The changing regulatory and market landscape of

accounting and audit education

South-South Exchange Program

Chisinau, Moldova Sept 2013

Liam Coughlan

Accounting Education Adviser, CFRR

1. How updated International Accounting Education

Standards can help countries articulate and achieve the

Europe 2020 knowledge economy agenda

2. Benchmarking, accreditation and EU/global recognition

of accounting and audit education programs – why this

program will succeed, and how the Universities may

take it forward

3. Delivering effective A&A education at classroom,

tutor/professor, faculty and governance lessons –

suggestions for work program, and linkages with PAO,

Oversight and QA roles

4. Questions and answers

Overview

2

IES – relevance and

framework

3

IES compatible with current and proposed audit approval requirements as

articulated in Statutory Audit Directive

IES implemented utilizing a large number of different models globally, for

example ACCA, Common Content, NASBA/AICPA, CGA Canada,

Romania etc UNCTAD model syllabus based on early IES, proposal to

update it.

IES most relevant to Universities are IES2 and 8, which prescribe the content

of formal theoretical courses required for professionals. Universities play a

vital role in delivering this content, in collaboration with PAOs under

guidance of HE/MoE regulators and Audit Regulators. IES also cover

exams, PER and CPE.

Revision to IES focus on delivery of competence, more emphasis on output

based approaches to setting, measuring and developing requirements to

achieve competent accountants and auditors

IAESB unlikely to revise IES again in near term, as they are now principles

based, and recognize national/global competent authorities for education

IAESB Standards – relevance and direction

4

Framework for IES – ideas and terms

Development

Learning

Education (systematic learning/structured

includes training)

Training

• Growth of capabilities that contribute to competence

• Most development comes about through learning

• Main process by which person acquires capabilities (knowledge, skills, values/ethics). Includes Education, but also self-directed, unstructured, informal

• On the job (occupational – focus on how person does the job)

• Mix of instruction and practice, experience related

Capabilities are the attributes held by the individuals that

enable them to perform their roles. It is defined by IAESB as

the professional knowledge, skills and values required to

demonstrate competence

Competence is defined as being able to perform a work role

to a defined standard, with reference to real working

environments

Bloom’s taxonomy used in IES-3 to describe intellectual

requirements for accountants and auditors: knowledge,

understanding, application, analysis, synthesis and evaluation

This model used globally by Universities and PAOs in

structuring the progressive acquisition of the required

intellectual skills from the point of entry (Year 1) to exit

Framework for IES – capability versus competence

Practical experience requirements exist to foster competence

Continuing Professional Development (CPD) refers to learning

activities for developing and maintaining capabilities of professional

accountants to perform competently

Training refers to educational activities, within the context of the

workplace, aimed at bringing trainee to agreed level of competence

Professional accountancy education – imparts professional

knowledge, skills, values, ethics and attitudes. May or not take place

in academic setting (recognizing variety of global practice amongst

IFAC membership)

IAESB terms used frequently also include

Observed - establishing this hierarchy has not been popular among PAOs and

does not necessarily reflect practice in many countries

Hierarchy of titles within IES ?

Audit professional

Professional Accountant

Technician/Skilled Graduate level

And shape of challenge for PAOs

Auditor

Accountant

Technician

Regulatory requirements

and costs

Luxury of multiple institutions duplicating activities in professional

accounting and audit education at national level is disappearing,

thanks to financial and economic crisis

Partnership and twinning leverages scarce expertise, saves time

and money, and has impact

Benchmarking can save enormous development costs, and guide

reform efforts of AA Education stakeholders

Benchmarking a requirement for accreditation – globally, regionally

and nationally. Accreditation is the basis for mutual recognition of

University and PAO qualifications, signaled in the new SAD by the

concept of the “single passport” for statutory auditors

For European Union aspirant countries, and wider, the

Romania/Moldova partnership and exchange an excellent example

of leverage and partnerships – between faculty and PAOs. “If we do

not hang together, we shall be hanged separately” (Yes Minister)

Benchmarking and accreditation issues

1. Covers common content

2. Allows shared teaching resources, and materials

3. Provides for recognition amongst participating Universities

4. Promotes accounting and audit education and benefits to the

next generation

5. Provides awareness and access to ACCA and equivalent

certification

6. Saves time, money and effort by focusing on what is needed

7. Helps to create the concept of the profession, and thus enable

the PAOs to develop sustainably

8. The greater the content covered by Universities, the lower the

cost and more likely higher quality can be delivered by PAOs

for final exams

Why this project will succeed….

