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An article about pre-qualification education of Chartered Accountants published in the April 2007 issue of Accountancy Ireland raised a number of queries about whether the direction of education has fundamentally changed over recent years and the impact, if any, of these changes on the international standing of the ICAI qualification. This article seeks to answer these questions.

“My father was fond of saying you need three things in life – a good doctor, a forgiving priest, and a clever accountant.” – Oscar Schindler. (Schindler’s List – Thomas Kenneally)

Has the direction of education for Chartered Accountants changed fundamentally in recent years?

Traditionally an accountant was defined as ‘one who professionally makes up accounts: an officer in a public office who has charge of the accounts’ (Shorter Oxford Dictionary, 3rd edition). Whilst the core skills of maintaining and auditing accounts (as well as taxation and finance) are very much at the centre of the profession, much more is expected of an accountant in the current business environment.

Certainly the environment in which Chartered Accountants work is changing at an ever increasing pace due to such factors as: advancements in technology, increasingly mobile labour force, growing trend to outsource manufacturing and support services to less expensive / more flexible economies, etc. In addition, there has been renewed focus on professional standards, ethics and values within the accountancy profession. In such a context, the Chartered Accountant (CA) qualification might be more accurately described as educating business professionals, with particular focus on core skills.

How does the concept of ‘competency’ affect how Chartered Accountants are educated? The challenge is how best to educate accountants to work in the type of environments described above; to develop the appropriate skill sets and acquire the relevant knowledge. It is logical to expect that changes in the business environment and in the expectations of how accountants operate might lead to changes within the qualification process. This is where competency-focused education comes in.

Competency-based education is not a new concept. It has been a recognized challenge for many years in many aspects of education (not just accountancy). The International Federation of Accountants (IFAC) issued a discussion paper in June 1998, looking at ‘Competence-Based approaches to the Professional Preparation of Accountants’. It noted the three assumptions that underlie the concept of competency within the accounting profession as follows:

-The credibility and utility of a professional qualification depends on the ability of those who carry the designation to meet the expectations of both employers and the general public; -The ability to perform a professional accountant role can only be demonstrated in an authentic work context; -The demonstration of competence should be a necessary condition for the award of a professional qualification. These assumptions have many implications – not least the requirement to combine knowledge, application and skills in the education and assessment model.

How does ICAI’s prequalification education programme support the concept of ‘competency’? ICAI has traditionally recognized the importance of the links between ‘on-the-job’ and ‘off-the-job’ education. Typical ways in which this was evident included the use of case studies in education and assessment (particularly at the FAE), the involvement of experienced ICAI members within student education – whether as lecturers, advisors or as part of the examination system – and some integration of material at the latter stages of the examinations system.

However, the challenge of competency-based education is to develop these links, with particular focus on transferable skills and the integration of technical material, particularly in the later stages of the education programme.

In order to maintain the focus towards competency, a competency wheel was developed,1 which integrates the competencies expected of a newly qualified CA into three main areas: -Functional Competencies, -Business Competencies, and -Core Professional Values and

Competencies (See Figure 1 in publication). All aspects of the qualification process are mapped to the competency wheel – from the Learning Outcomes in the CA Proficiency 1, CA Proficiency 2 and FAE Competency Statements to the workplace competencies identified in the Online CA Diary and the IT competencies in the Personal Computing for Accountants (PCA) assessment. Much of the new syllabus development work is focused on finding ways to make these links ‘real’ for students. Some of the main developments in the transition to a competency based Education

Programme are: -Increased use of case-studies, including at CA Proficiency 2 (replacing Professional Three in 2008/2009) -Greater levels of integration of the various subject areas at FAE: One integrated competency statement to be examined over two days (to be introduced 2009/2010) -Introduction of an elective at FAE to give students the opportunity to focus on an area of particular interest -Linking of education programme, workplace experience and PCA assessment back to an overall Competency Wheel -Incorporation of Professional Values, Business Competencies and Functional (technical) Competencies into the Competency Wheel -Refocus on basic skills (such as double-entry book-keeping) in response to feedback from training firms (introduced 2007/2008) -Proposal to include small-group workshops, to include case-based assessments and oral presentations (planned 2009/2010) -Online CA Diary of Professional Development: This is an online tool whereby students are required to reflect on their work-based learning and relate this learning to identified competencies. Regular reviews by development of these competencies.

How is the ICAI qualification recognised outside of Ireland and will the developments in ICAI pre-qualification education have any impact on this? The ICAI qualification is truly a global qualification. ICAI members benefit from this at several levels, as described below. The developments in prequalification education, including the transition to competency, will help to ensure that ICAI retains global recognition and that its members remain Ireland’s leading business professionals.

Global Accounting Organisations ICAI has a strong profile in accountancy education within global accounting organisations. The International Federation of Accountants (IFAC) is recognised as the global organisation for the accountancy profession. ICAI is active within IFAC, and currently holds the chair of the International Accounting Education Standards Board (IAESB) and the International Ethics Standards Board for Accountants (IESBA).

Ireland & the UK Within Ireland, ICAI is the only professional accountancy body to have been granted a Level 9 on the National Framework for Qualifications. A ‘Level 9’ is the 2nd highest level available, and is of a similar standard to a Masters Degree. The award was made by the Higher Education & Training Awards Council (HETAC) which is the qualifications awarding body for third-level educational and training institutions outside the university sector. Through its Mutual Recognition Agreements, members of ICAI have automatic access to membership of the Institute of Chartered Accountants of England and Wales (ICAEW) and the Institute of Chartered Accountants in Scotland (ICAS) (see Table 2).

Europe Irish Chartered Accountants who are registered auditors may register in other EU member states under the EU Directive on Professional Recognition.

Worldwide ICAI is one of the founding members of the Global Accounting Alliance (GAA), an international alliance of leading professional accountancy bodies, formed in 2005. One of the benefits of this is a ‘Passport for Members’ that entitles all members of ICAI to local support from GAA member bodies when domiciled in that member’s region, for no extra fee. (Table 1 in publication).

In addition, ICAI has Mutual Reciprocity Agreements (MRA) with a number of professional bodies (Table 2). An MRA entitles members of ICAI to membership of the other organisation, subject to certain specific CPD requirements in local tax and law. It is worth noting that ICAI is the only body in the UK and Ireland to have a Mutual Recognition Agreement with the American Institute of Certified Public Accountants (AICPA). All bodies benefiting from MRAs undergo regular stringent reviews as part of a quality assurance process.

Has ICAI introduced its competency-referenced education programme? Yes. The transition to the competency-referenced education programme commenced with the phasing out of Professional Two in 2007. This has been replaced by the first year of the competency-based education programme: CA Proficiency 1 (first exams during May 2008). CA Proficiency 2 (CAP2) and the revised FAE will be phased in during 2008 and 2009. A phased implementation was considered to be more appropriate, both in terms of the educational experience for trainees and to minimise transition requirements.

Details of CAP1 and subsequent levels can be found on http://www.icai.ie/careers/ new_syllabus.cfm.

For further details on any of the issues mentioned above, please contact the author or the ICAI Director of Education and Training.

1 This has already been the subject of a previous Accountancy Ireland article (See Vol. 39, No. 2, April 2007, ‘Competency is Key’).

Joanne Powell is Syllabus Development Manager, at the Institute of Chartered Accountants in Ireland. Email: joanne.powell@icai.ie