Framework for International Education Standards for Professional Accountants

International Accounting Education Standards Board

Framework for International Education Standards Framework for International Education Standards for Professional Accountantsfor Professional Accountants

Framework Support MaterialFramework Support Material

Prepared by IAESB StaffPrepared by IAESB Staff

January 2010January 201011

IntroductionIntroduction

• Establishes concepts used in IAESB Establishes concepts used in IAESB publicationspublications

• Provides an introduction to IAESB Provides an introduction to IAESB pronouncements & IFAC member body pronouncements & IFAC member body obligationsobligations

Framework

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• Financial information needs; andFinancial information needs; and

• Non-financial information needs of decision Non-financial information needs of decision makersmakers

Accountancy Profession Serves

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• Present and potential investors and creditors; Present and potential investors and creditors;

• Managers and employees within organizations;Managers and employees within organizations;

• Suppliers;Suppliers;

• Customers; Customers;

• Governments and their agencies; andGovernments and their agencies; and

• Public. Public.

Decision Makers Include:

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• Users’ information needs contributes to an Users’ information needs contributes to an efficient economy, creating value to society.efficient economy, creating value to society.

Ability of Accountancy Profession to Satisfy

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““serve the public interest by strengthening serve the public interest by strengthening the worldwide accountancy profession the worldwide accountancy profession through the development and enhancement through the development and enhancement of education.”of education.”

IAESB’s Mission is to

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- - Developing and publishing IESs; andDeveloping and publishing IESs; and

- - Promoting the use of those standards Promoting the use of those standards through IFAC member bodies.through IFAC member bodies.

The IAESB achieves its mission primarily by:

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• ServesServes the public interest by contributing to the public interest by contributing to the ability of the accountancy profession to the ability of the accountancy profession to meet the needs of decision makers.meet the needs of decision makers.

• Increases the competence of the global Increases the competence of the global accountancy profession, contributing to accountancy profession, contributing to strengthened public trust. strengthened public trust.

Enhancing Education by Implementing IESs

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• Reduction in international differences in the Reduction in international differences in the requirements to qualify and work as a requirements to qualify and work as a professional accountant;professional accountant;

• Facilitation of the global mobility of Facilitation of the global mobility of professional accountants; and professional accountants; and

• Provision of international benchmarks Provision of international benchmarks against which IFAC member bodies can against which IFAC member bodies can measure themselves.measure themselves.

Other Desirable Outcomes of Developing and Implementing IESs Include:

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Purpose of FrameworkPurpose of Framework

• Assist IFAC member bodies, as they have Assist IFAC member bodies, as they have direct or indirect responsibility for the direct or indirect responsibility for the education and development of their members education and development of their members and students; andand students; and

• Enhance the understanding of the work of Enhance the understanding of the work of the IAESBthe IAESB

The Framework Is Intended To:

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• IFAC Member Bodies;IFAC Member Bodies;

• Universities, employers, and other stakeholders Universities, employers, and other stakeholders who in accounting education programs; who in accounting education programs;

• Regulators;Regulators;

• Government authorities;Government authorities;

• Accountants and prospective accountants; andAccountants and prospective accountants; and

• Any other parties interested in the work of the Any other parties interested in the work of the IAESB. IAESB.

IAESB Stakeholders Include:

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• Consistency in Development of IESs ;Consistency in Development of IESs ;

• More efficient and effective standard-setting More efficient and effective standard-setting process; andprocess; and

• Increased transparency and accountability of Increased transparency and accountability of the IAESB for its decisions. the IAESB for its decisions.

Intended Benefits of the Framework Include

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Authority & Scope of the FrameworkAuthority & Scope of the Framework

• an individual who is a member of an IFAC an individual who is a member of an IFAC member bodymember body

Members of IFAC member bodies work in: Members of IFAC member bodies work in:

– Every sector of the economy; and Every sector of the economy; and

– Many different areas of accountancy (e.g., Many different areas of accountancy (e.g., including auditing, financial accounting, including auditing, financial accounting, management accounting, and tax accounting). management accounting, and tax accounting).

