IES 8 IES 8:
Audit Engagement Partner Competence

Introduction

Scope of this Standard
  1. International Education Standard (IES) 8 prescribes the professional competence that professional accountants are required to develop and maintain when performing the role of an Engagement Partner responsible for audits of financial statements. For the purpose of IES 8, hereafter referred to as "Engagement Partner" per the definition set out in the International Standard on Auditing (ISA) 220, Quality Control for an Audit of Financial Statements.
  2. IES 8 is addressed to International Federation of Accountants (IFAC) member bodies. IFAC member bodies have a responsibility for the Continuing Professional Development (CPD) of professional accountants, and for fostering a commitment to lifelong learning among professional accountants. Under IES 7, Continuing Professional Development (2020), IFAC member bodies require professional accountants to develop and maintain professional competence necessary to perform their role as a professional accountant. IES 8 applies this IES 7 requirement to the role of an Engagement Partner. It is the responsibility of the professional accountant performing the role of an Engagement Partner to develop and maintain professional competence by undertaking relevant CPD activities, which include practical experience.
  3. IES 8 is intended to be read in conjunction with Statement of Membership Obligations (SMO) 1 - Quality Assurance, International Standard on Auditing (ISA) 220, Quality Control for an Audit of Financial Statements, and International Standard on Quality Control (ISQC) 1, Quality Control for Firms that Perform Audits and Reviews of Financial Statements, and Other Assurance and Related Services Engagements. Together, these pronouncements place responsibilities on IFAC member bodies, Engagement Partners, and firms as part of the system of quality control for audits of financial statements. Also, in many jurisdictions, a regulator may have an oversight role in this system of quality control. Each of these stakeholders may have an impact on the professional competence of the Engagement Partner.
  4. IFAC member bodies or other stakeholders may also apply the requirements of IES 8 to professional accountants performing an equivalent role to that of an Engagement Partner on audits of other historical financial information in compliance with the ISA (or other relevant auditing standards) or other types of engagements providing assurance and related services.
  5. 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). Additional terms from the International Auditing and Assurance Standards Board (IAASB) pronouncements are also included in the Explanatory Material.
Explanatory Material
References to Definitions Contained within IAASB Pronouncements
  1. IES 8 uses the following terms already defined within IAASB pronouncements.

Auditor's Expert

ISA 620 - Using the Work of an Auditor's Expert, Paragraph 6(a).

An individual or organization possessing expertise in a field other than accounting or auditing, whose work in that field is used by the auditor to assist the auditor in obtaining sufficient appropriate audit evidence. An auditor's expert may be either an auditor's internal expert (who is a partner or staff, including temporary staff, of the auditor's firm or a network firm), or an auditor's external expert.

Engagement Partner*

ISA 220 - Quality Control for an Audit of Financial Statements, Paragraph 7 (a).

The partner or other person in the firm who is responsible for the audit engagement and its performance, and for the auditor's report that is issued on behalf of the firm, and who, where required, has the appropriate authority from a professional, legal, or regulatory body.

Engagement Team

ISA 220 - Quality Control for an Audit of Financial Statements, Paragraph 7 (d).

All partners and staff performing the engagement, and any individuals engaged by the firm or a network firm who perform audit procedures on the engagement. This excludes an auditor's external expert engaged by the firm or a network firm. The term engagement team" also excludes individuals within the client's internal audit function who provide direct assistance on an audit engagement when the external auditor complies with the requirements of ISA 610, Using the Work of Internal Auditors.

Financial Statements

ISA 200 - Overall Objective of the Independent Auditor, and the Conduct of the Audit in Accordance with International Standards on Auditing, Paragraph 13 (f).

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.

Firm*

ISA 220 - Quality Control for an Audit of Financial Statements, Paragraph 7 (e).

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

Professional Judgment

ISA 200 - Overall Objective of the Independent Auditor, and the Conduct of the Audit in Accordance with International Standards on Auditing, Paragraph 13 (k).

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 Skepticism

ISA 200 - Overall Objective of the Independent Auditor, and the Conduct of the Audit in Accordance with International Standards on Auditing, Paragraph 13 (l).

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 audit evidence.

* "Partner" and "firm" should be read as also referring to their public sector equivalents.

