bullet nNews from Botswana Institute of Chartered Accountants

To all Members of BICA, stakeholders, colleagues, students and friends. When a new-look newsletter for our Institute was being deliberated, we started

right at the beginning – with the name.The result: BICA News has become BICA Bulletin – which, I am sure you will

agree, has a much better look and a more businesslike ‘feel’ to it. We talked about production – and quickly agreed to re-energise our newsletter

by going electronic.The result: the image that you see on your screen right now. So, a very warm welcome to you all. It gives me much pleasure to take part in

the launch of this the first issue of BICA Bulletin e-newsletter.Its production in this changed format reflects our ongoing commitment to

communicate effectively, attractively and timeously with our members and stakeholders in the accounting fraternity and the business community – and indeed with interested members of the public as a whole.

BICA Bulletin will arrive in your mailbox regularly, bringing you news and views, advice and entertainment. This is an excellent medium for rapid communication

and we will make the most of it, for your benefit.But communication is a two-way street, of course. We urge you to let us know what is on your mind – be it comment, compliment, or a contribution in the form of articles and other content as this is your newsletter. Your views, feedback and contributions are important to us as we strive to represent and promote the accounting profession and to fulfil our mandate of service to you.

On a personal note, I thank the Honourable Minister of Finance and the team at the Ministry of Finance and Development Planning, especially the Accountant General’s office, for all the support that they accorded BICA during my two-year tenure as President. I step down with great pride and satisfaction given the achievements to date in setting up structures to enable the implementation of the Accountants Act of 2010, most of which were made possible with your

support. I also thank the BICA Council and office bearers

for working tirelessly in the implementation of the BICA strategy and the achievements made despite the challenges. My sincere gratitude also goes to the Secretariat for diligently implementing Council decisions to ensure that we move BICA forward.

Last but not least, I thank immediate past President VJ and previous Presidents who have rendered their

support and guidance throughout my term of office, and all stakeholders for supporting me during this period. I wish my

successor well in taking BICA to greater heights andpledge my support to him/her at all times. PULA!

BICA President Tshegofatso

Modise

New name, new ways – same commitment to service

14 PAGES OF BICA NEWS

WELCOME

TO THE

LAUNCH ISSUE OF

April 2015BICA BULLETIN

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Botswana Institute ofChartered Accountants

Plot 50374 Block 32nd and 3rd floorFairgrounds Financial CentrePrivate Bag 0021Gaborone, BotswanaTel. (0267) 3972992Fax (0267) 3972982 Email bica@bica.org.bw www.bica.org.bw

Francistown Satellite OfficePlot 32753/42nd Floor FNBB BuildingBlue Jacket StreetTel. (+267) 2418280Fax (+267) 2418263Email bica@bica.org.bw www.bica.org.bw

Editorial TeamEditorOupa Gaofise

Editorial supportFeliaty TJ Ndeke, Othusitse Siele, Regina Ramanteba,Tshepang Monare, Masego Lesole

Project managerOupa Gaofise

Design and layoutKgotla Communications

ContributorsIFAC, Sonny Mabheju, Jonathan Hore

Disclaimer: The Council of Botswana Institute of Char-tered Accountants does not necessarily agree with or guarantee the accuracy of statements made by contrib-utors or advertisers, or accept responsibility for state-ments that are in this publication.

2015 BICA Bulletin is published on behalf of Botswana Institute of Chartered Accountants. No part of this work may be used in any form or by any means – graphically, electronically or mechanically, including photocopy-ing, recording, taping, information storage or retrieval system – without permission from the Institute, except in accordance with the Accountants Act or laws of Bot-swana.

IN T

HIS

ISS

UE VAT Amendment Act – how

it could affect you

CEO’s ‘getting-to-know-you’ visit to Francistown

Schedule of seminars for 2015

Exemptions and CPLs – what they are and how they work

Major changes toAuditor’s Report

Study tips

The importance of revising international education standards

Wisdom on the Wall

Something to say?Put it on the Gateway

Coming out tops atTertiary Education Fair

Netball trophy goes toErnst and Young – again

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89

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13

Botswana Institute of Chartered

Accountants

Paid-up members are reminded that the 24th Annual General Meeting of the Botswana Institute of Chartered Accountants will take place at Cresta Lodge, Samora Machel Drive, Gaborone on Thursday 23 April at 3pm. Your attendance is encouraged. The BICA Annual Report for 2014 has been sent to members.

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The Minister of Finance and Development Planning, Dr Kenneth Matambo, proposed changes to

the VAT Act in his budget presentation of February 2014, with the stated intention being to encourage ‘the intake of balanced meals for families’. The proposed changes were effected through the VAT Amendment Act No. 1 of 2015 (Amendment Act) which was promulgated on 23 January 2015. We analyse below the salient features of the Amendment Act, which amends the VAT Act CAP 50:03 (the Act).

