Tag Archives: integrity

Qwertyman No. 93: A Century of Philippine Accountancy

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Qwertyman for Monday, May 13, 2024

IN MY long life as a professional writer—aside from being a fictionist, journalist, and academic—I’ve occasionally been asked to write books for both private and public institutions and individuals, usually to commemorate an important milestone. My clients have included banks, power and energy companies, accounting firms, NGOs, business tycoons, politicians, and thinkers. 

While it’s a job, it’s also been a great learning experience for me, particularly when I’ve had to deal with topics like oil exploration, steel manufacturing, and geothermal energy. I begin to understand how things really work in our economy and society, seeing the cogs and wheels that turn industry, create jobs, and produce things people need. I meet people I never would have run into otherwise, people with interesting stories to tell about themselves and their work.

Probably the most famous of those people was Washington SyCip, the legendary founder of SGV & Co., once one of Asia’s largest and most highly respected accounting firms, whose biography Wash: Only a Bookkeeper I wrote back in 2008. When people tell me how boring the lives of accountants must be, I tell them the story of Wash, who wasn’t just an academic prodigy who graduated summa cum laude from college at 17, but who also served as a US Army codebreaker in India in the Second World War. Granted, not many accountants lead lives as colorful as Wash’s, but to suggest that there’s no drama in accountancy is certainly mistaken. 

I discovered this in my latest (and very likely my last) commissioned book, A Century of Philippine Accountancy, which will be launched this week by the Philippine Institute of Certified Public Accountants (PICPA) Foundation. The book is a compendium of both big and small stories, an institutional history that also delves into the personal struggles and triumphs of key people in the industry.

The centennial book comes a bit late, because the Philippine accounting profession formally traces its beginning to March 17, 1923, when the Sixth Philippine Legislature passed Act No 3105, “An act regulating the practice of public accounting; creating a Board of Accountancy; providing for examination, for the granting of certificates and the registration of Certified Public Accountants; for the suspension or revocation of certificates and for other purposes.” Six years later, the PICPA was established within the private sector to represent professional interests.

Of course, some form of bookkeeping was being practiced in the Philippines long before that. Given the Philippines’ vigorous trade with other countries such as China even before Spain’s arrival in 1521, there must have been some early form of record-keeping maintained by both natives of the islands and their foreign trading partners. Accounting in early China was said to have reached a peak during the Western Zhou dynasty (1100-771 BC); the Chinese developed sophisticated methods of accounting to keep track of such basics as revenues, expenditures, salaries, and grain. In Spain, regulations began to be applied regarding the accountability of companies starting with Queen Juana and her son Emperor Charles V in the 1500s. Manila’s galleon trade with Mexico, which lasted from 1565 to 1815, required meticulous bookkeeping, and archival records still exist of the cargo manifests of the galleons; these records show, for example, that audits of the ships’ cargo revealed discrepancies in capacity that suggested smuggling (whereby space meant for such necessities as water was reduced to make way for profitable goods).

Since 1923, the profession has grown in the Philippines by leaps and bounds to nearly 200,000 registered CPAs, employed in over 8,000 firms and partnerships. Based on the number of Publicly Listed Companies (PLCs) they audit, six firms dominate the industry: SGV & Co. (Ernst & Young); Isla Lipana & Co. (PricewaterhouseCoopers Philippines); R.G. Manabat & Co. (KPMG Philippines); Reyes Tacandong & Co. (RSM Philippines); Punongbayan & Araullo (Grant Thornton Philippines); and Navarro Amper & Co. (Deloitte Philippines). In keeping with the times, many local firms have affiliated themselves with large global partners to avail themselves of the latest technology and expertise. (For a bit of trivia, the first Filipino CPA was Vicente F. Fabella, the founder of what is now Jose Rizal University.)

The profession is governed by the Board of Accountancy (BOA), which administers the CPA Licensure Exam at least once a year. The BOA in turn is supervised by the Professional Regulatory Commission, along with other professional boards. The BOA and PRC work closely with the Securities and Exchange Commission (SEC), which is responsible for ensuring the integrity of the country’s financial system and its institutions.

The 1997 Asian financial crisis highlighted the importance of quality assurance and adopting international financial reporting standards in accounting. With the help of the Asian Development Bank and the World Bank, the major players in the profession—PICPA, BOA, PRC, and SEC, among others—undertook studies to reform the industry, resulting in the Philippine Accountancy Act of 2004. The SEC also initiated an Oversight Assurance Review to extend and strengthen reforms further. What the book chronicles most significantly, according to former SEC Commissioner Antonieta Fortuna-Ibe, is the Filipino CPA’s rise to global respectability and prominence, because of the industry’s relentless efforts to raise its standards and to keep pace with the latest developments in financial technology. Ibe stood at the vanguard of many basic reforms in Philippine accountancy, and was behind the push for a book to mark their centenary.

