IES 5 IES 5:
Practical Experience

Introduction

Scope of this Standard
  1. International Education Standard (IES) 5 prescribes the practical experience that aspiring professional accountants are required to complete by the end of Initial Professional Development (IPD).
  2. IES 5 is addressed to International Federation of Accountants (IFAC) member bodies. IFAC member bodies have responsibility for ensuring that IPD meets the requirements set out in IES 5. In addition, IES 5 may be helpful to educational organizations, employers, regulators, government authorities, and any other stakeholders who support the practical experience of aspiring professional accountants.
  3. Practical experience refers to workplace and other activities that are relevant to developing professional competence. Practical experience is a component of IPD. IPD is learning and development through which aspiring professional accountants first develop professional competence leading to perform a role as a professional accountant.
  4. Practical experience during IPD builds on general education and professional accounting education programs. The public expects professional accountants to apply their experience and knowledge in carrying out their roles. However, the variety of roles that professional accountants perform means that the required practical experience may vary from one IFAC member body to another, and even within an individual IFAC member body that offers different types of membership. IFAC member bodies are able to adapt practical experience requirements to meet (a) their own needs, (b) the requirements of the relevant regulatory authorities, as well as (c) public expectations that professional accountants are competent.
  5. After the completion of IPD, practical experience may be required to bring professional accountants to a level of professional competence needed for other roles, such as (a) that of a statutory auditor, (b) other forms of specialization, or (c) those roles that are regulated. Practical experience is a part of the lifelong learning that professional accountants engage in to develop and maintain professional competence relevant to their role during CPD. Changes in the working environment, career progression, or new roles may require that professional accountants increase their level of professional competence and acquire new competences. This is covered in IES 7, Continuing Professional Development (2020).
  6. Practical experience supervisors and employers have important roles in planning and monitoring practical experience gained by aspiring professional accountants.
  7. Definitions and explanations of the key terms used in the IES and the Framework for International Education Standards for Professional Accountants and Aspiring Professional Accountants (2015) are set out in the Glossary of Terms for International Education Standards (2021).
Explanatory Material
  1. An aspiring professional accountant is an individual who has commenced a professional accounting education program as part of IPD. IPD is the learning and development through which aspiring professional accountants first develop competence leading to a performing role as a professional accountant. IPD builds on general education and includes professional accounting education, practical experience, and assessment. IPD continues until aspiring professional accountants can demonstrate the professional competence required for their chosen roles in the accountancy profession.
  2. Professional accounting education programs are designed to support aspiring professional accountants develop the appropriate professional competence by the end of IPD. They may consist of formal education delivered through degrees and courses offered by universities, other education providers, IFAC member bodies, and employers, as well as workplace training. The design of professional accounting education programs during IPD may therefore involve substantive input from stakeholders other than IFAC member bodies.
  3. Professional competence can be described and categorized in many different ways. Within the IES, professional competence is the ability to perform a role to a defined standard. Professional competence goes beyond knowledge of principles, standards, concepts, facts, and procedures; it is the integration and application of (a) technical competence, (b) professional skills, and (c) professional values, ethics, and attitudes.
  4. Practical experience provides a professional environment in which aspiring professional accountants develop competence by:
    1. becoming aware of the environment in which services are provided;
    2. enhancing their understanding of organizations, how business works, and professional work relationships;
    3. being able to relate accounting work to other business functions and activities;
    4. developing the appropriate professional values, ethics and attitudes in practical, real-life situations (see also IES 4, Initial Professional Development - Professional Values, Ethics, and Attitudes (2021)); and
    5. having an opportunity to develop at progressive levels of responsibility while under appropriate levels of supervision.