Expansion of zero-rated goodsIt is necessary to appreciate what it means to ‘zero-rate’ goods for VAT purposes. VAT is either chargeable at the standard rate (currently 12%) or at the zero-rate (0%). Zero-rated goods are taxable but at a rate of 0%. This means that a registered person (a person who is registered with BURS for VAT purposes) who supplies such goods does not technically charge VAT on his/her supplies.

On the other hand, that person is permitted to claim VAT incurred on the acquisition of inputs into his/her business (input tax). By so doing, the registered person does not bear the input tax as a cost (i.e. he/she claims it back from BURS).

Further, the registered person does not charge VAT when making supplies of the zero-rated goods. As a result, the retail prices of zero-rated goods would be cheaper to the final consumer as they will be exclusive of VAT. If the goods are standard rated for VAT purposes, the retail prices will be more expensive as the final consumer bears the VAT as a cost.

The Amendment Act provides for the zero-rating of a number of additional basic foodstuffs. Brown bread is one of the goods that is now zero-rated but white bread remains standard-rated. Bread flour, whether it be white, brown or whole wheat, is now zero-rated. It is important to note that we now have ‘flour’ and ‘bread flour’ as zero-rated goods.

Milk of goats, sheep or cattle now forms part of the list of zero-rated goods, whether it is high fat, low fat or fat free. Interestingly, however, such milk will only be zero-rated where it has not been sweetened, flavoured, cultured or condensed, among such other similar processes.

Rice in whatever form is zero-rated except where it has been prepared for consumption. This includes rice which, among others, has been milled, husked or parboiled. In addition, samp, as long as it is not

further processed or prepared, is also now zero-rated.

Vegetables which have not been treated or cooked are now zero-rated, including preserved vegetables which retain their natural state. This includes vegetables such as potatoes, tomatoes, onions, cabbages, lettuce, beans and peas, among others. Where the vegetables are dehydrated, canned or bottled, they remain standard-

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VAT Amendment Act – how it could affect you

By JONATHANHORE

Senior TaxAdvisor KPMGBotswana

‘Businesses are advised to critically analyse how the Amendment Act will affect them and take appropriate action’

To be the leading accountancy professional body with an internationally recognised professional accountancy qualification

To protect public interest through:• Promoting the

accountancy profession• Facilitating quality

professional accountancy services through the monitoring and regulation of professional accountants

• Developing professional accountants

In order to motivate the right behaviour and culture that will support the implementation of the Vision and Mission statements, the BICA Core Values are:• Integrity• Excellence• Independence• Transparency and

Accountability

Vision

Mission

Core values

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rated. Fruits such as oranges, grapes, mangoes and avocadoes in their raw state, including those preserved, are also zero-rated.

The zero-rating of basic foodstuffs is expected to make the goods more affordable as the VAT component charged by suppliers will be removed.

Farm tractors now exemptTractors of tariff heading 8701.90 acquired by a farmer for use in a farming business (‘farm tractors’) were moved from zero-rated to exempt goods. Other tractors of the same tariff heading that are used for other purposes such as construction remain standard-rated. The Act does not prescribe how a vendor of tractors is supposed to determine whether a customer purchasing a tractor is a farmer and that he will use it for a farming business. Further, the phrase ‘farming business’ is not defined in the Act. This will certainly pose challenges to affected registered persons. It is hoped that BURS will develop guidelines to assist taxpayers.

The effect of the exemption means that input tax that is directly allocable to farm tractors may not be claimed. Some registered vendors will inevitably become mixed-suppliers for VAT, i.e. suppliers of both taxable and exempt supplies. Where the ratio of taxable supplies to total supplies does not exceed 90%, such mixed suppliers will be required to apportion input tax using the Turnover Method prescribed in section 20 of the Act.

Further, such suppliers will have to pay VAT on Imported Services (VOIS) on services that are directly allocable to exempt supplies. Further, VOIS will have to be paid on the portion that relates to exempt supplies, determined by applying the Turnover

Method. This is a complex topic and taxpayers are advised to consult their tax advisers for guidance.

VAT registration thresholds increased

In addition to providing for the zero-rating of basic foodstuffs, the Amendment Act increased the turnover threshold for compulsory VAT registration from at least P500 000 to at least P1m. Further, voluntary VAT registration was tightened by a provision which requires persons applying for such registration to have exceeded annual taxable turnover of P500 000.