Scope of this Standard
  1. Professional competence can be described and categorized in many different ways. Within IES 8, 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.
  2. CPD is a continuation of Initial Professional Development (IPD). IPD is the learning and development through which individuals first develop competence leading to performing the role as a professional accountant. CPD is learning and development that takes place after IPD, and that develops and maintains professional competence to enable professional accountants to continue to perform their roles competently. CPD provides continuous development of: (a) technical competence, (b) professional skills, and (c) professional values, ethics, and attitudes achieved during IPD, refined appropriately for the professional activities and responsibilities of the professional accountant.
  3. As outlined in IES 7, CPD includes practical experience. As the career of an Engagement Partner progresses, practical experience becomes increasingly important in developing and maintaining the necessary depth and breadth of professional competence. Practical experience for Engagement Partners may be evidenced by annual self-declarations, records of chargeable time, and the results of qualitative monitoring activities such as performance reviews, engagement quality assurance reviews and regulatory inspections.
  4. In addition to professional competence and practical experience, other factors outside the scope of IES 8 determine whether a professional accountant has, where required, the appropriate authority from a professional, legal, or regulatory body to perform the role of Engagement Partner.
  5. In many jurisdictions, legislation, regulation, or a regulator (referred to collectively as a "licensing regime") sets or enforces the requirements as to who may perform the role of an Engagement Partner. Licensing regimes vary widely in their requirements. Where licensing is not within the authority of the IFAC member body, IFAC member bodies shall use their best endeavors as described in SMO 2 - International Education Standards for Professional Accountants and Other Pronouncements Issued by the IAESB to influence the licensing regime so that the IFAC member body can meet the professional competence requirements set out in IES 8. (SMO 2 sets out the requirements of an IFAC member body with respect to international standards and other pronouncements issued by the IAESB. The SMO specifically addresses the situation where an IFAC member body has no responsibility or shared responsibility for adopting and implementing professional accounting.)
  6. A firm, which by definition includes sole practitioners, determines who can issue an audit opinion as a legal representative of that firm. Most firms operate in a partnership structure, and the partners in the partnership decide who in that firm can perform the role of Engagement Partner.

Stakeholders That Impact the Professional Competence of Engagement Partners

  1. Figure 1 illustrates stakeholders that impact the professional competence of Engagement Partners. Relationships between stakeholders can be dependent on the jurisdiction or as a consequence of requirements contained in ISA and IES and obligations contained in IFAC pronouncements.
  2. In accordance with IES 7, IFAC member bodies require professional accountants to undertake and record relevant CPD that develops and maintains professional competence necessary to perform their role as a professional accountant.

Figure 1: Stakeholders That Impact the Professional Competence of Engagement Partners

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  1. IES 7 also requires IFAC member bodies to establish a systematic process to monitor whether professional accountants meet the IFAC member body's CPD requirements.
  2. ISA 220 addresses the responsibilities of the Engagement Partner with respect to whether the engagement team and any auditor's experts who are not part of the team, collectively have the appropriate competence and capabilities. Unless information provided by the firm or other parties suggest otherwise, ISA 220 indicates that the engagement team may rely on the firm's system of quality control in relation to the competence of personnel through their recruitment and formal training.
  3. ISQC 1 requires the firm to establish policies and procedures designed to provide reasonable assurance that the firm has sufficient personnel with the competence, capabilities and commitment to ethical principles, including independence requirements, necessary to (a) perform engagements in accordance with professional standards and applicable legal and regulatory frameworks, and (b) enable the firm or Engagement Partners to issue reports that are appropriate in the circumstances.
  4. In many jurisdictions, regulators may have an oversight role in relation to IFAC member bodies, firms, and Engagement Partners.
  5. By complying with the requirements of IES 8 and fulfilling their obligations under SMO 1 and SMO 2, IFAC member bodies assist firms in complying with the requirements of ISQC 1 and assist Engagement Partners in complying with the requirements of ISA 220. Collectively these pronouncements promote clarity and consistency with respect to the professional competence required of the Engagement Partner and the engagement team, which serves to protect the public interest. (SMO 1 sets out the requirements of an IFAC member body with respect to quality assurance review systems for its members who perform audits, review and other assurance and related services engagements of financial statements. The SMO specifically addresses the situation where an IFAC member body has no responsibility or shared responsibility for setting the rules and operating the quality assurance review system. SMO 2 sets out the requirements of an IFAC member body with respect to international education standards and other pronouncements issued by the IAESB. The SMO specifically addresses the situation where an IFAC member body has no responsibility or shared responsibility for adopting and implementing professional accounting.)

