IFAC
Education
June 2002
Exposure Draft
Response Due Date December 31, 2002
Committee
Continuing Professional
Education and Development
Proposed International Education
Standard for Professional Accountants
Issued for Comment by
the International
Federation of Accountants
This Exposure Draft was approved for publication in May 2002 by the
Education Committee of IFAC.
The mission of IFAC is the worldwide development and enhancement of
an accountancy profession with harmonized standards, able to provide
services of consistently high quality in the public interest. The Education
Committee’s mission is to serve the public interest by the worldwide
advancement of education and development for professional accountants
leading to harmonized standards.
The Education Committee requests comments on this Exposure Draft.
Respondents are encouraged to comment on the specific questions
attached at the end of this document and any other issues related to this
Exposure Draft. Comments sent by e-mail are preferred but they may also
be submitted by computer disk or in hard copy.
Comments should be received by 31 December 2002.
Comments received by the due date will be reviewed by the Education
Committee and may influence the final Standard. Comments received by
15 October 2002 will be reviewed by the Education Committee at its
meeting in November 2002. Comments received after that date will be
reviewed by the Committee in March 2003. Notwithstanding this,
comments received after the due date and on an ongoing basis are also
welcome. Respondents should note that comments are considered a matter
of public record.
Comments on this publication should be sent to:
Technical Director
International Federation of Accountants
535 Fifth Avenue, 26th Floor
New York, NY 10017, USA
Fax + 1 212-856 9420
E-mail responses should be sent to: EDComments@ifac.org
Information about the International Federation of Accountants can be
found at its web site, www.ifac.org. Copies of this publication may be
downloaded free of charge from the site.
Copyright © June 2002 by the International Federation of Accountants.
All rights reserved.
CONTENTS
PAGE
PREFACE .............................................................................................. 2
INTERNATIONAL EDUCATION STANDARDS FOR
PROFESSIONAL ACCOUNTANTS .................................................. 2
PURPOSE OF THE STANDARD ...................................................... 2
SCOPE OF THE STANDARD ........................................................... 3
BACKGROUND .............................................................................. 3
DEFINITIONS ....................................................................................... 4
EFFECTIVE DATE ............................................................................. 10
FOREWORD ....................................................................................... 10
ACKNOWLEDGEMENTS................................................................... 13
MEMBERSHIP OF THE IFAC EDUCATION COMMITTEE ........... 13
AVAILABILITY OF CPD ................................................................... 14
MINIMUM LEVEL OF CPD .............................................................. 14
COMPLIANCE PROCESS .................................................................. 16
DISCUSSION QUESTIONS ................................................................. 17
Continuing Professional Education and Development
Proposed International Education Standard for Professional Accountants
Preface
International Education Standards for Professional Accountants
1.
International Education Standards for Professional Accountants
(IES) prescribe standards of generally accepted “good practice”’
in the education and development of professional accountants.
International Education Standards express the benchmarks that
member bodies are expected to meet in the preparation and
continual development of professional accountants. They
establish the essential elements of the education process at a
level that is aimed at gaining international recognition,
acceptance and application of the education process. Hence,
member bodies must consider these prescriptions.
2.
International Education Standards for Professional Accountants
cannot legally override local laws and regulations but will
provide an authoritative reference for informing and influencing
local regulators regarding generally accepted “good practice”.
3.
International education standards are the paragraphs in bold
typeface in this Standard. Commentary paragraphs, which may
elaborate on and assist in the interpretation of the standard
paragraphs, appear in plain typeface.
4.
The individual standards need to be read in conjunction with the
Guiding Principles for International Education Statements, and
the related commentary and implementation material contained
in the Introduction to International Education Standards for
Professional Accountants.
Purpose of the Standard
5.
2
This Standard requires member bodies to implement a
mandatory continuing professional education and development
(hereafter referred to as continuing professional development or
CPD) program. CPD is an important aspect of serving the public
interest and fosters values of continuous learning and greater
professional competence among professional accountants to
better meet client and employer needs.
Preface
6.
This Standard should be read in conjunction with proposed
International Education Guideline, “Continuing Professional
Education and Development”, which aims to assist member
bodies in implementing and achieving good practice by
providing advice and guidance on how to achieve the Standards
prescribed in this document.
Scope of the Standard
7.
