International Federation of AccountantsInternational Federation of Accountants

International Education Standards for International Education Standards for Professional AccountantsProfessional Accountants

Mark Allison, Executive DirectorMark Allison, Executive DirectorInstitute of Chartered Accountants of ScotlandInstitute of Chartered Accountants of Scotland

and Technical Advisor to IFAC Education and Technical Advisor to IFAC Education Committee 1998 - 2005Committee 1998 - 2005

Presentation Outline

About IFAC

Harmonisation of International Standards through education

International acceptance and benefits

IFAC Education Board

Overview of International Education Standards

IFAC TodayIFAC Today

Comprehensive set of standards on auditing, ethics, education, and public sector financial reporting

Expanding network of 158 member bodies in 118 countries, representing 2.5 million accountants

Increasing recognition of IFAC’s work by international organizations

IFAC’s Mission

To serve the public interest, strengthen the worldwide accountancy profession and contribute to the development of strong international economies

IFAC Achieves this Mission by -

Establishing and promoting adherence to high quality standards

Furthering international convergence

Speaking out on public policy issues

Harmonisation of International Standards

Harmonisation key issue for profession

Solid foundation to support application of international standards

Education provides foundation

Benefits of IES to Profession

Provide consistent global framework of education

Promote consistency and convergence in accounting education processes

Advance convergence in the application of technical and practice standards

Support greater mobility of accountantsContribute to co-operation among member

bodies

Education Board (IAESB)

Develops standards and guidance for education and development of professional accountants

Transparency in standard-setting process

Members include practicing accountants, academics, representatives from business and the public

Observers from international accounting academic community and UNCTAD

Standards Development

Decision to develop Education Standards November 2001

Exposure drafts released July 2002

Consideration of comments

International Education Standards (1 -6) issued October 2003

Support of academics, employers

IES7 issued May 2004

Implementation of Education Standards

Compliance required by all IFAC member bodies

– January 2005, IES 1 – 6

– January 2006, IES 7

Recognise different education systems and processes

Acknowledge stages of development

International Education Standards

Set benchmarks for education of worldwide accountancy profession

Ensure quality and consistency in accounting education

Foundation to achieve convergence of international accounting, auditing, public sector standards

Different approaches around the world

International Education Standards

Prescribe the range of professional knowledge, professional skills, professional values, ethics and attitudes required

Develop an attitude of lifelong learning

Framework and Introduction

Framework – objectives and operating procedures of EDCOM

Introduction– purpose, scope and development of IES– discussion about way standards may be adopted

and applied

IES 1, Entry Requirements

Requirements for entry to a programme of professional accounting education and practical experience

Aim to ensure students have background to have reasonable chance of achieving success

IES 2, Content of Professional Accounting Education Programs

Prescribes knowledge and competences candidates require to function as a professional accountant– Accounting, finance and related knowledge– Organisational and business knowledge– IT knowledge and competences

Degree or professional qualification At least two years full time study

IES 3, Professional Skills

Prescribes the mix of professional skills required

– Intellectual skills– Technical and functional skills– Personal skills– Interpersonal and communication skills– Organisational and business management skills

General education helps to develop these skills

IES 4, Professional Values, Ethics and Attitudes

Prescribes the professional values, ethics and attitudes required

Prescribes minimum subject areas

Acknowledge different approaches will reflect national and cultural environment

IES 5, Practical Experience Requirements

Aims to ensure candidates have the necessary practical experience to become a professional accountant

Minimum of 3 years’ practical experience Guidance of experienced professional

accountant Record of experience and review

IES 6, Assessment of Professional Capabilities and Competence

Final assessment before qualification as a professional accountant

Test of theoretical knowledge and practical application of knowledge

Reliable and valid

IES 7, Continuing Professional Development

Mandatory CPD for all professional accountants Foster commitment to lifelong learning Facilitate access to CPD opportunities Establish benchmarks for development and

competence of professional accountants Monitor and enforce CPD

IES 7, Continuing Professional Development

Three approaches Input approach – 120 hours, three year

rolling period Output approach Combination approach

IES8 (Draft) Competence for Audit Professionals

Audit of historic financial information All IES1-7 and additional advanced

knowledge Graduate level Audit specific skills Application of ethics in an audit context Specific work experience To be issued July 2006

European Union – Revised Eighth Directive

Final draft stage (May 2006 published) Two years to implement to national law Articles 6 – 14 Education related Similar to current Eighth Directive applied in

EU member states

European Union – Revised Eighth Directive

However changes in: International accounting and auditing standards Auditing professional skills Ethics and independence Risk management Corporate governance Continuous education

Increasing links to IES evident

More information

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