draft minutes of the international accounting …...apr 13, 2016 · morning of wednesday, november...

AGENDA ITEM 1iii DRAFT

DRAFT MINUTES OF

THE INTERNATIONAL ACCOUNTING EDUCATION STANDARDS BOARD PUBLIC

MEETING HELD NOVEMBER 4 TO 6, 2015.

PLACE: New York, USA Meeting No. 2/15 (84)

VENUE: International Federation of Accountants’ Headquarters

PRESENT:

Voting Members: Technical Advisors:

United Kingdom Chris Austin (Chair) Adrian Pulham

Germany Thomas Orth Christian Bauch

Indonesia Sidharta Utama Lindawati Gani

Mexico Blanca Tapia

South Korea Yeong Kyun Ahn Seung Kyoung Yoo

Sri Lanka Sujeewa Mudalige

United Kingdom Rachel Banefield Suzie Webb

United Kingdom Elizabeth Gammie

United States Brian McGuire Raef Lawson

Zambia Mubita Anakoka

TAC Susan St. Amant Andrew Barry

TAC Greg Owens Catherine Hartley

TAC David Simko Susan Flis

TAC Gareth Wellings Kirstine Otty

TAC Anne-Marie Vitale Catherine Forster

Public Member Kazuo Hiramatsu Hiroshi Shiina

Public Member Laine Katzin Robert Zwane

Public Member Isaac Njuguna Edwin Makori

Observers:

CAG Chair Keith Bowman

IAAER Observer Keryn Chalmers

PIOB Representative Jules Muis

IAESB Staff:

Managing Director, Professional Standards James Gunn

Senior Technical Manager David McPeak

Administrative Assistant Sonia Tavares

APOLOGIES:

Zambia, Voting Member Nambayo Kalaluka

TAC Member Gareth Wellings

UNCTAD Observer Yoseph Asmelash


OPENING MATTERS

1(i) Welcome

Ms. Anne-Marie Vitale, IAESB Deputy Chairperson, welcomed IAESB members, technical advisors, and

observers to the meeting. Ms. Vitale extended a special welcome to Ms. Seung Kyoung Yoo (technical

assistant to Dr. Yeong Kyun Ahn; South Korea) and to Mr. Jules Muis who participated in this meeting as

the PIOB representative.

Apologies were received from Mr. Nambayo Kalaluka (Zambia member), Mr. Gareth Wellings (TAC

member) and Mr. Yoseph Asmelash (UNCTAD Observer). Regrets were given by Mr. Chris Austin for the

morning of Wednesday, November 4.

1(ii) Approval of Agenda

The agenda was approved as is.

1(iii) Minutes and Action List of April 2015 (New York) Meeting

The minutes of the previous meeting were approved, subject to following change:

Page 16 of 19, Section10, 3rd sentence. Replace this sentence with the following to improve clarity, “Mr.

Wellings also reported that he presented on behalf of the DWG to the CAG at its February meeting on

the Standards Maintenance project.”

1(iv) Report from the Chairman

Ms. Vitale reminded IAESB members of the need to deliberate on educational issues resulting from the

agenda meeting papers with the view of protecting the public interest.

Mr. Austin, IAESB Chairman, reported that he and IAESB representatives had undertaken the following

speaking engagements and associated communications activities since the April 2015 (New York, USA)

meeting:

May

Professional Development and Certification of Accountants and Auditors: Applying International

Standards and Good Practices in the Regional Context, Roundtable discussion at CReCER 2015,

Quito, Ecuador (Tapia-Sanchez)

IAESB CAG Teleconference Meeting (Austin, Bowman, Vitale, Forster, Gunn, McPeak)

Africa’s Role in International Standard Setting, Panel Discussion at the ACOA 2015, Mauritius

(Kalaluka, Katzin)

Standard-Setting Boards and IFAC Developments, INTOSAI PSC meeting, Ottawa, Canada (Gunn)

June

IAESB Update, IFAC Board Meeting, Washington, USA (Austin, Gunn)


PIOB Meeting, Madrid, Spain (Austin, Gunn)

July

Impact of Accounting on Economic Development, Roundtable held at IAAER (International Association

for Accounting Education and Research) and SAAA (Southern African Accounting Association) jointly

hosted the Biennial Conference, East London, South Africa (Hiramatsu, Chalmers, Abela)

August

The Global Accountancy Profession: Learning and Development, AICPA-CIMA Conference, New York,

USA (Owens)

September

IAESB CAG Meeting (Austin, Bowman, Vitale, Forster, Wellings, Katzin, Owens, Gunn, McPeak)

PIOB 10th Anniversary Seminar - Madrid, Spain (Austin, Bowman, Gunn)

October

PIOB Meeting, Madrid, Spain (Austin, Bowman, Gunn)

IAESB Update, Meeting with the IMCP Commission on Education, Mexico City, Mexico (Tapia, Vitale,

McPeak)

Challenges in Education and Professional Development of Accountants in a Globalized Environment,

IMCP Conference, Mexico City, Mexico (Tapia, Vitale, McPeak)

IAESB Update, IFAC Forum of Firms meeting, New York, USA (St Amant)

IAESB Update, IFAC Compliance Advisory Panel meeting, New York, USA (Austin, McPeak).