Effective Date

  1. IES 5 is effective from July 1, 2015.

Objective

  1. The objective of IES 5 is to establish the practical experience that is sufficient for aspiring professional accountants, and needs to be completed by the end of IPD, in order to perform a role as a professional accountant.
Explanatory Material
  1. Sufficient practical experience has a blend of depth and breadth, knowledge and application and, where appropriate, integration of material from different areas applied to a range of situations and contexts. The breadth of practical experience is affected by factors such as: nature of role; level of complexity; national or local laws; requirements of regulatory authorities; and the public's expectation for professional competence. The depth of practical experience is affected by factors such as the variety and complexity of tasks as well as the level of supervisory and monitoring support.
  2. Establishing what constitutes the sufficient practical experience that aspiring professional accountants need to complete by the end of IPD serves several purposes. It protects the public interest, enhances the quality of the work of professional accountants and promotes the credibility of the accountancy profession.

Requirements and Explanatory Material

Practical Experience
  1. IFAC member bodies shall require that aspiring professional accountants complete practical experience by the end of IPD.
  2. IFAC member bodies shall require sufficient practical experience to enable aspiring professional accountants to demonstrate that they have gained the (a) technical competence, (b) professional skills, and (c) professional values, ethics, and attitudes necessary for performing a role of a professional accountant.
  3. IFAC member bodies shall establish their preferred approach to measure practical experience using one of the following three approaches:
    • output-based;
    • input-based; or
    • a combination approach.
Explanatory Material
  1. IPD builds on general education and includes professional accounting education, practical experience, and assessment. The exact combination of these components may vary depending on a range of factors including, for example, the complexity and variety of tasks, special knowledge required, level of autonomy, and the level of judgment required by the role the aspiring professional accountant is expected to undertake at the end of IPD. The combination of practical experience and education might also vary according to (a) rules established by individual IFAC member bodies, (b) national and local laws, (c) the requirements of regulatory authorities, and (d) public expectations.
  2. In determining what constitutes an appropriate balance between professional accounting education and practical experience, IFAC member bodies may consider the following:
    1. Some professional accounting education programs that place a strong emphasis on practical application, such as traineeships, internships, cooperative education work periods, and secondments, may contribute to the practical experience requirement.
    2. Study for academic or professional qualifications is useful for acquiring and demonstrating professional accountancy knowledge. However, by itself, study does not necessarily demonstrate achievement of the professional competence to perform a role as a professional accountant. Experience gained at work equips aspiring professional accountants with many of the skills needed to become competent professional accountants.
    3. Practical experience may be obtained after completion of a professional accounting education program or concurrently with such a program.
  3. In setting the approach and requirements for practical experience, IFAC member bodies may consider a number of factors, including:
    1. the public interest, including knowledge of the local environment, public expectations, and any relevant regulatory requirements;
    2. the needs of the aspiring professional accountants, including an understanding of the roles that they are expected to undertake upon completion of IPD;
    3. the needs of the employer, including efficiency and cost-effectiveness, and whether that employer is in industry, government, or public practice; and
    4. the needs of the IFAC member body, including regulatory requirements, efficiency, and cost-effectiveness.

 

Output-Based Approach
  1. Those IFAC member bodies implementing an output-based approach shall require aspiring professional accountants to demonstrate, using output measures, that they have obtained practical experience.
Explanatory Material
  1. The evidence that could be used for assessment purposes in an output-based approach could include
    1. measurement of learning outcomes achieved in accordance with a competency map;
    2. reviews of a research project or reflective essay; and
    3. work logs compared against an appropriate competency map. Work logs are records maintained by individuals, which document the nature of assignments, tasks completed, and time incurred in completing those assignments and tasks.