Progressive Nature of Professional Competence

  1. Only those professional accountants who develop and maintain the professional competence that is demonstrated by achievement of the learning outcomes listed in requirement 8 will be able to deal with the complex situations that Engagement Partners may face during their careers. A professional accountant aspiring to be an Engagement Partner will usually serve for several years on engagement teams and may progress through supervisory and managerial roles under the supervision of an Engagement Partner. This progression through increasing levels of responsibility is a common path through which a professional accountant may prepare to assume the role of an Engagement Partner. Those serving as an Engagement Partner develop and maintain their professional competence through leading or serving on audit engagements, and through other learning activities as part of their CPD.

Audit of Financial Statements and Other Assurance Engagements

  1. IES 8 is applicable to Engagement Partners responsible for the audits of financial statements. The professional competence that is demonstrated by the achievement of the learning outcomes in requirement 8 may also be helpful when performing audits of other historical financial information in compliance with the ISA or other types of assurance and related services. Similarly, much of the professional competence required for an audit of financial statements may be relevant to those Engagement Partners responsible for assurance engagements relating to non-financial statement information, such as environmental or social measures.

Effective Date

  1. IES 8 is effective from January 1, 2021.

View Currently-Effective IES

Objective

  1. The objective of IES 8 is to establish the professional competence that professional accountants develop and maintain when performing the role of an Engagement Partner.
Explanatory Material
  1. Establishing the professional competence that professional accountants develop and maintain in performing the role of Engagement Partner serves several purposes. It protects the public interest; contributes to audit quality; enhances the work of Engagement Partners; and promotes the credibility of the audit profession.
  2. While a premise of IES 8 is that Engagement Partners have already developed the professional competence to assume that role, Engagement Partners operate in an environment of significant change. Pressure for change can come from many sources, including, but not limited to: (a) increased regulation, (b) developments in financial and non-financial reporting, (c) emerging technologies, (d) increasing use of business analytics, and (e) business complexity. Change requires Engagement Partners to maintain and further develop professional competence throughout their careers.

Requirements and Explanatory Material

  1. IFAC member bodies shall require professional accountants performing the role of an Engagement Partner to develop and maintain professional competence that is demonstrated by the achievement of learning outcomes including, but not limited to, those listed under the competence areas below.
Learning Outcomes for the Professional Competence of an Engagement Partner

Expand each competence area to see the required learning outcomes.

(a) Audit

  1. Lead the audit through active involvement during all phases of the audit engagement.
  2. Lead the identification and assessment of the risks of material misstatement.
  3. Develop an audit plan that responds to the risks of material misstatement identified.
  4. Evaluate responses to the risks of material misstatement.
  5. Conclude on the appropriateness and sufficiency of all relevant audit evidence, including contradictory evidence, to support the audit opinion.
  6. Evaluate whether the audit was performed in accordance with International Standards on Auditing or other relevant auditing standards, laws, and regulations applicable to an audit of the financial statements.
  7. Develop an appropriate audit opinion and related auditor's report, including a description of key audit matters as applicable.

(b) Financial accounting and reporting

  1. Evaluate whether an entity has prepared, in all material respects, financial statements in accordance with the applicable financial reporting framework and regulatory requirements.
  2. Evaluate the recognition, measurement, presentation, and disclosure of transactions and events within the financial statements in accordance with the applicable financial reporting framework and regulatory requirements.
  3. Evaluate accounting judgments and estimates, including fair value estimates, made by management.
  4. Evaluate the fair presentation of financial statements relative to the nature of the business, the operating environment, and the entity's ability to continue as a going concern.

(c) Governance and risk management

  1. Evaluate corporate governance structures and risk assessment processes affecting the financial statements of an entity as part of the overall audit strategy.

(d) Business environment

  1. Analyze relevant industry, regulatory, and other external factors that are used to inform audit risk assessments including, but not limited to, market, competition, product technology, and environmental requirements.

(e) Taxation

  1. Evaluate procedures performed to address the risks of material misstatement in the financial statements in respect of taxation, and the effect of the results of these procedures on the overall audit strategy.

