International Education Standards for Professional Accountants · INTERNATIONAL EDUCATION STANDARDS FOR PROFESSIONAL ACCOUNTANTS American English spelling conventions are followed

International Education Standards for Professional Accountants

IES 1–6


October 2003

IFAC

Education

Committee

Issued by the International

Federation of Accountants


IFAC’s Education Committee has approved the documents and Standards in thisbook for publication.

The mission of IFAC is the worldwide development and enhancement of anaccountancy profession with harmonized standards, able to provide services ofconsistently high quality in the public interest. The Education Committee’s missionis to serve the public interest by the worldwide advancement of education anddevelopment for professional accountants leading to harmonized standards.

The Education Committee welcomes comments on the documents and Standardscontained in this book, both in terms of feedback and in terms of its future activities.

Comments on this publication should be sent to:International Federation of Accountants545 Fifth Avenue, 14th FloorNew York, NY 10017, USAFax: +1-212-856-9420E-mail responses should be sent to [email protected]

Information about the International Federation of Accountants can be found at itsweb site, www.ifac.org. Copies of this publication may be downloaded free ofcharge from the site.

Copyright © October 2003 by the International Federation of Accountants. All rightsreserved. With the exception of member bodies, no part of this publication may bereproduced, stored in a retrieval system, or transmitted in any form or by any means,electronic, mechanical, photocopying, recording, or otherwise, without the priorwritten permission of the International Federation of Accountants. Permission andtranslation requests should be submitted to [email protected].

ISBN 1-931949-08-5

http://www.ifac.org

INTERNATIONAL EDUCATION STANDARDS FOR PROFESSIONAL ACCOUNTANTS

CONTENTS

PAGE

FRAMEWORK FOR INTERNATIONAL EDUCATION STATEMENTS . . . . 1–24

INTRODUCTION TO INTERNATIONAL EDUCATION STANDARDS . . . . 25–36

IES 1: ENTRY REQUIREMENTS TO A PROGRAM OF PROFESSIONAL

ACCOUNTING EDUCATION . . . . . . . . . . . . . . . . . . . . . . . . 37–40

IES 2: CONTENT OF PROFESSIONAL ACCOUNTING EDUCATION

PROGRAMS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41–50

IES 3: PROFESSIONAL SKILLS . . . . . . . . . . . . . . . . . . . . . . . . . . . 51–58

IES 4: PROFESSIONAL VALUES ETHICS AND ATTITUDES . . . . . . . . 59–65

IES 5: PRACTICAL EXPERIENCE REQUIREMENTS. . . . . . . . . . . . . 66–72

IES 6: ASSESSMENT OF PROFESSIONAL CAPABILITIES AND

COMPETENCE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73–78

FRAMEWORK FOR INTERNATIONAL EDUCATION STATEMENTS

IFAC EDUCATION COMMITTEE


CONTENTS

PAGE

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

OBJECTIVES AND TERMS OF REFERENCE . . . . . . . . . . . . . . . . . . . 2

INTERNATIONAL EDUCATION STANDARDS AND GUIDELINES . . . . . 3

LANGUAGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

EDUCATION COMMITTEE MISSION AND STRATEGIC OBJECTIVES . . . . . 4

MISSION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

KEY STRATEGIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

STRATEGIC OBJECTIVE FOR ACCOUNTING EDUCATION

STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

NATURE, SCOPE, AND AUTHORITY OF STATEMENTS . . . . . . . . . . . . . . . 5

FUNCTIONS OF EDUCATION COMMITTEE STATEMENTS . . . . . . . . . 5

TYPES OF EDUCATION COMMITTEE STATEMENTS . . . . . . . . . . . . . 5

BLACK AND GRAY LETTERING . . . . . . . . . . . . . . . . . . . . . . . . . . 6

DEFINITIONS AND EXPLANATIONS OF STATEMENTS. . . . . . . . . . . . 7

CONSULTATIVE PROCESS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

QUORUM AND VOTING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

DEVELOPMENT CONCEPTS AS USED BY THE EDUCATION COMMITTEE. . . . . 10

RELATIONSHIP BETWEEN CAPABILITY AND COMPETENCE . . . . . . . . . 12

GLOSSARY OF TERMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

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Introduction

Objectives and Terms of Reference

1. The mission of the International Federation of Accountants(IFAC) as set out in paragraph 2 of its Constitution is “theworldwide development and enhancement of an accountancyprofession with harmonized standards, able to provide servicesof consistently high quality in the public interest.”

2. The Education Committee is a standing committee of the Boardof IFAC, formed to develop standards, guidelines, discussionpapers and other information documents on pre-qualificationeducation and training of professional accountants and oncontinuing professional education and development formembers of the accountancy profession. In addition, theEducation Committee is expected to act as a catalyst inbringing together the developed and developing nations, as wellas nations in transition, and to assist in the advancement ofaccountancy education programs worldwide, particularlywhere this will assist economic development.

3. The members who serve the Education Committee arenominated by the member bodies in the countries selected bythe Board of IFAC. Members are appointed for an initial termof three years and elections will be held annually in such a waythat one-third of the members shall retire each year. Continuousservice on the Committee by the same person shall be limitedto two consecutive three-year terms. For voting purposes, eachmember represented on the Committee has one vote.

4. In accordance with the Constitution of IFAC, member bodiessubscribe to the mission set out in paragraph 1 above. Inhelping to fulfil this mission, IFAC expects member bodies tocomply with these Standards. To assist member bodies in theimplementation of International Education Standards andGuidelines for Professional Accountants, the EducationCommittee will seek to promote an understanding andacceptance of such standards and guidelines.

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International Education Standards and Guidelines

5. International Education Standards for Professional Accountantsestablish essential elements (e.g., subject matter, methods andtechniques) that education and development programs areexpected to contain and that have the potential for internationalrecognition, acceptance and application. Although theseStandards cannot override authoritative local pronouncements,they are prescriptive in nature. International Education Guidelinesfor Professional Accountants assist in the implementation of goodpractice or provide advice. They may also provide examples orguidance on the best practices or the most effective methods fordealing with the issues being addressed.

6. The Committee is conscious of the wide diversity of culture,language, and educational, legal, and social systems in thecountries of the member bodies and of the variety of functionsperformed by accountants. Therefore, it is for each individualmember body to determine the detailed requirements of thepre-qualification and post-qualification education anddevelopment programs. Accordingly, International EducationStandards for Professional Accountants are intended toestablish only the essential elements on which those programsfor all professional accountants should be founded.

7. The Committee acknowledges that some member bodies aresubject to legal or regulatory authorities within theirjurisdictions. International Education Standards for ProfessionalAccountants cannot legally override the requirements orrestrictions placed on individual member bodies by such laws orregulations. However, member bodies must consider theStandards (and should consider the recommended practice inthe Guidelines) in developing their education and developmentprograms. Member bodies are also obliged to advise legislativeand regulatory authorities of International Education Standardsand Guidelines for Professional Accountants and seek, to theextent possible, to harmonize authoritative localpronouncements with those Standards and Guidelines.

Language

8. The approved text of a statement is that published by theEducation Committee in the English language. In all instances,

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American English spelling conventions are followed. Afterobtaining IFAC approval, and at their own cost, member bodiesof IFAC are authorized to prepare translations of suchstatements to be issued in the language of their own countriesas appropriate. These translations should indicate the name ofthe body that prepared the translation and that it is a translationof the approved text. If disputes arise, the original (American)English language text will prevail.

Education Committee Mission and Strategic Objectives

Mission

9. The mission of the Education Committee is to, “serve thepublic interest by the world-wide advancement of educationand development for professional accountants leading toharmonized standards.”

Key Strategies

10. To meet its mission, the Education Committee has currentlydeveloped four key strategies. They are:

(a) Understand the current and future needs of users ofprofessional accountants and the implications foraccountancy education;

(b) Develop standards, guidance and other forms of adviceand assistance for member bodies;

(c) Be aware of implementation issues; and

(d) Promote education for professional accountants.

11. It may be necessary for the Committee to develop otherstrategies in the future to help achieve its mission.

Strategic Objective for Accountancy Education Statements

12. In relation to the second key strategy, it is the Committee’sobjective:

• To have on issue a series of Standards and other statementsreflecting good practice in pre- and post-qualificationprofessional accountancy education and development;

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• To create the education benchmarks for IFAC’s complianceactivities; and

• To foster international debate on emerging issues relating tothe education and development of professional accountants.

Nature, Scope, and Authority of Statements

Functions of Education Committee Statements

13. Under the new publications framework adopted by theCommittee in 2001, each of the Committee’s publications isintended to fulfil one of the following three functions:

(a) Prescribe “good practice” (i.e., establish standards formember bodies to achieve and be measured against);

(b) Provide guidance, interpretation, discussion, illustration,examples of application, or in any other way assist memberbodies to achieve “good practice,” and

(c) Discuss, promote or facilitate debate on education issues;reveal facts; present research or survey findings (i.e.,describe situations); or promote awareness of issues.

14. All three functions (prescribe, provide guidance,discuss/present findings) are valid in achieving the EducationCommittee’s mission. Different issues are best dealt with indifferent ways depending on, for example:

• The nature of the issue;

• Its level of importance;

• The level of detail being dealt with;

• The degree to which broad compliance could be expected; and

• Whether an issue is in its infancy or has reached maturityand broad consensus.

Types of Education Committee Statements

15. The three different functions are expressed through threedifferent types of statement.

• International Education Standards for ProfessionalAccountants (IES)

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• International Education Guidelines for ProfessionalAccountants (IEG)

• International Education Papers for ProfessionalAccountants (IEP)

16. The three types of statement reflect, in descending order, theauthoritative nature of the publications, in line with theirintended functions. International Education Standards forProfessional Accountants prescribe good practice and are thusmore authoritative than International Education Guidelines forProfessional Accountants, which provide guidance (forexample, on how to achieve good practice). The Guidelines are,in turn, more directive than International Education Papers forProfessional Accountants, which discuss issues (includingemerging issues) or present findings.

Black and Gray Lettering

17. Within International Education Standards for ProfessionalAccountants, the “standard” paragraphs are in bold type-face(i.e., “black letter”). Commentary paragraphs, which mayelaborate on or assist in the interpretation of the standardparagraphs, appear in plain type-face (i.e., “gray letter”). Tocomply with International Education Standards for ProfessionalAccountants, member bodies will need to demonstrate that theymeet the requirements of the “black letter” paragraphs.

18. Gray-letter commentary within International EducationStandards for Professional Accountants serves the function ofexplaining or elaborating on the standard paragraphs written inbold type-face. As such, these commentary paragraphs arerestricted in scope to providing an explanation of the specificstandard paragraphs to which they relate. By contrast,International Education Guidelines for Professional Accountantsdo not contain bold type-face paragraphs because they presentguidelines only (including recommended practice), rather thanprescribe practice that is expected to be followed. However, a Guideline could be issued on a topic related to a Standard; ifso, then the Guideline could interpret or elaborate on theStandard in greater depth, provide illustrations or advice on howthe Standard could be met, or suggest recommended practice thatis wider or deeper than the practice prescribed in the Standard.

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19. The Education Committee considers the black/gray letterdistinction to be useful and appropriate for the nature ofInternational Education Standards for ProfessionalAccountants. The Committee will, nevertheless, maintain awatching brief on future developments in approaches tostandard setting in other areas of the profession.

Definitions and Explanations of Statements

Definition Explanation

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20. International EducationStandards for ProfessionalAccountants prescribestandards of generallyaccepted “good practice”in education andd e v e l o p m e n t f o rprofessional accountants.

