Competence-based Approaches to the Assessment of Professional Accountancy Training Work Experience Requirements: The ICAS Experience

Abstract

Most professional accountancy bodies' qualification processes encompass three components: a prescribed programme of professional education, some form of work experience, and a formal final examination to determine professional competence. The International Federation of Accountants (IFAC) suggests that purely theoretical and knowledge-based education does not meet the needs of all employers. Thus professional bodies are encouraged to find ways to deliver and assess relevant competences in the most appropriate manner. Despite educationalists suggesting that performance measurements based on direct observation within the work place are more effective at measuring competences than traditional paper-based examinations, assessment strategies within the accountancy domain remain conservative. The Institute of Chartered Accountants of Scotland (ICAS) was one of the first professional bodies to introduce a competency-based approach to work based assessment in 1999 and subsequently undertook a review of the process in 2004. The data collected for the review was undertaken by way of a questionnaire to authorized training offices, in-depth interviews with employers, and discussions which emanated from a Working Party which included internal ICAS employees, an academic and a representative from a large accountancy firm. This paper presents the findings of the review, discusses the pertinent issues in relation to work based assessment and outlines the changes that were made to the competency-based approach adopted by ICAS. It concludes with recommendations for future practice.

Keywords:

• Competence
• work based assessment
• professional accounting qualification

Notes

The backwash effect of assessment suggests that the assessment drives both the teaching and learning; therefore, if the assessment instruments remain very traditional then the teaching and learning processes will not develop. By changing the nature of assessment, teaching and learning can be moved in the direction perceived to be most appropriate.

The first level is the Test of Competence (candidates who have successfully completed an accredited degree can be exempt from part or all of this level). The second level is the Test of Professional Skills which covers Financial Reporting, Advanced Finance, Assurance and Business Systems and Taxation. The final level is the Test of Professional Expertise, which is a multi-discipline case study.

There is a requirement that students complete a minimum of 450 days of relevant practical experience during their training contracts.

The minimum requirements were for 43 days in each of accounting, auditing and one other technical discipline. In addition, those students wishing to obtain registered auditor status post qualification were required to spend 210 days on audit work. This requirement still remains. The 210 days of audit experience is not required for qualification as a CA.

At this time, Training Principals were required to be members of the Institute.

Any alternative competences were reviewed by the CA student's training firm and agreed as a suitable alternative by the Institute.

Counselling Members are required to be members of the Institute and to have been qualified for at least three years. The Training Principal is primarily responsible for the organisation of student training and now may not necessarily be an ICAS member (ICAS, CA Student Guide, 8th edition). These different roles were introduced by ICAS to accommodate firms who wished to train students but did not necessarily have an ICAS qualified member directly involved with the CA Student. Prior to the introduction of these two roles, Training Principals had sole responsibility for the students.

The Reviewer position tends to be filled by a manager or another senior staff member, who may have more daily contact with the student. Thus in the case of large training firms, where one Counselling Member may have responsibility for many students, often the Achievement Logs are reviewed and signed first by the Reviewer and then countersigned by the Counselling Member or Training Principal.

At the time of writing, the Institute reviews a sample of first year students' logs, all second year students' logs and all logs will be reviewed at the end of the training contract period.

Before this status is granted, a review is undertaken by ICAS to ensure that the office complies with all the ICAS requirements.

This includes responses from three of the Big 4 accounting firms and a separate response from the tax arm of one the Big 4.

One of the authors of this paper was the Convenor of SEC at the time of the review

This person is one of the authors of this paper.

Changes have been incorporated into the 2005 version of the Achievement Log.

This is further compounded through the authorisation of more TOPPS employers.

It would be interesting to elicit both trainee and recently-qualified chartered accountant's views on the relevance of their work experience during their training contract and the impact this has on their subsequent career aspirations.

Generally, students substituting competences would substitute three out of the six prescribed competencies in the area of accounting.

The accounting areas are: period end adjustments, journal entries, reconciliations, preparation of financial information, understanding financial information.

For example, a sample alternative competency for accounting is ‘can the CA student use variance analysis to identify trends and discrepancies in accounting data and interpret/comment on these accordingly?’ whereas a pre-printed competency for accounting reads ‘can the CA student perform analytical review on a set of accounts?’

There is an argument that says specialization should be a post-qualification event and that the training period is a time to develop core competences, which then provide the platform for qualified accountants to go on and specialize.

CICA identify three levels of proficiency, from the lowest (level C) to the highest (level A).

The Counselling Member must have been a member of the Institute for at least three years.