Definition of a Professional Accountant is

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• Establishes the learning and development Establishes the learning and development principles for the education of professional principles for the education of professional accountants; and accountants; and

• May establish requirements for roles that are May establish requirements for roles that are widely practiced or are of specific public widely practiced or are of specific public interest internationallyinterest internationally

The IAESB

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• IAESB develops IESs;IAESB develops IESs;

• IFAC member bodies and other interested IFAC member bodies and other interested parties design, deliver, and assess education parties design, deliver, and assess education for professional accountants, in the absence for professional accountants, in the absence of a specific IES. of a specific IES.

Concepts of Framework Are Applied When

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Structure of the FrameworkStructure of the Framework

a)a) CompetenceCompetence

b)b) Initial Professional DevelopmentInitial Professional Development

c)c) Continuing Professional DevelopmentContinuing Professional Development

d)d) Assessment. Assessment.

Part One: Educational Concepts

Part Two: Publications & IFAC Member Body Obligations a)a) Nature of IESs & Related PublicationsNature of IESs & Related Publications

b)b) IFAC Member Body Obligations IFAC Member Body Obligations 16

Educational ConceptsEducational Concepts

-- To develop competent professional To develop competent professional accountants.accountants.

Objective of Accounting Education Is

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The ability to perform a work role to a The ability to perform a work role to a defined standard with reference to working defined standard with reference to working environments.environments.

• A professional accountant must possess the A professional accountant must possess the necessary necessary

a) Professional knowledge, a) Professional knowledge,

b) Professional skills, and b) Professional skills, and

c) Professional values, ethics, and attitudes.c) Professional values, ethics, and attitudes.

Competence is

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• Emphasizes performance to an expected Emphasizes performance to an expected standards, and standards, and

• Requires an appropriate level of Requires an appropriate level of knowledge, skills, values, ethics, and knowledge, skills, values, ethics, and attitudes to achieve that competence.attitudes to achieve that competence.

Competence

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• Complexity of the environment, Complexity of the environment,

• Complexity of tasks, the variety of tasks, Complexity of tasks, the variety of tasks, required specialist knowledge, required specialist knowledge,

• Influence on the work of others, Influence on the work of others,

• Reliance on the work of others, Reliance on the work of others,

• Level of autonomy, and Level of autonomy, and

• Required level of judgment.Required level of judgment.

Level of Competence Will Vary Depending On:

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• EducationEducation

• Practical ExperiencePractical Experience

• Training Training

Primary Types of Learning & Development Include :

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(a)(a) Coaching, Coaching,

(b)(b) Networking, Networking,

(c)(c) Observation, Observation,

(d)(d) Reflection, and Reflection, and

(e)(e) Self-directed and unstructured gaining of Self-directed and unstructured gaining of knowledge.knowledge.

Other Activities Included in Learning & Development Are:

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• An ongoing process of acquiring, An ongoing process of acquiring, maintaining, and renewing competence at an maintaining, and renewing competence at an appropriate level throughout a professional appropriate level throughout a professional accountant’s careeraccountant’s career

• Lifelong learningLifelong learning

Learning & Development Is

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• Learning and development through Learning and development through which which individuals first develop individuals first develop competence competence leading to performing a leading to performing a role in the role in the accountancy profession.accountancy profession.

Initial Professional Development is

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• General education General education

• Professional accounting educationProfessional accounting education

• Practical experiencePractical experience

• Assessment Assessment

Initial Professional Development Includes

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• Continues until individuals can demonstrate Continues until individuals can demonstrate the competence required for their chosen the competence required for their chosen rolesroles

• Is linked with the point of qualification (or Is linked with the point of qualification (or licensing) as specified by an IFAC member licensing) as specified by an IFAC member body.body.

