International

Education Standards for Professional Accountants

Prof. Dr. DHC Alain BURLAUD Emeritus

Three main standards setters

1.

2.

3.

International Accounting Education Standards Board (IAESB) Common Content (European professional bodies) Eighth European Directive of the Parliament and the Council

1/ IAESB

’

s IAES

11.What is the IAESB?

IAESB is an independent standard-setting body that serves the public interest by strengthening the worldwide accountancy profession through the development and enhancement of education. It increases the competence of the global accountancy profession, contributing to strengthened public trust.

1/ IAESB

’

s IAES

12. Why International Accounting Education Standards?

A common reference point or benchmark is required to: minimize differences among countries, implement international standards, increase the opportunity for mobility of labor, contribute to the global economy.

1/ IAESB

’

s IAES

13. What does the IAESB do?

IAESB sets high-quality accounting education standards and guidance. Its publications include: International Accounting Education Standards (IAESs), International Education Practice Statements (IEPSs), International Education Information Papers (IEIPs), Support material, such as toolkits or interpretation guidance. The IAESB also acts as a catalyst in bringing together the developed and developing nations, as well as nations in transition.

1/ IAESB

’

s IAES

14. Who comprises the IAESB?

IAESB consists of: a chairman, a deputy chairman, and 16 members, all volunteers from around the world, comprising accounting academics, practitioners in public practice, accountants in business, the public, and other individuals with an interest in its work.

1/ IAESB

’

s IAES

15. How does the IAESB set global education standards?

The IAESB follows a rigorous due process, including an international exposure and consultation process.

Transparency is an essential component of the standard-setting process. IAESB ’s quarterly meetings are open to the public.

1/ IAESB

’

s IAES

16. IAESB structure and governance Public Interest Oversight Board

The

PIOB

oversees the IAESB and the CAG to ensure that their activities respond properly to the public interest. There are 10 PIOB members nominated by the International Organization of Securities Commissions, the Basel Committee on Banking Supervision, the International Association of Insurance Supervisors, the World Bank, and the European Commission.

IAESB Consultative Advisory Group

The

CAG

ensures that the public’s interest is represented in the development and maintenance of IAESB’s standards, agenda, project timetable, and priorities. The CAG is made up of regulators, preparers of financial information, and others with an interest in international auditing and assurance.

IAESB

The IAESB consists of 18 volunteer members.

8

1/ IAESB

’

s IAES

17.IAESB

’s publications.

171.International Accounting Education Standards (IAES) Framework for IAES Glossary of Terms IAES 1: Initial Professional Development (IPD): Entry Requirements to a Program of Professional Accounting Education IAES 2: IPD: Technical Competence IAES 3: IPD: Professional Skills IAES 4: IPD: Professional Values, Ethics and Attitudes IAES 5: IPD: Practical Experience Requirements for Aspiring Professional Accountants IAES 6: IPD: Assessment of Professional Capabilities and Competence IAES 7: Continuing Professional Development (CPD) IAES 8: Professional Development for Engagement Partners Responsible for Audits of Financial Statements

1/ IAESB

’

s IAES

172.

International Education Practices (IEP): IEP 1 – Recognition of Pre-Certification Education Providers by IFAC Member Bodies IEP 2 – Toward Competent Professional Accountants IEP 3 – Assessment Methods. Accommodation of Candidates with Disabilities (IES 6 Support Material) 173. Accountancy Education Support Material (AESM) & Studies: AESM: Assistance Projects in Accountancy Education and Development AESM: Competence-Based Approaches to the Preparation of Professional Accountants AESM: Approaches to Continuing Professional Development (CPD) Measurements Study: An Advisory on Education and Training of Technical Accounting Staff

1/ IAESB

’

s IAES

18. IAES: Main requirements

– IAES 1: Same entry requirement as for a University degree – IAES 2: Input: at least 3 years full-time study / Output: acquire the necessary competencies – – – – – – IAES 3: Professional skills IAES 4: Professional values, ethics & attitudes IAES 5: Practical experience: 3 years IAES 6: Assessment IAES 7: CPD: Input: 40 h / Year IAES 8: Audit

1/ IAESB

’

s IAES

19. IAES: Main debates

– Should IAES apply to all professional accountants? Management accountants? Public sector?

– Input or output approach? Relevant vs reliable (measurable and verifiable).

– Are competencies global or specific to a local environment and culture?