This Standard prescribes continuing professional development
requirements for IFAC member bodies. The Standard addresses
access to CPD activities, minimum levels of mandatory CPD for
professional accountants and the establishment of processes to
monitor compliance with CPD requirements.
Background
8.
The IFAC Education Committee has for many years issued
guidelines and other papers on education issues. Previously, the
Committee released IEG 2, “Continuing Professional Education”
(February 1982 revised in May 1998). The Committee considers
that it is now appropriate to issue individual Standards building
on this framework, by dealing with each major topic in a
separate Standard.
9.
This Standard prescribes certain requirements set out in IEG 2
that member bodies are expected to meet and introduces a
minimum level of mandatory CPD.
10.
This Standard is supported by the proposed International
Education Guideline, “Continuing Professional Education and
Development,” which assists member bodies in establishing a
requirement for an effective program of continuing professional
development.
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Continuing Professional Education and Development
Proposed International Education Standard for Professional Accountants
Definitions
11.
Terms marked with an asterisk (*) indicate terms that are defined
elsewhere in this section.
Best practice
Refers to practices considered to be exemplary,
of the highest order, the most advanced, or
leading in a particular area in the education* of
professional accountants.
Explanation
“Best practice” refers to the best examples of
established practice in the preparation of
professional accountants. “Best practice” will
often go beyond “good practice” and, as such,
is at a higher level than the considered
minimum requirements. Statements and
examples of “best practice” are essential for
the advancement of accounting education and
provide useful guidance to member bodies for
the continual improvement of their education
programs.
Capabilities
Are the professional knowledge*, skills* and
professional values* required to demonstrate
competence*.
Explanation
Capabilities include content knowledge,
technical and functional skills, behavioral
skills, intellectual abilities, and professional
values and attitudes.
Competence
Is being able to perform a work role to a
defined standard, with reference to real
working environments.
Explanation
Competence may be assessed by a variety of
means, including work place performance,
4
Definitions
work place simulations, written tests of various
types and self-assessment.
Continuing
professional
development (CPD)
Refers to learning* activities for developing the
capabilities* of individuals to perform
competently within their professional
environments.
Explanation
Continuing professional development is aimed
at the post-qualification maintenance or
enhancement of professional competence. It
involves the development of capabilities
through either formal, structured and verifiable
learning programs (sometimes referred to as
“continuing professional education” or CPE)
or informal, unstructured learning activities.
Development
Is the acquisition of capabilities* which
contribute to competence*.
Explanation
Development refers to the growth of attributes
that contribute to competence, however
achieved. Individuals may develop their
abilities through a wide range of processes
such as learning, including education and
training; experience; reflection; observation or
receipt of information; other structured and
unstructured learning activities; or through
natural growth over time.
Education
Refers to a systematic act or process aimed at
developing knowledge, skills*, character, or
other abilities and attributes within individuals.
It includes developmental activities commonly
referred to as training*
Explanation
Education is a formal, structured learning
process whereby individuals develop attributes
considered desirable by society. Education is
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Continuing Professional Education and Development
Proposed International Education Standard for Professional Accountants
usually characterized by the growth of an
individual’s mental and practical abilities, as
well as maturing in attitude, resulting in an
enhanced ability of the individual to function
and contribute to society, in either specific or
non-specific contexts. While often conducted in
academic environments, education also
includes formal learning processes in other
environments, such as on-the-job and off-thejob training. Education is, by nature, formal
and therefore excludes informal, unstructured
learning and developmental processes.
Valuable learning, training, and development
can also take place in less formal environments
through processes that are not formal or
structured enough to be considered
“education”.
Ethics
Refers to the professional values* and
principles of conduct applying to professional
accountants* as well as to students and trainees
associated with IFAC member bodies.
Good practice
Refers to those elements considered essential to
the education* and development* of
professional accountants* and performed at a
standard necessary to the achievement of
competence*.
Explanation
“Good practice” relates not only to the range
of content and processes of education and
development programs, but also to the level or
standard at which they are performed (i.e. the
depth and quality of the programs). The IFAC
Education Committee is conscious of the wide
diversity of culture; language; and educational,
legal, and social systems in the countries of the
member bodies and of the variety of functions
performed by accountants. Different factors
6
Definitions
within these environments may vary the ability
of member bodies to adopt some aspects of
“good practice”. Nevertheless, member bodies
should continuously aspire to “good practice”
and achieve it wherever possible.