Initial Professional Development

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• Goes beyond knowledge of principles, standards, Goes beyond knowledge of principles, standards, concepts, facts, and procedures concepts, facts, and procedures

• It includes the ability to integrate It includes the ability to integrate

(a)(a)Professional knowledge, Professional knowledge,

(b)(b)Professional skills, and Professional skills, and

(c)(c)Professional values, ethics, and attitudes. Professional values, ethics, and attitudes.

• Enables individuals to identify issues, know what Enables individuals to identify issues, know what knowledge is relevant, and know how to apply that knowledge is relevant, and know how to apply that knowledge and professional judgment to resolve knowledge and professional judgment to resolve issues ethically.issues ethically.

Initial Professional Development

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• Enables learning and development that maintains and Enables learning and development that maintains and develops capabilities to enable professional develops capabilities to enable professional accountants to perform their roles competently. accountants to perform their roles competently.

• Provides continual development of the Provides continual development of the

a)a) Professional knowledge, Professional knowledge,

b)b) Professional skills, Professional skills,

c)c) Professional values, ethics and attitudes, andProfessional values, ethics and attitudes, and

d)d) Competence achieved during IPD. Competence achieved during IPD.

Continuing Professional Development

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• Enables professional accountants during Enables professional accountants during their careers to their careers to

– Change and expand the scope of their Change and expand the scope of their competence, competence,

– Develop their expertise, and Develop their expertise, and

– Improve and renew their competence. Improve and renew their competence.


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• Enables professional accountants to Enables professional accountants to

– maintain and develop new and/or more maintain and develop new and/or more specialized knowledge and skillsspecialized knowledge and skills

– take on new roles. take on new roles.

• Includes many of the same elements as IPD Includes many of the same elements as IPD but at a level that enables additional breadth but at a level that enables additional breadth and/or depth and/or depth


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• Input–based Input–based

• Process–basedProcess–based

• Output–based Output–based

The Measurement Approaches to Assess Effectiveness of Learning and Development Include

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• Input measures Input measures

– Focus on the investment made in learning and Focus on the investment made in learning and development and served as proxies for measuring the development and served as proxies for measuring the development of competence. development of competence.

• Process measuresProcess measures

– Focus on the design and delivery of learning and Focus on the design and delivery of learning and development and serve as proxies for the development and serve as proxies for the competence developed.competence developed.

3 Measurement Approaches:

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• Output measuresOutput measures

– Focus on whether the professional accountant has Focus on whether the professional accountant has developed the specified competence. developed the specified competence.

3 Measurement Approaches (continued):

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• Dependant on following characteristics:Dependant on following characteristics:

– Validity – whether it measures what needs to Validity – whether it measures what needs to be measured; be measured;

– Reliability – whether it consistently produces Reliability – whether it consistently produces the same result, given the same set of the same result, given the same set of circumstances; and circumstances; and

– Cost effectiveness – whether the benefits Cost effectiveness – whether the benefits outweigh the costs of measurement.outweigh the costs of measurement.

Choice of Measurement Approach Is

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• rated as highly valid;rated as highly valid;

• not considered cost-effective;not considered cost-effective;

• are closely linked with the objective of are closely linked with the objective of accounting education – the development of accounting education – the development of competence; competence;

• Require a inherent compromise between Require a inherent compromise between validity, reliability, and cost effectiveness - a validity, reliability, and cost effectiveness - a mix of input, process, and output measures is mix of input, process, and output measures is often adopted. often adopted.

Output Measures Are

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Publications & ObligationsPublications & Obligations

• International Education Standards (IESs)International Education Standards (IESs)

• International Education Practice International Education Practice Statements (IEPSs)Statements (IEPSs)

• International Education Information International Education Information Papers (IEIPs)Papers (IEIPs)

• Additional Support MaterialAdditional Support Material

IAESB Publications Include:

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• Establish standards for IFAC member bodies Establish standards for IFAC member bodies for both IPD and CPD. for both IPD and CPD.

• Address the principles of learning and Address the principles of learning and development development

• Prescribe good practice in learning and Prescribe good practice in learning and developmentdevelopment

• Establish educational requirements for Establish educational requirements for IFAC member bodies. IFAC member bodies.