2/ Common Content

21. Participating Member Bodies: Compagnie Nationale des Commissaires aux Comptes (CNCC) Ordre des Experts-Comptables (OEC) Institut der Wirtschaftsprüfer (IDW) Wirtschaftsprüferkammer (WPK) Chartered Accountants Ireland (CAI) Consiglio Nazionale dei Dottori Commercialisti ed Esperti Contabili (CNDCEC) Koninklijk Nederlands Instituut van Registeraccountants (NIVRA) Institute of Chartered Accountants in England and Wales (ICAEW) Institute of Chartered Accountants of Scotland (ICAS )

2/ Common Content

22. Represented countries:

– – – – – – France Germany Ireland Italy Netherland United Kingdom

2/ Common Content

Professional Accountants

23. Curriculum

Integrate knowledge and w ork exper ience in a busines s and finance context, w orking to the highest prof essional and ethical sta ndards - - - - - - - - - - - Cor e Services and Functions - - - - - - - - - - T a x a ti o n a n d re l a te d c h a rg e s m a n a g e m e n t B u s in e s s F i n a n c e B u s in e s s M a n a g e m e n t A s s u ra n c e a n d re l a te d s e r v i c e s P e r fo r m a n c e R e p o r ti n g Sept. 2005 B usines s, Financial, L egal and IT knowledge Contenu commun 8

2/ Common Content

24. Documents issued: Qualifications Requirements Learning Outcomes and Knowledge Skills Framework Compliance Manual See: www. commoncontent.com/

3/ Eighth European Directive

31. DIRECTIVE 2006/43/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 17 May 2006 on statutory audits of annual accounts and consolidated accounts, amending Council Directives 78/660/EEC and 83/349/EEC and repealing Council Directive 84/253/EEC

3/ Eighth European Directive

32. Article 6 Educational qualifications Without prejudice to Article 11, a natural person may be approved to carry out a statutory audit only after having attained university entrance or equivalent level, then completed a course of theoretical instruction, undergone practical training and passed an examination of professional competence of university final or equivalent examination level, organised or recognised by the Member State concerned.

3/ Eighth European Directive

33. Article 7 Examination of professional competence The examination of professional competence referred to in Article 6 shall guarantee the necessary level of theoretical knowledge of subjects relevant to statutory audit and the ability to apply such knowledge in practice. Part at least of that examination shall be written.

3/ Eighth European Directive

34.Article 8 Test of theoretical knowledge 1 . The test of theoretical knowledge included in the examination shall cover the following subjects in particular: (a) general accounting theory and principles; (b) legal requirements and standards relating to the preparation of annual and consolidated accounts; (c) international accounting standards; (d) financial analysis; (e) cost and management accounting; (f) risk management and internal control; (g) auditing and professional skills; (h) legal requirements and professional standards relating to statutory audit and statutory auditors; (i) international auditing standards; (j) professional ethics and independence.

3/ Eighth European Directive

Article 8 Test of theoretical knowledge 2. It shall also cover at least the following subjects insofar as they are relevant to auditing: (a) company law and corporate governance; (b) the law of insolvency and similar procedures; (c) tax law; (d) civil and commercial law; (e) social security law and employment law; (f) information technology and computer systems; (g) business, general and financial economics; (h) mathematics and statistics; (i) basic principles of the financial management of undertakings

3/ Eighth European Directive

35. Article 9 Exemptions 1. By way of derogation from Articles 7 and 8, a Member State may provide that a person who has passed a university or equivalent examination or holds a university degree or equivalent qualification in one or more of the subjects referred to in Article 8 may be exempted from the test of theoretical knowledge in the subjects covered by that examination or degree.

3/ Eighth European Directive

36. Article 10 Practical training 1. In order to ensure the ability to apply theoretical knowledge in practice, a test of which is included in the examination, a trainee shall complete a minimum of three years' practical training in, inter alia, the auditing of annual accounts, consolidated accounts or similar financial statements. At least two thirds of such practical training shall be completed with a statutory auditor or audit firm approved in any Member State.

3/ Eighth European Directive

37.Article 13 Continuing education Member States shall ensure that statutory auditors are required to take part in appropriate programs of continuing education in order to maintain their theoretical knowledge, professional skills and values at a sufficiently high level, and that failure to respect the continuing education requirements is subject to appropriate penalties as referred to in Article 30.

Conclusion & Debate

Are education standards compatible with academic freedom?

Does mobility of labor require education standards?

Are education standards useful only for auditors?

Thank you!