Information
Technology
Refers to hardware and software products,
information
system
operations
and
management processes, and the human
resources and skills* required to apply those
products and processes to the task of
information production and information system
development, management and control.
Learning
Refers to a broad range of processes whereby
an individual develops capabilities*, including
skills* and attitudes in the application of
knowledge.
Learning plan
Structured processes that help professional
accountants
guide
their
professional
development*. Plans include a self-assessment
of the gap between current and needed
knowledge, skills*, and abilities, a set of
learning objectives arising from this
assessment, and learning activities to be
undertaken to fulfill the learning plan.
Post-qualification
Refers to the period after qualification* as an
individual member of an IFAC member body.
Explanation
The term “post-qualification” is usually
associated with activities and requirements
relating to the professional development of
those who have already obtained a professional
qualification. It is often associated with action
relating to the maintenance or further
development of professional competence.
Professional
accountant
Refers to those individuals, whether they be in
public practice (including a sole practitioner,
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Continuing Professional Education and Development
Proposed International Education Standard for Professional Accountants
partnership or corporate body), industry,
commerce, the public sector or education, who
are members of an IFAC member body.
Professional
knowledge
Refers to those topics that make up the subject
of accountancy as well as other business
disciplines that, together, constitute the
essential body of knowledge for professional
accountants*.
Professional values
Are the attitudes that identify professional
accountants* as members of a profession. They
comprise principles of conduct generally
associated with, and deemed essential in
defining the distinctive characteristics of,
professional behavior.
Explanation
Professional values include technical
competence,
ethical
behavior
(e.g.,
independence, objectivity, confidentiality, and
integrity), professional demeanor (e.g., due
care, timeliness, courteousness, respect,
responsibility, and reliability), pursuit of
excellence (e.g., commitment to continual
improvement and life-long learning) and social
responsibility
(e.g.,
awareness
and
consideration of the public interest).
Skills
Refer to the various types of abilities required
to apply knowledge and values appropriately
and effectively in a professional context.
Specialization
Is the formal recognition by a member body of
a group of its members possessing distinctive
competence* in a field, or fields, of activity
related to the work of the professional
accountant.
Explanation
8
Definitions
Professional accountants are required to
possess a range of skills, including technical
and functional skills, organizational and
business management skills, personal skills,
interpersonal and communication skills, a
variety of intellectual skills, and skills in
forming professional judgments.
Structured Learning
Is measurable, verifiable activity designed to
impart specific knowledge and skills.*
Explanation
Examples of structured learning include
courses and presentations; individual study
programs that require some
completion
by the individual; and participation in formal
conferences, briefing sessions, or discussion
groups. Structured learning is usually, in some
respects, not totally within the control of the
individual undertaking the learning. For
example, a third party may determine the scope
or design of the activity, or when or how the
learning takes place.
Training
Refers to pre-qualification and postqualification* developmental activities, within
the context of the work place, aimed at bringing
a student* or professional accountant* to an
agreed level of professional competence.*
Explanation
Training includes work place-based education
and experience activities for developing an
individual’s competence to perform tasks
relevant to the role of the professional
accountant. Training may be undertaken while
performing actual tasks (on-the-job training) or
indirectly through instruction or work-place
simulation (off-the-job training). Training is
conducted within the context of the work place,
with reference to the specific roles or tasks
performed by professional accountants. It can
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Continuing Professional Education and Development
Proposed International Education Standard for Professional Accountants
include any activity purposefully designed to
improve the ability of an individual to fulfill the
practical experience requirements for
qualification as a professional accountant.
Effective Date
12.
Member bodies should aim to comply with this standard by 1
January 2005. Earlier application is encouraged.
Foreword
13.
IFAC’s mission is the worldwide development and enhancement
of an accountancy profession with harmonized standards, able to
provide services of consistently high quality in the public
interest. A fundamental principle of the IFAC Code of Ethics for
Professional Accountants (November 2001) states, “A
professional accountant should perform professional services
with due care, competence and diligence and has a continuing
duty to maintain professional knowledge and skill at a level
required to ensure that a client or employer receives advantage of
competent professional service based on up-to-date
developments in practice, legislation and techniques.” (paragraph
16)
14.