CURRENT PROJECTS

2. IAESB FUTURE FRAMEWORK

During its discussions, IAESB members received revised versions of the draft consultation paper and an

Issues paper that provided Board members with (a) background information and (b) issues arising from the

drafting of the consultation paper. The following summarizes the Board’s discussion.

IAESB Discussion of Issues

Criteria for New/Revised IES

IAESB members agreed with the proposed criteria for revising and developing new IES (See Agenda Item

2-1 of November 2015 meeting). IAESB members also agreed that the standard-setting process needs to

ensure a formalized review of each IES, provides opportunities for exploratory discussions on new or

emerging issues, and identifies the impact of a new standard on stakeholders. IAESB members also


supported the view that the revision or development process of IES should be structured and conducted on

a publicly disclosed time frame.

CAG Report

The IAESB Chair thanked the CAG for submitting its report (See Agenda Item 2-2 of November 2015

meeting) and its hard work in developing the recommendations for the IAESB’s future strategy. In general,

IAESB members supported the recommendations of the report viewing them as opportunities that the Board

needed to further investigate in determining its future strategy. Several IAESB members suggested that

thought leadership should be investigated in areas such as the application of professional skepticism at

various points along the financial reporting supply chain and the role of the educator in the learning

outcomes approach.

Consultation Paper

General Comments

In general, IAESB members supported the proposed direction for the future Board strategy and work

priorities (See Revised Agenda Item 2-4 of the November 2015 meeting). IAESB members, however, made

the following comments for consideration:

Explore the need of additional role-based education standards such as for the Chief Financial Officer;

Need to ensure that there is a real demand for any future standard-setting and that standards will

remain relevant given the pace of change in areas such as Information Technology and

Communications (ITC);

Need to define what success for the IAESB would look over the next five years to rationalize the

Board’s work activities;

Question why the IAESB should have as a strategic objective, setting education benchmarks, should

this work be done by IFAC or some other organization;

Need to confirm what is the core purpose of IAESB’s activities;

Reorganize the themes and question of the consultation paper to cover: validation of IAESB’s Strategic

Objectives; revision of IES 7, Continuing Professional Development; assistance with the development

of professional competence to support professional skepticism and professional judgment;

identification of emerging areas for future standard-setting areas; and identification what other areas

for IAESB activities; and

Need a structured communications approach to use the Board’s network of contacts to request

comments on the consultation paper, including reaching out to regional organizations and major IFAC

member bodies.

In summary, IAESB members supported the view that the Board’s strategy needed to provide a bold,

forward looking vision for the next 5 years which speaks to all IAESB stakeholders.

Content Review of Consultation Paper

Following a review of a revised version of the consultation paper, IAESB members provided the following

comments to improve the paper’s clarity:

Review opening paragraphs with the aim to improve conciseness, emphasizing what needs

to addressed in the public interest, extending the invitation to all interested stakeholders,

and providing a sense of next steps.

Re-order section on the context of IAESB’s standard-setting activities to follow section on trends and

implications because it provides explanation for IAESB’s standard setting activities.


Improve the clarity of the section on trends in the accounting profession and their implication for

accounting education by categorizing trends as follows: changing roles of professional accountants;

changing policy and content; and changing nature of accounting education;

Discuss the implications of the identified trends by indicating that the IESs now includes a learning

outcomes approach which recognizes diversity of practice across jurisdictions. The trends point to

the importance of a structured approach to ensure that learning outcomes may be met regardless of

the teaching and learning methods applied.

Explain the Standard-setting context by indicating the following aspects: the IAESB is currently

developing implementation material and other guidance to support a deeper understanding of the

revised IESs and their implications; the IAESB is looking ahead by assessing gaps in the existing IES

and scanning for emerging environmental trends in accounting education; and recognizing that time

is needed to implement fully and setting a time horizon of five years for its future strategy.

Re-organize the section on the IAESB’s vision and strategic objectives to include the Board’s vision

and strategic priorities. The content describing the IAESB’s strategic priorities should be organized

according to the following areas: Enhancing existing IES; Potential new IES; Adoption and

implementation support; and Advancing international debate.

Public Consultation

IAESB members agreed the process to finalize and the direction of the content of the consultation paper,

subject to a small workgroup from the Steering Committee preparing a revised version of the consultation

paper from Board members’ comments and suggestions on Agenda Item 2-5, which will be circulated to

IAESB members for a fatal flaw review.

Finally, IAESB members also agreed that the consultation paper should have a 90-day exposure period to

obtain public comments.

