Revision of IESs – 
Implications & Opportunities 
Page 1 | Confidential and Proprietary Information 
Prof. Peter Wolnizer ...
Introduction 
Page 2 | Confidential and Proprietary Information 
Outline of Presentation 
1. 
• Description of IFAC & IAES...
Who Is IFAC? 
IFAC & IAESB Overview 
• Global organization of the accountancy 
profession, dedicated to the public interes...
What IFAC Does? 
IFAC & IAESB Overview 
• Serves the public interest 
• Develop high-quality standards & guidance 
• Facil...
IAESB Overview 
International Auditing and Assurance 
Standards Board 
International Ethics Standards Board 
for Accountan...
IAESB Overview 
Page 6 | Confidential and Proprietary Information 
What Is Our Purpose? 
STATEMENT of PURPOSE: 
“The IAESB...
IAESB Overview 
Page 7 | Confidential and Proprietary Information 
What Is Our Mission? 
MISSION STATEMENT: 
“ To serve th...
IAESB Overview 
Enhancing Education By: 
• Contributing to the ability of the accountancy 
profession to meet the needs of...
IAESB Overview 
What Are Our Objectives? 
To serve the public interest by 
• Establishing a series of high quality standar...
How Do We Operate? 
A shared standard-setting process involving 
• Volunteer members - including practicing 
accountants, ...
How Do We Operate? (continued) 
IAESB Overview 
Rigorous due process subject to PIOB review 
Expose draft Standards for pu...
IESs Overview 
Page 12 | Confidential and Proprietary Information 
Important Characteristics 
International 
Education 
St...
IESs Overview 
A Set of interlinked Standards covering initial & 
continuing professional development that: 
Page 13 | Con...
IESs Overview 
Initial & Continuing Professional Development 
Page 14 | Confidential and Proprietary Information 
Initial ...
IESs Overview 
Current International Education Standards 
Page 15 | Confidential and Proprietary Information 
IES 1, Entry...
Revision of IESs 
Page 16 | Confidential and Proprietary Information 
Project Objectives for Revision of IESs: 
Improving ...
Revision of IESs 
IES 1, Entry Requirements To A Program Of 
Professional Accounting Education 
Page 17 | Confidential and...
Revision of IESs 
Page 18 | Confidential and Proprietary Information 
IES 2, Content of Professional Accounting 
IES 2 
• ...
Revision of IESs 
Page 19 | Confidential and Proprietary Information 
Learning Outcome Table 
Competence Area 
(Proficienc...
Revision of IESs 
Page 20 | Confidential and Proprietary Information 
Level of Proficiency 
Level of Proficiency Descripti...
Revision of IESs 
IES 3, Professional Skills and General Education 
Page 21 | Confidential and Proprietary Information 
IE...
Revision of IESs 
IES 4, Initial Professional Development – 
Professional Values, Ethics, and Attitudes 
Page 22 | Confide...
Revision of IESs 
IES 5, Practical Experience Requirements 
Page 23 | Confidential and Proprietary Information 
IES 5 
• A...
Revision of IESs 
IES 6, Assessment of Professional Capabilities and 
Page 24 | Confidential and Proprietary Information 
...
Revision of IESs 
IES 7, Continuing Professional Development 
Page 25 | Confidential and Proprietary Information 
IES 7 
•...
Revision of IESs 
IES 8, Competence Requirements for Audit Professionals 
Page 26 | Confidential and Proprietary Informati...
Application of IESs 
How Standards are Used? 
World Bank’s Reports on the Observance of 
Standards and Codes (ROSC) initia...
Page 28 | Confidential and Proprietary Information 
Implication of Revised Standards 
IES Status Developed 
PAO 
Developin...