This Standard prescribes a continuing professional development
requirement that member bodies should implement. Such a
requirement contributes to the profession’s objective of
providing high-quality services to meet the needs of the public
(including clients and employers).
15.
The knowledge needed to function effectively as an accountant
in public practice, industry, commerce, education and the public
sector continues to expand and change at a rapid rate. This trend
is certain to continue. Not only are accountants facing increased
knowledge requirements, but they and their professional
associations are also facing increased public expectations about
the quality of financial statements and independent audits.
Related pressures for disclosure of more information, some
assurance on interim financial statements and greater use of
forecasts have had an impact on management accountants and
10
Foreword
independent auditors alike. In addition, the need to be
competitive in a worldwide economy has prompted a more
intense focus on the role and responsibilities of the management
accountant in entities of all types. Finally, there is an increasing
interest around the world in achieving greater public
accountability by the business and financial communities, as
well as the public sector, and accountants in all sectors have
important contributions to make to that process. All of this
places a special responsibility on accounting educators.
16.
The case for mandatory CPD is as follows:

The profession must be seen to be taking practical steps to
ensure that its members maintain their technical knowledge
and professional skills.

In many countries, the profession is granted the privilege of
self-regulation and, in some cases, of reserved functions.
These privileges assume that a member body is best able to
maintain and improve the professional competence of its
members and the quality of the services provided to clients
and employers. Even in countries where such privileges are
not granted to the accounting profession, member bodies
should accept that responsibility.

In today’s changing and increasingly complex environment,
accountants cannot possibly possess all the knowledge
required to render high-quality professional services if they
do not participate in appropriate CPD. Thus, to fulfill their
responsibilities to their members and the public alike,
member bodies should implement and enforce a CPD
requirement to provide reasonable assurance that their
members can and will perform their work with professional
competence.

Reliance on competition and market forces is inadequate
and unacceptable since it is likely that incompetence or
inadequate service will be detected only after damage has
already been suffered.

Members would have guidance, added motivation and an
agreed norm under which to plan and measure their
participation in CPD.
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Continuing Professional Education and Development
Proposed International Education Standard for Professional Accountants

17.
12
This is an effective way to ensure participation in CPD by
accountants whose knowledge is out of date and who are
unlikely to respond to a voluntary program.
On its own, CPD does not provide absolute assurance that all
members will provide every professional service with high
quality. Doing so involves more than maintaining professional
competence; it involves applying that knowledge with
professional judgment and an objective attitude in the real-life
situations found in today’s environment of social and economic
change Also, there cannot be complete assurance that every
person who participates in a CPD program will obtain the full
benefits of that program, because of variances in individual
commitment and capability. Nevertheless, it is certain that
members who are not up-to-date on current technical and general
knowledge pertinent to their work will not be able to provide
professional services competently. Therefore, despite the
inherent limitations of any CPD program, a CPD requirement
should be an important element in preserving the standards of the
profession and maintaining public confidence.
Acknowledgements
Acknowledgements
The Education Committee thanks the Task Force members who have
contributed to the development of this standard:
Country
Canada
China
Malaysia
United States
Transnational Auditors Committee
Name
Shirley Reilly, Steven J Glover,
Robert W Dye
Shuang Li, WeiHua Liu
Dato Abdul Halim Mohyiddin, Tan
Shook Kheng and Albert Wong
Mun Sum
Gary Holstrum Beatrice Sanders,
Charles H Calhoun III
Melvin Berg (observer to the
Education Committee)
Membership of the IFAC Education Committee
The following were members of the Education Committee when this
Exposure Draft was approved:
Country
New Zealand
Argentina
Canada
China
Czech Republic
France
Hungary
Israel
Malaysia
Pakistan
South Africa
Thailand
Turkey
United Kingdom
United States
Name
Warren Allen (Chair)
Hector Carlos Ostengo
Shirley Reilly
Shuang Li
Bohumil Král
Alain Burlaud
József Rooz
Yoram Eden
Abdul Halim Mohyiddin
S.M. Zafarullah
Steve McGregor
Usana Patramontree
Masum Türker
David Hunt
Gary Holstrum.
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Continuing Professional Education and Development
Proposed International Education Standard for Professional Accountants
Availability of CPD
18.
IFAC member bodies should help their members meet their
CPD requirement by facilitating access to CPD activities that
maintain and improve members’ technical and professional
skills.