Proposed Way Ahead

In preparing the consultation paper for its release the paper will undergo a DWG review and formatting by

IFAC staff. Any editorial changes resulting from this review will be approved by the IAESB chair. The

expected date of publication of the consultation paper is early December 2015. Respondents’ comments

will be analyzed by the Steering Committee and an Issues Paper identifying significant issues and proposals

will be developed for discussion by IAESB CAG and IAESB at their April 2016 meetings.

3. LEARNING OUTCOMES GUIDANCE

During its deliberations the IAESB received revised versions of the Guiding Principles paper, Value

Proposition statement, Frequently Asked Questions and Answers document, and Examples of Practice

Illustrating a Learning Outcomes Approach, as well as an Issues paper that provided Board members with

(a) background information and (b) issues arising from the drafting of these guidance materials. The

following summarizes the Board’s discussion.


In general, IAESB members agreed with the content provided in the package of guidance materials, subject

to following suggestions which aimed to improve the scope and consistency among the materials.

Guiding Principles


Need to recognize that the design of a program is informed by professional competence required of

targeted accountancy roles;

Include instructional design in the Design principles section;

Address assessment from the perspectives of program, individual, and activities;

Extend discussion of assessment into the Governance principles section;

Need to improve linkage between guiding principles and value proposition statement to promote

learning outcomes approach;

Indicate in an introduction that these documents are not meant to be “how to” guidance materials;

Address the delivery aspect of a learning outcomes approach through the Design principles section;

Clarify the Assessment principles section by ensuring the appropriate use of terms such as monitoring

and evaluating;

Need to recognize that learning process focuses on achievement of learning outcomes within a

competence area at a desired level of proficiency;

Consider discussion around the transition period to achieve an outcomes approach, for example:

suggest integration of a learning outcomes approach into the regular reviews of their Member Bodies

education programs; recognize of the maturity stage of the Member Body as an important factor;

Indicate that the learning outcomes approach is successful if it focuses on learner-centric ownership;

Value Proposition

Publish as an independent document that can be used to promote a learning outcomes approach;

Ensure a balanced presentation of the traditional-based education approach because the the

implementation of a learning outcomes approach has failed in certain jurisdictions;

Recognize that a learning outcomes approach represents a natural progression in developing learning

programs and should be seen as “good” practice;

Need to communicate the benefits of the learning outcomes approach to various types of audiences;

Recognize that learning outcomes support criteria-referenced assessments;

Ensure that there is linkage between Values Proposition document and Guiding Principles;

Consider whether Values Proposition statement should be included in the Framework (2015)

document; and

Include governance in the 1st paragraph of the Values Proposition statement.

Frequently Asked Questions and Answers

Review Questions 1, 2, and 6 for clarity issues with the aim of ensuring translation;

Change the wording of Question 6 to a negative answer and address delivery;

Include examples from the literature to illustrate and enhance the answers;

Review the use of the following terms in the Introductory table, “not-applicable,” “not-specified”, and

use of blank spaces;

Consider using the convention of graying out in the Introductory table to reflect a no response;

Ensure that the content on benefits of implementing learning outcomes in the FAQs document and the

Value Proposition statement is consistent;

Ensure Yes or No responses are clearly indicated for Questions 14, 19, and 25;

Provide an academic reference to the term, “instructional design”;

Include a “key words” section to assist reader; and

Include a reference to experiential learning in Questions 3 and 4.

Examples of Good Practice

Clarify in assessment example whether there is an expectation to demonstrate all of the learning

outcomes or a reasonable majority;


Provide additional context around examples to ensure that the reader understands that this is a

collection of practices by professional accountancy organizations and is a non-authoritative document

for information purposes only;

Require further explanation on the use of multi-examination forms and how calibration occurs between

these forms; and

Avoid the use of embedded attachments.

Introduction

Ensure that each guidance document is properly introduced so that the user can understand the

suggested flow of the suite of materials and context of guidance materials; and

Review the wording of 2nd paragraph around “the most effective way of learning” so as not to mitigate

the importance of the learning process.

IAESB members approved the content of the package of guidance materials (See agenda items 3-5, 3-6,

3-7, 3-8, 3-9 (Work Based Learning), 3-10 (Higher Education Contributes to Professional Qualifications)),

subject to consideration of the members’ editorial suggestions. In finalizing the documents IAESB members

requested that the maintenance process be clarified so as to ensure the guidance documents remain

“evergreen.” IAESB members also suggested the following:

Develop communications activities to promote the guidance documents;

Develop an interactive format for presenting the FAQs and include an introduction that explains how

the FAQs documents are maintained; and

Investigate a longer-term solution for presentation, for example a repository or FAQs on the IAESB

website.

Proposed Way Forward

In preparing the package of guidance materials for publication the guidance materials will undergo a DWG

review and formatting by IFAC staff. Any editorial changes resulting from this review will be approved by

the taskforce chairperson. The expected date of publication of the package of guidance materials is late

December of 2015 or early January of 2016.

