Presentation on theme: "By Dr. Musa Inuwa Fodio,CNA"— Presentation transcript:
1 The Changing Landscape of Educational Standards in the Accountancy Profession ByDr. Musa Inuwa Fodio,CNApresented at the 2ND African Congress of Accountants (ACOA), May , 2013 held at Accra International Conference Centre, Accra, Ghana.
2 OUTLINEBackgroundDrivers of change in global educational standards for accounting professionImplications of changes in educational standards for the accountancy professionThe Role of IAESB in setting Standards for global accounting educationThe Role of professional bodies in promoting IESIES and the academicsRecommendations and Conclusion
3 BACKGROUNDThe accounting profession has never in its history been confronted with the kinds of challenges that it faces today.Unending sensational accounting scandalsLoss of public confidenceLoss of authority as self-regulating profession
4 BACKGROUNDThe profession’s reactions to the challenges led to radical innovations in the principles, standards and practice of accountingThis challenges and responses have widened the gap in accounting education – What accountants do and what accounting educators do.
5 BACKGROUNDPublic accounting firms recognised the problem over 20 years ago. Consistent with Bedford Report, a white paper issued by the big 8 audit firms in 1989 described the profession asExpandingChangingBecoming increasingly complex.Accountant are no longer mere information providers/financial advisers but executive partners.Suggested the critical need for the profession to re-examine its educational processConcluded that the “current environment” makes real curriculum change essential and necessitates a dynamic partnership between practitioners and academics
6 BACKGROUNDIn late 1980s and early 1990s, IMA received complaints from financial executives indicating that entry-level accountants were inadequately prepared and lack skills necessary for success as entry corporate accountants.The IAESB has since its coming into being, been building on the work of IASCF. The foundation in 2002 identified some areas of change which included education standards and regulations.
7 BACKGROUNDThe overall mission of IAESB is to serve the public interest by the world wide advancement of education and development for professional accountants leading to harmonised standards.Current trend is towards globalisation of educational standards for accounting profession.
8 DRIVERS OF CHANGE IN GLOBAL EDUCATIONAL STANDARDS FOR ACCOUNTING PROFESSION Unrelenting competitive pressureImpact of information and communication technologiesDemand for improvements in corporate governance and ethicsGlobalisation of businessFocus on fair value accountingDemand for new knowledge and skills
9 Unrelenting competitive pressure DRIVERS OF CHANGE IN GLOBAL EDUCATIONAL STANDARDS FOR ACCOUNTING PROFESSIONUnrelenting competitive pressureRapid change has been the characteristic of the environment in which professional accountants workPressures for change are coming from expanded stakeholders including regulators and oversight bodies
10 Impact of information and communication technologies DRIVERS OF CHANGE IN GLOBAL EDUCATIONAL STANDARDS FOR ACCOUNTING PROFESSIONImpact of information and communication technologiesICT continues to advance at a rapid paceInternet has revolutionised global communicationsXBRL is an off-shoot of ICT developmentDemand for improvements in corporate governance and ethics; and growing concern for the environment and sustainable development
11 Globalisation of Business DRIVERS OF CHANGE IN GLOBAL EDUCATIONAL STANDARDS FOR ACCOUNTING PROFESSIONGlobalisation of BusinessBusiness and organisations are engaging in ever more complex arrangements and transactionsRisk management has become more importantFocus on fair value accountingFair value becomes the conceptual foundation of financial reporting and valuation techniques are basic tools of accountants (which involves modelling)
12 Demand for new knowledge and skills DRIVERS OF CHANGE IN GLOBAL EDUCATIONAL STANDARDS FOR ACCOUNTING PROFESSIONDemand for new knowledge and skillsAccountant to be a “Jack of all trade and a mini-master of all”; ICT, Managerial, Actuarial valuation etc as part of the challenges associated with IFRS.Judgement is now more important as well as reliance on conceptual frameworkLess reliance on memorization of rules and more focus on application of principles and use of best judgement.
