Practical experience requirements - Initial professional development for professional accountants
Comments from ACCA
March 2007
General Comments
ACCA welcomes the publication of this IEPS as an instructive document. It gives comprehensive, but not overly prescriptive, guidance to member professional bodies on how to ensure successful implementation of IES5.
In accordance with the instruction, ACCA have provided, below, direct responses to the three questions set out in the Exposure Draft:
1 What are respondents' views on the introduction of the concept of “initial Professional Development” (IPD)? Is this helpful to member bodies and trainees (and others)? Please explain
2 What are respondents' views on the usefulness of the framework for practical experience (Table 1)? Is the table helpful and complete? Please explain your views.
3 The IAESB has tried to develop guidance that can be applied by member bodies across a range of training environments. What are respondents' views on the applicability of the proposed guidance for accountants training in business and/or SME's/SMPs?
Specific Comments
QUESTION 1
What are respondents' views on the introduction of the concept of “initial Professional Development” (IPD)? Is this helpful to member bodies and trainees (and others)? Please explain
The concept will further help to foster, and develop, an ethos and culture of continuing development and by so doing enhance the learning continuum from pre to post qualification. However, some consideration ought to be given to the potential (albeit slight) for confusion that may arise with employers and trainees. This confusion may entail Trainees and Employers seeing the process and requirements for Continuing Professional Development (CPD) as the same as those for Practical Experience for Trainees.
Common elements of IPD and CPD, for example, the development of skills to enable competent performance could be illustrated, but placing emphasis upon the potential level, area(s) and complexity of skills to be developed for IPD as opposed to CPD. This would help where appropriate, to make a distinction between them. ACCA would not want Employers to believe that fulfilment of a CPD requirement (intended for post-qualified professional accountants) be seen as appropriate for a Trainee's Practical Experience requirement. The distinction could also be emphasised by providing definitions for Initial Professional Development and Continuing Professional Development in all relevant documents. Additionally, the definition for CPD may now need to be explicit as to its post-qualification application.
Finally, member bodies may find it useful if IFAC were to develop an “umbrella” term, which would seek to articulate and define the concept of “cradle to grave” learning and development.
QUESTION 2
What are respondents' views on the usefulness of the framework for practical experience (Table 1)? Is the table helpful and complete? Please explain your views
Paragraphs 31 through to 37 provide an array of good practice recommendations that include Member Bodies developing competences and having a framework for this, through to suggesting appropriate approaches to simulation (paragraph36). Placing the table amongst this mixture of options may lead to several, potentially inappropriate interpretations, including:
- as a framework for developing competences - the Table 1 is misleading as it contains a range of capability requirements, rather than competences. It would be preferable to see illustrations of what competence statements may look like to help focus Member Bodies development effort in this area
- it may be seen as a framework for developing a full range of simulations to achieve competence outcomes
- it suggests 3 levels – these are not properly explained and may not have any relevance in relation to carrying out certain work-related activities and demonstration of competence
- it suggests that gaining responsibility and applying professional values, ethics and attitudes can be set apart - rather than being integral to developing competent trainees.
The table is also limited as it does not illustrate the range of technical and non technical competences that Member Bodies may wish to focus upon. ACCA's key areas, definitions and expected outcomes are set out in Appendix One for illustration.
Generally it would be more useful to have broad areas with principles-based definitions that consequently allow Member Bodies to define competences and levels appropriate to their environment and needs of employers. The style of the framework provided, in Table 1, may have the impact of being overly prescriptive, if followed as a model of best practice.
ACCA suggests that identifying key areas for development and setting a principle-based definition followed by identified outputs will provide greater flexibility and relevance. ACCA believes that Table 1 would be better placed as an Appendix, along with examples from member bodies, rather than within the main part of the document.
QUESTION 3
The IAESB has tried to develop guidance that can be applied by member bodies across a range of training environments. What are respondents' views on the applicability of the proposed guidance for accountants training in business and/or SME's/SMPs?
ACCA sees the guidance as being applicable globally and across sectors. This is extremely beneficial as the consistency will ensure that Mentors, Trainee's and a broad range of employers will only need to understand with a single, common approach, thereby assisting with a greater level of engagement
The flexibility, reasonable expectations and viable options, on the training and appointment of Mentors will assist smaller employers manage time and resource constraints.
The suggestion that guidance be provided to Employers will assist in engaging and raising the overall level of awareness and engagement by those smaller employers who do not have the resources to develop their own frameworks.
Other points
ACCA would also like to make some suggestions to as to some other points.
1. The text frequently refers to “..a minimum three year period” (for example paragraph 16 on page 6). ACCA's experience is that the period is not always a single continuum. Consequently, we would suggest that the period be stated as 36 months. This will recognise that the Trainee may require more that the 3 years to gain the total experience.
2. ACCA recommends that “Relevant accountancy oversight body” be added to the list of stakeholders (paragraph 39, page 13).
3. For the sake of completeness ACCA recommends that “Participate in Mentor Training” be added to the list of mentor responsibilities on paragraph 43, page 14.
4. There will be exceptional situations where “…suitably qualified and experienced members of IFAC member bodies…” (page 15, paragraph 46) are not available. ACCA recommends therefore the guidance on the Alternative Mentoring Arrangements (page 16, paragraph 49) should include individuals who are not “experienced members” but in all other ways substantially meet the requirements stated in paragraph 47, page 15.
5. Where an employer has been “registered” there is a clear relationship upon which the Member Body may monitor that employer to ensure that trainees are gaining relevant and effective practical experience. However, in the absence of such a relationship, as is the case with non-registered employers, the Member Body will have no locus standi on which to monitor. ACCA recommends, therefore, that the thrust of paragraph 74, page 22, be modified to reflect the reality that monitoring in these circumstances will be voluntary and the ability to enforce any recommendations is limited.
6. Paragraph 29 makes reference to Internships. This term may not be universally recognised and as such it may be appropriate to expand the definition and add it to the definitions list.
Conclusions
ACCA is pleased to have contributed to the development of the practice statement. This IEPS is very comprehensive, providing Member Bodies with best practice guidance in a practical manner. ACCA believes that the suggestions offered in this response will help to enhance the effectiveness and successful implementation across IFAC Member Bodies.
APPENDIX ONE: ACCA PERFORMANCE OBJECTIVES
Professionalism, ethics and governance
1 Demonstrate the application of professional ethics, values and judgement
2 Contribute to the effective governance of an organisation
3 Raise awareness of non-financial risk
Personal effectiveness
4 Manage self
5 Communicate effectively
6 Use information and communications technology
Business management
7 Manage on-going activities in your area of responsibility
8 Improve departmental performance
9 Manage an assignment
Financial accounting and reporting
10 Prepare financial statements for external purposes
11 Interpret financial transactions and financial statements
Performance measurement and management accounting
12 Prepare financial information for management
13 Contribute to budget planning and production
14 Monitor and control budgets
Finance and financial management
15 Evaluate potential business/investment opportunities and the required finance options
16 Manage cash using active cash management and treasury systems
Audit and assurance
17 Prepare for and collect evidence for audit
18 Evaluate and report on audit
Taxation
19 Evaluate and compute taxes payable
20 Assist with tax planning