4. SUPPORT MATERIALS FOR IMPLEMENTING IES 8, PROFESSIONAL COMPETENCE

FOR ENGAGEMENT PARTNERS RESPONSIBLE FOR AUDITS OF FINANCIAL

STATEMENTS

Mr. Greg Owens, chair of the IAESB taskforce on developing support materials for IES 8 Guidance,

provided a FAQs document and an Issues paper which identified issues and questions for IAESB members’

input. The following summarizes the Board’s discussion.


Project Proposal for IES 8 (revised) Implementation Support Materials

IAESB members agreed with the proposed direction of project proposal for developing IES 8

implementation support materials. Members supported the proposed types of project deliverables and

indicated that the project proposal provides a clear difference between the scope of the learning outcomes

guidance project and the scope of the project to develop IES 8 implementation support materials.

Review of Phase I Deliverables for IES 8 (Revised) Implementation Support Materials

Organization and Format


In general, IAESB members supported the organization of the Frequently Asked Questions and Answers

(FAQs) into categories. There was also agreement as to the proposed format of questions, subject to

reviewing some of the answers of the questions to ensure that a definitive yes or no answer is provided

when required and that additional explanation is included to provide assistance.

IAESB members suggested that the FAQs be reorganized to include questions at the beginning of the

document to clarify why IES 8 is directed to the engagement partner and how it is a role-based CPD

standard.

Content

IAESB members provided the following suggestions on improving the content coverage by the FAQs:

Provide examples of how organizations can transition to a learning outcomes approach;

Add questions to address assessment of learning outcomes;

Clarify how performance reviews can be used to demonstrate the achievement of learning outcomes;

and

Clarify the linkage of IES 8’s learning outcomes to the underlying learning outcomes prescribed in IESs

2, 3, and 4.

Perspective

IAESB members suggested that the FAQs needed to place greater emphasis on the Regulator as a

stakeholder. It was pointed out that regulators influence the criteria for final assessment of professional

competence and ISQC 1 influences the quality control environment of an audit engagement.

Other Issues

IAESB members suggested that an Introduction be used to introduce the FAQs. It was suggested that the

introduction include background on IES 8 which would explain the focus of the standard and its aim with

respect to protecting the public interest.

Issues Concerning Implementation of IES 8 (Revised)

Impact of IES 8 Learning Outcomes on IFAC Member Bodies

IAESB members indicated concern around awareness and dissemination of the FAQs document to

engagement partners and regulators. Members also expressed a concern around the maintenance process

so as to ensure its status be continued as a “living” document with the aim of adding FAQs when necessary.

IAESB members also suggested that the following areas needed further clarification to improve the

implementation of the standard:

The use of practical experience to achieve learning outcomes and how performance reviews can be

used to demonstrate the achievement of learning outcomes;

The requirement to specify a preferred approach to measure achievement of CPD activity and the

need to influence the behavior of the engagement partner to develop and maintain professional

competence; and

The differences between input and output-based measures and how to mitigate these differences

between these approaches to protect the public interest on a global basis.

IES 8 as a Potential Hurdle for Appointment to Engagement Partner


IAESB members suggested that wording around the admission to an engagement partner was confusing

and might be misleading since it could be interpreted as being a minimum requirement and does not apply

in all jurisdictions. IAESB members agreed that this question should be reworded to be more concise and

indicated that IES 8 is not intended to set entry requirements for admission to being an engagement partner.

IAESB members also suggested that identifying examples of good practice should be deferred to give public

accounting firms time to obtain experience with IES 8.


In preparing the FAQs document for publication the document will undergo a DWG review and formatting

by IFAC staff. Any editorial changes resulting from this review will be approved by the taskforce chairman.

The expected date of publication of the package of guidance materials is mid-December of 2015.

5. STANDARDS MAINTENANCE PROJECT

Mr. Gareth Wellings, Chairman of Drafting Work Group (DWG), presented a list of drafting changes to the

IES and IAESB Glossary of Terms; marked-up and clean versions of these pronouncements; and an Issues

paper that raised issues and questions on the types of changes and the process going forward for Board

discussion. The following summarizes the Board’s discussion.


In general, IAESB members agreed with the proposed drafting changes to the International Education

Standards (IESs) and the IAESB Glossary of Terms (See Agenda Items 5-2 and 5-5 of the November 2015

meeting). In addition, IAESB members provided their comments on the following matters.

Objective Statements

IAESB members indicated that the change from identifying the objective of the IFAC member body to

identifying the objective of the IES was appropriate because not all IFAC member bodies have responsibility

for their professional accounting education programs.

IAESB agreed with the proposed changes to the Objective statements of IESs 1 and 4. It was pointed out

that the term, “fair”, may not be interpreted in the same across jurisdictions and should be fully explained

in accompanying Explanatory paragraphs in IES 1.

IAESB members agreed the following version of the Objective statement for IES 5.