 

Input-Based Approach
  1. Those IFAC member bodies implementing an input-based approach shall require aspiring professional accountants to demonstrate, using input measures, that they have obtained practical experience.
Explanatory Material
  1. Input-based approaches are often used as a proxy for measuring development of competence due to their ease of measurement and verification. Input-based approaches have limitations; for example, they do not always directly measure the learning outcomes or competence developed. Traditionally, input-based approaches are based on time, for example, hours spent on relevant activities, or total duration (days, months, or years) of practical experience.
  2. Evidence that could be used for measurement in an input-based approach includes attendance records, time sheets, workplace diaries, and a work log or journal. IFAC member bodies setting a requirement using an input-based approach may consider the structure and relevance of education programs completed by aspiring professional accountants. Professional accounting education programs that deliver outcomes similar to the outcomes derived from measured work-based experience (such as internships) may contribute to the total requirement for practical experience. Equally, where a substantial professional accounting education program has been completed, such as a Master's degree in accounting, an IFAC member body may elect to reduce the practical experience component. For example, an IFAC member body choosing the input-based approach might consider three years of practical experience (as preferred and implemented by several IFAC member bodies), or two years with a Master's degree in accounting or other relevant subject, or a minimum of five years total of combined accounting education and sufficient practical experience.
  3. Regardless of the balance of the component parts, there is typically an expectation by the public that a professional accountant has completed a professional accounting education program and has obtained sufficient practical experience.

 

Combination Approach
  1. Those IFAC member bodies implementing a combination of output- and input-based approaches shall comply with the output-based approach requirement and the input-based approach requirement, as applicable.
Explanatory Material
  1. Approaches that combine input-based and output-based approaches might be constructed by the IFAC member body. Input units might be considered as contributing to the professional competences being measured. Achievement of particular competences might either be used to verify input, or in some cases replace a portion of the input requirement.

 

Practical Experience Supervision and Monitoring
  1. IFAC member bodies shall require that practical experience of aspiring professional accountants be conducted under the direction of a practical experience supervisor.
  2. IFAC member bodies shall require that practical experience of aspiring professional accountants is recorded in a consistent form prescribed by an IFAC member body or, where applicable, a regulatory body, and is supported by verifiable evidence.
  3. IFAC member bodies shall require that the practical experience supervisor undertake a periodic review of the records of practical experience of aspiring professional accountants.
  4. IFAC member bodies shall establish appropriate assessment activities to assess that sufficient practical experience has been completed by aspiring professional accountants.
Explanatory Material
  1. A practical experience supervisor is a professional accountant who is responsible for guiding, advising, and assisting aspiring professional accountants in acquiring sufficient practical experience. Practical experience supervisors can represent an important link between aspiring professional accountants and IFAC member bodies. They may be responsible for planning the practical experience period, and provide guidance to aspiring professional accountants. In some environments practical experience supervisors may also provide mentoring support to aspiring professional accountants. IFAC member bodies may provide training for practical experience supervisors, and put in place both assistance and quality control programs.
  2. Practical experience supervisors may be assisted in performing the monitoring function by others, some of whom may not be professional accountants.
  3. Verifiable evidence is evidence that is objective, and capable of being proven and retained.
  4. The purpose of the periodic review by the practical experience supervisor of the record of practical experience, supported by verifiable evidence, is to check that requirements set by the IFAC member body or regulatory authority are being met. In addition, this periodic review can also be used to monitor an individual's progress. If the aspiring professional accountant's progress does not match expectations, the practical experience supervisor has an opportunity to review the situation to discover the reasons why and what can be done to improve progress. This periodic monitoring will (a) provide an opportunity for the practical experience supervisor, the employer, and the aspiring professional accountant to review the practical experience obtained to date, and (b) contribute to future development of the aspiring professional accountant.
  5. In assessing the sufficiency of the practical experience acquired by aspiring professional accountants, IFAC member bodies may consider the following activities:
    1. Establishing a system, which may take a sampling approach, to monitor and report the practical experience obtained;
    2. Providing detailed written guidance for employers, practical experience supervisors, and aspiring professional accountants regarding the program of practical experience and their respective roles and responsibilities;
    3. Establishing a mechanism for approving the suitability of employers to provide the appropriate practical experience for aspiring professional accountants;
    4. Assessing and approving the practical experience environment before commencement of experience. For example, the nature and scope of practical experience and the training arrangements of employers can be reviewed to ensure that aspiring professional accountants would receive appropriate direction, supervision, mentoring, counseling, and evaluation;
    5. Establishing a system of periodic reporting by employers to cover changes, if any, in the planned nature, scope, and content of practical experience undertaken by aspiring professional accountants;
    6. Assessing, prior to completion of IPD, the practical experience gained, based on written submissions (possibly supported by oral submissions) made by aspiring professional accountants and practical experience supervisors (see also IES 6, Initial Professional Development - Assessment of Professional Competence (2015));
    7. Encouraging employers to provide feedback to aspiring professional accountants and to practical experience supervisors, and to communicate when competences have been achieved;
    8. Monitoring previously approved employers and practical experience supervisors. IFAC member bodies may advise on areas for improvement or might recommend withdrawal of approval if conditions have so changed that relevant experience criteria are not being met; and
    9. Undertaking a periodic and timely study of the competences required by professional accountants to help to ensure that sufficient practical experience is acquired and supported by verifiable evidence, e.g., a work log.
  6. IES 6, Initial Professional Development - Assessment of Professional Competence (2015) provides the principles that apply to the design of assessment activities used to assess the sufficiency (of practical experience)of practical experience.
  7. Various activities can be used to assess the sufficiency (of practical experience)of practical experience of aspiring professional accountants. Appropriate assessment activities may include workplace assessments as presented in IES 2, Initial Professional Development - Technical Competence (2021), IES 3. Initial Professional Development - Professional Skills (2021) and IES 4, Initial Professional Development - Professional Values, Ethics, and Attitudes (2021) in their respective areas of focus within IPD.