The profession will need to adapt to the ever-changing financial landscape. As SGV’s Wilson Tan puts it, “While we have yet to see how new technologies such as the Metaverse and the integration of AI into work applications will impact the accounting profession, CPAs of the future will need to likewise evolve their skills and capabilities. Foundational changes will need to be made in the curriculum to integrate learning that encompasses non-financial reporting matters, use of technology, data, and analytics, and cybersecurity, among others.”

Personal integrity, as ever, lies at the bedrock of accountancy. The BIR’s Marissa Cabreros reminds everyone that “Every CPA being asked to sign a financial statement must give weight to the purpose of their signature. If it has your signature as a CPA, we expect that you reviewed and recorded that properly. But unfortunately, sometimes lapses happen and CPAs forget what they signed for. An accountant must always have the importance and value of her signature in her heart.” Wash SyCip could not have put it any better.

Accountants and other members of the public interested in getting a copy of the book can email Lolita Tang at lolitatang@yahoo.com for more information.

Qwertyman No. 41: Living up to “Honorable”

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Qwertyman for Monday, May 15, 2023

I’VE BEEN following the saga of the Hon. George Santos, the freshman Republican congressman from New York, who’s been caught in a tangle of lies he made about his education and employment on his résumé, and who’s now been charged in federal court on 13 counts from wire fraud and money laundering to theft of public funds and making materially false statements to the House of Representatives. So brazen have been this young politico’s prevarications that even his fellow Republicans—many of whom had forced themselves to swallow Donald Trump’s gargantuan lies about the 2020 election—have called on Santos to resign, if only to spare their party from the prolonged embarrassment of nursing a self-confessed falsifier in their ranks.

Now this is what gets me: Santos had earlier admitted to having fabricated about four-fifths of his CV, an act he called “résumé embellishment” which involved a “poor choice of words.” He said he was sorry—but then just as quickly insisted that he was no criminal and intended to serve the rest of his term, and even run for re-election. He boldly reappeared in Congress—still dressed like the preppy he never was—and acted like nothing happened. Despite the ostracism, he stood his ground, knowing that under its rules, the US Congress couldn’t kick out one of its own—even someone convicted of a crime, unless that crime was treason.

The story fascinates me because it illustrates the utter shamelessness and disregard for the truth that now seems par for the course in politics, and not just in America. The fact that many of his colleagues found Santos’ behavior reprehensible offers hope that some people still know right from wrong. The other fact, that Santos refuses to take responsibility for his actions and resign—and that some people continue to support him nonetheless—reminds us of how degraded the idea of “honor” has become in contemporary society. 

Social scientists tell us that “honor” has evolved over the centuries from the chivalric, even aristocratic notion of responsibility to a community—think of a hero undertaking a noble sacrifice, even at the cost of one’s life, for the common good—to something much more individualized and internalized, to one’s own sense of respect, dignity, and integrity. 

I’d argue even further that for most people today, “honor” has become a much more elastic term, one that allows for a range of justifiable behaviors. I’ll give you an example: would you rat on an officemate, perhaps even your best friend, who’s also your chief competitor for that AVP position? You could, and you would—if you convince yourself that becoming that AVP is a more important honor, something your family and circle of friends would appreciate. This is the difference, as one scholar noted, between “internal” and “external” honor, between integrity and reputation. If we equate, as many might, “reputation” with popularity, with a positive public perception of your image, then it’s easy to see how and why many people find integrity expedient and expendable.

These thoughts ran through my mind when I learned of the recent passing of former Foreign Affairs Secretary Albert del Rosario, and read the many eulogies and encomiums following his death. All of them spoke of him as a man of honor, someone who fought for his country, stood by his word, and conducted himself with dignity. I had only occasional brushes with him, but can agree from those encounters with what was said. Some people communicate their integrity instantly, even wordlessly, just by their very manner. 

On the other hand, there are people who, by their swagger and arrogance (often a cover for some deeply felt inferiority), immediately invite mistrust if not repugnance. I’m reminded of a man who, from his lofty perch, drenched the good secretary with vitriol, accusing him of being “not a Filipino, you don’t look like a Filipino,” and threatening to “pour coffee on your face.” To which the diplomat merely reiterated the need to defend the country’s interests and to beware of the duplicity of our aggressive neighbor. 

The sad thing is how many Pinoys laughed along with that sneering man and thought that he was doing and saying the right thing. For years, he had fed them a diet of vulgarity, as if to reinforce the idea that that was the Filipino’s natural state and that he was one of them and spoke their language. In fact, he was cultivating and normalizing their basest instincts, an easier thing to do than the nobler alternative: appealing to their better selves, to what they could yet be. I see this innate goodness and decency, this desire for self-betterment, in Filipinos every day, even among the poorest of us. Overwhelmingly, this is still who and what we are. Those who believe otherwise debase only themselves.