Page 29 | Confidential and Proprietary Information 
Sources of Information 
www.iaesb.org 
THANK YOU 
Information
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Revision of IESs – Implications & Opportunities

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Presentation by Professor Peter Wolnizer , IAESB Chair and David McPeak, IAESB Senior Technical Manager for the Institute of Cost and Management Accountants of Pakistan , April 24, 2014

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Transcript of "Revision of IESs – Implications & Opportunities"

  1. 1. Revision of IESs – Implications & Opportunities Page 1 | Confidential and Proprietary Information Prof. Peter Wolnizer IAESB Chair David McPeak IAESB Senior Technical Manager ICMA Pakistan April 24, 2014
  2. 2. Introduction Page 2 | Confidential and Proprietary Information Outline of Presentation 1. • Description of IFAC & IAESB 2. • Overview of IESs 3. • Revision of IESs 4. • Implications of Revised IESs 5. • Application of IESs
  3. 3. Who Is IFAC? IFAC & IAESB Overview • Global organization of the accountancy profession, dedicated to the public interest • Comprised of 179 member bodies and associates Page 3 | Confidential and Proprietary Information in 130 countries • Represents 2.5 million accountants in public practice, education, government, service, industry, and commerce
  4. 4. What IFAC Does? IFAC & IAESB Overview • Serves the public interest • Develop high-quality standards & guidance • Facilitate the adoption & implementation • Contribute to the development of strong PAOs & Page 4 | Confidential and Proprietary Information accounting firms • Contribute to high-quality practices by professional accountants • Promote the value of professional accountants worldwide • Speak out on public interest issues
  5. 5. IAESB Overview International Auditing and Assurance Standards Board International Ethics Standards Board for Accountants International Public Sector Accounting Standards Board International Accounting Education Standards Board Page 5 | Confidential and Proprietary Information Four Standard-Setting Boards
  6. 6. IAESB Overview Page 6 | Confidential and Proprietary Information What Is Our Purpose? STATEMENT of PURPOSE: “The IAESB exists, in the public interest, to raise the level of confidence and trust of stakeholders in the work of professional accountants.”
  7. 7. IAESB Overview Page 7 | Confidential and Proprietary Information What Is Our Mission? MISSION STATEMENT: “ To serve the public interest by strengthening the worldwide accountancy profession through the development and enhancement of education.”
  8. 8. IAESB Overview Enhancing Education By: • Contributing to the ability of the accountancy profession to meet the needs of decision makers • Increasing the competence of the global accountancy profession, contributing to strengthened public trust Page 8 | Confidential and Proprietary Information
  9. 9. IAESB Overview What Are Our Objectives? To serve the public interest by • Establishing a series of high quality standards and other publications reflecting good practice in the education, development and assessment of professional accountants • Promoting the adoption and implementation of the International Education Standards (IESs) • Developing education benchmarks for measuring Page 9 | Confidential and Proprietary Information the implementation of the IESs • Advancing international debate on emerging issues relating to the education, development and assessment of professional accountants
  10. 10. How Do We Operate? A shared standard-setting process involving • Volunteer members - including practicing accountants, academics, representatives from business, the forum of firms and the public • Public Interest Oversight Board (PIOB) - oversight of Page 10 | Confidential and Proprietary Information Board’s activities • Consultative Advisory Group (CAG) – strategic and operational advice • IFAC staff – facilitate structures and processes that support the operations of the IAESB IAESB Overview
  11. 11. How Do We Operate? (continued) IAESB Overview Rigorous due process subject to PIOB review Expose draft Standards for public comment Page 11 | Confidential and Proprietary Information Have public members Receive input through Consultative Advisory Groups
  12. 12. IESs Overview Page 12 | Confidential and Proprietary Information Important Characteristics International Education Standards Audience IFAC Member Bodies Coverage Policy & Professional Accounting Education Programs Level of Authority “To Prescribe …” Scope “Advancing accountancy profession by establishing benchmarks..”