 

Tools for Implementation

Overview

IFAC

FAQs - Implementing a Learning Outcomes Approach Based on the International Education Standards

General Information; Design-related; Assessment-related; Governance-related.

IFAC

Video - The Importance of Professional Accounting Education and the Impact of IESs

What is professional accounting education and how does it differ from an accounting education program offered by a university? Why is professional accounting education important? How do the revised International Education Standards impact professional accounting education?

IFAC

Video - An Overview of the International Education Standards

What are the International Education Standards and what do they regulate? Who is the target audience for International Education Standards? What is their level of authority?

Implementation Support

IFAC

The Value of Implementing a Learning Outcomes Approach

Learning Outcomes Approach: Purpose and Benefits.

IFAC

Guiding Principles for Implementing a Learning Outcomes Approach

Describes the guiding principles on design, assessment, and governance for a learning outcome approach.

IFAC

Illustrative Example: A Mentored Workplace-Based Learning Experience Program For Aspiring Professional Accountants

The example illustrates a mentored experience program that is a work experience-based program designed to assist new entrants to the accountancy profession.

Perspectives

IFAC

New Generations in the Workplace: Educational Innovation Challenges

The Personal Perspectives series presents IAESB members’, technical advisors’, and other stakeholders’ visions on challenges affecting aspiring and current professional accountants’ learning and development.

Glossary

Aspiring professional accountant

An individual who has commenced a professional accounting education program as part of Initial Professional Development.

Assessment

Evaluation of professional competence developed through learning and development.

Assessment activity

Those activities designed to assess specific areas of professional competence.

Combination approach

A combination approach combines elements of input-based and output-based approaches.

Competence area

A category for which a set of related learning outcomes can be specified.

Content validity (of assessment)

In relation to assessment, whether an assessment activity provides adequate coverage of the particular aspect of professional competence being assessed.

Continuing professional development (CPD)

Learning and development that takes place after initial professional development, and that develops and maintains professional competence* to enable professional accountants to continue to perform their roles competently.

Cooperative education

A program of education, generally leading to a degree, which includes alternating periods (e.g., terms, semesters, trimesters) of academic study and full-time work experience. This will generally result in additional time required to complete degree requirements.

Education

Systematic process aimed at acquiring and developing knowledge, skills, and other capabilities within individuals, a process that is typically but not exclusively conducted in academic environments.