This may affect taxpayers who engage in activities such as exploration, forestry and property development as they can only generate taxable supplies some time after commencement of operations. Additionally, this may negatively affect potential investors, particularly exploration companies, as they will have to bear VAT charged to them as a cost. Other countries in the region still have relaxed voluntary VAT registration criteria.

Some registered persons will deregisterAny person whose annual taxable supplies do not exceed P500 000 is now required to

deregister as prescribed in section 18 of the Act. When a registered person deregisters for VAT purposes, he/she is deemed to have made a supply of stock and assets on the date of cessation of trade. The value of supply is, per section 18(11) of the Act, the market value of the goods/assets. This is different from regional practice (RSA/Zim) where the output tax is accounted for on the lesser of cost or market value of the goods/assets. In other words, a registered person is ideally not supposed to account for more output tax than what he/she claimed on acquisition of the goods/assets.

The use of the market value as prescribed in the Act may negatively affect some registered persons who may shut down their businesses, especially those in the property industry. For instance, assuming that a VAT-registrant acquired a commercial property for P1m (VAT P120k) and the property appreciates in value to P3m, such person will be required to declare P360k as output tax on deregistration. Such output tax is paid from the registered person’s personal funds as this is a deemed supply.

Businesses are advised to critically analyse how the Amendment Act will affect them and take appropriate action.

Comments on this article can be forwarded to taxservices@kpmg.bw Disclaimer: The information contained in this article is of a general nature and is not meant to address particular circumstances of any person. KPMG does not accept legal liability for any loss occasioned through the reliance of information contained in this article.

How the VAT Amendment Actcould effect you

The effect of the exemption means that input tax that is directly allocable to farm tractors may now not be claimed.

‘Some registered persons may be negatively affected and may shut down their businesses’

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CEO’s ‘getting-to-know-you’ visit to Francistown

BICA Chief Executive Officer Verily Molatedi made the most of her first visit as CEO to Northern Region when

she attended a members and stakeholders get-together in Francistown.

It was a valuable opportunity to meet and interact, to discuss pertinent issues centred on enhancing the relationship between the Institute and its members and how best the region can be served – and to enjoy good fellowship.

The CEO met staff of the BICA satellite office and also shared ideas with Northern Committee and other members, to hear their views and appreciate their challenges.

She briefed members on measures being taken by the Institute to implement and enforce the Accountants Act of 2010, reminding them of BICA’s mandate to:

• Protect public interest through promoting the accounting profession

• Facilitate quality professional accounting services through the monitoring and regulation of professional accountants, and

• To develop professional accountants.

She noted that in terms of the Act it is a legal requirement for all accountants operating in Botswana to register with BICA, and that non-compliance carried the penalty of a fine not exceeding P500 000 or imprisonment not exceeding 10 years, or both (Section 30, No.12). It is

also a requirement that every firm that provides or intends to provide professional accounting services – i.e. accounting, taxation, management consultation, financial management and auditing – must register with the Institute (Section 33, No.12)

The CEO outlined BICA’s collaboration with key stakeholders such as the Botswana Accounting Oversight Authority (BAOA), the Pan African Federation of Accountants (PAFA), the International Federation of Accountants (IFAC), the Botswana Government and private and public sector organisations.

For their part, the members made clear their expectations of BICA and stressed that the Institute should also protect them from abuse and unethical behaviour by some members of the public.

Invited stakeholders at theBICA Francistown seminar.

From left: Carlos Chileshe, formerBICA Northern Committee Chairperson; Ananth Padmanaban, current BICA Northern Committee Chair; and Mmilili Kenneth, BICA Francistown Satellite Office Administrator.

BICA CEO Verily Molatedi

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FRANCISTOWN

GABORONE

2015CPD Events

ACTIVITY DATES CPD

Financial Intelligence Act, 2009 and 24 March 4 hoursits Implications

Advanced Excel 19-20 May 16 hours

International Standards on Auditing 16-17 April 16 hoursand Quality Control Advanced Forensics Investigation 13-14 May 16 hours(Fraud)

Taxation (VAT, Corporate Tax and 18-19 June 16 hoursComputation)

IFRS : Back to Basics 9-10 July 16 hours

Company Secretarial Seminar 6 August 8 hours

Financial Modeling in Excel 19-20 August 16 hours

IFRS for SMEs 8-9 September 16 hours

Tax Update Seminar 17 September 8 hours

Corporate Governance 15 October 8 hours

Fraud and Risk Management 12 November 8 hours

ACTIVITY DATES CPD

Financial Intelligence Act, 2009 and 26 March 4 hoursits Implications

International Standards on Auditing 13-14 April 16 hoursand Quality Control IT Audit Bootcamp 11-12 May 16 hours

Taxation (VAT, Corporate Tax 15-16 June 16 hoursand Computation)

IFRS : Back to Basics 6-7 July 16 hours

Company Secretarial Seminar 4 August 8 hours

Taxation Update Seminar 14 September 8 hours

Corporate Governance 15 October 8 hours

Fraud and Risk Management 10 November 8 hours

MAUN ACTIVITY DATES CPD

Introduction to Microsoft Excel 5-6 May 16 hours

IFRS : Back to Basics 2-3 July 16 hours

The purpose of awarding exemptions or Credit for Prior Learning (CPL) is to recognise the prior knowledge

in topics students have been taught in other earlier qualifications. The Institute aims to avoid duplication of learning and assessment. Exemptions can be awarded where one can demonstrate that BICA learning outcomes have been integrated into their programme(s).