  13. 13. IESs Overview A Set of interlinked Standards covering initial & continuing professional development that: Page 13 | Confidential and Proprietary Information Prescribe the knowledge, skills, values, ethics and attitudes required of a professional Develop skills for life-long learning Focus on learning outcomes, not inputs Promote consistency in accounting education
  14. 14. IESs Overview Initial & Continuing Professional Development Page 14 | Confidential and Proprietary Information Initial Professional Development Entry Requirements for Professional Accounting Education Content of Professional Accounting Education Practical Experience Assessment Continuing Professional Development Continuing Professional Development Specialization
  15. 15. IESs Overview Current International Education Standards Page 15 | Confidential and Proprietary Information IES 1, Entry Requirements to a Program of Professional Accounting Education IES 2, Content of Professional Accounting Education Programs IES 3, Professional Skills & General Education 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 IES 8, Competence Requirements of Audit Professionals Initial Professional Development Continuing Professional Development
  16. 16. Revision of IESs Page 16 | Confidential and Proprietary Information Project Objectives for Revision of IESs: Improving clarity Ensuring consistency with concepts of the revised Framework document Clarifying issues resulting from changes in the environment of accounting education and the experience gained from implementation of the Standards by IFAC member bodies
  17. 17. Revision of IESs IES 1, Entry Requirements To A Program Of Professional Accounting Education Page 17 | Confidential and Proprietary Information IES 1 • Aim to ensure students have background to have reasonable chance of achieving success • Requires education at least equivalent to enter a university degree program or equivalent REVISED IES 1 • Prescribe principles for setting & communicating educational requirements for entry • Specify that educational entry requirements allow entrance only to those with a reasonable chance of completing the program • Require publically available information to help individuals assess their own chances of completing a professional accounting education program
  18. 18. Revision of IESs Page 18 | Confidential and Proprietary Information IES 2, Content of Professional Accounting IES 2 • Aim is to ensure that candidates have advanced professional accountancy knowledge to function as competent professional accountants. • Content of professional accounting education includes: • Accounting, finance and related knowledge • Organizational and business knowledge • IT knowledge and competences REVISED IES 2 • Prescribes learning outcomes to achieve technical competence • Review education programs to achieve learning outcomes • Require assessment activities that measure the achievement of technical competence of aspiring professional accountants Education Programs
  19. 19. Revision of IESs Page 19 | Confidential and Proprietary Information Learning Outcome Table Competence Area (Proficiency Level) Learning Outcome Financial Accounting & Reporting (i) Apply accounting principles to transactions and other events. (Intermediate) (ii) Apply International Financial Reporting Standards (IFRSs) or other relevant standards to transactions and other events. (iii) Evaluate the appropriateness of accounting policies used to prepare financial statements. (iv) Prepare financial statements, including consolidated financial statements, in accordance with IFRSs or other relevant standards. (v) Interpret financial statements and related disclosures. (vi) Interpret reports that include non-financial data, for example, sustainability reports and integrated reports.
  20. 20. Revision of IESs Page 20 | Confidential and Proprietary Information Level of Proficiency Level of Proficiency Description Intermediate Typically, learning outcomes in a competence area focus on: • Independently applying, comparing, and analyzing underlying principles and theories from relevant areas of technical competence to complete work assignments and make decisions; • Combining technical competence and professional skills to complete work assignments; • Applying professional values, ethics, and attitudes to work assignments; • Presenting information and explaining ideas in a clear manner, using oral and written communications, to accounting and non-accounting stakeholders. Learning outcomes at the intermediate level relate to work situations that are characterized by moderate levels of ambiguity, complexity, and uncertainty.
