06 Feb 2017
Last week, the posting results for those who took the 2016 O Level exams was released. I remembered vividly the joy and jubilation I had when I was admitted to the Commerce stream in the junior college of my choice. I was happy because I could study accounting which I discovered was my natural strength. However, this choice is no longer available to students pursuing junior education from 2000 onwards.
I wrote to the Ministry of Education regarding the removal of the commerce stream in junior colleges and they gave the following reply:-
“The key rationale was to encourage the JC students to pursue Mathematics, Sciences, Humanities, Arts, Languages which will provide strong foundational knowledge and skills for their University education.”
As a beneficiary of the past policy, please allow me to explain how the inclusion of accounting could upgrade the life skills of Singaporeans and how the exclusion created difficulties for students with strong aptitude for the subject.
Financial Literacy
While the pursuit of excellence in Mathematics, Sciences, Humanities, Arts and Languages laid the foundation for wealth creation, the management of the accumulated wealth is equally important. What we cannot managed can be lost.
Principle of Accounting builds the basic foundation through knowing how financial records are recorded and processed to create financial statements to make informed decisions. Accounting is the language of business.
Small and Medium Enterprises (SME) form the backbone of Singapore economy as SMEs account for 48% of Nominal Value added in 2015 (www.singstat.gov.sg). Having accounting and business knowledge will ease the process of setting up and managing new business. For example, the process of budgeting helps to project the amount of working capital required after accounting for cash inflows and expenditure. Business knowledge need not be confined to commerce students. It is a basic skill that all entrepreneurs should possess. The exposure of this knowledge should begin at tertiary level where the students are mature and competent to handle the information.
On an individual basis, the knowledge of financial statements such as Income Statement and Balance Sheet builds up the foundation of individual financial planning. Individuals should be trained to understand and interpret financial information for their investment and retirement purposes. Being financial literate helps individuals become self-sufficient so that they can achieve financial stability. Those who understand the subject should be able to answer several questions about purchases, such as whether an item is required, whether it is affordable, and whether it an asset or a liability. This self-sufficiency also reduces the reliance on others and prevents many from falling into scams.
On a country level, if more Singaporeans can be financially independent, the government’s burden of aging population can be lightened. Equipping our next generation with financial knowledge is likened to how exercise can reduce healthcare costs.
According to the Education Statistic Digest 2015, there are 15,337 students enrolled in junior colleges vs 600 enrolled in Millennia Institute in 2014. It is obvious that the majority of students pursuing A Level qualifications in junior colleges are not given the choice to equip themselves with financial knowledge. While financial education has begun in schools, it is still in its infancy and at best supplementary to the normal curriculum. Acquiring accounting and business knowledge should not be seen as a specialisation but a pursuit of a life skill. It is more often that we apply budgeting concepts in our daily life than complex mathematical formulas.
Training of the mind
For those who had studied accounting, they will realise that what is taught in the first chapter can be linked to the last chapter via the double entry concept. The various topics are synthetized to produce financial statements. Unlike mathematics where one can study trigonometry without affecting vectors or differentiation, accounting is like a jigsaw puzzle where one missing part makes the picture incomplete. It trains the mind to think holistically and critically.
Under A level accounting syllabus, the student is taught financial accounting and management accounting. In a typical financial accounting question, where one is required to prepare financial statements after making adjustments, it trains the individual to be focused, systematic and adept with the ability to make adjustments. In the case of management accounting where there is no fixed format, the student’s analytical skills are honed and develops a road map to present the findings in a logical and systematic manner.
Accounting has many interlinked definitions which form the foundation for more complex ideas. To go further, accounting translates these ideas from words to numbers and tables. The alternation between words and numbers demonstrate the flexibility to switch between different modes of expression.
Many thought that those who study accounting would become accountants. Rather, I would argue that they become better individuals who can analyse and present information systematically coupled with the flexibility and adaptability for changes.
Who bears the brunt of the policy?
Many are exposed to the basic of accounting when “Principles of Accounts” are taught at O Level but the pursuit of higher accounting education within subsidized state-funded institutions comes at huge cost.
| Duration | School Fees | Source |
|---|
| Polytechnic | 3 Years | $8,100 | http://www.np.edu.sg/admissions/fees/Pages/finance.aspx |
| Junior College | 2 Years | $ (792) | https://www.moe.gov.sg/admissions/international-students/general-info |
| Difference | 1 Year | $7,308 | |
| Opportunity Costs of Delaying University Graduation |
|---|
| Fresh Graduate Pay | 1 Year | $39,600 | http://www.todayonline.com/singapore/fresh-graduates-ntu-nus-and-smu-see-increase-starting-pay |
Under the current policy, a student wishing to pursue higher accounting education may consider the polytechnic route. However, as shown above, the polytechnic student would have to spend an additional year and incur additional cost of $7,308. While that student may consider going to Millennia Institute, he also has to spend 3 years before he can complete his A Level studies. In both cases, should the student be admitted to the business or accountancy faculty, the delay would cost $39,600 of earnings as his university graduation is deferred by 1 year due to the policy.