Exemptions could be granted in up to eight modules of the Certificate and Professional Levels for academic qualifications, i.e. Accounting, Assurance, Business and Finance, Law, Management Information, Principles of Taxation, Business Strategy and Financial Management. If you have a professional qualification you may be entitled to twelve exemptions, that is, the entire certificate and the professional level modules. Law and Principles of Taxation can only be considered if you have studied the local variant papers. No credits are awarded for the Advanced Level modules.

If students hold the necessary qualifications they can apply for all available exemption. However, they do not need to apply for all the modules. They should only seek exemptions for the modules where they believe their programme(s) meet the BICA learning outcomes.

Applying for exemptionsThere are two ways in which applications for exemptions from students are assessed. If a student’s qualification has been assessed, it will be listed in the exemptions directory. This makes the work easier and faster considering the fact that the assessor checks the modules

against the data which had been captured and award to the student exemptions accordingly.

The other method is for institutions whose qualifications have not been assessed and are not list in the directory. Occasionally, the Institute receives applications from individual students whose qualifications are not listed in the directory. When such applications are received, the Institute will assess the materials supplied for the programme the students have studied and award credit on a case-by-case basis. For an award to be made, applicants should submit supporting evidence such as module syllabuses and past examination papers. The challenges that most students have experienced is that some of the Institutions do not give out these documents, which makes it difficult for assessment to be carried out.

The final method is where Institutions of higher learning apply for exemptions. The process is almost similar to students whose qualifications are not listed in the exemptions directory, except that there are additional requirements that must be met. The institutions should demonstrate that their programme assessments meet the BICA learning outcomes for the relevant BICA module, that the examinations are structured in such a way that the key areas of the BICA modules are covered, and that the assessment of topics should be of the same standards as BICA exams.

The other important element that should be considered is that the examination component for courses relevant to BICA modules should be at least 50% of the total marks available. Students must achieve a mark of 50% or more in order to be exempted from BICA modules.

Advice to studentsExemptions can be helpful for people who

have recently achieved or completed a qualification, since the concepts studied will still be fresh in their minds. If the qualification was completed some years ago it would be difficult to remember some of the material learnt, therefore studying for the examination will be the best option because it would give

one an opportunity to recall the information learnt and will ensure that they are adequately prepared to confront the more challenging higher level papers, which address topics in greater depth. Our requirement is that for academic qualifications one should have completed the qualification within five years of applying for exemptions to be considered. For professional qualifications, there is no duration as to how long one

should have completed the qualification.Exemptions may lead one to complete the

programme of study within a shorter period of time but at the same time it may prolong your completion depending on whether the skills learnt are fresh in your mind. Individuals who apply for exemptions should therefore think carefully as this may affect their progress in the qualification.

Some universities do not release their examination papers to students and outside organisations. Without the exam papers and the programme syllabus an assessment cannot be performed. Therefore, if students want to claim exemptions they must demonstrate with supporting documentation that they have fulfilled the criteria as outlined in the exemptions policy and instructions. Failure to do so would results in a declined application.

Students who want to apply for exemptions should be convinced that they acquired the necessary knowledge and skills in earlier study programmes which match the BICA syllabuses. Those with qualifications that are not in the directory must get the necessary documentation so that their applications can be assessed.

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‘No credits are awarded for the Advanced Level modules’

Exemptions and CPLs – whatthey are and how they work

By OTHUSITSE SIELE

Manager, Training, Exams, Exemptions & Accreditations

VOLUME 5ISSUE 1MAY 2015

2

The current auditor’s report has been criticised in recent years by various stakeholders who view it as boilerplate,

predictable and not very informative to the users of the financial statements about the audited entity, the audit process, and significant findings.

Calls for audit quality and high quality financial reporting have also put pressure on the current form of the auditor’s report. An enhanced auditor’s report is one of the components of audit quality and high quality financial reporting. An enhanced auditor’s report is therefore critical to the continued relevance of the auditing profession.

