IFAC PROPOSES NEW EDUCATION REQUIREMENTS FOR AUDIT PROFESSIONALS
Source: IFAC
Country: International
Date: 17 April 2005
Contributor: Andy Lymer
Web: http://www.ifac.org

The Education Committee of the International Federation of Accountants (IFAC) is proposing new guidance that will assist current and prospective audit professionals in carrying out their public interest responsibilities. To ensure that these professionals have the necessary knowledge, skills, values, ethics and attitudes to perform competently, the committee has released an exposure draft (ED) of a proposed International Education Standard (IES) entitled Competence Requirements for Audit Professionals.

The proposed IES will apply to all professional accountants who have a substantial involvement in the audit assignment and who are responsible for making significant judgment decisions contributing to the overall audit opinion, not just the audit engagement partner.

"This is a landmark document because it is the first time the Education Committee has developed education requirements for a specific area of the accountancy profession," states Education Committee Chair Henry Saville. "Because of the reliance that the public and other third parties place on the audits of financial statements, the committee felt it was vital to provide direction to IFAC member bodies and professional accountants worldwide on the specialized knowledge and skills required to perform competently in the audit field."

"The committee recognizes the increasing expectation for high quality auditor performance. These proposals are designed to meet this expectation by making sure audit professionals have the right training and the right skills," emphasizes Mr. Saville.

The proposed standard provides a common foundation for the competence of all audit professionals around the world, which is an essential step in strengthening the profession and maintaining public confidence in audits of financial statements.

Professional accountants working on audit engagements should already comply with the requirements in IESs 1-6 and are required to maintain their competence through continuing professional development, as prescribed in IES 7. The proposed standard calls for audit professionals to have an advanced level of knowledge in three areas:

financial statement audits,

financial accounting and reporting, and

information technology.

This advanced level of knowledge is deeper than that expected of other professional accountants. The proposed standard also requires individuals to gain a period of relevant practical experience before having substantial involvement in a financial audit assignment.

For audits of financial statements in specific environments and industries, the proposed standard requires that the audit professional possess professional knowledge and experience relevant to those environments or industries.

IFAC member bodies, audit firms, regulatory authorities, and other third parties share responsibility for the development and assessment of the required competence. The proposed standard can be complied with in different ways, and assessments can be carried out by an IFAC member body, a third party (such as a work place assessor, government or regulatory authority), through the member body's peer review process, an audit firm's quality control systems, or a combination of these.

Competence Requirements for Audit Professionals

IFAC website