19.
Member bodies should either directly provide relevant CPD
programs for their members or facilitate access to programs
offered by others (e.g., commercial providers, other professional
bodies, other member bodies, universities and colleges, Internet
courses, etc.).
20.
CPD should contribute to the professional ability of individual
members. Therefore, acceptable CPD courses or activities should
be relevant to the professional work of each member concerned.
Though not required by this Standard, some member bodies may
choose to mandate specific topics for their CPD program. Others
may choose to rely on their members to select subject areas that
are appropriate for them.
21.
In some circumstances (e.g., for licensed members or specialist
members), a member body may establish higher minimum
requirements or minimum requirements in specified topic areas.
22.
Specialist members (e.g. transnational auditors) may need
particular assistance in accessing courses in their specialist area
to maintain their unique technical knowledge and professional
skills.
Minimum Level of CPD
23.
14
Member bodies should establish minimum levels of CPD that
their members should obtain within a specified period of
time. These levels may be input based (e.g., prescribed
number of hours per year) or output based (e.g.
demonstrable competences at an appropriate level).
Minimum Level of CPD
24.
The minimum requirement should apply to all active accounting
professionals, including those in industry, commerce, education,
government and public accounting.
25.
Member bodies with an input-based system should establish
the following minimum number of hours of structured CPD
for every active member:
a) 20 hours of structured learning per year, and
b) 120 hours of structured learning in every three-year
period.
26.
Member bodies with an output-based system should establish
minimum levels of competence based on objectively
verifiable and reliable measurements of skills, knowledge or
competences resulting from CPD activities.
27.
The effectiveness of CPD is ideally measured in terms of the
knowledge, skills or competences that have been acquired.
Output-based assessments may not be practicable in many
situations. Member bodies are encouraged to experiment with
innovative approaches for measuring knowledge, skills, and
competences.
28.
It is for each member body to determine which activities would
qualify for recognition as structured learning. Member bodies
should focus on the need for an activity to be measurable and
verifiable, as well as the need to meet appropriate learning
objectives.
29.
Member bodies should consider what specific or additional CPD
should be obtained by members working in areas of high risk to
the public, such as auditing, work with securities or the
preparation of financial reports of publicly held companies.
There may also be a need to establish higher or more specific
requirements for members operating in specialist areas, (e.g.,
transnational auditors).
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Continuing Professional Education and Development
Proposed International Education Standard for Professional Accountants
Compliance Process
30.
Member bodies should establish a compliance process to
determine whether members meet the minimum requirement
and to provide for disciplinary action when they do not.
31.
Regardless of whether a member body opts for an in-put based
or output-based CPD program, it should establish a system for
monitoring individual member participation in CPD activities
and for evaluating the quality and appropriateness of those
activities.
32.
A system of mandatory CPD will operate effectively and in the
public interest only if members who willfully fail to comply with
the requirement are brought into compliance on a timely basis or,
if they persist in willful non-compliance, are appropriately
sanctioned. Member bodies should determine punitive sanctions
after considering the legal and environmental conditions in their
countries. Some member bodies may have the legal authority to
expel non-compliant members or deny the right to practice.
33.
Evaluating the quality of structured learning may include
approving the providers of certain programs or approving a
specific program. The quality of structured learning offered by
accounting firms or other employers should be evaluated on the
same basis as that of other external education providers.
34.
Individual members should be required to maintain sufficient
documentation to support an annual report of compliance to their
member body. CPD is an individual responsibility and members
should be encouraged to maintain a lifetime record of CPD,
which may be useful to show employers or potential employers.
16
Discussion Questions
Discussion Questions
Please reference comments to the relevant paragraph numbers and provide
alternative proposals where applicable.
1.
Do you agree with the requirement for 120 hours of CPD activity
over three years (or an average of one week per year) (refer
paragraph 25)? Please comment on implementation issues
separately from the appropriateness of this level of CPD
providing your preferred alternative and reasons why.
2.
Do you agree that CPD standards should apply to all members,
not just those in public practice?
3.
Do you agree that IFAC member bodies should implement a
compliance system with appropriate disciplinary sanctions to
monitor individual members’ compliance with mandatory CPD
(refer paragraph 30)?
4.
Comment on the proposed effective date of January 1, 2005.
5.
Please comment on any other issues.
17