Presentation on theme: "By Dr. Musa Inuwa Fodio,CNA presented at the 2 ND African Congress of Accountants (ACOA), May 14 -16, 2013 held at Accra International Conference Centre,"— Presentation transcript:
By Dr. Musa Inuwa Fodio,CNA presented at the 2 ND African Congress of Accountants (ACOA), May , 2013 held at Accra International Conference Centre, Accra, Ghana.
Background Drivers of change in global educational standards for accounting profession Implications of changes in educational standards for the accountancy profession The Role of IAESB in setting Standards for global accounting education The Role of professional bodies in promoting IES IES and the academics Recommendations and Conclusion
The accounting profession has never in its history been confronted with the kinds of challenges that it faces today. Unending sensational accounting scandals Loss of public confidence Loss of authority as self-regulating profession
The professions reactions to the challenges led to radical innovations in the principles, standards and practice of accounting This challenges and responses have widened the gap in accounting education – What accountants do and what accounting educators do.
Public 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 as Expanding Changing Becoming 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 process Concluded that the current environment makes real curriculum change essential and necessitates a dynamic partnership between practitioners and academics
In 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.
The 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.
Unrelenting competitive pressure Impact of information and communication technologies Demand for improvements in corporate governance and ethics Globalisation of businessFocus on fair value accountingDemand for new knowledge and skills
Unrelenting competitive pressure Rapid change has been the characteristic of the environment in which professional accountants work Pressures for change are coming from expanded stakeholders including regulators and oversight bodies
Impact of information and communication technologies ICT continues to advance at a rapid pace Internet has revolutionised global communications XBRL is an off-shoot of ICT development Demand for improvements in corporate governance and ethics; and growing concern for the environment and sustainable development
Globalisation of Business Business and organisations are engaging in ever more complex arrangements and transactions Risk management has become more important Focus on fair value accounting Fair value becomes the conceptual foundation of financial reporting and valuation techniques are basic tools of accountants (which involves modelling)
Demand for new knowledge and skill s Accountant 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 framework Less reliance on memorization of rules and more focus on application of principles and use of best judgement.
Recognition of changes in educational standards for the Accounting profession Recognition by the profession that its only Real Capital is its Human Capital Need for investment in human capital The need to change nationally-based accounting education systems to reflect global dimension. Through collaborative efforts with academics, practitioners, government and regulatory agencies, industries, etc.
Future accounting practitioners must have broad and specialized knowledge and skills Accounting practitioners must continually acquire new knowledge and skills (life long learning) because of the rapidly changing environment in which the professional accountant works IFRSs, IPSASs, ISAs, XBRL, IES, etc Future professional accountants need training in corporate governance, environment and sustainable reporting and ethics
Need for continuous monitoring of the environment in which professional accountants operate to ensure that the educational process remains relevant Need for educators delivering professional accounting education program to respond to the changing needs of international accounting profession as well as individual professional accountants
The increased role of IAESB in developing and issuing high quality standards and other guidance to strengthen accounting education worldwide IAESB focuses on: Prequalification accounting education Practical experience and training as well as assessment of professional accountants Continuing (post-qualification) professional education needed by accountants
All IFAC members were required to comply with IES 1-6 by January 2005, IES 7 by January 2006 and IES 8 by July 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).
IFAC member bodies are expected to comply with IES. IES are targeted at the member bodies and not individual members Member 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
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 harmonization Member bodies should assist the growing movement toward international reciprocity and comparability of qualifications through IES Member bodies are to work with other educators and academics to ensure that programs are relevant and logically sequential
IAAER is championing the course for design and implementation of accounting education program that achieves the IES objectives of prequalification education IAAER is also creating awareness of the need for improvement in accounting education and research IAAER proposes a Project Athena on IES targeted at faculty development program in developed and emerging economies.
At 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 profession Dilemma on what student of accounting in the university or college should learn (emphasis)
Knowledge vocationalisation (commercialisation) which lend itself to demands of the work place Knowledge commodification- which arises out of the marketisation of courses (revenue drive) Knowledge corporatisation- which focuses on performance measurement and learning outcomes Knowledge professionalization- which focuses on professional practice
Model 1 Model 2 Professional qualification Work PlaceAcademyProfessionalism Post qualification Professionalism Pre- qualification Formal Process Pre qualification Informal Process
IAESB IFAC member bodies Accounting educators and academics Conclusion
Increase awareness and understanding of IES across professional bodies and accounting academics Resolve the dilemma on what accounting education should emphasise. The model proposed may be useful Reduce/harmonise areas of conflict between IES and national accounting education standards- using the IFRS model
Increase IES awareness among individual members Seek additional collaboration with academics through the regulatory and government agencies in different jurisdictions
Need to develop more interest in IES Need to assist in the implementation of IES at prequalification level through improvement in accounting curricula Should build stronger bodies at national and regional level to promote the course of IAESB AAFA (African Accounting and Finance Association) Should work with other stakeholders such as professional bodies and employers to make accounting curricula richer and more relevant
In 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 judgement Its 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
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