International Education Standardsfor Professional Accountantsexpress the benchmarks thatmember bodies are expected tomeet in the preparation andcontinual development ofprofessional accountants. TheStandards establish the essentialelements of the content andprocess of education anddevelopment at a level that isaimed at gaining internationalrecognition, acceptance andapplication. Hence, memberbodies must consider theserequirements. (The gray-letterparagraphs within the Standardsare intended to help explain theprescriptions within the black-letter, standard paragraphs.)International Education Standardsfor Professional Accountantscannot legally override local lawsand regulations but will providean authoritative reference forinforming and influencing localregulators regarding generallyaccepted “good practice.”


21. International EducationGuidelines for ProfessionalAccountants assist in the implementation ofgenerally accepted “goodpractice” in the educationand development ofprofessional accountantsby providing advice orguidance on how toachieve “good practice”or current “best practice.”

International Education Guidelinesfor Professional Accountants mayinterpret, illustrate, or expand onmatters related to InternationalEducation Standards forProfessional Accountants. In thisfunction, the Guidelines assistmember bodies to implementand achieve “good practice” asprescribed in InternationalEducation Standards forProfessional Accountants. TheGuidelines may also recommendpractice that is wider or deeper thanthe practice prescribed in a Standard.Alternatively, they may outlinecommendable methods or practices,including those that are recognizedas current “best practice,” whichmember bodies may wish to adopt.

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22. International EducationPapers for ProfessionalAccountants promotediscussion or debate oneducation and developmentissues affecting theaccountancy profession,present f indings, ordescribe situations ofinterest relating toeducation and developmentissues affecting theaccountancy profession.

International Education Papers forProfessional Accountants may raisediscussion within the accountancyprofession to a level whereby issuesmay be progressed or eventuallyresolved. As such, the Papers mayexplain, examine, analyze, orotherwise critically assess educationissues and practices. The aim of suchPapers is to provoke considerationof the issues and to encouragecomment and feedback so that theissues can be advanced. In this way,they may be useful for exposingviews, approaches and methodsthat are in early stages ofdevelopment and thus may be useful forerunners to Standards andGuidelines. Alternatively, thePapers may be simply descriptive


Consultative Process23. While the Education Committee is ultimately responsible for

selecting the subject matter to be addressed by its Standards,Guidelines, and Papers, suggestions and proposals areencouraged from IFAC member bodies, other professional bodies,and interested individuals and organizations. The responsibilityfor carrying out the necessary research and for preparingExposure Drafts of Standards and Guidelines, or drafts of Papers,may be delegated by the Committee to sub-committees, projectteams comprising Committee members and technical advisors, orindividuals. Sub-committees and project teams are always chairedby a Committee member but may include persons who are notmembers of the Committee or of a member body of IFAC.

24. In the developmental stage, the Committee assignsresponsibility to a Project Manager to oversee the developmentof each statement. The Project Managers are Committeemembers or Technical Advisors and are responsible forreporting to the Control Group, in accordance with the projectplan. The Control Group, which includes the Committee Chairand Technical Manager, is set up to monitor the progress of allprojects for developing education statements. The ControlGroup also reviews early drafts for compliance with theprojects’ terms of reference and consistency of approach.

25. The Committee issues Exposure Drafts of all proposedStandards and Guidelines for comment by IFAC memberbodies, the accounting academic community, regulators,government agencies, and others who may be interested in thestatements. The Committee will expose a proposed Standard orGuideline for a reasonable time (usually six months) to allowfor interested parties to consider and comment on its proposals.This provides an opportunity for those affected by Education

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in nature. In this function, they aim to promote awareness of, and totransfer knowledge and informationon, education and developmentissues or practices relating to theaccountancy profession.



Committee statements to present their views on them before thestatements are finalized and approved by the Committee.

26. The Committee welcomes and considers all comments receivedon Exposure Drafts and makes such modifications as it considersappropriate. It also continues to consider any commentssubmitted on finalized Standards and Guidelines, for input tofuture revisions. Likewise, comments received on Papers areconsidered for future revisions and the advancement of issues.

Quorum and Voting27. A quorum of three-quarters of the Committee members (or

their nominees) is required for a vote to be held.

28. Exposure Drafts of proposed Standards and Guidelines must beapproved for issue by vote of at least two-thirds of the total votingrights of the Education Committee participating at a meeting.

29. Before the statement is published and released as a finaldocument, the final draft of a Standard or Guideline, or of aPaper submitted for approval, must be approved by at least two-thirds of the total voting rights of the Education Committeeparticipating at a meeting.

Development Concepts as Used by the Education Committee

30. The following diagram illustrates the relationships among keyterms relating to education and development concepts, as usedby the Education Committee. Some of these terms are definedin the Glossary of Terms later in this publication. The followingdiscussion explains what is meant by the various terms and howthey fit together as subsets of the development process.

31. Readers’ own interpretations and usage of such terms maydiffer slightly from the way they are explained in the followingparagraphs. The Education Committee does not insist that thefollowing discussion represents the only “true meaning” of theseterms; rather, the following paragraphs explain how the termsare used in the Education Committee’s statements, together withthe underlying thinking and the inter-relationships among them.

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32. “Development” is both a process (as depicted in the diagram)and an outcome. English language dictionaries (e.g., Oxfordand Collins) take care to explain that “development” means to“bring to” (i.e., process) or to “come to” (i.e., outcome) a moreadvanced state. Hence, development can refer to an individualwho “is being developed” (process) as well as to an individualwho “has been developed” (outcome - the finished state).

33. As a process, “development” is the over-arching term used by theEducation Committee, encapsulating every process by which anindividual grows. It refers to the growth of capabilities thatcontribute to competence, however achieved. Most (but not all)development, in a professional sense, comes about through learning.

34. “Learning” refers to the main processes by which individualsacquire capabilities (i.e., professional knowledge; professionalskills; and professional values, ethics, and attitudes). Learningcan be systematic and formal, or unsystematic and informal.When individuals learn through a systematic process, it isreferred to as “education.” By contrast, there are many valuablelearning processes other than “education,” such as self-directedand unstructured gaining of knowledge, experience,observation, reflection, and other non-programmed activitiesaimed at developing capabilities.

35. “Education” refers to those learning processes that aresystematic, structured, and often formal. The processes aretherefore programmed to a significant extent. Educationincludes a form of developmental process referred to as training.

36. “Training” is a particular type of education, which focuses onhow the individual does the job. Training is usually a mix ofinstruction and practice. It is experience related, and thus has amore practical or applied element than other forms of education.Training may be “on the job” (i.e., while the trainee is performingreal tasks in the work place) or “off the job” (i.e., which takesplace while the trainee is not actually performing work).

37. Throughout this publication, reference is made to the work of the Education Committee in terms of the “education and development”of professional accountants. In this sense, the phrase relates to“education” as the main process and to “development” as the outcome.

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Subsets of the development process

Relationship Between Capability and Competence

38. The concepts of capability and competence may be describedas being the two sides of a coin. The following is an elaborationon terms used in the Glossary of Terms (next section).

39. Capabilities are the professional knowledge; professionalskills; and professional values, ethics, and attitudes requiredto demonstrate competence. Capabilities are the attributes heldby individuals that enable them to perform their roles.

40. The possession of capabilities gives an indication that anindividual has the ability to perform competently in the workplace.

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Development

Learning

Education (i.e., systematic learning)

Training

Off the jobOn the job


41. Competence is being able to perform a work role to a definedstandard, with reference to real working environments. Itrefers to the actions that individuals undertake to determinewhether they can actually perform to the required standard.When an individual draws on capabilities to perform therequired tasks to the required standard, competence is deemedto have been achieved (i.e., the individual is competent).

CAPABILITY COMPETENCEKey concepts

Attributes ActionsPotential ActualPossess Demonstrate

Can be expressed as Can be expressed aslearning outcomes performance outcomes

Types of capability Types of competence

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• Professional knowledge • Professional skills (e.g.,

intellectual, technical, non-technical, organizational,personal, interpersonal)

• Professional values, ethics,and attitudes (e.g., ethicalvalues, professional manner,commitment to high technicalstandards, skeptical attitude,commitment to continualimprovement and life-longlearning, appreciation ofpublic interest and socialresponsibility)

• Includes the range ofperformance outcomesrelating to practice standards(e.g., functional, managerial,and interpersonal)

• Includes the range ofperformance outcomesrelating to behavioralstandards (e.g., ethical andprofessional conduct,demonstrating appropriateskepticism, performance inrelation to professionaldevelopment)


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Glossary of Terms42. This glossary comprises a collection of defined terms, many of

which have been specifically defined within existing EducationCommittee statements. Some of the existing terms may bemodified, and other terms added to the glossary, as they are(re)defined in future publications.

43. The Committee acknowledges that terms may be understood tohave different common meanings, nuances of meaning, andapplications among the various countries in which memberbodies operate. The glossary does not prescribe the use of termsby member bodies. Rather, the glossary is a list of definedterms, with special meanings, for their use within the Standards,Guidelines and Papers produced by the Education Committee.

44. Words marked with an asterisk (*) indicate terms that aredefined elsewhere in the glossary.

Assessment All forms of tests of professional competence,*whether in writing or otherwise, includingexaminations, carried out at any time throughoutthe learning process.

Best practice Practices considered to be exemplary, of the highestorder, the most advanced, or leading in a particulararea in the education of professional accountants.*Explanation:“Best practice” refers to the best examples ofestablished practice in the preparation ofprofessional accountants. “Best practice” will oftengo beyond “good practice” and, as such, is at ahigher level than the considered minimumrequirements. Statements and examples of “bestpractice” are essential for the advancement ofaccountancy education and provide useful guidanceto member bodies for the continual improvement oftheir education programs.


Candidate Any individual who is enrolled for assessment as partof a professional accountancy education program.Explanation:A candidate is an individual who is undergoing, orabout to undergo, a formal assessment as part ofaccountancy education. The term refers to anindividual who is still in the process of demonstratingthe capabilities or competences required for aparticular purpose (e.g. professional examination). Theassessment may relate to either a program forqualifying as a professional accountant or a post-qualifying education program. The term does not relateto an individual at the stage following completion of aneducation program (i.e., it excludes those who havecompleted the requirements for membership of aprofessional body and are in the process of applying formembership).

Capabilities The professional knowledge;* professional skills;*and professional values, ethics, and attitudes*required to demonstrate competence.*Explanation:Capabilities are the attributes held by individualsthat enable them to perform their roles, whereascompetence refers to the actual demonstration ofperformance. The possession of capabilities gives anindication that an individual has the ability toperform competently in the work place. Capabilitiesinclude content knowledge; technical and functionalskills; behavioral skills; intellectual abilities(including professional judgement); andprofessional values, ethics, and attitudes. They aresometimes referred to, in other literature, ascompetencies, capacities, abilities, key skills, coreskills, fundamental skills and values, attitudes,distinguishing characteristics, pervasive qualities,and individual attributes.

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Competence Being able to perform a work role to a definedstandard, with reference to real working environments.Explanation:Competence refers to the demonstrated ability toperform relevant roles or tasks to the requiredstandard. Whereas capability refers to the attributesheld by individuals that give them the potential toperform, competence refers to the actualdemonstration of performance. Competence may beassessed by a variety of means, including work placeperformance, work place simulations, written andoral tests of various types, and self-assessment.

Learning* activities for developing andmaintaining the capabilities* of professionalaccountants to perform competently within theirprofessional environments.Explanation:Continuing professional development is aimed at thepost-qualification development and maintenance ofprofessional competence. It involves thedevelopment of capabilities through either formaland verifiable learning programs (sometimesreferred to as “continuing professional education”— CPE) or informal learning activity.

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Continuing professional development (CPD)


Development 1. The acquisition of capabilities,* which contributeto competence.*2. The state at which capabilities have been acquired.Explanation:Development, as a process, refers to the growth ofcapabilities, which contribute to competence,however achieved. Individuals may develop theirabilities through a wide range of processes such aslearning, including education and training;experience; reflection; observation or receipt ofinformation; or through natural growth over time.