In order to address these issues, the International Auditing and Assurance Standards Board (IAASB) has been working on a project aimed at enhancing the communicative value and relevance of the auditor’s report. The project came to an end and on 15 January 2015 the IAASB produced a bouquet of new and revised International Standards on Auditing (ISAs) aimed at overhauling the auditor’s report for the benefit of investors and other users of financial statements.

To achieve the objective of enhancing the communicative value and relevance of the auditor’s report, the IAASB had to modify the design of the reporting ISAs to accommodate the requirements of the changing financial reporting frameworks. In all there is one new ISA, five revised ISAs, and conforming amendments to eight ISAs as follows:• ISA 700 (Revised) – ‘Forming an Opinion

and Reporting on Financial Statements’• ISA 701 – ‘Communicating Key Audit

Matters in the Independent Auditor’s Report’

• ISA 570 (Revised) – ‘Going Concern’• ISA 705 (Revised) – ‘Modifications to

the Opinion in the Independent Auditor’s Report’

• ISA 706 (Revised) – ‘Emphasis of Matter Paragraphs and other Matter Paragraphs in the Independent Auditor’s Report’

• ISA 260 (Revised) – ‘Communication with those Charged with Governance’Conforming

amendments have been made to the following ISA:• 210 – ‘Agreeing

the Terms of Audit Engagements’

• 220 – ‘Quality Control for an Audit of Financial Statements’

• 230 – ‘Audit Documentation’• 510 – ‘Initial Audit Engagements –

Opening Balances’•540 – ‘Auditing

Accounting Estimates, Including Fair Value Accounting Estimates, and Related Disclosures’

•580 – ‘WrittenRepresentations’

•600 – ‘SpecialConsiderations – Audits of Group Financial Statements (Including the Work of Component Auditors)’

•710 – ‘ComparativeInformation – Corresponding Figures and Comparative Financial Information’Coming in April 2015 is ISA 720 (Revised)

‘The Auditor’s Responsibilities Relating to Other Information’. This relates to new and revised reporting information requirements relating to other information included in an entity’s annual report.

All the changes are effective for audits

of financial years ending on or after 15 December 2016.

It is important to appreciate that changes to the revised ISAs do not change the underlying work effort an auditor has to perform in an ISA audit; rather they require

increased focus on transparency about the audit performed. It is also hoped that auditors will increase focus on matters to be reported requiring the auditor to increase professional scepticism. Management and those charged with governance are also expected to increase their attention to the audit process and disclosures in the financial statements.

EnhancementsThe outcome of the project is that the IAASB made a number of enhancements

to the new auditor’s report, with two of them applicable to audits of listed entities only.

The first major enhancement is the new requirement for auditors of listed entities to communicate clearly, concisely and in an understandable manner, entity specific key audit matters. These are matters in the auditor’s judgment were most significant in the current audit. The auditor must disclose why a matter is considered a key audit matter, how the matter was addressed during the audit, and make reference to any related disclosure in the financial statements.

The other enhancement applicable to auditors of listed entities only is to disclose the name of the engagement partner, with a ‘harm’s way’ exemption in those exceptional circumstances where such disclosure can lead to significant personal threat to the engagement partner.

As indicated, the above enhancements are specific to the audits of listed entities. Some jurisdictions may consider it necessary to extend these requirements to audits of all public interest entities.

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Major changes to auditor’s report

By SONNY MABHEJU

CorporateForensic& AdvisoryServices ‘Management

and those charged with governance are also expected to increase their attention to the audit process and disclosures in the financial statements’

‘An enhanced auditor’s report is critical to the continued relevance of the auditing profession’

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The other enhancements made are applicable to audits of all entities. The major enhancement in this category relates to the auditor’s report on going concern. The other enhancements are: presenting the opinion as the first section of the auditor’s report followed by the basis of opinion section, including an affirmative statement about the auditor’s independence and fulfillment of relevant ethical responsibilities, and enhanced description of the responsibilities of the auditors.

The enhancements relating to going concern are major and are against the background that users of financial statements require early warning of an entity’s potential going concern issues. This is more so where there are indications which cast doubt about an entity’s going concern, but after considering management’s plans to address the issues management and the auditors conclude that no material uncertainty exists (‘close call’ situation).

Management and those charged with governance are primarily responsible for communicating and disclosing going concern issues. The IAASB however believes there is a role for the auditors to play. particularly in considering the adequacy of disclosures. This compelled the IAASB to include the following in ISA 570 (Revised):

new guidance to support the auditor’s evaluation of disclosures when material going concern uncertainty exists, and a new requirement for auditors to evaluate the adequacy of disclosures in ‘close call’ situations. Consistent with this, ISA 701 also highlights that going concern uncertainties may also be key audit matters.