13 IMPLICATIONS OF CHANGES IN EDUCATIONAL STANDARDS FOR THE ACCOUNTANCY PROFESSION Recognition of changes in educational standards for the Accounting professionRecognition by the profession that its only Real Capital is its Human CapitalNeed for investment in human capitalThe need to change nationally-based accounting education systems to reflect global dimension.Through collaborative efforts with academics, practitioners, government and regulatory agencies, industries, etc.
14 IMPLICATIONS OF CHANGES IN EDUCATIONAL STANDARDS FOR THE ACCOUNTANCY PROFESSION Future accounting practitioners must have broad and specialized knowledge and skillsAccounting practitioners must continually acquire new knowledge and skills (life long learning) because of the rapidly changing environment in which the professional accountant worksIFRSs, IPSASs, ISAs, XBRL, IES, etcFuture professional accountants need training in corporate governance, environment and sustainable reporting and ethics
15 IMPLICATIONS OF CHANGES IN EDUCATIONAL STANDARDS FOR THE ACCOUNTANCY PROFESSION Need for continuous monitoring of the environment in which professional accountants operate to ensure that the educational process remains relevantNeed for educators delivering professional accounting education program to respond to the changing needs of international accounting profession as well as individual professional accountants
16 THE ROLE OF INTERNATIONAL ACCOUNTING EDUCATION STANDARDS BOARD (IAESB) IN SETTING STANDARDS FOR GLOBAL ACCOUNTING EDUCATIONThe increased role of IAESB in developing and issuing high quality standards and other guidance to strengthen accounting education worldwideIAESB focuses on:Prequalification accounting educationPractical experience and training as well as assessment of professional accountantsContinuing (post-qualification) professional education needed by accountants
17 THE ROLE OF INTERNATIONAL ACCOUNTING EDUCATION STANDARDS BOARD (IAESB) IN SETTING STANDARD FOR GLOBAL ACCOUNTING EDUCATIONAll IFAC members were required to comply with IES 1-6 by January 2005, IES 7 by January 2006 and IES 8 by July 2008.Compliance (with black letter requirements) is self-enforced by professional bodies in collaboration with and involvement of national oversight as well as third parties- universities, employers (government and private).
18 THE ROLE OF PROFESSIONAL BODIES IN PROMOTING IES IFAC member bodies are expected to comply with IES. IES are targeted at the member bodies and not individual membersMember bodies are to determine detailed requirements of the pre-qualification, post-qualification and development programs considering the diversity of culture, language and educational, legal and social systems in their countries
19 THE ROLE OF PROFESSIONAL BODIES IN PROMOTING IES Where member bodies are subject to legal or regulatory authorities in their countries, they must consider IES and must advise legislative and regulatory authorities on same and seek for harmonizationMember bodies should assist the growing movement toward international reciprocity and comparability of qualifications through IESMember bodies are to work with other educators and academics to ensure that programs are relevant and logically sequential
20 IES AND THE ACADEMICSIAAER is championing the course for design and implementation of accounting education program that achieves the IES objectives of prequalification educationIAAER is also creating awareness of the need for improvement in accounting education and researchIAAER proposes a Project Athena on IES targeted at faculty development program in developed and emerging economies.