Development may also refer to the final stage ofgrowth at which an individual is considered to befully developed, as a result of the developmentprocess. However, it is recognized that, with the needfor continual learning, the process of developingone’s capabilities and the subsequent reaching of atargeted stage of development are not fixed orpermanent states.

Distributed An education process in which either the majority ofthe instruction is delivered at a different time fromwhen the instruction is received or when theinstructor and student are in different places.Explanation:A primary feature of distributed learning is thatinstructors and students are not required to be in thesame place at the same time. “Distributed learning”includes, but is not restricted to, “distance learning.”Distributed learning can take place over short orlong distances, whereas distance learning impliesdistribution across only significant distances.

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learning


Education A systematic process aimed at developingknowledge, skills, and other capabilities* withinindividuals. It includes “training.”*Explanation:Education is a systematic learning process wherebyindividuals develop capabilities considereddesirable by society. Education is usuallycharacterized by the growth of an individual’smental and practical abilities, as well as maturing inattitude, resulting in an enhanced ability of theindividual to function and contribute to society, ineither specific or non-specific contexts. While oftenconducted in academic environments, educationalso includes systematic learning processes in otherenvironments, such as on-the-job and off-the-jobtraining. Education is, by nature, somewhat plannedand structured and therefore excludes casual,unsystematic learning and developmental processes.

Good practice Those elements considered essential to theeducation* and development* of professionalaccountants* and performed at a standard necessaryto the achievement of competence.*Explanation:“Good practice” relates not only to the range ofcontent and processes of education and developmentprograms, but also to the level or standard at whichthey are performed (i.e., the depth and quality of theprograms). The IFAC Education Committee isconscious of the wide diversity of culture; language;and educational, legal, and social systems in thecountries of the member bodies and of the variety offunctions performed by accountants. Differentfactors within these environments may vary theability of member bodies to adopt some aspects of“good practice.” Nevertheless, member bodiesshould continuously aspire to “good practice” andachieve it wherever possible.

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Higher Education* beyond secondary school level, usuallyat universities or colleges.Explanation:Primary and secondary education refer to the mainlycompulsory element of schooling required by thegovernments of many countries. “Higher” educationrefers to a third order of education, which succeedssecondary education and for which a secondaryeducation qualification (or equivalent) is often aprerequisite. It is at a higher level than “highersecondary” or “upper secondary” education and issometimes referred to as “tertiary education.”

Information Hardware and software products, informationsystem operations and management processes, andthe human resources and skills required to applythose products and processes to the task ofinformation production and information systemdevelopment, management and control.

Learning A broad range of processes whereby an individualacquires capabilities.*Explanation:Learning can be achieved by systematic andrelatively formal processes such as education(including training) or processes such as day-to-daywork experience, reading published material,observation, and reflection, for which the process ofacquiring capabilities tends to be less systematicand relatively informal.

Mentor Professional accountants who are responsible forguiding and advising trainees and for assisting in thedevelopment of the trainees’ competence.*

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technology

education


Post- The period after qualification* as an individualmember of an IFAC member body.Explanation:The term “post-qualification” is usually associatedwith activities and requirements relating to theprofessional development of those who have alreadyobtained a professional qualification. It is oftenassociated with action relating to the maintenanceor further development of professional competence.While “post-qualification” refers to the period afterqualifying as a professional accountant, the term isnot restricted to formal qualifications obtained afterqualifying as a professional accountant.

Practical Work experience, undertaken by a trainee* or aqualified professional accountant* that is relevant tothe work of professional accountants.* The programof experience enables the individuals’ development ofprofessional competence* (including professionalbehavior) in the work place and provides a meanswhereby individuals can demonstrate the achievementof professional competence in the work place.Explanation:Practical experience refers to the on-the-jobexecution of tasks that are relevant to the field ofaccountancy. The practical experience part of thequalifying process is intended to facilitate thedevelopment and direct application of professionalknowledge; professional skills; and professionalvalues, ethics, and attitudes. Ultimately, it is throughpractical experience that trainees will demonstratetheir competence to perform the roles of professionalaccountants. Practical experience also refers to theongoing experience of professional accountants inthe accountancy field. Practical experience issometimes referred to as “professional experience”and has the same meaning as that term.

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qualification

experience (orprofessional experience)


Pre- The period before qualification* as an individualmember of an IFAC member body.Explanation:The term “pre-qualification” is usually associatedwith activities and requirements relating to thedevelopment of those who have not yet obtained aprofessional qualification.

Professional A person who is a member of an IFAC member body.

Professional Education* that builds on general education andimparts professional knowledge;* professionalskills;* and professional values, ethics, andattitudes.* It may or may not take place in anacademic environment.

Professional Those topics that make up the subject ofaccountancy as well as other business disciplinesthat, together, constitute the essential body ofknowledge for professional accountants.*

Professional The various types of abilities required to applyprofessional knowledge, and professional values,ethics, and attitudes* appropriately and effectively ina professional context.Explanation:Professional accountants are required to possess arange of skills, including technical and functionalskills, organizational and business managementskills, personal skills, interpersonal andcommunication skills, a variety of intellectual skills,and skills in forming professional judgments.

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skills

accountant

accountancyeducation

knowledge

qualification


Professional The professional behavior and characteristics thatidentify professional accountants* as members of aprofession. They include the principles of conduct(i.e., ethical principles) generally associated with,and considered essential in defining the distinctivecharacteristics of, professional behavior.Explanation:Professional values, ethics, and attitudes include acommitment to technical competence, ethicalbehavior (e.g., independence, objectivity,confidentiality, and integrity), professional manner(e.g., due care, timeliness, courteousness, respect,responsibility, and reliability), pursuit of excellence(e.g., commitment to continual improvement andlifelong learning), and social responsibility (e.g.,awareness and consideration of the public interest).

Qualification Qualification as a professional accountant* means,at a given point in time, an individual is consideredto have met, and continues to meet, the requirementsfor recognition as a professional accountant.*Explanation:Qualification is the formal recognition of anindividual as having attained a professionaldesignation, or having been admitted to a class ofprofessional membership, that signifies theindividual is a professional accountant.Qualification implies that the individual has beenassessed as competent in terms of meeting therequirements prescribed for obtaining professionalaccountant status. While the term “qualification”can be applied to various stages of professionaldevelopment and classes of membership, its usage inIFAC Education Committee documents (unlessotherwise indicated) relates to the benchmark forrecognition as a professional accountant.

Relevant Participation in work activities in an environmentappropriate to the application of professionalknowledge;* professional skills;* and professionalvalues, ethics, and attitudes.*

22

experience

values, ethicsand attitudes


Specialization The formal recognition by a member body of agroup of its members possessing distinctivecompetence* in a field, or fields, of activity relatedto the work of the professional accountant.*

Student An individual following a course of study, includinga trainee.*Explanation:In the context of professional education, a student isan individual undertaking a course or program ofstudy deemed necessary for the education ofprofessional accountants, whether general orprofessional in nature.

Technical Staff engaged in technical accounting work who aredirected by or support professional accountants.*Explanation:“Technical accounting staff” includes staffcustomarily known as “accounting technicians” andcovers staff engaged in technical support rolesacross all areas of accountancy. The term does notrefer to trainees who are in the process of qualifyingas professional accountants.

Trainee An individual undertaking pre-qualification* workexperience and training* within the work place.Explanation:A trainee is an individual who is undertaking apractical experience or work-place training programfor qualification as a professional accountant.

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accountingstaff


Training Pre- and post-qualification* educational activities,within the context of the work place, aimed atbringing a student* or professional accountant* toan agreed level of professional competence.*Explanation:Training includes work place-based education andexperience activities for developing an individual’scompetence to perform tasks relevant to the role ofthe professional accountant. Training may beundertaken while performing actual tasks (on-the-job training) or indirectly through instruction orworkplace simulation (off-the-job training). Trainingis conducted within the context of the work place,with reference to the specific roles or tasksperformed by professional accountants. It caninclude any activity purposefully designed toimprove the ability of an individual to fulfil thepractical experience requirements for qualificationas a professional accountant.

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INTRODUCTION TO INTERNATIONAL EDUCATION STANDARDS

INTRODUCTION TO INTERNATIONALEDUCATION STANDARDS

CONTENTS

PARAGRAPH

PURPOSE OF THIS DOCUMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

INTERNATIONAL EDUCATION STANDARDS FOR PROFESSIONAL

ACCOUNTANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2–6

BACKGROUND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7–12

THE IMPORTANCE OF ACCOUNTING EDUCATION . . . . . . . . . . . . . 13–21

SCOPE OF INTERNATIONAL EDUCATION STANDARDS. . . . . . . . . . . 22–25

THE APPLICATION OF INTERNATIONAL EDUCATION STANDARDS FOR

PROFESSIONAL ACCOUNTANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 26–42

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Purpose of this Document1. This document provides background information to the

development of International Education Standards forProfessional Accountants (IES), describes the scope of issuescovered within the Standards, and discusses the ways in whichthe Standards may be adopted and applied to the educationprograms of IFAC member bodies.

International Education Standards for ProfessionalAccountants

2. IES prescribe standards of generally accepted ‘good practice’ inthe education and development of professional accountants.IES express the benchmarks that member bodies are expectedto meet in the preparation and continual development ofprofessional accountants. They establish the essential elementsof the content and process of education and development at alevel that is aimed at gaining international recognition,acceptance and application. The gray-letter paragraphs withinthe Standards are intended to help explain the prescriptionswithin the black-letter, standard paragraphs.

3. IES cannot legally override local laws and regulations but willprovide an authoritative reference for informing and influencinglocal regulators regarding generally accepted ‘good practice.’

4. All IFAC member bodies are expected to comply with IES, andthe Standards are directed primarily at IFAC member bodiesrather than individuals. Member bodies are expected to usetheir best endeavors to:

• work towards implementation of all IES and other statementsdeveloped by the IFAC Education Committee; and

• incorporate in their education programs the essential elementsof the content and process of education on which IES arebased or, where responsibility for the education program lieswith third parties, persuade those responsible for theeducational requirements for the accountancy professionto incorporate the essential elements in that program.

[See Statement of Membership Obligations #2, exposuredraft released July 2003]

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5. IFAC recognizes that member bodies may be at different stagesin their development. Some may have already addressed mostor all of the requirements in the Standards. Others may findthem challenging. IFAC will review its requirements from timeto time because of changes to the profession’s environment,cultures and flexibility of approaches.

6. The individual Standards need to be read in conjunction withthe Framework for International Education Statements, and therelated commentary and implementation material contained inthis document.

Background7. The goal of accounting education and practical experience is to

produce competent professional accountants capable of makinga positive contribution over their lifetimes to the profession andsociety in which they work. In the face of the increasingchanges that accountants meet, it is essential that accountantsdevelop and maintain an attitude of learning to learn, tomaintain professional competence.

8. Learning to learn involves developing skills and strategies thathelp individuals to learn more effectively and to use theseeffective learning strategies to continue to learn throughout life.It is a process of acquiring understanding and using a variety ofstrategies to improve the ability to attain and apply knowledge.This process results from, leads to, and enhances a questioningspirit and a lifelong desire to learn.

9. The education and practical experience of professionalaccountants should provide a foundation of professionalknowledge, professional skills, and professional values, ethicsand attitudes that enable them to continue to learn and adapt tochange throughout their professional lives. These capabilities willenable professional accountants to identify problems, know whatknowledge is required to solve problems, know where to find thisknowledge and know how to apply it in an ethical manner toachieve appropriate solutions. The balance of these elements mayvary but what is required is to develop the knowledge base andstrong skills in order to produce competent professionalaccountants with appropriate values, ethics and attitudes.