An enhancement to the auditor’s report when a material going concern uncertainty exists is the inclusion of a section on going concern. Where the disclosures in the financial statements are adequate, the section will be headed ‘Material Uncertainty Related to Going Concern’ and draw attention to those disclosures. Where the disclosures are inadequate, a modified opinion will be given as the first section of the auditor’s report. Additionally, all auditors’ reports are required to include a description of the respective responsibilities of the auditor and management in relation to going concern in order to provide an additional focus on going concern.

This is a major development in accounting and auditing. Professionals both in business and in the profession are encouraged to read more on this on the IFAC website and attend relevant workshops on the topic.

The IAASB intends to undertake a post-implementation review after two years from the effective date of the new auditor’s report.

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>studyt ps

PreviewRead through the major points.

QuestionsNote questions to be answered after previewing those points.

ReadRead the whole chapter thoroughly, to understand it fully.

SummarySummarise in you own way – such as notes, charts and process flows.

TestAnswer the questions that you have noted in the Questions stage.

G.R.E.A.T / G.P.A. GUIDEGo to classReview and pre-readEarly studyingAnswer questionsTake notes

Gadgets-aided learningPeers can helpAsk for past exam papers and other class work

VOLUME 5ISSUE 1MAY 2015

Recognising the trend towards global convergence and the increasing mobility of professional accountants,

the International Accounting Education Standards Board (IAESB) project to revise and redraft the suite of eight International Education Standards (IESs) will clarify the obligations of IFAC member bodies and other interested stakeholders involved with the education, development, and assessment of professional accountancy education.

Additionally, the suite of revised IESs is expected to contribute to other desirable outcomes, including the reduction in international differences in the requirements to qualify and work as a professional accountant; the facilitation of the global mobility of professional accountants; and the provision of international benchmarks against which IFAC member bodies can measure themselves.

The IESs improve the consistency and clarity by articulating the nature of professional competence in terms of technical competence, professional skills, and professional values, ethics, and attitudes. They delineate the competence areas required to perform a role as a professional accountant. In addition, they set the essential learning outcomes required to meet the public’s expectations of the professional competence to be demonstrated by

a professional accountant and audit engagement partner.

And, ultimately, the revised IESs aim to raise the level of confidence and trust of stakeholders in the work of professional accountants.

Initial ProfessionalDevelopment (IPD)The revised IESs have benefited from a wide-ranging consultation that accords with rigorous due process, including oversight by the Public Interest Oversight Board (PIOB). The revised IESs not only protect the public interest by setting entry requirements for professional accounting education programmes, but also elevate the standard required of professional accounting education programmes by delineating 18 competence areas and 82 learning outcomes required of the aspiring professional accountant.

They go beyond knowledge of principles, standards, concepts, facts, and procedures; they require the integration and application of technical competence, professional skills, and professional values, ethics, and attitudes.

The IAESB’s revision project has ensured that professional accounting education programmes will be in sync with cutting-edge advances in accounting education that are being incorporated into top-tier accounting programmes in universities across the United States, Europe and Australia. In addition, the revised IESs set clear requirements for IFAC member bodies and other PAOs on entry to professional accounting education programmes

(i.e. IES 1), content of professional accounting education (IESs 2, 3, & 4), practical experience (IES 5), and assessment (IES 6). These education standards lay the foundation for further learning and

development in which professional accountants are required through continuing professional development (CPD) and one of the specialisations of accountancy, auditing, to develop and maintain their professional competence.

Continuing Professional Development (CPD)The revision project has also extended to the redrafting of IES 7 on CPD so as to improve its clarity. IES 7, Continuing Professional Development (Redrafted), continues to require that all professional accountants undertake CPD, regardless of sector or size of the organisation in which they work. CPD plays an important part in enabling professional accountants to develop and maintain a level of professional competence that is relevant to their role. All professional accountants have an obligation of due care to their clients, employers and other relevant stakeholders – and are expected to demonstrate their ability to competently discharge this responsibility.

IES 7 also requires measuring CPD, which can be achieved by three alternative approaches: output-based (professional competence demonstrated by way of outcomes); input-based (professional competence established by the amount of learning activity); and a combination approach (professional competence achieved by combining elements of input- and output-based approaches). This type of requirement provides the member body with flexibility in measuring CPD activity.