The objective of this IES is to establish practical experience that is sufficient for aspiring

professional accountants to perform a role as a professional accountant.

This version was viewed as preferable because it maintained the concept of sufficiency. It was also agreed

by IAESB members to remove the phrase, “by the end of IPD”, because it was seen as being redundant for

standards aimed at Initial Professional Development.

IAESB members requested that the phrase, “by the end of IPD”, should also be removed from the objective

statements of IESs 2, 3, and 4.

Although there was a suggestion by IAESB members to review the Objective statement of IES 8 for an

opportunity to insert a reference to the public interest, the IAESB accepted the DWG’s conclusion that any

further change to an already concise objective statement would require substantive editorial changes that

was outside the scope of this project. The DWG also pointed to substantial discussion about the public


interest in the Explanatory Material section of IES 8 which was seen as appropriate to address the

suggestion.

Drafting Changes to the Framework, IESs, and Glossary of Terms

IAESB members suggested that the DWG also review the Framework (2015) to ensure consistency with

the IESs and Glossary. In addition, IAESB members suggested the following changes:

Review the use of the terms “measurement” and “assessment”;

Change the phrase IESs 2, 3, and 4, “IPD includes general education” to “IPD builds on general

education”;

Change the phrase, “Recognizing the importance of professional values” to “Applying professional

values” in the foundation proficiency level;

Review the use of the phrase, “level of complexity” in IES 5; and

Ensure that Paragraph in Explanatory Material section on scope in IES 6 is consistent with that of the

other IESs.

Mr. Muis suggested that the 1st paragraph of IES 4 should be reviewed to determine whether it sends a

clear message on the purpose of IES 4 and whether it accurately represents the nature of professional

values, ethics, and attitudes.

Due Process Activities

Exposure Period

The IAESB approved an exposure period of 90 days for public exposure of the proposed drafting changes

to the IES, Framework (2015), and the IAESB Glossary of Terms.

Vote on Content of the Exposure Draft

Following a full discussion on the DWG’s proposals for the proposed drafting changes as shown in Agenda

Items 5-2 and 5-5, the IAESB voted to approve the Exposure Draft on proposed drafting changes to the to

the IESs, Framework for International Education Standards for Professional Accountants and Aspiring

Professional Accountants (Framework 2015), and the IAESB Glossary of Terms to obtain public comment

over a period of 90 days.


The IAESB directed the DWG to develop an accompanying memorandum explaining the scope and

rationale for the drafting changes with the aim of releasing the Exposure Draft for a 90-day period to obtain

public comments. Respondents’ comments will be analyzed by the DWG and an Issues Paper identifying

significant issues and proposals will be developed for discussion by IAESB CAG and IAESB at their April

2016 meetings.

6. GUIDANCE FOR IES 1, ENTRY REQUIREMENTS TO PROFESSIONAL ACCOUNTING

EDUCATION PROGRAMS

Ms. Laine Katzin, taskforce chairperson of IES 1 Guidance, presented a Project Proposal and an Issues

paper which identified issues and questions for IAESB members’ input. More specifically, the Issues paper

covered issues relating to the project approach and project scope relating to influencing factors on entry


requirements from a literature study, ethical obligations of member bodies, and the inclusion of recognition,

reciprocal, and articulation agreements. The following summarizes the Board’s discussion.


In general, IAESB members agreed that both the Information paper and Frequently Asked Questions and

Answers (FAQs) document were helpful in explaining the need for entry requirements tor professional

accounting education programs. IAESB members suggested that the Information Paper should be retitled

a Thought Leadership paper because of its focus on describing factors that should be considered in setting

entry requirements. IAESB members also indicated the need for a short guidance paper that clarifies

important concepts of IES 1 and provides examples of good practice.

IAESB members provided the following suggestions to improve the clarity of the Information paper:

Include the views of educators in the discussion of factors on factors that should be considered in

setting entry requirements;

Recognize that there are different approaches to setting entry requirements, for example a degree in

accounting is required in some jurisdictions;

Avoid being too prescriptive by not using words such as, should or shall;

Include a bibliography; and

Keep the discussion at a high level, recognizing that in some jurisdictions bodies other than the

professional accountancy organizations control the setting of entry requirements.

IAESB members also provided the following suggestions to improve the clarity of the FAQs document:

Question 2. Review the use of the word, motivate, in 3rd sentence;

Questions 3 and 4. Change the order to improve clarity;

Question 6. Review appropriateness of the term, “school leaver’s certificate”;

Question 7. Add technological requirements to list of information to include; and

Provide illustrative examples within the questions.