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10. The IFAC Education Committee has, for many years, issuedguidelines and other papers on education issues. It considersthat it is now appropriate to issue individual Standards buildingon this framework, by dealing with each major element ofprofessional accounting education (see paragraph 25) in aseparate Standard. The international accountancy profession isworking on an agreed set of international accounting andauditing Standards, and IES complement this body of technicaland professional Standards.

11. International Education Standards for ProfessionalAccountants build on and update the International EducationGuidelines previously issued by IFAC, specifically IEG 9,Prequalification Education, Assessment of ProfessionalCompetence and Experience Requirements of ProfessionalAccountants, and IEG 10, Professional Ethics for Accountants:The Educational Challenge and Practical Application. This isin recognition of the fact that the global profession isincreasingly expected to formulate and live up to standards ofcompetence that meet public expectations.

12. International Education Guidelines (IEG) and other paperspreviously issued by IFAC and drawn on in these Standards arereferenced at the end of this document, together with other references.

The Importance of Accounting Education13. All cultures exist in an environment of significant change.

Increasingly, today’s professional accountants need to betechnical experts with excellent communication skills, and theyneed to be able to meet the reporting and information needs ofthe new knowledge economy. In addition to acquiring technicalaccounting knowledge and skills, professional accountantsneed skills that enable them to be, when appropriate, businessadvisors, financial analysts, communicators, negotiators, andmanagers. At the same time, integrity, objectivity andwillingness to take a firm stand are essential attributes ofprofessional accountants. Professional values, ethics andattitudes are integral to being a professional accountant.

14. A program of accounting education and practical experienceneeds to go beyond the traditional approach. This approach

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emphasized “transfer of knowledge,” with learning defined andmeasured strictly in terms of knowledge of principles, standards,concepts, facts and procedures at a given point in time.

15. Increased emphasis needs to be placed on a set of professionalknowledge, professional skills, and professional values, ethicsand attitudes broad enough to enable adaptation to constantchange. Individuals who become professional accountantsshould have a constant desire to learn and apply what is new.

16. Accountancy is a profession that plays an important role in allsocieties. As the world moves toward global market economies,and with investments and operations crossing borders to an evergreater extent, professional accountants need a broad globaloutlook to understand the context in which businesses andother organizations operate.

17. Rapid change has been the main characteristic of theenvironment in which professional accountants work. Pressuresfor change are coming from many sources includingglobalization, information and communication technologies, andthe expansion of stakeholder groups, including regulators andoversight boards. Professional accountants are now expected toserve the needs not only of investors and creditors but also theinformation needs of many other users of financial and non-financial information.

18. Businesses and other organizations are engaging in ever morecomplex arrangements and transactions. Risk management hasbecome more important. Information technology continues toadvance at a rapid pace and the internet has revolutionized globalcommunications. Trade and commerce have become moretransnational. Privatization has become an increasinglyimportant trend in many countries. Legal action has becomemore usual in many societies, while in others it is the legalframework that defines the profession’s responsibilities. Concernfor the environment and sustainable development has grown.

19. These trends lead to the need for greater accountability and, asa result, in all cultures demands on the profession are high andcontinue to rise. It is the profession’s capacity to satisfy thesedemands that determines its value to society.

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20. These trends challenge professional accountants to makegreater contributions to society than ever before, and they alsopresent a challenge to maintaining competence. The viability ofaccountancy as a profession depends on the ability andwillingness of its individual members to accept responsibilityfor meeting these challenges. It is the responsibility of themember bodies of IFAC to ensure their members are equippedto fulfill these responsibilities.

21. To meet these challenges, the profession needs to ensure thatindividuals who become professional accountants achieve anagreed level of competence, which is then maintained. Themeans by which individuals develop and maintain competenceis through education and practical experience, followed bycontinuing professional development. The profession, therefore,needs to set and meet high standards in these three areas.

Scope of International Education Standards22. International Education Standards for Professional Accountants

are intended to advance the profession of accountancy byestablishing benchmarks for the minimum learningrequirements of qualified accountants, including education,practical experience and continuing professional development.

23. One of the aims of the Standards is to identify the subject areasthat need to be covered, rather than to suggest actual coursesthat should be taken. That is because the subjects identified aredescribed differently in different parts of the world. It isrecognized that some member bodies require a greater range ofsubjects; others may place greater emphasis on certainsubjects to meet the specific purposes for which their studentsare being trained. Professional values, ethics and attitudes,however, run through all areas and may be integrated withmany of the other subjects.

24. IFAC recognizes that member bodies may be at different stagesin their development. The required level of understanding mayalso vary in different professional accountancy bodies and overdifferent time periods. One important defining factor of thecurriculum is the set of professional knowledge, professionalskills, and professional values, ethics and attitudes relevant to a

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particular country, region, culture or professional body whilecontinuing to recognize the broader global view. While thestandards need to be complied with, the gray lettering takes intoaccount the different circumstances around the world.

25. International Education Standards for Professional Accountantsprescribe the learning and development requirements ofprofessional accountants under the following Standards:

• IES 1, Entry Requirements to a Program of ProfessionalAccounting Education

• IES 2, Content of Professional Education Programs

• IES 3, Professional Skills

• IES 4, Professional Values, Ethics and Attitudes

• IES 5, Practical Experience Requirements

• IES 6, Assessment of Professional Capabilities and Competence

• IES 7, Continuing Professional Development.

The Application of International Education Standardsfor Professional Accountants

26. The overall goal is to produce competent professionalaccountants by combining the parts of an education program ina suitable fashion. The exact combination of parts may vary aslong as this goal is achieved. Different combinations exist invarious parts of the world.

27. Professional education prepares accountants to be able tomaintain competence throughout their professional careers.Professional education may be pursued at academic institutionsor through the programs of professional bodies or both.

28. Although the requirements set out in paragraph 25 are listed ina particular order, they are not necessarily acquired in thatorder. For example, professional education may be gained at thesame time as general education, that is, while pursuing auniversity degree or other program of study leading to aprofessional accountancy qualification. Alternatively,professional education may be obtained by advanced study

31


after completing another program of study at a highereducation level.

29. Practical experience may be obtained after a program of study,at the same time as a program of study, or by some combinationof these methods. However, the quality of experience needs tomeet the requirements set out in IES 5, Practical ExperienceRequirements.

30. The educational process may take place on a part-time or full-time basis. It may be beneficial if it takes place during the sameperiod of time or partly the same period of time as practicalexperience is obtained. Regardless of how candidates choose toobtain their education, they need to complete all elements ofprofessional accountancy education as set out in IES.

31. It is understood that the education and practical experienceneeds — as well as the institutional and cultural environment— in different countries and regions will differ. Thoseresponsible for the development of accountants will need toadapt their requirements to these needs. While IES need to becomplied with, it is acknowledged needs vary and the IES maybe complied with in a variety of different but equivalent ways.

32. IFAC recognizes that each professional body will need todetermine not only how to best comply with the Standards, butalso what emphasis to place on the various parts. Furthermore,the profession is dynamic. Care needs to be taken to continuallymonitor the environment in which each body operates to ensurethat the education process remains relevant and professionalvalues are upheld.

33. Admission to membership of an IFAC member body isrecognition that, at a given point in time, a person is deemed tohave met the requirements for qualification as a professionalaccountant. In a time of continuous change, however,development of professional competence and lifelong learningis critical to meet the needs of the users of professional services.

34. The process of lifelong learning commences early andcontinues throughout the individual’s career. Continuingprofessional development may be seen as an extension of the

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education program leading to qualification as a professionalaccountant. The professional knowledge, professional skillsand professional values, ethics and attitudes gained continue todevelop and are refined appropriate for the professionalactivities and responsibilities of the individual.

35. The issue of post-qualification continuing professional developmentwill be addressed in IES 7, Continuing Professional Development.

36. Much work is being done on the emerging concept ofcompetence assessment. The IFAC Education Committee haspublished a paper on competence approaches in IEP 2, TowardsCompetent Professional Accountants. Member bodies need tohave regard to the emerging concept of competence and how itcan best be incorporated into their own systems.

37. To demonstrate competence at work, professional accountantsneed to have a defined set of professional knowledge,professional skills, professional values, ethics and attitudes.This set is wide and is increasing. Competence is gainedthrough a mix of study, work and training. Although thecombination of these parts may vary, it should lead to equallyvalid education and practical experience programs whichdevelop the required competence for the profession.

38. Educators delivering professional accounting educationprograms will need to respond to the changing needs of theinternational accountancy profession as well as individualprofessional accountants. During pre-qualification education,teaching methods should focus on providing students with thetools for self-directed learning after qualification. Educatorsare free to adopt the methods that work best in their particularcultures. However, educators may need to be trained andencouraged to use a broad range of learner-centered teachingmethods that include:

(a) using case studies, projects and other means to simulatework situations;

(b) working in groups;

(c) adapting instructional methods and materials to the ever-changing environment in which the professionalaccountant works;

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(d) pursuing a curriculum that encourages self learning so thatstudents learn to learn on their own and carry this skillwith them after qualification;

(e) using technology and e-learning;

(f) encouraging students to be active participants in thelearning process;

(g) using measurement and evaluation methods that reflect thechanging knowledge, skills, and professional values, ethicsand attitudes required of professional accountants;

(h) integrating knowledge, skills, professional values, ethicsand attitudes across topics and disciplines to addressmany-sided and complex situations typical of professionaldemands;

(i) emphasizing problem identification and problem-solving,which encourages identifying relevant information,making logical assessments and communicating clearconclusions;

(j) exploring research findings; and

(k) stimulating students to develop professional skepticismand professional judgment.

Education programs need to include reflection when studentsare required to consider an experience, what went well, whatdid not work and what approach should be taken in future insimilar circumstances.

39. Delivering all of these teaching methods in a purely academicenvironment is not the only solution. Integration of educationand practical experience can bring benefits by drawing onwork-based examples to enable students to apply knowledge. Awell-designed program of on-the-job training can deliver manyof the required experiences. Supervisors, mentors and othersinvolved in practical experience may need to be trained in themost effective way of planning practical experience.

40. Other learning methods include:

(a) working in groups and in-office environments;

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(b) integration of professional knowledge, professional skills,and professional values, ethics and attitudes across topicsand practice in problem solving; and

(c) reflection and post-implementation work reviews as ameans of learning.

41. Achieving the goal of providing a foundation for lifelonglearning requires a grounding in the professional knowledge,professional skills, and professional values, ethics and attitudesessential to professional competency. Providing students withsuch a grounding needs to be the focus of a program ofprofessional accountancy education as well as practicalexperience. Educators and academics are often required towork with employers to ensure that programs are both relevantand logically sequential. Member bodies may wish to considerthe provision of professional knowledge and practicalexperience alongside each other.

42. Member bodies will also be aware of the growing movementtoward international reciprocity and the comparability ofqualifications. IES may assist this process.

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ReferencesIEG 2, Continuing Professional Education, IFAC (first issued 1982,

revised 1998).

IEG 9, Prequalification Education, Assessment of ProfessionalCompetence and Experience Requirements of ProfessionalAccountants, IFAC (first issued 1991, revised 1996, and to bewithdrawn effective from 31 December 2004).

IEG 10, Professional Ethics for Accountants: The EducationalChallenge and Practical Application, IFAC (issued 1982, and to bewithdrawn effective from 31 December 2004).

IEG 11, Information Technology for Professional Accountants, IFAC(first issued 1995, revised 1998 and 2002).

IEP 1, Recognition of Pre-Certification Education Providers, IFAC 2002.

IEP 2, Towards Competent Professional Accountants, IFAC 2003.

An Advisory on Education and Training of Technical Accounting Staff,IFAC (first issued in 1987 as IEG 7, The Education and Training ofAccounting Technicians, revised and issued as Study 2 in 1999).

An Advisory on Examination Administration. Study 1, IFAC (issued 1998).

