Corporate Securities Info
Provincial standouts
By Raul J. Palabrica
Philippine Daily Inquirer
First Posted 03:18:00 04/11/2008
Last week, 29 third-year accountancy students of University of St. La Salle of Bacolod City visited the Securities and Exchange Commission to attend a briefing on its operations.
The SEC’s “speakers bureau” walked them through the registration process, corporate finance, accreditation of accountants, stock market trading and investment scams.
The four-hour power point presentation is part of the agency’s investor information program for schools, trade groups and professional organizations.
Depending on the profile and composition of the audience, the briefing, which covers pre-selected corporate and securities topics, is conducted either at the SEC office or the preferred venue of the requesting party.
At the outset, I was struck by the discipline of the 23 female and six male students. They came on time, were ready with their notepads, and sat through the session without any interruptive conversations or movements.
During the open forum, which came after the speakers had delivered their spiels, I got a sense of the potential worth of these future accountants and auditors.
Originally planned for 30 minutes, the question-and-answer period extended to a full hour and a half. The subject of the queries showed the students’ keen understanding of their course and awareness of current events.
Articulate
The students were proficient in English. Their grammar and choice of words were perfect. They did not speak in the “Taglish” style common among Metro Manila teenagers and some media practitioners.
There were no “er, I mean, ah” or similar words that some people use to fill up temporary disconnects between mind and mouth. Although their Ilonggo accent was evident, it was not distracting.
Two students asked questions in grammatically correct Filipino. If I didn’t know that they come from Bacolod, I would have thought they were residents of Metro Manila or a Tagalog-speaking province.
The students exuded self-confidence in asking clarification on some of the issues taken up during the briefing. Clearly knowledgeable with the basic principles of accounting, they inquired into the rationale behind the criteria the SEC uses in its accreditation of accountants.
Their hubris showed when a student, who seemed to have been challenged by the low number of SEC-accredited accountants (compared to thousands who pass the annual CPA board exams), prefaced his question with the words “when we become accountants.”
His statement was met with loud applause.
Questions
The financial scams that have hit the headlines lately—Ponzi and multi-level schemes—drew a lot of queries.
Under existing rules, the sale of products by a company’s sales staff to consumers (known as direct selling) and receipt of commission from sales made is okay.
What’s illegal is when members are recruited to an organization and made to pay membership fees in consideration for some future financial rewards without having to sell any product or doing anything, and the recruiter gets a cut from those fees.
A student disclosed that he once attended a “business opportunity” meeting where the organizers promoted certain products, and at the same time urged the attendees to recruit new members with a promise of commission for the effort, but no mention was made about the sale of any product or services.
From the look of things, the sale-cum-recruitment activity he described appeared to be a subtle ploy to put a semblance of legitimacy in an otherwise illegal act.
The other questions touched on money laundering, allowable interest rates by financing companies, review of audited financial statements, and compliance with reportorial requirements by corporations.
Quality
Some of the jargon used in the stock market, e.g., profit taking and blue chips, were also discussed. Questions were raised about Philippine Dealing and Exchange Corp. (PDEx), and the stock market index and how it is computed at the end of trading.
What the SEC’s speakers bureau initially thought would be a humdrum session with students who had to comply with some procedural academic requirements turned out to be anything but that.
From the quality of the questions asked, it was apparent the students are academically prepared and would, in the future, be a credit to the accounting profession.
They do not fit into the caricature of “promdi” that some Metro Manila students derisively call provincial residents who come to the metropolis for their education.
My brief experience with these students validates the perception held by many that students need not go to Metro Manila (and suffer the agonies of urban blight) to get quality education.
The results of recent government board exams, including the bar, show that graduates of provincial institutions of learning can go head to head with their counterpart in the so-called elite Metro Manila schools.
When good students are placed under the care of competent educators in a school with adequate teaching facilities, the expected result is academic excellence.
Teachers, please take a bow!
(For feedback, please write to rpalabrica@inquirer.com.ph.)
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