Additional Topics to be Addressed

IAESB members supported the discussion on diversity, but suggested that more emphasis be placed on

monitoring services that are needed to support individuals who might require further development to ensure

a reasonable chance of successfully completing a professional accounting education program. IAESB

members also suggested covering the following topics:

• Provide examples of entry/exit points and explain how they have been recognized by the market and

assessed for successful completion;

• Include discussion on the need to recognize ethical standards as an entry requirement;

• Include discussion on the use of profiling job careers so as to ensure an understanding of critical

success factors;

• Improve understanding and application of terms such as, “reasonable chance of successfully

completing professional accounting education program,” “setting out principles for entry requirement

for professional accounting education programs that are neither too high or too low,” and “barriers to

entry;” and

• Link success to clear admission criteria.



The IAESB asked the taskforce to prepare revised drafts of the Thought Leadership paper, FAQs

document, and Implementation Guidance paper for discussion by the IAESB CAG and IAESB at their April

meetings.

7. IES USAGE STUDY

Professor Brian McGuire, taskforce chair of IES Usage Study, presented the taskforce’s findings on an

analysis of IFAC questionnaire responses relating to the implementation of IES 7 (See Agenda Item 7-1 of

the November 2015 meeting). The following summarizes the Board’s discussion.


IAESB members indicated that the Board needed to be careful as to what conclusions it could draw from

the IFAC questionnaire responses because the responses represent a “snapshot” at a point in time and

suggested that monitoring of these responses over a period of time might be more informative. IAESB

members indicated that this monitoring of IFAC member body responses on compliance with the IES should

be included as an activity in the next IAESB work program so as to obtain relevant information. Recognizing

the limitations of the data being collected, IAESB encouraged the taskforce to report any conclusions and

recommendations in its report to the Board.


IAESB members directed the taskforce to prepare a final report on the IES Usage study with the aim of

setting out conclusions and recommendations on the status of IES adoption, especially in regard to IES 7.

OTHER MATTERS OF INTEREST

8. IAESB AND OTHER IFAC DASHBOARD REPORTS

The IAESB received and noted the Dashboard reports on the activities of the IFAC Boards. IAESB had no

comments on the reports but were asked to forward a list of their speaking engagements to IAESB staff.

9. DRAFTING WORK GROUP- PROGRESS REPORT

Mr. Gareth Wellings, Chairman of Drafting Work Group (DWG), reported that (i) he provided a final review

of suggestions from the plain English language review on Framework (2015) and (ii) DWG members

performed a review of the final version of consultation paper on a Learning Outcomes Guidance as well as

a “lite” review of IES 8 FAQs document. Mr. Wellings also indicated that a process needed to be

documented on the type of review that the DWG should conduct on non-authoritative publications. IAESB

members suggested that it was important for the DWG to review both authoritative and non-authoritative

publications issues by the IAESB. It was suggested that the scope of the DWG’s reviews on non-

authoritative IAESB publications should be negotiated with the taskforces before publication. IAESB

members suggested that the policy and procedure manual be revised for work on non-authoritative

publications, which would be especially timely given the Board’s work in the area of developing support

materials for implementation guidance. Mr. Muir pointed out the value-added that this process provides and

how it acts as a filter that improves consistency among publications. Because Mr. Andrew Barry has


indicated that he is stepping down from the IAESB, Mr. Wellings took the opportunity to recognize his work

and thanked him for his contributions to the DWG.

FUTURE MEETINGS & OTHER BUSINESS

10. ENVIRONMENTAL SCAN AND EMERGING EDUCATION ISSUES

The IAESB received the following reports that provided updates on IAESB conferences or meetings and

emerging education issues:

Education Developments in Mexico for Accountants (B. Tapia; See Appendix 1 for PowerPoint

Presentation)

o Input-based measurement approach is predominantly used in Mexico to measure achievement of

CPD activities by accountants.

CAPA CPD Systems Toolkit (S. Mudalige; See Appendix 2 for PowerPoint Presentation)

o ROSC Reports provide excellent source about developing countries status with respect to

compliance with standards and infra-structure that is in place to support the implementation of

standards;

o Need to work with regional organizations to identify specific country needs for implementation

guidance and areas of inconsistent application of education standards and then to speak in a

coordinated manner with donor agencies for assistance;

o IAESB needs to reach out to World Bank, Mosaic and IFAC’s Professional Accountancy

Organizations Development Committee to coordinate on development of implementation guidance

for the IES.

Update from Institute of Certified Public Accountants of Kenya (E. M Makori)

o By Act of Parliament Kenyan government has recognized the Kenya Accountants and Secretaries

National Examination Board (KASNEB-ICPAK) as an independent Examination body that oversees

the professional examinations of accountants.

o The Institute is rolling out a new syllabus that affect the examinations starting next June. There is

greater emphasis on learning outcomes in the area of professional education.

o The issues of input-based and output-based measurement approaches is also important for the

Institute with a Committee being set up to monitor how there can be a transition to an output-based

approach from an input-based approach.

o The Institute is also mentoring the Eastern African countries of Uganda, Rwanda, and Burundi to

assist in the harmonization of their qualification programs to create greater mobility among these

countries.

o Because of high drop-out rates, the Institute is placing greater efforts on supporting aspiring

professional accountants to complete their accounting education programs.