21 IES AND THE ACADEMICSAt various national levels academy and profession have perennially failed to settle on agreed core of accounting Knowledge and skills (what exactly is a “work ready” accounting graduate?)Accounting academics generally feel that they are the arm of academia that studies accounting rather than the academic arm of the accounting professionDilemma on what student of accounting in the university or college should learn (emphasis)
22 IES AND THE ACADEMICSKnowledge vocationalisation (commercialisation) which lend itself to demands of the work placeKnowledge commodification- which arises out of the marketisation of courses (revenue drive)Knowledge corporatisation- which focuses on performance measurement and learning outcomesKnowledge professionalization- which focuses on professional practice
23 TWO SAMPLE MODEL TO RESOLVE THE DILEMMA Model Model 2Post qualificationPost qualificationProfessionalismProfessionalismAcademyWork PlaceProfessional qualificationProfessional qualificationPre qualification Informal ProcessPre-qualification Formal Process
24 RECOMMENDATIONS AND CONCLUSION IAESBIFAC member bodiesAccounting educators and academicsConclusion
25 IAESBIncrease awareness and understanding of IES across professional bodies and accounting academicsResolve the dilemma on what accounting education should emphasise. The model proposed may be usefulReduce/harmonise areas of conflict between IES and national accounting education standards- using the IFRS model
26 IFAC MEMBER BODIES Increase IES awareness among individual members Seek additional collaboration with academics through the regulatory and government agencies in different jurisdictions
27 ACCOUNTING EDUCATORS AND ACADEMICS Need to develop more interest in IESNeed to assist in the implementation of IES at prequalification level through improvement in accounting curriculaShould build stronger bodies at national and regional level to promote the course of IAESBAAFA (African Accounting and Finance Association)Should work with other stakeholders such as professional bodies and employers to make accounting curricula richer and more relevant
28 CONCLUSIONIn conclusion, it is important to note that accounting profession has today changed from its traditional role of financial information provider with emphasis on technical practice to a profession which stresses moral practice with emphasis on professional judgementIts role will continue to be relevant to all spheres of human endeavour.Educational standards for training future professional accountants must necessarily encapsulate an appropriate mixture of intellectual, vocational and professional viewpoints
29 RERENCES FOR FURTHER READING AAA, (1986), Future Accounting Education: Preparing for the Expanding Profession, American Accounting Association, Bedford Committee ReportAECC, (1990), Objectives of Education for Accountants, Accounting Education Change Commission, Position Statement N° 1, September 1990Albrecht W.S., Sack R.J., (2000), Accounting Education: Charting the Course through a Perilous Future, Accounting Education Series, Vol. 16
30 RERENCES FOR FURTHER READING Big 8, (1989), Perspectives on Education: Capabilities for Success in the Accounting Profession, Arthur Andersen & Co, Arthur Young, Coopers & Lybrand, Deloitte Haskings & Sells, Ernst & Whinney, Peat Marwick Main & Co, Price Waterhouse, Touche RossEvans, C., Buritt, R. and Guthrie, J. (2010), Accounting Education at a Crossroad, University of South Australia and Institute of Chartered Accountants in AustraliaKarreman, G.H., (2002), The Impact of Globalisation on Accountancy Education, International Accounting Standards Committee Foundation, LondonKarreman, G.H., (2002) The Impact of Globalisation on Accountancy Education, International Accounting Standards Committee Foundation, London
31 RERENCES FOR FURTHER READING IAESB, (2012), Developing a Global Model of Accounting Education and Examining IES Compliance in Australia, Japan and Sri LankaICAA, (1998), Vision 2020, Institute of Chartered Accountants in AustraliaIFAC, (2006), SMO 2, International Education Standards for Professional Accountants and Other GuidanceIFAC, (2007), International Accounting Education Standards Board, Strategic and Operational Plan 2007 – 2009IFAC, (2007), Developing Nations Committee, Strategic and Operational Plan 2007 – 2010IFAC, (2007), Member Body Compliance Program, Strategic and Operational Plan 2007 – 2010IFAC, (2003), IES 1, Entry Requirements to a Program of Professional Accounting Education
32 RERENCES FOR FURTHER READING IFAC, (2003), IES 2, Content of Professional Accounting Education ProgramsIFAC, (2003), IES 3, Professional SkillsIFAC, (2003), IES 4, Professional Values, Ethics and AttitudesIFAC, (2003), IES 5, Practical Experience RequirementsIFAC, (2003), IES 6, Assessment of Professional Capabilities and CompetenceIFAC, (2004), IES 7, Continuing Professional Development: A Program of Lifelong Learning and Continuing Development of Professional CompetenceIFAC, (2006), IES 8, Competence Requirements for Audit Professionals (Implementation 2008)
33 RERENCES FOR FURTHER READING Needles, B.E. Jr., (2005), Implementing International Education Standards: The Global Challenge, Accounting Education: An International Journal, 14, March, 2005,The 103rd American Assembly (2003), The Future of the Accounting Profession, the American Assembly, Columbia University