In addition, IES 8, Professional Competence for Engagement Partners Responsible for Audits of Financial Statements (Revised), prescribes the professional competence that professional accountants are required to develop and maintain when performing the role of an engagement partner responsible for audits of financial statements. IES 8 is primarily aimed at IFAC member bodies, but recognises the shared responsibilities of engagement

Continued on following page

The importance of revisingInternational Education Standards

By PETERWOLNIZER

Immediate past Chair, International Accounting Education Standards Board

‘These revisions aimto raise the level of confidence and trust of stakeholdersin the work of professional accountants’

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partners, public accounting firms, and regulators as part of the system of quality control for engagement teams performing audits of financial statements. This standard will also be of interest to employers, regulators, government authorities, educational organisations, and any other stakeholders who support the learning and development of professional accountants.

The IAESB recognises that continuing professional development develops and maintains competence of professional accountants performing the role of engagement partner. Accordingly, the IAESB has specified learning outcomes that engagement partners must achieve to demonstrate competence in areas relating to technical competence, professional skills, and professional values, ethics, and attitudes.

As the career of an engagement partner progresses, practical experience also becomes increasingly important in

maintaining and further developing the necessary depth and breadth of professional competence.

Supporting Adoption and ImplementationFollowing the approval of the revised IES 8,

the IAESB will focus its work on supporting the adoption and implementation of the revised IESs.

In completing my term as IAESB Chair, I leave the Education Board to move ahead on the next three-year work programme, which combines completing the current projects and introducing new projects that will support the adoption and implementation of the IESs, and preparing to conduct a review of the impact of the revised IESs.

I am confident that new Chair, Chris Austin, will successfully lead the IAESB work programme as it aims to accelerate and enhance the required capacity and capability of IFAC member bodies and other professional accountancy organisations to implement these revised IESs in an effective and efficient manner.

‘Developing and maintaining the competence of professional accountants performing the role of engagement partner’

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Look tothis Day

Look to this day

for it is life, the very life of life.In its brief course lie all the realities

and truths of existence;

The joy of growth, the splendour of action,

the glory of power.

For Yesterday is but a memory and Tomorrow is only a vision,

but Today well lived makes every yesterday a memory of happiness

and every tomorrow a vision of hope.

Look well, therefore, to this day.

KALIDASA 5th Century Sanskrit poet

WISDOM ON THE WALL

Our thanks go to all the writers who contributed to the inaugural year of the Global Knowledge Gateway.

Viewpoints hosted on the Gateway in 2014 covered a wide variety of topics and featured opinions from professional accountancy organisation CEOs, regulators, academics and industry experts. Looking back on the year, several common themes described the authors’ concerns, priorities, and visions for the future.

Strong calls for reform in government and the public sector

Viewpoints from former IFAC CEO Ian Ball; the Hon. David M. Walker; Andreas Bergmann, Chair, International Public Sector Accounting Standards Board; and Ken Warren, Chief Accounting Adviser, Treasury of the Government of New Zealand, all called for reform of public sector finances. They emphasised the need for greater accountability, accrual-based accounting, and the adoption of International Public Sector Accounting Standards (IPSASs) in jurisdictions around the world as indispensable steps toward meeting the long-term needs of society. Policymakers and elected officials are being called upon to recognise the threats and opportunities surrounding these issues and how the accounting profession can play a leading role in mitigating them.

Regulatory pressures and changes have global implicationsJens Roder, Secretary General and CEO of Nordic Federation of Public Accountants, and Yves Nicolas, President,

and Cedric Gelard, Technical Director, CNCC, provided insights into how regulatory changes undertaken by the European Commission will have costs and impacts on the global accountancy profession. While James Turley, former Global Chairman and CEO, EY; David Wright, Secretary General, IOSCO; and IFAC CEO Fayez Choudhury each contributed viewpoints addressing the importance of high quality professional standards for financial reporting, auditing, and ethics, it is clear that support from all major financial institutions worldwide, as well as the G-20, will be critical for the convergence of international standards. On a different note, the Hon. Pierre Pettigrew, former Canadian Minister for Foreign Affairs and International Trade, called for reduced international regulatory barriers to facilitate greater trade in professional services across borders.

The need for reform of taxation systemsFriedrich Roedler, Chair of the Federation of European Accountants Tax Policy Group, and Russell Guthrie, IFAC Executive Director, Professional Relations and CFO, drew attention to the need for reform of taxation systems internationally. Governments are finding it difficult to sustain their tax bases in light of stressed economies and increasingly mobile and sophisticated taxpayers. Governments should arrive at taxation outcomes that are clear, operate fairly, and are appropriate for today’s global economic environment.

The need for integrated reportingMervyn King, Chair of the International Integrated Reporting Council; Helen Brand, Chief Executive, Association of Chartered Certified Accountants; and Alta Prinsloo, Executive Director, IFAC Strategy and Chief Operating Officer, stressed the benefits of integrated reporting in a world that is becoming increasingly aware that financial information alone cannot provide a comprehensive picture of the health, sustainability, and social and environmental

impacts of an organisation. The accountancy profession and all those charged with financial leadership are encouraged to embrace integrated reporting from the bottom up.