But we are short on exemplary leadership—on leaders who value honor and integrity, on leaders who can feel shame, on leaders who can curb their profligacy out of respect for the poverty of the many, on leaders who will be genuinely missed and mourned by the masses when they depart. Our role models have become so few—and our expectations of our officials have become so low—that many of us have forgotten what honor truly means, assuming simply and tragically that it comes with wealth and power. The word “Honorable” is too easily affixed to certain high offices. Are they truly so?

I may be aghast at Rep. George Santos’ behavior in New York, but who knows how many lies are buried in our politicians’ CV’s, how many “résumé embellishments” and “poor choices of words” we have had to swallow?

And then again there’s a part of me that says, forget the résumé; it’s never been a trustworthy predictor of moral intelligence. Ability is the most basic we should expect of our “honorables.” Living up to their titles lies at the other extreme. But still I have to wonder: if a George Santos happened here, would he resign? 

Penman No. 416: Tips for Freelancers

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Penman for Monday, June 21, 2021

A GROUP of freelancers—people who write for a living but who prefer not to be tethered to any single employer—recently asked me to share some advice on how to get the most out of their job. Even in normal times, freelance writing has never been easy. You are basically on your own, dependent on your network of contacts and on your resourcefulness to get that next assignment and get that story published. While the Internet may have opened up new opportunities, it has also intensified competition and imposed new demands. 

Having been a professional writer and editor for almost 50 years, I was happy to give them these tips:

1. Broaden your interests. If your main interest is arts and culture, learn something about science and technology. Know your history, and gain even a basic understanding of economics. Don’t be choosy. As long as the job pays fairly and will not harm you in any way, do it because it will be another learning experience and will add more value to your résumé. 

2. Expand your capabilities. Learn the basics of good photography and invest in a good camera (even a good smartphone), as it will add value to your articles and make them easier to sell. Learn to write bilingually, especially as many clients will need scripts or articles in Filipino. Expand your genres, so you can write not only features but scripts, speeches, reports, and other marketable materials. Master the language, so you can also do editing work. Learn the basics of web design. 

3. Know the market. Writing single articles can be fun, but I doubt that they will make you enough to support yourself and your family. The physical magazines have shrunk to almost nothing, and while there may be money to be made online doing nearly mechanical work, you will want something more engaging and more remunerative. In my experience, a freelance writer can make the most from writing commissioned books. 

4. Learn to market yourself. This means you have to put yourself and your name out there, meeting people from all backgrounds. You may have to attend art exhibit openings, book launches, anniversaries, and other functions to make contacts and get to know what’s going on. Get on the mailing and invitation lists of embassies. Make friends with key media people. You may even have to do a few “freebies”—free publicity—just to get known. Maintain a blog that will display both your writing and your photography—indeed, your style—so potential clients can have an idea of how you write and how you will treat their material. Write a book—that will be the best way to get yourself noticed as a writer. Ask yourself: if someone were to Google my name, what will they find? Provide a positive answer to that. 

5. Be thoroughly professional. Be mindful of appointments, contracts, deadlines, accreditation, receipts, and taxes. Treat every job, no matter how small, as your first, last, and only job. Attend meetings promptly, dress smartly, speak knowledgeably—all of these contribute to the impression your client will make of you. Digitally record all interviews, after asking prior permission; never rely on handwritten notes. Back up your files to the Cloud and to an external drive. If the job is big enough, ask for a written contract, or at least a signed conformé to your proposal. 

6. Treat your work as a business. You will get more—and also more substantial—writing jobs if you are able to issue official receipts. This means getting properly registered as a business enterprise with the SEC, the BIR, and other agencies. To get government contracts, you need to be accredited with PhilGEPS, or the Philippine Government Electronic Procurement System. These accreditation processes can be tedious and expensive; you will also have to file taxes every year and do your own bookkeeping. But if you want to write for a living for the rest of your life, it’s an investment that will pay for itself in the long run. 

7. The writing life can be full of delightful freebies. I’m not telling you to reject them outright—Lord knows your professional fees are small enough, so these can be taken as compensation in kind—but don’t lie, and don’t be a party to fraud or misrepresentation. If you can’t write honestly about a product or a service, don’t take any favors coming your way. Like they say, there’s no such thing as a free lunch—but make sure your lunch isn’t poisoned and will kill you later.

8. Maintain your integrity. As I said, don’t be too choosy and too proud, especially if you’re starting out and trying to build a name. But don’t undersell yourself, either, and try not to get exploited. I say “try,” because in practice, at some point or other, someone will exploit you, whether you’re aware of it or not. Learn to say “No” if and when you have to. Compromise is good and even often necessary, but draw a line in the sand beyond which you will not go. Money is important, but it is not everything. Other and better projects will come. Unless you are desperate, do not take on jobs that will not make you happy; at least, make them pay well for your unhappiness.