Code of Ethics for Professional Accountants, IFAC (first issued 1990,revised 1998 and 2001).

Intentional Learning: a Process for Learning to Learn in the AccountingCurriculum, Accounting Education and Change Commission, 1995.

Practical Experience, Discussion paper, IFAC (issued 1998).

Quality Issues for Internet and Distributed Learning in AccountingEducation, IFAC (issued 2000).

Specialization in the Accounting Profession, Discussion paper, IFAC(issued 1992).

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IES 1 ENTRY REQUIREMENTS TO A PROGRAM OF PROFESSIONAL ACCOUNTING EDUCATION

IES 1 ENTRY REQUIREMENTS TO A PROGRAMOF PROFESSIONAL ACCOUNTING EDUCATION

CONTENTS PARAGRAPH

PURPOSE AND SCOPE OF THIS STANDARD. . . . . . . . . . . . . . . . . . . . . 1–2

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3–4

EFFECTIVE DATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

ENTRY REQUIREMENTS TO A PROGRAM OF PROFESSIONAL ACCOUNTING

EDUCATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6–12

37


Purpose and Scope of this Standard1. This Standard lays down the entry requirements for an IFAC

member body’s program of professional accounting educationand practical experience. It also provides some commentary onhow to assess entry-level qualifications.

2. The aim of this Standard is to ensure that students hoping tobecome professional accountants have an educational backgroundthat enables them to have a reasonable possibility of achievingsuccess in their studies, qualifying examinations and practicalexperience period. To fulfill this requirement, member bodiesmay require certain entrants to take pre-entry proficiency tests.

Introduction3. Fundamentally, the quality of a profession cannot be

maintained and improved if the individuals who enter it are notprepared to meet the necessary standards. All IFAC memberbodies should try to attract the best quality individuals to thestudy of accountancy. Ultimately, the quality of the professiondepends on the quality of the individuals it can attract. Entryrequirements are the first step in this process. Higher entryrequirements may allow professional education and practicalexperience requirements to be met in a shorter period of time.

4. Definitions and explanations of the key terms used in theStandards are set out in the Framework for InternationalEducation Statements.

Effective Date5. This Standard is effective from January 1, 2005.

Entry Requirements to a Program of ProfessionalAccounting Education

6. For an individual seeking to begin a program of professionalaccounting education leading to membership of an IFACmember body, the entry requirement should be at leastequivalent to that for admission into a recognized universitydegree program or its equivalent.

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IES 1 ENTRY REQUIREMENTS TO A PROGRAM OF PROFESSIONAL ACCOUNTING EDUCATION

7. An individual needs to bring to a program of professional accountingeducation an appropriate level of prior education and learning toprovide the foundation necessary to acquire the professionalknowledge, professional skills, and professional values, ethics andattitudes needed to become a professional accountant.

8. Candidates starting on a program of professional accountancyeducation will have a certain mix of knowledge, skills, andprofessional values, ethics and attitudes. The extent of thesecapabilities will determine the entry point of candidates intoprofessional programs. The lower the requirement at the pointof entry, the more the program of professional accountingeducation has to cover.

9. The starting point of a program of professional accountingeducation can vary. Many programs of professional accountingeducation start at the post-graduate level. Other programs startat the immediate post-secondary education level or at somepoint at a higher education level that is below that of anundergraduate degree. Many of these programs are organizedby professional bodies themselves rather than by universities orcolleges. Some programs recognize work experience, maturestudents, candidates joining the program part way through theircareer, and other types of learning.

10. Whichever route is chosen, the entry requirements adoptedshould fit together consistently with the overall program ofprofessional accounting education laid down by the professionalbody concerned. It is important that candidates from all possibleeducational routes, whether starting from secondary, further orhigher education, achieve a comparable level of professionalcompetence at the point of qualification. The entry level needsto be high enough to provide assurance of an individual’s likelysuccess in the program of professional accounting education.

11. The assessment of equivalence of qualifications to universitydegree entry standard should be cross-checked with standardreference sources, together with information available to themember bodies of IFAC (see note below). Even with these aids,evaluating qualifications can be complicated and difficult, withan accurate evaluation possible only after reviewing specific,detailed information about courses and curricula.

39


12. University degree programs may be recognized by statute, anapproved non-statutory body or the market. Recognition andevaluation of degree programs can focus on the content, lengthand other quality aspects.

Note:

The length of degree programs can vary. In an attempt to standardisepractice, the Bologna Declaration, signed by 29 European countries in1999, supported the adoption of two main types of degree cycles -undergraduate and graduate. Undergraduate degrees are expected to takeat least three years to complete. The NARIC database compares thestandard of qualifications to degree entry standards, undergraduatedegrees and postgraduate degrees (see note below).

Standard reference sources used by member bodies include the following:

American Universities and Colleges, produced in collaboration with theAmerican Council on Education, includes detailed descriptions of morethan 1,900 institutions of higher education in the USA.

International Comparisons, published by the National AcademicRecognition Information Centre in the UK (NARIC), under contract to theDepartment for Education and Skills. It includes both secondary andhigher-level qualifications worldwide and covers some 190 countries.NARIC helps to identify qualifications that are equivalent to a universitydegree and those that are equivalent to a university entry standard. The UKNARIC is part of a network of NARICs throughout the European Union.

International Handbook of Universities, published by PalgraveMacmillan. The 15th edition included more than 6,000 institutions in174 countries, with descriptions of their degrees and diplomas.

The World of Learning, published by Europa Publications, listsinstitutions worldwide that are considered to be higher educationinstitutions, including universities and colleges.

In a large number of countries, “Country Education Profiles” together withan indication of the standard of the degreesare published by the NationalOffice of Overseas Skills Recognition (NOOSR), a branch of theAustralian Commonwealth Department of Education, Science and Training.

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IES 2 CONTENT OF PROFESSIONAL ACCOUNTING EDUCATION PROGRAMS


CONTENTS

PARAGRAPH


INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4–9

EFFECTIVE DATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

CONTENT OF PROFESSIONAL ACCOUNTING EDUCATION PROGRAMS . . . 11–33

41


Purpose and Scope of this Standard1. This Standard prescribes the knowledge content of professional

accounting education programs that candidates need to acquireto qualify as professional accountants.

2. The aim of this Standard is to ensure that candidates formembership of an IFAC member body have enough advancedprofessional accountancy knowledge to enable them to functionas competent professional accountants in an increasinglycomplex and changing environment. The issue of maintainingthis competence will be dealt with in IES 7, ContinuingProfessional Development.

3. The primary knowledge part of professional accountingeducation programs is shown under three major headings:

(a) accounting, finance and related knowledge;

(b) organizational and business knowledge; and

(c) IT knowledge.

The professional skills required and the content of general education, professional values, ethics and attitudes, and the requirements related to practical experience are set out inIES 3, Professional Skills, IES 4, Professional Values, Ethicsand Attitudes and IES 5, Practical Experience Requirements.

Introduction4. Professional accounting education may take place in an

academic environment or in the course of studying for aprofessional qualification, but needs to be at least equivalent todegree level study. Candidates need to acquire the professionalknowledge, professional skills, and professional values, ethicsand attitudes, and need to be able to integrate these elements.

5. The knowledge component of professional accounting educationprograms can also be used to develop professional skills.Current knowledge may be obsolete later in a career. Therefore,a surface approach to learning knowledge across a very broadrange of subjects is not in the long-term interests of prospectiveprofessional accountants and the profession. The intellectual

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skills required include understanding, application, analysis andevaluation. Over a lifetime’s career, professional skills, values,ethics and attitudes are more important than the professionalknowledge base obtained at the point of qualification.

6. Just as important is the development of skills to identifyproblems to know what knowledge is required to both identifyand to solve problems, and know where to obtain the requiredknowledge. Instilling a commitment to lifelong learning is, in thelong run, more important than any piece of knowledge. Lifelonglearning is a skill that needs to be acquired, an attitude of mindthat needs to be developed and a value that society endorses.

7. The body of knowledge professional accountants need toacquire to function competently is constantly changing andexpanding. Local conditions also call for variations in theknowledge base required. In addition, professional accountantswill specialize during their careers. For these reasons, thisStandard sets out only broad subject headings on the premisethat professional accountants will need to continually updatetheir knowledge.

8. While this Standard focuses mainly on the professionalknowledge required to function as a professional accountant, italso includes competences for the IT component of the program.These competences have been identified in IEG 11, InformationTechnology for Professional Accountants (revised 2003).



Content of Professional Accounting Education Programs11. Professional accounting study should be a part of the pre-

qualification program. This study should be long enough andintensive enough to permit candidates to gain the professionalknowledge required for professional competence.

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12. The professional accountancy knowledge component of pre-qualification education should consist of at least two yearsof full-time study (or the part-time equivalent).

13. Students should pursue a degree in accounting, or aprofessional qualification, to gain this knowledge.

14. The content of professional accounting education shouldconsist of:

(a) accounting, finance and related knowledge;

(b) organizational and business knowledge; and

(c) information technology knowledge and competences.

15. The professional knowledge component complements the non-professional knowledge, and the intellectual, personal,interpersonal, communication, and organizational andmanagement skills developed in general education.

16. The subjects discussed in this Standard are not necessarilyintended to be completed in the order shown. For example,professional accounting education may be gained alongsidegeneral education, while pursuing a university degree, or it maybe obtained in advanced study after completing another programof study at university degree level. Students may take non-accounting degrees, or no degrees at all, and then acquire thenecessary knowledge of professional accountancy subjectsthrough studying for the examinations of a professional body. Inthis case, the syllabus of the professional body needs to cover allthe subject content listed in this Standard. In addition, the subjectsand elements of the program may be integrated, for example,incorporating aspects of IT knowledge in specific accountingcourses. This may assist the learning process and help candidatesunderstand how the individual components are interrelated.

17. The professional accountancy knowledge component is onlypart of the pre-qualification education program. It may or maynot be acquired in an academic environment. Some degreeprograms may, in addition to requiring up to two years ofgeneral studies, devote at least another two years to accountingstudies. More specialist accounting degrees may incorporate

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general studies within a three-year program. The exactcombination of general studies, accounting studies andpractical experience may differ from one program to another aslong as the equivalent professional competences are achieved.

18. Accounting, finance and related knowledge provide the coretechnical foundation essential to a successful career as aprofessional accountant. The mix of topics may differaccording to the sectors or locations in which individuals work.The accounting curricula is itself changing and will continue tochange in response to rapidly changing market demands. Newtopics are entering the curriculum and the relative emphasisamong topics is altering. Member bodies may wish to addtopics, or alter the balance of their programs, to meet the needsof their particular environments.

19. Organizational and business knowledge provides the context inwhich professional accountants work. A broad knowledge ofbusiness, government and not-for-profit organizations is essentialfor professional accountants. Organizational and businessknowledge includes how businesses are organized, financed andmanaged, and the global environment in which business operates.

20. Information technology has transformed the role of theprofessional accountant. The professional accountant not onlyuses information systems and exercises IT controls skills butalso plays an important role as part of a team in the evaluation,design and management of such systems.

21. The weighting of subjects can vary from one program toanother. The three knowledge areas are not set out to indicaterelative importance or order. A competency study is a usefulway of deciding the relative weighting of subjects.

22. The subjects listed below represent the minimum subject areasin professional accounting education programs. However, therelative depth and weighting of coverage will depend on theneeds of individual IFAC member bodies and any restrictionsplaced on them by statutory authorities.

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23. The accounting, finance and related knowledge componentshould include the following subject areas:

(a) financial accounting and reporting;

(b) management accounting and control;

(c) taxation;

(d) business and commercial law;

(e) audit and assurance;

(f) finance and financial management; and

(g) professional values and ethics.

