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As the AICPA/NASBA International Qualifications Appraisal Board works on developing mutual recognition agreements, it has become apparent that professional bodies in other countries, as well as the United States, rely heavily on what is contained in the International Education Standards (IES). Dr. Raymond Johnson, chair of the Consultative Advisory Group (CAG) of the International Accounting Education Standards Board (IAESB), long-time member of the NASBA Board of Directors and former chair of the NASBA Education Committee, reports on the international body’s recent meeting in Bali, Indonesia, to address the competencies needed for the future, with a particular focus on information and communication technologies (ICT) and professional skepticism:

During the meeting the IAESB and the CAG focused on a preliminary analysis of Exposure Draft comments for the proposed revisions to IES 2,3,4 and 8. IES 2,3, and 4 address important competencies associated with initial professional development (e.g., what is needed to complete qualifications as a professional accountant). With respect to information and communication technologies, the exposed standards suggest that an accountant completing his or her qualifications should be able to: (1) analyze the adequacy of systems, process and controls for capturing, transmitting, reporting and safeguarding data and information; (2) identify improvements to ICT processes and controls; (3)explain how ICT supports data analysis and decision making; and (4) use ICT to analyze data and information.

The new standards also recognize that the various elements of ICT may well change over time, as technology continues to change and disrupt business and the accounting profession. For example, while blockchain may emerge as a key issue in the next few years, who knows what will follow? Hence, the definition of ICT needs to be less technology specific and more future ready.

IES 2,3, and 4 also address key competencies associated with critical thinking and professional skepticism expected of a professional accountant who has completed his or her qualifications. These include:

  • Applying critical thinking skills to solve problems, inform judgments, make decisions and reach well-reasoned conclusions.
  • Identifying when it is appropriate to consult with specialists to reach well-reasoned conclusions.
  • Analyze contrary evidence to inform decisions and reach conclusions.
  • Demonstrate intellectual agility – the ability to adapt quickly to changing circumstances or information in order to solve problems, make judgment and reach well-reasoned conclusions.
  • Monitor achievements against high personal standards of performance through feedback from others and personal reflections to improve future actions.
  • Demonstrate an awareness of personal and organization bias in decision making and applying techniques to reduce bias in identifying issues and decision making.

All of the IES 2, 3 and 4 competencies relate to work environments that are characterized by moderate levels of ambiguity, complexity and uncertainty. In the spirit of thinking globally and acting locally, consider the following questions: Is your alma mater currently addressing these competencies? How do we best address these competencies here in the United States? Should these competencies be assessed on the Uniform CPA Examination?

IES 8 addresses professional competence for engagement partners responsible for audits of financial statements. Revised competencies in the current exposure draft include: (1) setting the tone at the top to ensure proper application of professional skepticism during all phases of the audit engagement; (2) evaluating the ICT environment to identify controls that relate to the financial statements to determine the impact on the overall audit strategy; (3) applying professional skepticism to critically assess audit evidence obtained during the course of an audit and reach informed well-reasoned conclusions; and (4) promoting amongst the engagement team the skills and behaviors necessary to support compliance with the fundamental ethical principles.

Following the IAESB meeting, IFAC president In-Ki Joo, IAESB Chair Anne-Marie Vatale, IAESB CAG Chair Dr. Raymond Johnson and IAESB Technical Advisor Sarah Hamilin participated in a panel discussion with accounting students and faculty from local universities in Bali. The panel was moderated by Dr. Sidharta Utama, an IAESB member from Indonesia. The panel addressed: the skills employers seek when hiring accountants; requirements for the professional accountant in different countries; tips for staying current in an ever-changing professional environment; practical experience and its value; technology’s impact on the accountancy profession; and career opportunities, challenges and advice for students.

Panelists cited the significant opportunities offered by earning a professional accountant credential, and the importance of critical thinking and intellectual agility in today’s fast changing environment. Panel members felt that many employers specifically sought out individuals who had a professional accountant credential (e.g., CPA or CA), and that an individual’s lifelong employment opportunities were greatly enhanced by not only earning the professional credential, but by developing the future-ready competencies (being technologically competent, intellectually agile and demonstrating professional skepticism) that the professional credential
represents.