(f) Information and communications technologies

  1. Evaluate the information and communications technologies environment to identify controls that relate to the financial statements to determine the impact on the overall audit strategy.

(g) Business laws and regulations

  1. Evaluate identified or suspected non-compliance with laws and regulations to determine the effect on the overall audit strategy and audit opinion.

(h) Finance and financial management

  1. Evaluate the various sources of financing available to, and financial instruments used by, an entity to determine the impact on the overall audit strategy.
  2. Evaluate an entity's cash flow, budgets, and forecasts, as well as working capital requirements to determine the impact on the overall audit strategy.

(i) Interpersonal and communication

  1. Communicate effectively and appropriately with the engagement team, management, and those charged with governance of the entity.
  2. Evaluate the potential impact of cultural and language differences on the performance of the audit.
  3. Resolve audit issues through effective consultation when necessary.

(j) Personal

  1. Promote lifelong learning.
  2. Act as a role model to the engagement team.
  3. Act in a mentoring or coaching capacity to the engagement team.
  4. Promote reflective activity.

(k) Organizational

  1. Evaluate whether the engagement team, including auditor's experts, collectively has the appropriate objectivity and competence to perform the audit.
  2. Manage audit engagements by providing leadership and project management of engagement teams.

(l) Commitment to the public interest

  1. Promote audit quality and compliance with professional standards and regulatory requirements with a focus on protecting the public interest.

(m) Professional skepticism and professional judgment

  1. Apply professional judgment in planning and performing an audit and reaching conclusions on which to base an audit opinion.
  2. Promote the importance of the application of professional skepticism during all phases of the audit engagement.
  3. Apply professional skepticism to critically assess audit evidence obtained during the course of an audit and reach well-reasoned conclusions.
  4. Evaluate the impact of individual and organizational bias on the ability to apply professional skepticism.
  5. Apply professional judgment to evaluate management's assertions and representations.
  6. Resolve audit issues using critical thinking to consider alternatives and analyze outcomes.

(n) Ethical principles

  1. (i) Promote the importance of compliance with the fundamental principles of ethics.
  2. (ii) Evaluate and respond to threats to objectivity and independence that can occur during an audit.

  1. IFAC member bodies shall require professional accountants performing the role of an Engagement Partner to undertake CPD that develops and maintains the professional competence required for this role.
Explanatory Material
  1. Requirement 8 identifies the competence areas and related learning outcomes for (a) technical competence, (b) professional skills, and (c) professional values, ethics, and attitudes. A competence area is a category for which a set of related learning outcomes can be specified.
  2. Learning outcomes establish the content and depth of knowledge, understanding, and application required for each specified competence area. The achievement of learning outcomes is an output-based approach to measuring CPD. IES 7 provides further guidance in respect of the measurement of CPD.
  3. IES 8 builds on the learning outcomes that describe the professional competence required by aspiring professional accountants by the end of IPD as outlined in IES 2, 3, and 4.
  4. Other factors in addition to the learning outcomes in requirement 8 may affect the nature, timing, and extent of planned CPD. These factors may include, but are not limited to: (a) an Engagement Partner's portfolio of audit engagements, (b) the extent of any changes in auditing and financial reporting standards, and (c) the impact of any changes in the content of other competence areas noted in requirement 8.
  5. Irrespective of the size or nature of the audit engagement, and the firm of the Engagement Partner providing the audit, a premise of IES 8 is that Engagement Partners continue to undertake CPD appropriate to the complexity of the audits for which they serve as Engagement Partners.
  6. IFAC member bodies may include additional competence areas or require Engagement Partners to achieve additional learning outcomes that are not specified in this IES. This may occur, for example, when an Engagement Partner audits specialized industries or transactions.

Sole Practitioners and Small and Medium Practices

A25. By focusing on one specific role rather than an engagement team or firm structure, IES 8 recognizes the wide range of situations in which the Engagement Partner operates, including as a sole practitioner or within small and medium practices. In these situations, the Engagement Partner may be operating without the support of an engagement team, including those engagement team members with specialist skills. As a consequence, the Engagement Partner may have direct involvement in the completion of a wider range of audit activities than would otherwise be the case.