24. The accounting, finance and related knowledge component furtherdevelops and integrates the knowledge, skills and professionalvalues, ethics and attitudes from elsewhere into the subject areasall professional accountants need to study. It gives students thenecessary theoretical and technical accounting knowledge andintellectual skills, including an understanding of professionalvalues and ethics. This part needs to be delivered at least at thelevel of an accounting degree. This component includes:

(a) history of the accountancy profession and accounting thought;

(b) content, concepts, structure and meaning of reporting fororganizational operations, both for internal and externaluse, including the information needs of financial decisionmakers and a critical assessment of the role of accountinginformation in satisfying those needs;

(c) national and international accounting and auditing standards;

(d) the regulation of accounting;

(e) management accounting, including planning andbudgeting, cost management, quality control, performancemeasurement, and benchmarking;

(f) the concepts, methods and processes of control thatprovide for the accuracy and integrity of financial data andsafeguarding of business assets;

(g) taxation and its impact on financial and managerialdecisions;

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(h) a knowledge of the business legal environment, includingsecurities and companies law, appropriate for the role ofthe profession in the particular country;

(i) the nature of auditing and other assurance services,including risk assessment and fraud detection, and theintellectual and procedural bases for performing them;

(j) a knowledge of finance and financial management,including financial statement analysis, financialinstruments, capital markets — both domestic andinternational — and managing resources;

(k) ethical and professional responsibilities of a professionalaccountant in relation to both the professional and widerpublic environment (see also IES 4, Professional Values,Ethics and Attitudes);

(l) governmental and not-for-profit accounting issues; and

(m) the use of non-financial performance measures in business.

25. The organizational and business knowledge componentshould include the following subject areas:

(a) economics;

(b) business environment;

(c) corporate governance;

(d) business ethics;

(e) financial markets;

(f) quantitative methods;

(g) organizational behavior;

(h) management and strategic decision making;

(i) marketing; and

(j) international business and globalization.

26. Organizational and business education equips prospectiveprofessional accountants with knowledge of the environmentin which employers and clients operate. It also provides thecontext for the application of all the professional skills

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acquired during the pre-qualification process. Being able tounderstand is different from having the ability and experienceto undertake, participate in and contribute to organizationaland business management.

27. Organizational and business education includes:

(a) a knowledge of macro- and micro-economics;

(b) a knowledge of business and financial markets and howthey operate;

(c) the application of quantitative methods and statistics tobusiness problems;

(d) an understanding of corporate governance and businessethics;

(e) an understanding of organizations and of the environmentsin which they operate, including the major economic,legal, political, social, technical, international and culturalforces and their influences and values;

(f) an understanding of environmental issues and sustainabledevelopment;

(g) an understanding of interpersonal and group dynamics inorganizations, including the methods for creating andmanaging change in organizations;

(h) an understanding of personnel and human resource issues,managing people, project management, and marketing;

(i) an understanding of decision support and strategy,including business advice, strategic management andgeneral management;

(j) an understanding of organizational and operational risk;

(k) a basic knowledge of international trade and finance andthe ways in which international business is conducted, aswell as the processes of globalization; and

(l) an ability to integrate the above components inaccomplishing strategic objectives.

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28. The information technology component should include thefollowing subject areas and competences:

(a) general knowledge of IT;

(b) IT control knowledge;

(c) IT control competences;

(d) IT user competences; and

(e) one of, or a mixture of, the competences of, the roles ofmanager, evaluator or designer of information systems.

29. Guidance on the information technology knowledge andcompetences for professional accountants is set out in IEG 11,Information Technology for Professional Accountants.

30. As part of their pre-qualification education, all professionalaccountants are expected to participate in at least one of theroles of manager, designer or evaluator of information systemsor a combination of these roles as identified in IEG 11.

31. At the point of qualification, candidates are expected to have aknowledge and understanding of the competency elements in atleast one of these roles. This may be evidenced by the ability todescribe or explain the significance of the issues related to thelisted competencies in a relevant business setting. A candidateneeds to be able to participate effectively in the activities listed inthis section as part of a team or under supervision, but would notto be expected to demonstrate proficiency in all the competences.

32. Users of the various information technologies employinformation systems tools and techniques to help them meettheir own objectives and to help others meet their objectives.The following broad areas of competence relate to the user role:

(a) apply appropriate IT systems and tools to business andaccounting problems;

(b) demonstrate an understanding of business and accountingsystems; and

(c) apply controls to personal systems.

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33. The information technology knowledge component may beprovided in a variety of ways, perhaps as separate courses or byintegrating the subject into the organizational and businessknowledge component or into the accounting and accounting-related knowledge component. Competence may also beacquired through work experience in addition to the ITknowledge component. For the formal IT education component,case studies, interactions with experienced professionals andsimilar techniques may be used to enhance the presentation ofsubject matter and to help students develop practical skills, incombination with relevant IT work experience.

50

IES 3 PROFESSIONAL SKILLS


CONTENTS

PARAGRAPH


INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5–11

EFFECTIVE DATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

PROFESSIONAL SKILLS FOR PROFESSIONAL ACCOUNTANTS . . . . . 13–18

GENERAL EDUCATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19–24

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Purpose and Scope of this Standard1. This Standard prescribes the mix of skills that candidates

require to qualify as professional accountants. Part of thepurpose of this Standard is to show how a general education,which may be gained in a variety of ways and within differentcontexts, can contribute to the development of these skills.

2. The aim of this Standard is to ensure that candidates formembership of an IFAC member body are equipped with theappropriate mix of skills (intellectual, technical, personal,interpersonal and organizational) to function as professionalaccountants. This enables them to function throughout theircareers as competent professionals in an increasingly complexand demanding environment.

3. The skills professional accountants require are grouped underfive main headings:

• intellectual skills;

• technical and functional skills;

• personal skills;

• interpersonal and communication skills; and

• organizational and business management skills.

4. This Standard also addresses the non-business related studiesthat contribute to the development of these skills and may formpart of general education. It does not cover professionalaccounting education, professional values, ethics and attitudes,practical experience requirements, or assessment ofprofessional competence (please refer to IES 2, Content ofProfessional Accounting Education Programs, IES 4,Professional Values, Ethics and Attitudes, IES 5, PracticalExperience Requirements for Professional Accountants and IES 6,Assessment of Professional Capabilities and Competence).

Introduction5. Skills are part of the set of capabilities required by professional

accountants to demonstrate competence. These capabilitiesinclude knowledge, skills, professional values, ethics and

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attitudes. Capabilities are an indication of potential competencethat can be transferred across different environments. It isimportant to ensure that professional accounting educationprograms integrate the development of knowledge, skills,professional values, ethics and attitudes.

6. Rising expectations of employers, clients and the public as towhat professional accountants contribute at work and towardsociety generally have prompted an increased emphasis onprofessional skills.

7. Various lists of skills have been classified and described in several ways. The lists set out in paragraphs 16–21 are notexhaustive.

8. Appropriate skills enable the professional accountant to makesuccessful use of the knowledge gained through generaleducation. These skills are not always acquired from specificcourses devoted to them but, rather, from the total effect of theprogram of professional accounting education as well aspractical experience, and further developed through lifelonglearning. Professional skills will always be most effectivelyapplied if used in an ethical manner (see IES 4, ProfessionalValues, Ethics and Attitudes). Some skills are containedimplicitly within education programs. It may be necessary tohighlight how the various learning activities develop these skills.

9. Relevant skills can give professional accountants a competitiveedge in the market place and are useful throughout anindividual’s career. Not all these skills will, however, be fullydeveloped at the point of qualification. Some may be the focusof continuing professional development.

10. A good foundation of general education, although not an end initself, is one way of helping candidates become broad-mindedindividuals who think and communicate effectively and whohave the basis for conducting inquiry, carrying out logicalthinking and undertaking critical analysis. This foundation willenable candidates to make decisions in the larger context ofsociety, to exercise good judgment and professionalcompetence, to interact with diverse groups of people, to thinkglobally, and to begin the process of professional growth. The

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acquisition of these skills is more important than the way inwhich they are learnt.



Professional Skills for Professional Accountants13. Individuals seeking to become professional accountants

should acquire the following skills:

• intellectual skills;

• technical and functional skills;

• personal skills;

• interpersonal and communication skills; and

• organizational and business management skills.

14. Intellectual skills are often divided into six levels. In ascendingorder, these are: knowledge, understanding, application, analysis,synthesis (to combine knowledge from several areas, predict anddraw conclusions) and evaluation. It is important that candidateshave reached the highest levels at the point of qualification.

Intellectual skills enable a professional accountant to solveproblems, make decisions and exercise good judgment incomplex organizational situations. These skills are often theproduct of a broad general education. The required intellectualskills include the following:

(a) the ability to locate, obtain, organize and understandinformation from human, print and electronic sources;

(b) the capacity for inquiry, research, logical and analyticalthinking, powers of reasoning, and critical analysis; and

(c) the ability to identify and solve unstructured problemswhich may be in unfamiliar settings.

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15. Technical and functional skills consist of general skills as wellas skills specific to accountancy. They include:

(a) numeracy (mathematical and statistical applications) andIT proficiency;

(b) decision modeling and risk analysis,

(c) measurement;

(d) reporting; and

(e) compliance with legislative and regulatory requirements.

16. Personal skills relate to the attitudes and behavior ofprofessional accountants. Developing these skills helpsindividual learning and personal improvement. They include:

(a) self-management;

(b) initiative, influence and self learning;

(c) the ability to select and assign priorities within restrictedresources and to organize work to meet tight deadlines;

(d) the ability to anticipate and adapt to change;

(e) considering the implications of professional values, ethicsand attitudes in decision making; and

(f) professional skepticism.

17. Interpersonal and communication skills enable a professionalaccountant to work with others for the common good of theorganization, receive and transmit information, form reasonedjudgments and make decisions effectively. The components ofinterpersonal and communication skills include the ability to:

(a) work with others in a consultative process, to withstandand resolve conflict;

(b) work in teams;

(c) interact with culturally and intellectually diverse people;

(d) negotiate acceptable solutions and agreements inprofessional situations;

(e) work effectively in a cross-cultural setting;

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(f) present, discuss, report and defend views effectivelythrough formal, informal, written and spokencommunication; and

(g) listen and read effectively, including a sensitivity tocultural and language differences.

18. Organizational and business management skills have becomeincreasingly important to professional accountants.Professional accountants are being asked to play a more activepart in the day-to-day management of organizations. Whilepreviously their role might have been limited to providing thedata that would be used by others, today, professionalaccountants are often part of the decision-making team. As aresult, it is important that they understand all aspects of how anorganization works. Professional accountants therefore need todevelop a broad business outlook as well as political awarenessand a global outlook.

Organizational and business management skills include:

(a) strategic planning, project management, management ofpeople and resources, and decision making;

(b) the ability to organize and delegate tasks, to motivate andto develop people;

(c) leadership; and

(d) professional judgment and discernment.

General Education19. All professional education programs should include some

portion of general education.

20. A broad general education can contribute significantly to theacquisition of professional skills (see also IES 1, EntryRequirements to a Program of Professional AccountingEducation). General education requirements vary greatly fromprogram to program and from country to country. Generaleducation focuses on the development of non-professionalknowledge, intellectual skills, personal skills, interpersonal andcommunication skills, and organizational and management skills.

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21. A broad general education can encourage lifelong learning andprovide a foundation on which to build professional andaccounting studies. It may consist of:

(a) an understanding of the flow of ideas and events in history,the different cultures in today’s world and an internationaloutlook;

(b) basic knowledge of human behavior;

(c) a sense of the breadth of ideas, issues and contrastingeconomic, political and social forces in the world;

(d) experience in inquiry and evaluation of quantitative data;

(e) the ability to conduct inquiry, carry out logical thinkingand understand critical thinking;

(f) an appreciation of art, literature and science;

(g) an awareness of personal and social values and of theprocess of inquiry and judgement; and

(h) experience in making value judgments.