The knowledge economy vision is a modern economic block

that generates growth through adding value

The ICT revolution has enabled Europe to connect,

collaborate, co-operate and co-produce in ways unforseen

In the same time, the national professions have become

global (IFAC 1972) and a greater recognition of common

content

E-learning has taken root, and represents the largest potential

untapped “app” in the global “app-store”

The ACCA e-learning courses are just a start, and compared

with products under development, will be seen as antiquated

Potential and opportunity to fill this space is global. Combining

social learning/tools, interactive online seminars, podcasts,

the quality of learning experience is in development.

Linking e-learning to Europe 2020

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Teaching the next generation how to learn (academic)

Equipping graduates with greater employment prospects

Fostering financial literacy, amongst those who choose non-

accounting/audit careers

Building capacity for the country to contribute to the effective

financial management of enterprises they are employed in,

regardless of sector

Generating interest and pre-qualifying (to the extent of accreditation)

the next generation of accounting and audit professionals

Contributing to building the PAO – as Universities understood and

known better in new economy than the concept of PAOs. Excellent

graduates will become excellent professionals

AA ROSC 2013 Update highlights the importance and urgency of

addressing professional accounting and audit education

arrangements

Role of Universities and HE providers

Accounting, finance and related knowledge:

IFRS Foundation has contributed substantially to the

development of financial reporting education thought.

Framework can now be adopted by Universities whereby

graduates learn book-keeping, accounting, IFRS for SMEs

and then, at post graduate and/or PAO level, full IFRS

application

Audit, control environment, business, ethics and risk:

IAASB/IFAC development of clarified ISA and extensive

supporting guidance and tools. IFAC SMP/SME work also

provides globally accessible set of materials that can be

used in provision of IPD and CPD as appropriate

Parallel globalization of common content: ACCA new suite

of qualifications and support, BPP and Becker both global, e-

learning

Education reform opportunities

Accreditation requires that a course in a specific subject, or series of

linked subjects:

Mapping - contains learning outcomes, major and minor topics and

descriptors that are substantially (not 100% same) equivalent to the

target ACCA course

Materials – reading list, prescribed textbooks and articles

adequately cover the mapped topics, can be sourced organically,

nationally or globally

Testing - quality assurance arrangements that assure that

candidates achieve the learning outcomes. Past examination papers

and marking guides referenced to assess the quality of the course

Communication – in English represents the greatest challenge. If a

non English qualification is assessed, the application package must

be written in the language of the assessor. Different structures and

systems, and content/assessment must be explained in such a way

that the assessment team can understand in context of their model

Driving new syllabus at course level

AA ROSC 2013 describes a convoluted, complex, fragmented

system for accounting and audit education, certification and

licensing of professionals by multiple PAOs and incompatible and/or

unnecessary range of occupational specialist licenses

Despite this, Europe and society understands what the role of

Universities are, and the nature of Degree programs (Bachelors,

Masters and Doctorates). Hence, Moldovan University sector can

lead the required development and related communication reform

efforts

Twinning and partnerships amongst Universities can generate a

common basis from which a new unified final certification/licensing

regime can be built in collaboration with PAO/Regulators, but the

PAOs lack the power to impose change unilaterally because of

fragmentation

Unity of purpose needed to attract support and recognition for the

reform project. Simplicity, rationalization and communications the

key

Communication and development challenges

Ownership

Different regulatory systems

Cost

Capacity of Universities and PAOs to implement

Language, translation and support materials

Keeping up to date with evolving standards and regulatory

framework

PAOs relatively new in transitional economies, and lack of historical

linkages between Universities, profession and regulators

Absence of sufficient opportunities for trainees to gain practical

experience in accounting and audit

Recognition and reciprocity

Discussion of key challenges in implementing effective A&A education

Developing capacity requires:

Financial literacy for all university graduates, regardless of

course and career choices – they are all stakeholders

Business/Economics graduates to possess skills to add

value to private sector, public sector and hybrid entities

Career options for graduates who wish to join the

profession through electives/specialization, developed to

meet needs of economy and in collaboration with

profession

Professional accounting/audit organization that provides

the integrity and expertise needed for specialists

System is sustainable: financial, technical, reputational,

relevance

Under conditions where the target is constantly moving

Common aims – accounting education

GREATEST CHALLENGE is to market the benefit of the

skills and services of Graduates and PAO members, and

public education of value of qualifications

Market recognition will ensue, as this required for long

term political buy-in for statutory recognition

Focus on developing capacity to meet needs of

economy, should enhance market recognition

Fundraising needs careful articulation of benefit to

economy (and not expressed solely in terms of needs of

the professionals)

Mentoring/partnerships and peer learning very effective

Thank you for attention, look forward to a successful and

productive workshop

Conclusion

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Thank you

Q&A

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