not taken advantage of this potential opportunity for our CPAs to immigrate to the U.S.A. and be readily recognized and licensed as a U.S. CPA with very few requirements. to all deserving and friendly countries of the world. The


Editor’s Note: Angel Y. Dayan, EA, CPA, ABA, ATA, is the president of the PICPA’s Orange County, California, chapter. He was a director and the executive vice-president of the Philippine American Society of CPAs. He is a Certified Public Accountant in the State of Texas and the Philippines and an IRS Enrolled Agent admitted to practice in the entire 50 States of U.S.A. He completed a Masters Course in Tax Defense Representation. He is a Graduate Fellow of the National Tax Practice Institute, and Competent Member in good standing of the American Academy of Tax Practice and the American Institute of CPAs. He is an Accredited Business Accountant-Business Advisor (ABA), and Accredited Tax Advisor of the ABA.

Several years ago, we started a movement in California to obtain a “mutual recognition agreement for Filipino CPAs. An initial but important step has been completed. We first solicited the formal endorsement of the members of the Board of the California State Board of Accountancy. A group of us numbering about 20 CPAs attended a Special Meeting of the California Board of Accountancy in a hotel in Santa Monica, Southern California. In its specific agenda was our request for endorsement to the International Qualification Examining Board (IQEX) that will evaluate the qualifications of Philippine CPAs to qualify for “mutual recognition.” Mexico has not yet been officially accepted into the program at that time.


After some favorable-and-friendly deliberation, the California Board of Accountancy unanimously voted and supported the Philippine CPAs on their qualifications that would meet the standards required, in education, in examination and experience. We were gladly accepted and were cordially endorsed with open arms to the program. In a show of support, the 20 of us CPAs stood proud and thankful before the illustrious members of the California Board of Accountancy that deliberated earlier at length our proposal and their acceptance of it. They were convinced that of all countries in the world, the Philippines should be a participant to the international-reciprocity program since we used American accounting textbooks in school. Besides, our educational curriculum was comparably the same with U.S. standards, and we give by far similar CPA examination subjects to CPA candidates to be licensed. And Filipino CPAs acquire the same formal-accounting experience from businesses operated in a free-enterprise capitalist democracy, unlike other countries that may not even be democratic. It was self-evident that we would be given an easy passing mark by the American Institute of CPAs (AICPA) and the National Association of State Boards of Accountancy (NASBA) and they did. We were so excited at the time.


As we tried to meet further the rest of the formal requirements in the application process, we were informed subsequently that it would be important for our two countries (the Philippines and the United States) to have a trade agreement, or a proviso in international commerce or contract with the United States.  The Philippines unfortunately did not have that and up to now we still do not have such an understanding.


We, therefore, made representations with the Philippine Department of Trade and Industry if such an agreement could be forged between the United States and the Philippines. Philippine organizations such as the PICPA, and the big CPA firms in the Philippines were requested to submit their position papers about, or endorsement of, this matter. A former PICPA Executive Director I spoke with personally in Los Angeles was agreeable to the idea. The big CPA firms in the Philippines resented it because of its “trade protectionist” policy.


The US CPAs were seen as the would-be big competitors in the CPA practice in the Philippines that might affect the practice of licensed Philippine CPA firms. Our efforts to national reciprocity fizzled out. The project is now dead.

Had we been successful, a Philippine CPA would only be required to hurdle a 5-hour examination (in lieu of the normal 16 hours of testing) to pass the U.S. CPA exams. After passing, a Philippine CPA would have been able to practice in any part of the United States of their choice, perhaps even immigrate as a professional under this program. An immigration law under a new category for accountants could have passed in the U S. Congress by now. All we need right was a GATS Agreement between our countries, the Philippines and the United States. 


Have you watched crabs in a wicker basket lately? Yes, the big crabs that pulled us down are still in the basket but they are slow and older by now. The biggest one has been burned. I believe we should light up the torch again on this issue. There are just four (4) countries admitted into the program to date. The Philippines can be the 5th one if could align our forces and we value the economic benefits of global commerce. We are sending our professionals abroad anyway as overseas workers in order to sustain the homeland’s economy. Why the program can’t be given to the Philippine CPAs is hard to swallow. After all, the United States happens to be domicile of the world’s biggest concentration of Filipinos outside of the Philippines. # # #


Editor’s Notes: Mr. Dayan’s office is located at 150 East Olive Avenue, Suite-116, Burbank, California, 91502. He could be reached at (213)-365-1040. Send him an email at, for comments or visit his website at

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Last Updated on Monday, 14 July 2008 06:04

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