| Income Quartile | Average
Monthly Income | Average
Monthly Spending | Difference |
|---|
| 1st – 20th | $2,022 | $2,231 | $(209) |
| 21st – 40th | $5,299 | $3,536 | $1,763 |
| Source: http://business.asiaone.com/news/how-much-money-do-singapore-households-really-spend-each-month |
As shown above, the bottom 20% of Singapore households can ill-afford the additional expenditure of $7,309 and missing out one year of earnings of $39,600. Most of them hardly balance their budget as they are running a deficit of $209. They probably scrapped through with government subsidy and support. It is very difficult for them to jump from the current average income of $2,022 to the next higher income tier (21st to 40th) of $5,299 as it involves a major upgrade of skills sets. Education becomes the only route out of poverty. But such social mobility is obstructed by the policy.
| University Tuition Fees | NTU | NUS | SMU |
|---|
| Accountancy and Business Courses | $9,250 | $9,450 | $11,300 |
| Home Tuition | | | |
| (Once a week 2 Hour lesson for 10 months) | $4,800 | $4,800 | $4,800 |
| Home Tution Fees / University Fees x 100% | 52% | 51% | 42% |
Let’s look at this from another angle. If a student wishes to take A Level Principles of Accounting while in junior college, he may have no choice but hire a private tutor to cope with the higher order learning. His home tuition fee for 10 months is almost half of the annual university tuition fee. To ease family burden, it is no surprise that one would rather choose the longer route via polytechnic or the 3 year A level course. But this is depressing for these students as their grades are among the best as shown below:-
| Polytechnic | Course | Cut-off Point
(2016) | % of Courses with
Same or Lower
Cut-off Points |
|---|
| Ngee Ann Polytechnic | Banking and Financial Services | 10 | 8.1% |
| Ngee Ann Polytechnic | Business Studies | 11 | 10.3% |
| Ngee Ann Polytechnic | Accountancy | 12 | 18.9% |
| Singapore Polytechnic | Accountancy | 12 | 18.9% |
| Singapore Polytechnic | Banking and Finance | 12 | 18.9% |
| Temasek Polytechnic | Accountancy and Finance | 12 | 18.9% |
| Nanyang Polytechnic | Accountancy and Finance | 14 | 33.6% |
| Nanyang Polytechnic | Banking and Financial Services | 14 | 33.6% |
| Source : www.polytechnic.edu.sg |
The above states the 2016 cut-off points for admission into the various Business and Accountancy polytechnic courses. The last column represents the number of courses with the same or lower cut-off points. It implies, for example, Ngee Ann Polytechnic’s Banking and Financial Services course with a cutoff point of 10 only admits the top 8% of the cohort.
In this connection, as the median cutoff points for Business and Accountancy polytechnic courses is 12, it means that only the top 20% of the cohort would qualify for these courses.
These students would easily qualify for junior college as they are the among the cream of the crop. But the following statistic may disappoint some:-
| So in the end who has a higher chance of getting into University? |
|---|
| Approximate percentage of A-level holders who go on to university | 70% |
| Approximate percentage of poly diploma holders going to university | 30% |
| Source : http://www.straitstimes.com/singapore/education/1-in-3-local-university-students-admitted-last-year-is-a-polytechnic-student | #colspan# |
The sad truth remains that while 70% of their peers in junior college are admitted into university, only 20% of polytechnic graduates make the mark. The remaining 80% entered the workforce. Many pursue degree equivalent qualifications like ACCA while struggling with a challenging workload and ever-important family life.
Some parents chose to empty their retirement nests to fund to give their children university education abroad or in expensive private universities located locally.
Given the choice between an accountancy and business course in a polytechnic and the 3 year A level course offered by Millennia Institute, many would choose the polytechnic route as it offers better job opportunities for the same time investment. A safety net.
However, many are frustrated as the policy to close the commerce stream meant that they had to pay more, spend more time but yet have a lower chance of getting in a highly recognised state-funded university.
But if there is a shorter and more affordable choice to pursue degree qualifications, would their choice be different?
My appeal
If what I described so far makes sense to you, this is the result of my education. I am an ordinary person who took accounting at ‘O’ Level, ‘A’ Level and university. This is the only thing that I do well in my life and the system that I went through facilitated this process. After my graduation from NTU, I worked 2 years as a tax associate in a Big 4 accounting firm and has since then been self-employed. I depended on the systematic and analytical ability acquired in my accounting education to be self-sufficient these years.
I am now a full-time tutor who specialise in teaching accounting. Each year, several junior college students approach me for assistance in studying this subject as a private candidate. They had to make sacrifices but these students persisted because they have aptitude for the subject and believed this subject will enhance their chances of getting into university courses. Over time, I researched on the implications of the policy on the grassroots level and I offer my humble opinion with this article.
I understand the decision was made in 2000 and its not easy to make a U-turn after 17 years as resources are needed to restore accounting in junior college curriculum. However, I would argue that the hardest part is not about making the decision but about the people living with it. Many students with strong aptitude for accounting and business have struggled through what I described. They bear the brunt of the policy. It is the lives of these individuals and their families that we should consider.
Chong Kok Peng
Email : info@poatutor.com.sg