  21. 21. Revision of IESs IES 3, Professional Skills and General Education Page 21 | Confidential and Proprietary Information IES 3 • Aim is to ensure that candidates are equipped with the appropriate mix of skills to function as professional accountants • Skills of professional accounting education include: • Intellectual • Technical and functional • Personal • Interpersonal & communication • Organizational & business management REVISED IES 3 • Prescribes learning outcomes to achieve professional skills • Review education programs to achieve learning outcomes • Require assessment activities that measure the achievement of professional skills of aspiring professional accountants • No requirements relating to general education
  22. 22. Revision of IESs IES 4, Initial Professional Development – Professional Values, Ethics, and Attitudes Page 22 | Confidential and Proprietary Information IES 4 • Aim is to ensure that candidates are equipped with the appropriate professional values, ethics, and attitudes to function as professional accountants • Framework for exercising professional judgment and acting in an ethical manner • Acknowledge different approaches to reflect national and cultural environment REVISED IES 4 • Prescribes learning outcomes to achieve professional values, ethics & attitudes • Review education programs to achieve learning outcomes • Require assessment activities that measure the achievement of professional values, ethics & attitudes of aspiring professional accountants
  23. 23. Revision of IESs IES 5, Practical Experience Requirements Page 23 | Confidential and Proprietary Information IES 5 • Aim is to ensure that candidates have acquired the practical experience considered appropriate at the time of qualification to function as professional accountants. • Minimum of 3 years’ practical experience • Need to record and assess experience REVISED IES 5 • Require that practical experience is measured by using one of the following approaches: output-based, input-based; or combination of these approaches • Require assessment activities that asses completing sufficient practical experience by the end of IPD • Ensure that practical experience is properly recorded, as well as monitored and periodically reviewed by a practical experience supervisor
  24. 24. Revision of IESs IES 6, Assessment of Professional Capabilities and Page 24 | Confidential and Proprietary Information IES 6 • Aim is to ensure that candidate’s professional capabilities and competence before qualification is assessed • Test of theoretical knowledge and practical application of knowledge REVISED IES 6 • Require a formal assessment on whether aspiring professional accountants have achieved an appropriate level of professional competence by the end of IPD • Ensure that assessment activities are designed to have high levels of reliability, validity, equity, transparency & sufficiency within professional accounting education programs • Require assessment that is based on verifiable evidence Competence
  25. 25. Revision of IESs IES 7, Continuing Professional Development Page 25 | Confidential and Proprietary Information IES 7 • Aim is to ensure that professional accountants develop and maintain capabilities to perform competently within their professional environments. • Mandatory CPD for all professional accountants • Facilitate access, monitor, and enforce to CPD • Ensure relevant, measurable and verifiable CPD activities • Input, Output, or Combined REDRAFTED IES 7 • Clarify the obligations of CPD while requiring professional accountants to develop and maintain professional competence throughout their careers
  26. 26. Revision of IESs IES 8, Competence Requirements for Audit Professionals Page 26 | Confidential and Proprietary Information IES 8 • Aim is to ensure is to ensure that professional accountants acquire and maintain the specific capabilities required to work as competent audit professionals. • Qualify as a professional accountant • Hold undergraduate degree or equivalent • Advanced level knowledge audit of historical financial information financial accounting and reporting • Professional skills expected of audit professionals PROPOSED IES 8 • Require engagement partners to undertake CPD that maintains and further develops professional competence for this role
  27. 27. Application of IESs How Standards are Used? World Bank’s Reports on the Observance of Standards and Codes (ROSC) initiative – Page 27 | Confidential and Proprietary Information IFAC’s Compliance Program – SMO 2 • Support for Section IIC of Questionnaire which is used as a diagnostic tool to provide an overview of the accounting and auditing environment in the country USAID BISTA Project – Benchmarking International Standards of Transparency and Accountability UNCTAD – Guideline For A Global Accounting Curriculum And Other Qualification Requirements
  28. 28. Page 28 | Confidential and Proprietary Information Implication of Revised Standards IES Status Developed PAO Developing POA University Regulator 1 Standard M M L L 2 Standard H H H M 3 Standard M H M L 4 Standard M H M M 5 Standard M H L M 6 Standard M M M M 7 Standard H H L M 8 Post- Exposure H H L H
  29. 29. Page 29 | Confidential and Proprietary Information Sources of Information www.iaesb.org THANK YOU Information

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