Update on NASBA Annual meeting (K Bowman)

o Presentation: Recognizing Changes in Education. Western Governors University using evidence-

centered designs for assessment – measures learning not time to evidence development.

11-1. FUTURE MEETINGS

The IAESB Chairman reminded members that their next formal meetings would be held in Johannesburg,

South Africa on April 13 to 15, 2016 and in New York, USA on November 2 to 4, 2016. The Steering

Committee and interested taskforces will be meeting in London, UK on July 12 and 13, 2016.


11-2. PROFESSIONAL SKEPTICISM IAASB-IESBA-IAESB PROJECT

Mr. David Simko and Ms. Laine Katzin, IAESB members, presented on behalf of Professional Skepticism

Work Group (PSWG), an update on the Workgroup’s activities. More specifically, the presentation covered

(i) background information and (ii) issues and questions for the IAESB’s discussion. The following

summarizes the Board’s discussion.


Implications of PSWG’s Professional Skepticism Observations on Future IAESB Work

Mr. Simko presented several observations from the PSWG review of how professional skepticism was

covered in SSB’s pronouncements such as, ISAs, Code of Ethics and IESs (See Slide Presentation on

Professional Skepticism, Agenda Item 11-2 of November 2015 meeting). As a result, he proposed two

course of actions for IAESB consideration: (i) Review descriptions of professional skepticism within IESs 3,

4, and 8 through the IAESB’s Standards maintenance review project which is conducted by the DWG to

improve clarity and consistency of IAESB pronouncements; and (ii) Identify the need for any further IAESB

work on professional skepticism and professional judgment, subject to being informed by respondents’

comments from both upcoming IAESB and IAASB consultations, as well as observations or

recommendations from the PSWG’s report. In general, IAESB members agreed with the second proposed

course of action. Several IAESB members indicated that they supported the view of an enlarged scope and

applicability of the definition of professional skepticism which includes members of the financial reporting

supply chain, including perspectives of corporate and management accountants. It was also suggested by

members that this project has challenges with respect to: (i) application of the IAASB’s definition because

of need to critically analyze financial information by all professional accountants; (ii) identification of what

needs to be defined to demonstrate professional skepticism; as well as (iii) monitoring and measurement

of professional skepticism activities. Some IAESB members indicated that regulators’ findings which identify

professional skepticism as a root cause for audit deficiencies needed further discussion because identified

deficiencies should to be connected to underlying inspection matters to be informative and addressed

properly. IAESB members questioned whether PSWG deliberations have led to any preliminary thinking on

what would be the implications on accounting education. It was also suggested by members that any project

moving forward might be addressed by working with the other SSBs and sharing comments from

consultations so as to avoid duplication of efforts and improve consistency in addressing project issues.

Professional Skepticism: Interactions and Contextual Factors

IAESB members received a copy of a proposed figure that depicted professional skepticism in terms of

interactions and contextual factors. IAESB members made the following comments on the figure:

Direct Influencers: Add investors, tax payers as influencers;

Auditors’ Characteristics: Rename the heading to read, “Individuals’ Characteristics” to capture a

broader perspective and add synthesis skills, technical competence, and personal confidence;

Firm-Specific Factors: Rename the heading to read, “Company-Specific Factors to capture broader

perspective. IAESB members noted that: (i) impediments and deficiencies in the figure have not been

addressed; (ii) descriptors of the various firm-specific factors are too concise to be understood properly;

(iii) additional factors to be included such as mentoring and coaching, tone at the top, and formal core

training modules;

Auditors’ Decision Making: Rename the heading to read, “Individuals’ Decision Making” to capture a

broader perspective; and


Environmental and Contextual Factors: Add assessment of individuals who need to demonstrate

characteristics through the use of entry requirements into profession; Information technology, and

corruption.

IAESB members indicated concern on how concepts such as firm culture which can be interpreted in a

subjective manner across various jurisdictions, will lead to a definition of professional skepticism that can

be understood and applied globally. IAESB members suggested that auditors and professional accountants

needed some type of education process that brought awareness to information barriers and other barriers,

and how to deal with them and work with them in a more proactive way. It was also suggested that the

definition of assurance might be too narrow indicating that declarations on accounts by Chief Financial

Officers and Chief Executives could be viewed as a form of assurance. Several IAESB members indicated

the importance of emphasizing at the recruitment stage into the accountancy profession, the protection of

the public interest and the need to keep updated in terms of professional competence through CPD. These

aspects of professionalism should be elevated in importance as they are in other professions such as the

medical profession.

Proposed Way Ahead

IAESB comments on priorities and opportunities or gaps within the IESs should be forwarded through Mr.

Simko and Ms. Katzin to the PSWB workgroup and further action by the IAESB Steering Committee would

be taken in the interim to progress the IAESB’s work in this area.

