Revised Definition of the Professional Accountant
Saleem Kharwa (Task Force Chair)
Helen Hocken (Secretary)
Objective(s) of project
To develop an international definition of the term professional accountant.
To support IFAC's members and other professional accountancy organizations in the adoption and implementation of the International Education Standards by clarifying the definition of the professional accountant.
In November 2009, the chairs of IFAC’s committees and the independent standard-setting boards IFAC supports identified the need to assess the current definition of the term professional accountant. The chairs discussed a number of issues with the current definition and concluded that a task force should be established to 1) evaluate the current definition, and 2) determine whether an alternative could be developed for further consideration.
In March 2010, IFAC formed a task force comprised of a volunteer and a staff member from each of the boards and committees. The task force met on three occasions via teleconference and provided input to IFAC staff regarding the key issues that should be considered to assist staff in the development of this paper. The task force exchanged ideas through a series of informal discussion papers that noted various debates and perspectives. Through the outcomes of these discussions, IFAC staff developed a paper in January 2011.
The progress of the development of the definition and the IFAC staff paper were discussed in November 2011, at the meeting of chairs of IFAC’s committees and the independent standard-setting boards. At that time a decision was made to cease any further work on the project.
In June 2012 the Public Interest Oversight Board (PIOB) wrote to IFAC indicating that it believed that the project is important and should be completed. Consequently, the proposed definition was further refined in November 2012, incorporating the suggested changes and revisions made in response to the initial IFAC Staff paper (January 2011) as well as revisions suggested by the IAESB Chair, Deputy Chair, and technical staff. The status of the project and the PIOB letter was discussed at the November 2012 meeting of chairs of IFAC’s committees and the independent standard-setting boards, and it was agreed that the project had to be advanced by IFAC staff and more specifically by the IAESB for use in its pronouncements.
Issues that this project will address:
- Include members of organizations other than IFAC member bodies and individuals who meet jurisdictional qualification requirements and are subject to oversight.
- Facilitate the identification of the primary users of professional standards set by the independent standard-setting boards supported by IFAC (e.g., auditors, professional accountants in business), regardless of whether they belong to an IFAC member body.
- Provide some guidance at the national or jurisdictional level by enabling a clearer understanding of the potential users of international standards.
- Provide and understanding of the breadth of competence and functions that can be demonstrated by professional accountants.
- Develop a brief, easy-to-understand definition that provides the general public with a broad understanding of the field of accountancy.
- Clarify that other terms may be used within jurisdictions to refer to those meeeting the definition of professional accountant, and such terms may be based on local law or regulation.
Task Force progress / Board discussions to date
October 2013: The IAESB received a revised version of the proposed Definition of the Professional Accountant and an Issues paper that identified significant issues and questions resulting from the consultation with the CAG at its September meeting and the drafting of revised version of the Definition. The IAESB’s discussion of these issues covered: the compliance with a code of ethics and the conciseness of the definition. As a result of these discussions the IAESB directed the task force on the Revision of the Framework to include the proposed definition in the revised Framework for International Education Standards for Professional Accountants document. The IAESB also requested further consultation with the IAESB CAG and then to expose the definition in the Exposure Draft of the revised Framework for International Education Standards for Professional Accountants when appropriate.
June 2013: The IAESB received a revised version of the proposed Definition of the Professional Accountant and an Issues paper that identified significant issues and questions resulting from the drafting of revised version of the Definition. The IAESB’s discussion of these issues covered: the level of professional competence; the public interest; and compliance with a code of ethics. The IAESB requested that: the word, “pre-determined,” in the definition be replaced with the word, “appropriate” and that it should be explained in the explanatory guidance section; the 2nd bullet be amended to form 2 new bullets that emphasize a professional accountant should act in the public interest and comply to a Code of Ethics, respectively. In addition, the IAESB provided several editorial suggestions for the consideration of the task force. As a result of these discussions the IAESB directed the task force to consult with the IAESB CAG with the aim of preparing a revised draft of the definition of the professional accountant for discussion by the Board at its October 2013 meeting.
March 2013: The IAESB received a proposed draft of the revised Definition of the Professional Accountant and an Issues paper that identified significant issues and questions for discussion by the Board. In general, IAESB members agreed that the proposed Definition of the Professional Accountant and the accompanying Explanatory Material were a good starting point for the Board to develop a definition that can be used in its pronouncements. In reviewing the definition IAESB members suggested that the following issues required further consideration: Identify what are the implications of IESs on those who are not a part of IFAC member bodies; Recognize that professional accountants must successfully pass professional examinations to practice; Include the perspective of the preparers of financial information and those that provide assurance services; Review the definition to determine if it captures elements of professionalism and that the profession is self-regulating; Determine whether the definition applies to those that are on leave; Determine whether Accounting Technicians are recognized within the definition; and Identify what are the implications of the definition on the other PIACs. In addition IAESB provided editorial suggestions on the definition and explanatory guidance section for further consideration. The IAESB requested that a task force be formed to continue work on the definition and that a revised definition be prepared for discussion by the Board at its June meeting.
The IAESB directed the Framework taskforce to expose the definition in the Exposure Draft of the revised Framework for International Education Standards for Professional Accountants to obtain public comment.
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