Strengthening the role of the accountant – education and beyondKatherine Schipper and Thomas Keller, Professors of Accounting at Duke University, and Donna Street, Professor, University of Dayton, discussed the merits of the Deloitte International Association for Accounting Education and Research Scholarship programme, which was launched in February 2013. The programme provides scholars with mentors, successful senior accounting educators and researchers who commit to aiding their professional development. Charles Tilley, CEO of the Chartered Institute of Management Accountants, discussed the launch of Global Management Accounting Principles, which are designed to help CFOs assess and improve the quality of the management accounting practices and processes used in their organisations. IFAC CEO Fayez Choudhury examined the role of the accounting profession in relation to other professions and institutions in the financial reporting supply chain.

Thinking about change and trends for the futureViewpoints on the Gateway also looked at other trends affecting the global accounting profession. IFAC CEO Fayez Choudhury examined the accounting implications for digital currencies such as bitcoin. Eamonn Siggins, Chief Executive Officer, CPA Ireland, raised awareness of the role that professional accountancy organisations should play in supporting small- and medium-sized practices and enterprises in today’s post-financial crisis environment. Jaseem Ahmed, Secretary General, Islamic Financial Services Board, offered insights into the rise of Islamic finance and the general principles on which it is based, as a lead-up to the launch of the Gateway’s Islamic finance section.

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Something to say?Put it on the Gateway

By ELI R.KHAZZAM

Editor-in-Chief,IFAC GlobalKnowledgeGateway

Botswana Institute of Chartered Accoun-tants reinforced its leading position in the accountancy profession by taking first prize in the Best Professional Bodies category at the Botswana Tertiary Education Fair in Gabo-rone (25-28 March).

The inviting and busy BICA stand attracted much attention from young visitors who were keen to learn about careers in accountancy.

BICA is a regular and enthusiastic par-ticipant at the Fair, where it successfully ad-dresses its target audience with information and counselling about opportunities in the accounting profession, with emphasis on the BICA Qualification.

The Tertiary Education Fair – this year with the theme Gateway to Realising Your Potential and Shaping Your Future – followed the Botswana Tertiary Education Conference (23-25 March), in which BICA was also active.

BICA is mandated to promote the ac-countancy profession, to facilitate quality professional accounting services through the monitoring and regulating of professional ac-countants, as well as to develop professional accountants.

The Institute introduced its own profes-sional accounting qualification – the BICA – following the passing of the Accountants Act of 2010. This was made possible through a twinning arrangement with the Institute of Chartered Accountants in England and Wales (ICAEW).

‘Key to the BICA Qualification is the unique element of Practical Work Experience (PWE), which students undergo while studying with Approved Training Employers,’ says Feliaty Ndeke, BICA Director of Training and Profes-sional Development. ‘BICA students undergo 450 hours of PWE within an approved train-ing period, and this ensures that we produce well rounded graduates. This element is imperative.’

The qualification is offered to postgradu-ates who hold any degree recognised by BICA as being equivalent to a degree from the University of Botswana, AAT graduates, CAT, ACCA students who passed ACCA Part 1, CIMA students who passed CIMA Certifi-

cate in Business Accounting, and members of ACCA or CIMA or any other IFAC recognised accountancy body. Such entry requirements are reviewed from time to time in consulta-tion with the relevant stakeholders

The BICA Qualification is currently being offered at Arthur Portland, Botswana Accoun-tancy College, Ba Isago University College, Botho University and Imperial School of Busi-ness and Science

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BICA comes out topsat Tertiary Education Fair

Proud bearers of the Best Professional Bodies trophy are (from left) Joseph Gontse, Masego Lesole, Khumoetsile Modisa and Oupa Gaofise.

Tumelo Tsheole (above) and Pule Mogale (left) field questions from eager young visitors to the prizewinning BICA stand at Botswana Tertiary Education Fair.

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The day was cool but the competition was hot at the annual BICA netball tournament, sponsored for the third year running by the Office of the Auditor General.

Five teams turned out to do friendly but spirited battle at the University of Botswana netball courts – KPMG, Office of the Auditor General, Ernst and Young, BICA and Mazars.

While some seemingly had it easy in the group stages, crushing their opponents to qualify for the quarter finals, others fell by the wayside. BICA and KPMG were such early casualties.

The tournament climaxed with Ernst and Young defeating OAG to claim the 2015 trophy, with Mazars settling for 3rd place.

Good sport, fun and fellowship were enjoyed by players and spectators alike at the event, which marked the successful opening of the BICA sporting calendar for the 2015 season.

Netball trophy goes toErnst and Young – again