12. PIOB’S REPORT

Mr. Muis, PIOB representative, indicated that the PIOB is supportive of the work of the IAESB. He stated

that education is a very important lifeline to the accountancy profession and the discussion of agenda topics

at this meeting with their cross-connections to the other Standard-setting Boards proves this importance.

From a holistic or integrated perspective on standard-setting, without the discussion by IAESB members

on educational issues such as on whether the CFO gives or doesn’t give assurance, we would have to

question whether the standards of other Standards-setting Boards have it right.

Mr. Muis observed that IAESB members, individuals with different cultures from around the world, have

provided excellent input into this meeting’s discussions. He indicated that the PIOB will be closely following

the Board’s discussions on its future Strategy and Work Plan as well as its IES maintenance project.

Mr. Muis indicated that the IES Maintenance project is a very important project that requires agreement by

interested stakeholders. He will be discussing the importance of this project and noting the importance of

reflecting on the content of paragraph 1 of IES 4, Initial Professional Development – Professional Values,

Ethics, and Attitudes with the PIOB.

Mr. Muis thanked IAESB members for making at home during the discussions and wished them safe travels

going home.

The IAESB Chairman thanked Mr. Muis for his comments and his contribution to the IAESB’s discussions.

13. TERMINATION OF MEETING

Mr. Austin, IAESB Chairman, thanked everyone for their contributions to the meeting. He summarized the

highlights of meeting as follows. The Board:

Approved content of package of Leaning Outcomes Guidance materials;

Approved content of the IES 8 FAQs document;


Approved the content of the Exposure Draft on the Maintenance of the IES;

Agreed the process and direction of the content for the Consultation paper on the 2017-2012 IAESB

Strategy and Priorities;

Set up the taskforce for the review of IES 7;

Provided direction to the taskforce developing a report on the IES usage study; and

Provided direction to taskforce on FAQs document, Thought Leadership content, and short guidance

paper on IES 1, Entry Requirements to Professional Accounting Education Programs.

Mr. Austin indicated that excellent progress has been made on achieving the 2014-2016 work program,

including: publishing IES 8 and the Framework; Consulting on the Learning Outcomes Approach guidance

materials; Approving support materials for implementation guidance on the Learning Outcomes Approach

and IES 8; Progressing projects on providing guidance materials on IES 1, IES Usage study and maintaining

the IES to ensure compliance. This work has been achieved by empowering the taskforces with more

responsibility while improving engagement by IAESB members in the discussions at the Board’s meetings.

In addition, the Board has become more efficient and effective at achieving its work program by holding

only 2 formal meetings in a year.

Mr. Austin concluded by acknowledging the Board’s appreciation of the service and contributions of the

following retiring IAESB members: Professor Kazuo Hiramatsu, Mr. Sujeewa Mudalige, Mr. Andrew Barry,

and Mr. Jose Echenique.

Then, Mr. Austin wished all a safe journey home.

The meeting closed on Friday, (November 6th, 2015) at 13:15 hours.

Approved by Chairman: ………………………………………

Date: …………………………………………………………..


ACTION LIST – AS A RESULT OF NOVEMBER 2015 IAESB MEETING

ACTION PERSON(S)

RESPONSIBLE

DUE DATE STATUS

1. Update and circulate 2015-16 CDL

Sonia Tavares / David

McPeak

ASAP Done

2. Develop Agenda items on 2017-

2021 Strategy and Work Plan,

Learning Outcomes Guidance, IES

1 Guidance, IES Usage study,

Standards Maintenance Process,

and IES 7 Review for the April 2016

in-person CAG meeting

Anne-Marie Vitale,

Catherine Forster,

Brian McGuire,

Catherine Hartley,

Susan St. Amant,

Daniel Slezak, Laine

Katzin, Elizabeth

Gammie, Gareth

Wellings, & David

McPeak

April 11, 2016 Done

3. Prepare an Analysis of Comments

of responses from Consultation

Paper on 2017-2021 Strategy and

Work Plan

Steering Committee

and David McPeak

April 13, 2016 Done

4. Prepare an Analysis of Comments

of responses from Exposure Draft

on proposed Drafting Changes on

IES, Framework (2015), and

IAESB Glossary of Terms.

Drafting Work Group

and David McPeak

April 13, 2016 Done

5. Prepare final drafts of IES 1

Guidance materials.

Laine Katzin, E.

Gammie, and David

McPeak

April 13, 2016 Done

6. Develop Issues papers and

Reports for the April 2016 meeting

Anne-Marie Vitale,

Catherine Forster,

Brian McGuire,

Catherine Hartley,

David Simko, Susan St.

Amant, Daniel Slezak,

Laine Katzin, Elizabeth

Gammie, Gareth

Wellings, & David

McPeak

April 13, 2016 Done


APPENDIX 1


APPENDIX 2

draft minutes of the international accounting …...apr 13, 2016 · morning of wednesday, november...

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