22. A general education may be gained in a number of differentways and within different settings. General education may takeplace at any stage in a degree program with the balance of theprogram devoted to professional accountancy topics, includingaccounting, finance and related knowledge, organizational andbusiness knowledge and information technology knowledge(see IES 2, Content of Professional Accounting EducationPrograms). General education may also be fully integrated intoaccountancy degree programs, with provision for theacquisition of key skills spread throughout the program.

23. Candidates may also take non-accountancy degrees and thenacquire the necessary knowledge of professional accountancysubjects through studying for the examinations set byprofessional bodies. Candidates may also acquire key skillsthrough experience at work, combined with studying for theexaminations. This combination would include elements ofgeneral knowledge and skills and thus develop the competenceand capabilities, including the underlying technical knowledge,required to qualify as a professional accountant.

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24. How these skills can be acquired may, therefore, differ fromone IFAC member body to the next. How this Standard isimplemented depends on the cultural environment in whicheach body operates and the prevailing educationalinfrastructure. As a result, part of general education may beacquired during a broad and perhaps extended period ofsecondary education prior to higher education.

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IES 4 PROFESSIONAL VALUES, ETHICS AND ATTITUDES


CONTENTS

PARAGRAPH


INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4–11

EFFECTIVE DATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

PROFESSIONAL VALUES, ETHICS AND ATTITUDES . . . . . . . . . . . . . 13–16

TEACHING PROFESSIONAL VALUES, ETHICS AND ATTITUDES . . . . 17–22

WORKPLACE LEARNING AND PROFESSIONAL VALUES, ETHICS AND

ATTITUDES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23–27

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Purpose and Scope of this Standard1. This Standard prescribes the professional values, ethics and

attitudes professional accountants should acquire during theeducation program leading to qualification.

2. The aim of this Standard is to ensure that candidates formembership of an IFAC member body are equipped with theappropriate professional values, ethics and attitudes to functionas professional accountants.

3. IFAC recognizes that the accountancy profession throughout theworld operates in environments with different cultures andregulatory requirements. IFAC has, nevertheless, established aninternational Code of Ethics for Professional Accountants.Professional values, ethics and attitudes relate directly to IFAC’smission to develop and enhance the profession to enable it toprovide services of consistently high quality in the public interest.

Introduction4. Society has high expectations of the accountancy profession. It

is essential for professional accountants to accept and observeethical principles regulating all their relationships. Professionalvalues, ethics and attitudes identify professional accountants asmembers of a profession and should shape everything they doas professionals. It is the responsibility of member bodies toensure that their members have an adequate understanding ofthe principles of professional ethics and the underlyingrationale of the constraints that professional ethics place onprofessional accountants.

5. Since professional accountants have a role to play in decisionmaking, they need to have a thorough appreciation of thepotential ethical implications of professional and managerialdecisions. They also need to be aware of the pressures ofobserving and upholding ethical principles that may fall onthose involved in the decision-making process. This is truewhether they are working in public practice, industry orcommerce, the public sector or education.

6. Professional accountants operate in a world of change. Goodgovernance, both corporate and public, depends greatly on

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adherence to professional values, ethics and attitudes. In suchcircumstances, a clear understanding of, and education in, ethical principles is essential.

7. IFAC considers that member bodies have an obligation to theircurrent and future members, as well as to society at large, toensure that their members have a continuing understanding ofprofessional values, ethics and attitudes. This understandingneeds to be sufficient to enable them to operate effectively andwith integrity and discernment in an environment of change. Thepurpose of this Standard is to assist member bodies in this task.

8. Professional values, ethics and attitudes need to be treated intheir own right within the education framework. If futureprofessional accountants are to perceive professional values,ethics and attitudes as important to their work, it is essential thatthey do not perceive the treatment of professional values, ethicsand attitudes as peripheral to their main education programs.

9. Educators and professional bodies need to distinguish betweenteaching students about professional values, ethics andattitudes and developing and instilling ethical behavior.Developing professional values, ethics and attitudes needs tobegin early in the education of a professional accountant and bere-emphasized throughout a career. The professionalaccountant needs to consider this as part of lifelong learning.

10. Education programs need to deal with ethical rules in a positive,participative way, for example, by exploring links betweenethical behavior, corporate failure and fraud. It is important forprofessional accountants to learn from their experiences.



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Professional Values, Ethics and Attitudes 13. The program of professional accounting education should

provide potential professional accountants with a frameworkof professional values, ethics and attitudes for exercisingprofessional judgment and for acting in an ethical mannerthat is in the best interest of society and the profession.

14. The required values, ethics and attitudes of professionalaccountants include a commitment to comply with therelevant local codes of ethics which should be in conformitywith the IFAC Code of Ethics.

15. The coverage of values and attitudes in education programsfor professional accountants should lead to a commitment to:

(a) the public interest and sensitivity to socialresponsibilities;

(b) continual improvement and lifelong learning;

(c) reliability, responsibility, timeliness, courtesy andrespect; and

(d) laws and regulations.

16. While the approach of each program to the learning ofprofessional values, ethics and attitudes will reflect its ownnational and cultural environment and objectives, as aminimum all programs should include:

(a) the nature of ethics;

(b) differences of detailed rules-based and frameworkapproaches to ethics, their advantages and drawbacks;

(c) compliance with the fundamental ethical principles ofintegrity, objectivity, commitment to professionalcompetence and due care, and confidentiality;

(d) professional behavior and compliance with technicalstandards;

(e) concepts of independence, skepticism, accountabilityand public expectations;

(f) ethics and the profession: social responsibility;

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(g) ethics and law, including the relationship between laws,regulations and the public interest;

(h) consequences of unethical behavior to the individual, tothe profession and to society at large;

(i) ethics in relation to business and good governance; and

(j) ethics and the individual professional accountant:whistle blowing, conflicts of interest, ethical dilemmasand their resolution.

Teaching Professional Values, Ethics and Attitudes17. Because of the importance of professional values, ethics and

attitudes to future professional accountants, the presentation ofthe topic may be treated as a separate subject. As studentsprogress, and gain a wider knowledge of other subjects, it will beappropriate to integrate subject matters. This will encouragestudents to look for and consider the possible ethical implicationsof problems being discussed in their study of other subjects.

18. Students need to understand that values, ethics and attitudes runthrough everything that professional accountants do and howthey contribute to confidence and trust in the market.Subsequent treatment might address the particular ethical issueslikely to be faced by all professional accountants and those morelikely to be encountered by professional accountants in publicpractice in any particular cultural environment.

19. Students need to be encouraged to study the role of, andcritically appraise, relevant codes of ethics. Students may beinvited to view professional pronouncements in this area as apositive effort to create a framework of trust and integritywithin which professional accountants can operate. Studentsneed to be encouraged to examine the ethical pronouncementsof other professions and examine and discuss other potentialapproaches for the accountancy profession. Rote learning ofcodes and subsequent tests of memory will not produce thedesired effect.

20. The presentation of professional values, ethics and attitudes toaccounting students can be enhanced greatly through the use ofparticipative approaches. These may include:

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(a) the use of teaching materials such as multi-dimensionalcase studies;

(b) role playing;

(c) discussion of selected readings and videos;

(d) analysis of real life business situations involving ethicaldilemmas;

(e) discussion of disciplinary pronouncements and findings;and

(f) seminars using speakers with experience of corporate orprofessional decision making.

21. Such participative work will lead those involved to a greaterawareness of the ethical implications and potential conflicts forindividuals and businesses that may arise from having to makecomplex management decisions. Distance learning programsmay be limited in offering all these participative experiences,however, as many approaches as possible can be used toenhance the learning experience.

22. It is important for professional accountants to learn from theirethical experiences. With this in mind, education programsneed to include reflection when students are required toconsider an experience, what went well, what did not work, andwhat approach may be taken in the future in similarcircumstances.

Workplace Learning and Professional Values, Ethics andAttitudes

23. Professional values, ethics and attitudes affect the work of allprofessional accountants. Proper ethical behavior is asimportant as technical competence. Member bodies willrequire trainees to gain appropriate training and practicalexperience prior to admission to membership. Accordingly, theperiod of training and practical experience needs to bestructured to give trainees an opportunity to observe theapplication of professional values, ethics and attitudes in thework situation.

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24. Those responsible for the supervision of practical experienceneed to stress to their trainees the ethical dimensions of the roleprofessional accountants play in the workplace. This may bedone by encouraging them to identify any apparent ethicalimplications and conflicts in their work, to form preliminaryviews on such occurrences and to discuss them with theirsuperiors.

25. In addition to discussions with the supervisors or mentors,there are other ways for trainees to discuss ethical issues, forexample, discussions or interviews with other staff within theorganization.

26. Trainees, and those recently qualified as professionalaccountants, would also benefit from exposure to, andinvolvement in, discussions on relevant issues relating to thework of their employers that are perceived to have potentialethical implications, for example conflicts of interest related to:

(a) professional accountants’ job responsibilities (includingresponsibilities defined by the policies of organizationsand the instructions of supervisors) and their professionalresponsibilities (as defined by their professional codes ofconduct amongst other sources);

(b) confidentiality of information, including the limits ofconfidentiality;

(c) the structure and purpose of professional associations(including lobbying activities on behalf of members);

(d) the variety of ways in which professional accountants canface conflicts of interest, including, for example,inappropriate advocacy and earnings management.

27. Ethical problems and potential dilemmas may occur. Wherethere is doubt about the ethical aspects of a course of action orsituation, trainees need to consult some recognized ethicalreference point, within their work environment or memberbody, whichever may be the appropriate course of action.

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IES 5 PRACTICAL EXPERIENCE REQUIREMENTS

CONTENTS

PARAGRAPH


INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4–8

EFFECTIVE DATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

PRACTICAL EXPERIENCE REQUIREMENTS . . . . . . . . . . . . . . . . . . 10–17

MONITORING AND CONTROL . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18–26

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Purpose and Scope of this Standard1. This Standard prescribes the practical experience IFAC

member bodies should require their members to obtain beforequalification as professional accountants.

2. The aim of this Standard is to ensure that candidates seeking toqualify as professional accountants have acquired the practicalexperience considered appropriate at the time of qualificationto function as competent professional accountants.

3. Further development may be required after qualification tobring candidates up to the level of a statutory auditor or someother form of specialization. In any event, lifelong learning willbe required to develop and maintain professional competence(see also exposure draft of proposed IES 7, ContinuingProfessional Development).

Introduction4. Practical experience, gained by performing the work of

professional accountants, in addition to the acquisition ofknowledge through professional accounting educationprograms, is considered necessary before candidates canpresent themselves to the public as professional accountants(see also IES 3, Professional Skills). Given the variety ofcircumstances surrounding professional accountancy bodiesthroughout the world, the requirement for practical experiencemay vary from one body to another.

5. The balance between practical experience and academic studyor studying for professional qualifications may vary from onequalification to another. IFAC member bodies need to adapttheir practical experience requirements to meet their own needsand requirements, the requirements of the relevant regulatoryauthorities, as well as public expectations that professionalaccountants are competent.

6. No single combination of education and experience requiredfor preparation for qualification as a professional accountant isused throughout the world. When education requirements areextended to include practical business and accountingapplications, then a part of this education may contribute tosome of the practical experience requirements.

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7. Employers, work colleagues and mentors play important rolesin planning and monitoring practical experience gained by trainees.



Practical Experience Requirements 10. The period of practical experience in performing the work

of professional accountants should be a part of the pre-qualification program. This period should be long enoughand intensive enough to permit candidates to demonstratethey have gained the professional knowledge, professionalskills, and professional values, ethics and attitudes requiredfor performing their work with professional competenceand for continuing to grow throughout their careers.