International Education Standards

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– May choose to emphasize one type of May choose to emphasize one type of learning and development over another. learning and development over another.

– Need to determine how best to implement the Need to determine how best to implement the requirements of the IESs. requirements of the IESs.

– May adopt learning and development May adopt learning and development requirements that go beyond the IESs.requirements that go beyond the IESs.

IFAC Member Bodies

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• Assist in implementing generally accepted Assist in implementing generally accepted good practice in learning and developmentgood practice in learning and development

• Interpret, illustrate, or expand on matters Interpret, illustrate, or expand on matters related to IESs. related to IESs.

• Include commendable methods or best Include commendable methods or best practicespractices

International Education Practice Statements

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• May critically assess emerging learning and May critically assess emerging learning and development issues and practices. development issues and practices.

• May simply be descriptive in nature. May simply be descriptive in nature.

International Education Information Papers

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Publications & Obligations Publications & Obligations

• Toolkits; andToolkits; and

• Interpretation guidanceInterpretation guidance

Additional Support Material Includes

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• obligations in accounting education as obligations in accounting education as identified in Statement of Membership identified in Statement of Membership Obligation (SMO) #2, Obligation (SMO) #2, International International Education Standards for Professional Education Standards for Professional Accountants and Other IAESB GuidanceAccountants and Other IAESB Guidance , on , on the IFAC website. the IFAC website.

IFAC Members Are Encouraged to Meet

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• determine the competences and criteria for determine the competences and criteria for membership that are appropriate to the membership that are appropriate to the professional accountancy roles their professional accountancy roles their members undertake. members undertake.

• are subject to the requirements of law or are subject to the requirements of law or regulation within their jurisdictions. regulation within their jurisdictions.

IFAC Member Bodies

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• IESs cannot legally override educational IESs cannot legally override educational requirements or restrictions placed on requirements or restrictions placed on individual IFAC member bodies by such individual IFAC member bodies by such laws or regulations. laws or regulations.

• where IESs set a higher requirement than where IESs set a higher requirement than laws or regulations, the IFAC member body laws or regulations, the IFAC member body should use its best endeavors to persuade should use its best endeavors to persuade those responsible to incorporate the essential those responsible to incorporate the essential elements of IESs into those laws or elements of IESs into those laws or regulations.regulations.

IFAC Recognizes That

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IAESB Drafting ConventionsIAESB Drafting Conventions

• The sole approved text of IAESB publications is The sole approved text of IAESB publications is in the English language.in the English language.

• Wording will be guided by the Wording will be guided by the IAESB Drafting IAESB Drafting ConventionsConventions..

• Definitions are now found in the IAESB Definitions are now found in the IAESB Glossary of terms Glossary of terms

• Definitions are not intended to override Definitions are not intended to override definitions of other documents that may be definitions of other documents that may be established for other purposes, whether in law, established for other purposes, whether in law, regulation or otherwise.regulation or otherwise.

Language Provisions Recognize That

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IAESB Drafting ConventionsIAESB Drafting Conventions

• IntroductionIntroduction

• ObjectivesObjectives

• RequirementsRequirements

• Explanatory MaterialExplanatory Material

Structure of IESs Includes

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InformationInformation

• IFAC’s web site – IFAC’s web site – www.ifac.orgwww.ifac.org – provides access to all – provides access to all standards and a wide range of free guidance for the world’s standards and a wide range of free guidance for the world’s accountantsaccountants

• The public interest activity committees of IFAC (IAASB, The public interest activity committees of IFAC (IAASB, IAESB and IESBA) post agenda papers prior to meetings on IAESB and IESBA) post agenda papers prior to meetings on web siteweb site

• IAESB pronouncements available at: IAESB pronouncements available at: www.ifac.org/Education/Pronouncements.php

THANK YOUTHANK YOU

Sources of Information

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http://www.ifac.org/Education/Pronouncements.php

Documents

Framework for International Education Standards for Professional Accountants