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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,

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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:

1 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, Accra, Ghana.

2 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

3 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

4 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.

5 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

6 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.

7 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.

8 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

9 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

10 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

11 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)

12 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.

13 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.

14 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

15 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

16 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

17 All 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 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

19 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

20 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.

21 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)

22 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

23 Model 1 Model 2 Professional qualification Work PlaceAcademyProfessionalism Post qualification Professionalism Pre- qualification Formal Process Pre qualification Informal Process

24 IAESB IFAC member bodies Accounting educators and academics Conclusion

25 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

26 Increase IES awareness among individual members Seek additional collaboration with academics through the regulatory and government agencies in different jurisdictions

27 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

28 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

29 AAA, (1986), Future Accounting Education: Preparing for the Expanding Profession, American Accounting Association, Bedford Committee Report AECC, (1990), Objectives of Education for Accountants, Accounting Education Change Commission, Position Statement N° 1, September 1990 Albrecht W.S., Sack R.J., (2000), Accounting Education: Charting the Course through a Perilous Future, Accounting Education Series, Vol. 16

30 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 Ross Evans, C., Buritt, R. and Guthrie, J. (2010), Accounting Education at a Crossroad, University of South Australia and Institute of Chartered Accountants in Australia Karreman, G.H., (2002), The Impact of Globalisation on Accountancy Education, International Accounting Standards Committee Foundation, London Karreman, G.H., (2002) The Impact of Globalisation on Accountancy Education, International Accounting Standards Committee Foundation, London

31 IAESB, (2012), Developing a Global Model of Accounting Education and Examining IES Compliance in Australia, Japan and Sri Lanka ICAA, (1998), Vision 2020, Institute of Chartered Accountants in Australia IFAC, (2006), SMO 2, International Education Standards for Professional Accountants and Other Guidance IFAC, (2007), International Accounting Education Standards Board, Strategic and Operational Plan 2007 – 2009 IFAC, (2007), Developing Nations Committee, Strategic and Operational Plan 2007 – 2010 IFAC, (2007), Member Body Compliance Program, Strategic and Operational Plan 2007 – 2010 IFAC, (2003), IES 1, Entry Requirements to a Program of Professional Accounting Education

32 IFAC, (2003), IES 2, Content of Professional Accounting Education Programs IFAC, (2003), IES 3, Professional Skills IFAC, (2003), IES 4, Professional Values, Ethics and Attitudes IFAC, (2003), IES 5, Practical Experience Requirements IFAC, (2003), IES 6, Assessment of Professional Capabilities and Competence IFAC, (2004), IES 7, Continuing Professional Development: A Program of Lifelong Learning and Continuing Development of Professional Competence IFAC, (2006), IES 8, Competence Requirements for Audit Professionals (Implementation 2008)

33 Needles, B.E. Jr., (2005), Implementing International Education Standards: The Global Challenge, Accounting Education: An International Journal, 14, March, 2005, 123- 129 The 103 rd American Assembly (2003), The Future of the Accounting Profession, the American Assembly, Columbia University

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