Equity (of assessment)

In relation to assessment, whether an assessment activity is fair and without bias.

Face validity (of assessment)

In relation to assessment, whether an assessment activity is perceived to measure what it is intended to measure.

Financial statements

A structured representation of historical financial information, including disclosures, intended to communicate an entity’s economic resources or obligations at a point in time or of the changes therein for a period of time in accordance with a financial reporting framework. The term “financial statements” ordinarily refers to a complete set of financial statements as determined by the requirements of the applicable financial reporting framework, but can also refer to a single financial statement. Disclosures comprise explanatory or descriptive information, set out as required, expressly permitted or otherwise allowed by the applicable financial reporting framework, on the face of a financial statement, or in the notes, or incorporated therein by cross-reference.

The financial statements subject to audit are those of the entity, prepared by management of the entity with oversight from those charged with governance.

Firm

A sole practitioner, partnership, corporation, or other entity of professional accountants.

Formal education

The non-workplace based component of an accounting education program.

Good practice

Those elements considered essential to the education and development of professional accountants and performed at a standard necessary to the achievement of professional competence.

Information and communications technologies (ICT)

Established and emerging technologies, techniques, and processes used to capture, manage, transform, or communicate data and information.

Initial professional development (IPD)

Learning and development through which aspiring professional accountants first develop competence leading to performing a role as a professional accountant.

Input measure

An input-based measure focuses on the investment made in learning and development, for example, the number of hours an individual is expected to attend a course or the subject areas covered.

Input-based approach

An approach that establishes an amount of learning activity required for professional accountants to develop and maintain professional competence.

Intellectual skills

Skills relating to the ability of a professional accountant to solve problems, to make decisions, adapt to change, and exercise professional judgment.

Interpersonal and communication skills

Skills relating to the ability of a professional accountant to work and interact effectively with others.

Learning and Development

An ongoing process of developing and maintaining professional competence throughout the career of a professional.

Learning outcome

The content and the depth of knowledge, understanding, and application required for a specified competence area.

Monitoring

Systematic process of collecting, reviewing, and confirming the evidence that demonstrates professional competence has been developed or maintained.

Organizational skills

Skills relating to the ability of a professional accountant to work effectively with or within an organization to obtain the optimal results or outcomes from the people and resources available.

Output measure

An output-based measure focuses on whether the professional accountant has developed the specified competence.

Output-based approach

An approach that requires professional accountants to demonstrate, by way of achieved learning outcomes, that they develop and maintain professional competence.

Personal skills

Skills relating to the personal attitudes and behavior of a professional accountant.

Practical experience

Workplace and other activities that are relevant to developing professional competence.

Practical experience supervisor

A professional accountant who is responsible for guiding, advising, and assisting aspiring professional accountants in acquiring sufficient practical experience.

Predictive validity (of assessment)

In relation to assessment, whether the content of the assessment activity relates to the particular aspect of professional competence that it is intended to assess.

Professional accountant

An individual who achieves, demonstrates, and further develops professional competence to perform a role in the accountancy profession and who is required to comply with a code of ethics as directed by a professional accountancy organization or a licensing authority.

Professional accounting education

Education and training that builds on general education, and imparts (a) professional knowledge, (b) professional skills, and (c) professional values, ethics, and attitudes.

Professional accounting education program

Programs designed to support aspiring professional accountants to develop the appropriate professional competence by the end of initial professional development. They may consist of formal education delivered through degrees and courses offered by universities, other higher education providers, IFAC member bodies, and employers, as well as workplace training.

Professional competence

The ability to perform a role to a defined standard.

Professional judgment

The application of relevant training, knowledge, and experience, within the context provided by auditing, accounting, and ethical standards, in making informed decisions about the courses of action that are appropriate in the circumstances of the audit engagement.

