International Education Standards for Professional Accountants

1. Prof. Dr. DHC Alain BURLAUD Emeritus International Education Standards for Professional Accountants

2. Three main standards setters • International Accounting Education Standards Board (IAESB) • Common Content (European professional bodies) • Eighth European Directive of the Parliament and the Council

3. 1/ IAESB’s IAES • 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.

4. 1/ IAESB’s IAES • 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.

5. 1/ IAESB’s IAES • 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.

6. 1/ IAESB’s IAES • 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.

7. 1/ IAESB’s IAES • 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.

8. 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. 1/ IAESB’s IAES16.IAESB structure and governance

9. 1/ IAESB’s IAES • IAESB’s publications. • 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

10. 1/ IAESB’s IAES • 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) • 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 AccountingStaff

11. 1/ IAESB’s IAES • 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

12. 1/ IAESB’s IAES • 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?

13. 2/ Common Content • 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)

14. 2/ Common Content • Represented countries: • France • Germany • Ireland • Italy • Netherland • United Kingdom

15. 2/ Common Content • Curriculum

16. 2/ Common Content • Documents issued: • Qualifications Requirements • Learning Outcomes and Knowledge • Skills Framework • Compliance Manual See: www. commoncontent.com/

17. 3/ Eighth European Directive • 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

18. 3/ Eighth European Directive • 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.

19. 3/ Eighth European Directive • 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.

20. 3/ Eighth European Directive • 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.

21. 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

22. 3/ Eighth European Directive • 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.

23. 3/ Eighth European Directive • 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.

24. 3/ Eighth European Directive • 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.

25. Conclusion & Debate • Are education standards compatible with academic freedom? • Does mobility of labor require education standards? • Are education standards useful only for auditors?

26. Thank you!