Comments by the European Accounting Association on the International Accounting Education Standards Board Consultation Paper ‘Meeting Future Expectations of Professional Competence: A Consultation on the IAESB’s Future Strategy and Priorities’

Abstract

On December 2015, the International Accounting Education Standards Board (IAESB) issued a consultation paper entitled ‘Meeting future expectations of professional competence: A consultation on the IAESB’s future strategy and priorities’. Its aim is ‘to obtain public comment on its vision for the next five years and the strategic priorities it believes need to be addressed in serving the public interest’ [International Accounting Education Standards Board [IAESB]. (2015a). Meeting future expectations of professional competence: A consultation on the IAESB’s future strategy and priorities. Consultation paper. Retrieved from https://www.ifac.org/publications-resources/consultation-paper-meeting-future-expectations-professional-competence, p. 3]. This article reports the answers of the European Accounting Association to the questions asked in the consultation paper. The comments suggest a reinforcement of the entry requirements that would include a proper education background, advanced levels of both some technical competences and interpersonal/communication skills as well as a very strong ethical commitment. They also recommend a more thorough development process for the continuous education of accountants, a stronger link between practitioners and academia, insights for new IESs and more effective communication strategies about IAESB activities.

Keywords:

• international accounting education standards board
• international education standards
• accounting education

Acknowledgements

We gratefully acknowledge the full support from Salvador Carmona, President of the European Accounting Association, Ann Jorissen, past President of the European Accounting Association and Paul Andre, Editor of Accounting in Europe.

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1 IFAC is composed of representatives from 130 countries and jurisdictions that represent approximately 2.84 million accountants (IFAC, 2015b).

2 The other standard-setting boards under the IFAC umbrella include the IAASB that aims to set ‘high-quality international standards for auditing, assurance, and other related areas’, the International Ethics Standards Board for Accountants that aims to set ‘robust, internationally appropriate ethics standards, including auditor independence requirements, for professional accountants worldwide’, and the International Public Sector Accounting Standards Board that aims to ‘develop accrual-based standards used for the preparation of general purpose financial statements by governments and other public sector entities around the world’ (source: www.ifac.org).

3 PIOB’s main responsibility is to ensure that standard setting follows due process. For more details, please refer to PIOB (2015).

4 The IEASB describes the ‘intermediate’ level for its learnings outcome as follows:

independently applying, comparing, and analyzing underlying principles and theories from relevant areas of technical competence to complete work assignments and make decisions; combining technical competence and professional skills to complete work assignments; applying professional values, ethics, and attitudes to work assignments; and presenting information and explaining ideas in a clear manner, using oral and written communications, to accounting and non-accounting stakeholders. Learning outcomes at the intermediate level relate to work situations that are characterized by moderate levels of ambiguity, complexity, and uncertainty. (IAESB, 2015b)

The ‘advanced’ level is instead described as follows:

Selecting and integrating principles and theories from different areas of technical competence to manage and lead projects and work assignments, and to make recommendations appropriate to stakeholder needs; integrating technical competence and professional skills to manage and lead projects and work assignments; making judgments on appropriate courses of action drawing on professional values, ethics, and attitudes; assessing, researching, and resolving complex problems with limited supervision; anticipating, consulting appropriately, and developing solutions to complex problems and issues; and consistently presenting and explaining relevant information in a persuasive manner to a wide-range of stakeholders. Learning outcomes at the advanced level relate to work situations that are characterized by high levels of ambiguity, complexity, and uncertainty. (IAESB, 2015b)

5 This is referred to the well-known discussion about auditor independence that is made up of two components: independence in fact and in appearance. The former indicates that the auditor possesses an independent mindset when planning and executing an audit, the latter indicates whether the auditor appears to be independent (Dopuch, King, & Schwartz, 2003).

6 If it is true that ‘public interest’ ‘depends to a large extent on the ideological perspectives of the respondents’ (Baker, 2005, p. 5), it has been also incorporated in the audit research activity (e.g. Accounting and the Public Interest is the title of an academic journal published by the Public Interest Section of the American Accounting Association) and in the regulation of audit (e.g. EU audit regulation for Public Interest Entities) around the world.

7 A quite recent forum published on Accounting Horizon, June 2015, dealt with the impact of Big Data on accounting and auditing research and practice.

8 In this section, few minor changes have been introduced for the sake of clarity; thus the wording of the actual answers provided to the IAESB might be slightly different from those reported in this article.

9 For the definition of the level, please refer to endnote 4.

10 Such situations has been observed, among others, during the bankruptcy of Enron (Healy & Palepu, 2003), Worldcom (Cernusca, 2007), Parmalat (Melis, 2005) and Gowex (Gotham City Research, 2014).

11 This debate was not only reported by academic publications (please refer to previous note 7) but for example also the Financial Times wrote about this topic (Agnew, 2016). According to the latter, Big 4 audit firms are investing a significant amount of resources in new technologies. For example KPMG is ‘in the middle of a $1bn investment programme in data analytics and new technologies’ (Agnew, 2016, p. 2). These tools are positively perceived by auditor that believe that ‘workflow automation, data analytics and artificial intelligence are changing how audit is done’ (Agnew, 2016, p. 3) both decreasing the audit risk and allowing the issue of more accurate audit reports and giving auditors an important a role in translating information into meaningful business intelligence for clients.