Professional knowledge

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 skepticism

An attitude that includes a questioning mind, being alert to conditions which may indicate possible misstatement due to error or fraud, and a critical assessment of evidence

Professional skills

Intellectual, interpersonal and communication, personal, and organizational skills that a professional accountant integrates with technical competence and professional values, ethics, and attitudes to demonstrate professional competence.

Professional values, ethics, and attitudes

The characteristics that identify professional accountants as members of a profession. They include the principles of conduct (e.g., ethical principles) generally associated with and considered essential in defining the distinctive characteristics of, professional behavior.

Qualification

Qualification as a professional accountant means, at a given point in time, an individual is considered to have met, and continues to meet, the requirements for recognition as a professional accountant.

Reflective activity

The iterative process by which professional accountants, at all stages of their career, continue to develop their professional competence by reviewing their experiences (real or simulated) with a view to improving their future actions.

Relevant ethical requirements

Those ethical requirements to which professional accountants are subject, which ordinarily comprise the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants (including International Independence Standards) (IESBA Code) together with any national requirements that are more restrictive.

Reliability (of assessment)

In relation to assessment, whether an assessment activity consistently produces the same result, given the same set of circumstances, quality or state describing whether a measurement approach consistently produces the same result, given the same set of circumstances.

Role

A function that has a specific set of expectations attached.

Specialization

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.

Sufficiency (of assessment)

In relation to assessment, whether an assessment activity has a balance of depth and breadth, knowledge and application and, combines material from different areas applied to a range of situations and contexts.

Sufficiency (of practical experience)

Whether practical experience has a balance of depth and breadth, knowledge and application and, where appropriate, integration of material from different areas applied to a range of situations and contexts.

The breadth of practical experience is affected by factors such as: nature of role; level of proficiency, prior level of formal education, national or local laws; requirements of regulatory authorities; and the public’s expectation for professional competence.

The depth of practical experience is affected by factors such as: the variety and complexity of tasks; level of supervisory and mentoring support.

Technical competence

Technical competence is defined as the ability to apply professional knowledge to perform a role to a defined standard.

Training

Learning and development activities that complement education and practical experience. Training emphasizes practical application, and is usually conducted in the workplace or a simulated work environment.

Transparency (of assessment)

In relation to assessment, whether details of an assessment activity, such as competence areas to be assessed and timing of the activity, are disclosed publicly.

Validity

Quality or state describing whether a measurement approach measures what needs to be measured.

Verifiable evidence

Evidence that is objective, and capable of being proven and retained.

Work log

A record maintained by an individual of the nature of the assignments and tasks completed, and of the time incurred in completing those assignments and tasks. A work log might also include documentation of competences developed as a result of completing work assignments.

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Description of Levels of Proficiency

This description of levels of proficiency supports the use of learning outcomes in publications on professional accounting education such as IES 2, 3, and 4. It provides descriptions of three levels of proficiency. These descriptions, together with the learning outcomes, provide information to help IFAC member bodies design their professional accounting education programs for a variety of professional accounting roles and specializations.

Level of Proficiency Description

Foundation

Typically, learning outcomes in a competence area focus on:

  • Defining, explaining, summarizing, and interpreting the underlying principles and theories of relevant areas of technical competence to complete tasks while working under appropriate supervision;
  • Performing assigned tasks by using the appropriate professional skills;
  • Recognizing the importance of professional values, ethics, and attitudes in performing assigned tasks;
  • Solving simple problems, and referring complex tasks or problems to supervisors or those with specialized expertise; and
  • Providing information and explaining ideas in a clear manner, using oral and written communications.

Learning outcomes at the foundation level relate to work environments that are characterized by low levels of ambiguity, complexity, and uncertainty.

Intermediate

Typically, learning outcomes in a competence area focus on:

  • 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 environments that are characterized by moderate levels of ambiguity, complexity, and uncertainty.

Advanced

Typically, learning outcomes in a competence area focus on:

  • 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 environments that are characterized by high levels of ambiguity, complexity, and uncertainty.