Audit - Learning Outcomes

  1. Leading the identification and assessment of risks of material misstatements includes consideration of:
    • the risks identified by engagement acceptance and continuance procedures;
    • an entity's ability to continue as a going concern;
    • the risks of material misstatement due to fraud and error.
  2. Evaluating the response to the risks of material misstatements includes the process of approving or establishing an appropriate overall audit strategy.
  3. Evaluating whether the audit was performed in accordance with International Standards on Auditing or other relevant standards, and with relevant laws and regulations, includes:
    • concluding whether sufficient appropriate audit evidence has been obtained;
    • consideration of significant deficiencies in internal control and in other matters to be communicated to those charged with governance;
    • consideration of bias in management's estimates and other areas of judgment.

Organizational - Learning Outcomes

  1. Examples of areas where an auditor's expert may be used on an audit include, but are not limited to, taxation, ICT, legal, forensic accounting, valuations, actuarial services, and pensions.

Professional Skepticism and Professional Judgment - Learning Outcomes

  1. A key aspect of any audit is evaluating whether sufficient and appropriate audit evidence has been obtained to support the conclusions on which the auditor's opinion is based. Professional skepticism involves the application of a questioning mind for the critical assessment of audit evidence. The ISA also require Engagement Partners and their teams to exercise professional judgment in planning and performing an audit of financial statements. Professional judgment is exercised, for example, when challenging management assertions and assumptions contained within the financial statements, and when considering whether accounting standards are appropriately applied by an entity and determining an appropriate overall audit strategy.
  2. Planning effective CPD in the areas of professional skepticism and professional judgment involves due care and may include a blend of learning methods in which mentoring, reflective activity, and practical experience play a key role.

 

Tools for Implementation

Overview

IFAC

Webcast – IES 8 Webcast Presentation: Engagement Partners

Why is IES 8 Needed? What are IES 8’s Important Features? Who Does IES 8 Affect? What Does IES 8 Regulate? How Is IES 8 Implemented by Engagement Partner?

IFAC

Webcast – IES 8 Webcast Presentation: Firms

Why is IES 8 Needed? What are IES 8’s Important Features? Who Does IES 8 Affect? What Does IES 8 Regulate? How Is IES 8 Implemented?

IFAC

Webcast – IES 8 Webcast Presentation: Member Bodies

Why is IES 8 Needed? What are IES 8’s Important Features? Who Does IES 8 Affect? What Does IES 8 Regulate? How Is IES 8 Implemented by public accounting firms and SMPs?

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?

Perspectives

IFAC

A Public Accounting Firm Perspective

In the second of a three part video series, IAESB Technical Advisor David Simko discusses the implications of the board's recently released continuing professional development standard for public accounting firms.

IFAC

All Professional Accountants Need to Include Skepticism in their Mindset

The IAESB Personal Perspectives Series shares insights from board members, technical advisors and other key stakeholders on some of the challenges affecting aspiring professional accountants and the importance of effective accountancy learning and development.

Studies & Reports

External Resource | ICAS and FRC

Skills, Competencies and the Sustainability of the Modern Audit

Stuart Turley, Christopher Humphrey, Anna Samsonova-Taddei, Javed Siddiqui, Margaret Woods, Ilias Basioudis, and Chrystelle Richard (Commissioned by ICAS and FRC).

External Resource | ICAS and FRC

The Capability and Competency Requirements of Auditors in Today’s Complex Global Business Environment

Karin Barac, Elizabeth Gammie, Bryan Howieson, and Marianne van Staden (Commissioned by ICAS and FRC).

External Resource | UIL

Global Inventory of Regional and National Qualifications Frameworks 2019, Volume I: Thematic chapters

UNESCO Institute for Lifelong Learning (UIL); European Centre for Development of Vocational Training (Cedefop); European Training Foundation (ETF); United Nations Educational, Scientific and Cultural Organisation (UNESCO).

Thought Leadership

IFAC

A Conversation on Professional Skepticism and Accountancy Education

Listen to a conversation on professional skepticism with Professors Joe Brazel, Christine Nolder, and Doug Prawitt discuss a range of issues, including the definition of professional skepticism; skills and behaviors important to its application; the involvement of the higher education sector in developing its underlying behavioral competencies; techniques used for its development within an education setting; and the involvement of other stakeholders in a global environment.

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.