11. The period of practical experience should be a minimum ofthree years. A period of relevant graduate (beyond under-graduate, e.g., masters) professional education with astrong element of practical accounting application maycontribute no more than 12 months to the practicalexperience requirement.

12. The overall goal is to produce competent professionalaccountants through an appropriate mix of general education,professional education and practical experience. The exactcombination may vary, as long as the requirements ofparagraphs 10 and 11 are achieved. Simply spending theamount of time necessary to meet the practical experiencerequirement is not sufficient. Trainees need to demonstrate thecompetences achieved.

13. A sufficient period of practical experience is considerednecessary before candidates can present themselves to thepublic as professional accountants, that is, in addition to

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academic study or studying for a professional qualification. Theexact combination of practical experience and education willvary according to the rules laid down by individual memberbodies and in accordance with national and local laws, and therequirements of regulatory authorities and public expectations.

14. For example, some extended education programs that place astrong emphasis on practical application may contribute somepart of the practical experience requirement. Studying foracademic or professional qualifications are useful methods ofacquiring and demonstrating professional accountancyknowledge gained. However, this studying does not necessarilydemonstrate that professional competence in the workplace hasbeen achieved. Experience gained at work equips trainees withmany of the practical skills needed to become competentprofessional accountants.

15. Trainees need to gain practical experience in roles consideredappropriate by the professional body to which they are applying.

16. Practical experience may be obtained after a program of studyor alongside a program of study.

17. Practical experience provides a professional environment inwhich trainees develop competence by:

(a) enhancing their understanding of organizations, of howbusiness works and of work relationships;

(b) being able to relate accounting work to other businessfunctions and activities;

(c) becoming aware of the environment in which services areprovided;

(d) developing the appropriate professional values, ethics andattitudes in practical, real-life situations (see also IES 4,Professional Values, Ethics and Attitudes); and

(e) having an opportunity to work at progressive levels ofresponsibility.

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Monitoring and Control18. The member body and/or regulatory authority should

ensure that the practical experience candidates have gainedis acceptable. Experience leading to qualification as aprofessional accountant should be conducted under thedirection of a mentor who is an experienced member of anIFAC member body. For a program of practical experienceto be effective, it is necessary for the professional body orregulatory authority, the trainee, the mentor and theemployer to work together.

19. The program of practical experience should be mutuallybeneficial to both the trainee and the employer and bedeveloped together. A record of the practical experiencegained should be reviewed periodically by the mentor.

20. Before a trainee qualifies as a professional accountant, IFACmember bodies should assess the practical experience gainedby the trainee on the basis of written submissions reviewed bysupervisors or mentors and possibly supported by oralsubmissions made by trainees.

21. Mentors may be assisted in performing the mentoring functionby others in the organization, some of whom may not beprofessional accountants.

22. The program of practical experience needs to be designed andimplemented to meet the experience requirements set by theprofessional body. It also needs to be efficient and cost-effective for the employer, whether that employer is in industry,commerce, government or public practice (see also the IFACDiscussion Paper Practical Experience).

23. Mentors can represent an important link between trainees andmember bodies. They may be responsible for the planning ofthe practical experience period and provide guidance totrainees. Member bodies may wish to provide training formentors and put in place reporting arrangements.

24. IFAC member bodies, whose members are eligible for an auditlicense at the point of qualification, need to ensure thatappropriate audit experience is acquired during the pre-

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qualification period. If the license is granted by an externalagency, or after qualification, that agency will formulate thenecessary requirements for qualification. Those requirementsmight also be fulfilled during the post-qualification period.

25. The record of experience needs to be regularly compared withthe overall program established for the trainee to ensure that therequirements set by the professional body or regulatoryauthority are being met. If progress within the program doesnot match the anticipated development rate, the situation needsto be reviewed to discover the reasons why and what can bedone to improve it. This regular comparison will provideanother opportunity for all parties to comment on the practicalexperience and contribute to the trainee’s future development.

26. Steps that member bodies can take to ensure the achievementof appropriate experience include:

(a) establishing a monitoring system, normally on a samplingbasis, that provides for monitoring and reporting of thepractical experience obtained;

(b) providing detailed written guidance for employers,mentors and trainees regarding the program of practicalexperience and their roles and responsibilities;

(c) establishing a mechanism for approving employers assuitable for providing the appropriate experience fortrainees;

(d) assessing and approving the practical experienceenvironment before commencement of experience (Forexample, the nature and scope of practical experience andthe training arrangements of employers need to be reviewedto ensure that trainees would receive proper direction,supervision, mentoring, counseling and evaluation.);

(e) assessing, prior to membership, the practical experiencegained on the basis of a written submissions possiblysupported by oral submissions made by traineesappropriately supported (see also IES 6, Assessment ofProfessional Capabilities and Competence);

(f) providing feedback to trainees and certifying whencompetences have been achieved;

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(g) monitoring employers and mentors previously approved.The review may advise on areas that need improvement ormay recommend that approval be withdrawn if conditionshave changed to the extent that relevant experience criteriaare not being met;

(h) establishing a system of periodic reporting to coverchanges, if any, in the nature, scope and content of thetrainees’ practical experience if it is impractical to visit allapproved employers; and

(i) undertaking a periodic study of the competences requiredby professional accountants to help to ensure that thepractical experience gained is relevant and appropriate.

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IES 6 ASSESSMENT OF PROFESSIONAL CAPABILITIES AND COMPETENCE


CONTENTS

PARAGRAPH

PURPOSE AND SCOPE OF THIS STANDARD . . . . . . . . . . . . . . . . . . . . . . 1–4

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5–9

EFFECTIVE DATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

ASSESSMENT OF PROFESSIONAL CAPABILITIES AND COMPETENCE . . . 11–23

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Purpose and Scope of this Standard1. This Standard prescribes the requirements for a final

assessment of a candidate’s professional capabilities andcompetence before qualification.

2. This Standard deals with the assessment of the professionalcapabilities (i.e. the professional knowledge, professional skillsand professional values, ethics and attitudes) acquired throughprofessional education programs (see also IES 2, Content ofProfessional Accounting Education Programs, IES 3, ProfessionalSkills and IES 4, Professional Values, Ethics and Attitudes).

3. In the Framework for International Education Statementsprofessional knowledge, professional skills, and professionalvalues, ethics and attitudes are referred to as “capabilities”.Capabilities are the attributes held by individuals that enablethem to perform their roles competently. The possession ofcapabilities gives a good indication that an individual has thepotential to perform competently in the work place.

4. Certain competences, professional skills and values may bebetter acquired through practical experience and assessed in thework place or through work place simulations. IES 5, PracticalExperience Requirements deals with the monitoring, controland review of practical experience.

Introduction 5. It is the responsibility of IFAC member bodies to have in place

assessment procedures that ensure candidates admitted tomembership are appropriately qualified. A series ofassessments might be made leading up to the final assessmentof capabilities and competence.

6. The final assessment of capabilities and competence isnormally in addition to purely academic qualifications and isbeyond undergraduate degree level. This Standard prescribesthat a significant proportion of this assessment should be inrecorded form. It should test underpinning theoreticalknowledge as well as the practical application of knowledge.

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7. Candidates need to be able to demonstrate that they:

(a) have a sound technical knowledge of the specific subjectsof the curriculum;

(b) can apply technical knowledge in an analytical andpractical manner;

(c) can extract from various subjects the knowledge requiredto solve many-sided or complex problems;

(d) can solve a particular problem by distinguishing the relevantinformation from the irrelevant in a given body of data;

(e) can, in multi-problem situations, identify the problems andrank them in the order in which they need to be addressed;

(f) appreciate that there can be alternative solutions andunderstand the role of judgment in dealing with them;

(g) can integrate diverse areas of knowledge and skills;

(h) can communicate effectively with users by formulatingrealistic recommendations in a concise and logical fashion;and

(i) can identify ethical dilemmas.

8. The practical experience part of the qualifying process isintended to facilitate the development and direct application ofprofessional knowledge, professional skills, and professionalvalues, ethics and attitudes. Ultimately, it is through practicalexperience that trainees will demonstrate their competence to perform the roles of professional accountants. Detailsregarding the assessment of the practical experience can befound in IES 5, Practical Experience Requirements.



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Assessment of Professional Capabilities and Competence11. The professional capabilities and competence of candidates

should be formally assessed before the qualification ofprofessional accountant is awarded. IFAC member bodiesshould be responsible for ensuring this final assessment isof appropriate quality in accordance with the requirementsset out in paragraph 12 of this Standard. The finalassessment may be carried out by an IFAC member body ora regulatory authority with substantive input from an IFACmember body.

12. The final assessment of professional capabilities andcompetence should:

(a) require a significant proportion of candidates’responses to be in recorded form;

(b) be reliable and valid;

(c) cover a sufficient amount of the whole range ofprofessional knowledge, professional skills, andprofessional values, ethics and attitudes for theassessment to be credible; and

(d) be made as near as practicable to the end of the pre-qualification program.

13. While the final assessment may be the responsibility of theIFAC member body and would usually be carried out by theIFAC member body or regulatory authority, member bodiesmay wish to cooperate with other member bodies in makingtheir assessment arrangements, in whole or in part. Theresponsibility for the final assessment still remains with themember bodies whose qualifications will be awarded.

14. The assessment of professional capabilities and competenceserves several purposes. First, member bodies and regulatoryauthorities have a responsibility to ensure that professionalaccountants have the capabilities and competence expected ofthem by employers, clients and the public. Second, individualswho owe a duty of care to their clients, employers and relevantstakeholders need to demonstrate their ability to discharge thisresponsibility in a competent manner. Third, the public interestis protected and the credibility of the profession is enhanced

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when only those who meet the profession’s competencystandards are permitted to be professional accountants.

15. The critical consideration is whether the assessments arereliable and valid. Reliable assessments produce consistent,objective results over time. Valid assessment methods assessthe desired outcomes and may use quantitative and qualitativemeasures. Assessments need to be acceptable to stakeholdersand serve the public interest.

16. The assessments need to be appropriate for the professionalknowledge, professional skills and professional values, ethicsand attitudes being evaluated.

17. Although it is not practicable to assess the whole range ofcapabilities and competences at any single session, the wholerange needs to be covered over several sessions. Some materialmay have been covered before, and assessors are entitled toassume that this material is known and understood. In othercases some of the competences may have been assessed duringthe practical experience period.

18. IFAC acknowledges that there is no single preferred method fora final assessment of professional capabilities and competence.Because of the diversity of capabilities and competences beingevaluated, IFAC members need to use a variety of assessmentmethods, as appropriate.

19. The methods adopted will also depend on factors specific toeach member body, including:

(a) geographical location;

(b) educational and other resources available;

(c) the number of candidates being tested and theirbackgrounds; and

(d) training opportunities.

20. To provide sufficient evidence for the assessment of candidates’professional capabilities and competence, the assessment needsto assign a significant weighting to responses in recorded form.

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21. Candidates also need to demonstrate that they can integrate allthe various elements across a range of situations and applythem in the context of a professional accountant at work.

22. The assessment might also include elements of oral and groupassessments as well as objective testing. Scenario-basedquestions and case studies may be used to test higher-levelintellectual skills. The assessment needs to be at a level ofdifficulty appropriate for professional accountants to preservethe credibility of the final test of capabilities and competence.

23. Professional capabilities and competence may be assessedthrough a series of parts spread over an individual’s pre-qualification program. However, the final qualifying part of theassessment needs to be administered as near as practicable tothe end of the individual’s pre-qualification program leading toqualification. This final assessment needs to cover enough ofthe body of professional knowledge, professional skills, andprofessional values, ethics and attitudes necessary todemonstrate that the individual has the capabilities andcompetence to qualify as a professional accountant.

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Documents

International Education Standards for Professional Accountants · INTERNATIONAL EDUCATION STANDARDS FOR PROFESSIONAL ACCOUNTANTS American English spelling conventions are followed