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MINUTES OF

THE INTERNATIONAL ACCOUNTING EDUCATION STANDARDS BOARD PUBLIC MEETING HELD APRIL 26 TO 28, 2017.

PLACE: New York, USA Meeting No. 2/17 (87) VENUE: IFAC Headquarters, New York, USA PRESENT: Voting Members: Technical Advisors: United Kingdom Chris Austin (Chair) Adrian Pulham Indonesia Sidharta Utama Lindawati Gani Lebanon Rania Mardini Mexico Blanca Tapia Sylvia Meljem South Korea Yeong Kyun Ahn Sri Lanka Manil Jayesinghe United Kingdom Rachel Banfield Suzie Webb United Kingdom Elizabeth Gammie United States Brian McGuire Raef Lawson United States Bruce Behn Steve Matzke TAC Susan St. Amant Daniel Slezak TAC Greg Owens Sarah Jakubowski TAC David Simko Susan Flis TAC Gareth Wellings Mienkie Etcheverrigaray TAC Anne-Marie Vitale Jill Pate Public Member Yoshinori Kawamura Shinji Takada Public Member Robert Zwane Public Member Isaac Njuguna Edwin Makori Observers: CAG Chair Keith Bowman IAAER Observer Keryn Chalmers PIOB Representative Aileen Pierce IAESB Staff: Managing Director, Professional Standards James Gunn Principal David McPeak Administrative Assistant Sonia Tavares APOLOGIES: Public Member Bernard Agulhas Korea, Technical Advisor Seung Kyoung Yoo UNCTAD Observer Yoseph Asmelash

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OPENING MATTERS

1(i) Welcome

Mr. Chris Austin, IAESB Chair, welcomed IAESB members, technical advisors, and observers to the meeting. Mr. Austin extended a special welcome to new members Dr. Bruce Behn (United States), Ms. Rania Mardini (Lebanon), Dr. Steve Matzke (technical advisor to Dr. Bruce Behn), Ms. Mienkie Etcheverrigaray (technical advisor to Mr. Gareth Wellings), Mr. Shinji Takada (technical advisor to Mr. Yoshinori Kawamura), Ms. Sarah Jakubowski (technical advisor to Mr. Greg Owens), and Dr. Aileen Pierce who participated in this meeting as the PIOB representative.

Apologies were received from Mr. Bernard Agulhas (Public Member), Ms. Seung Kyoung Yoo (technical advisor to Mr. Yeong Kyun Ahn), and Mr. Yoseph Asmelash (UNCTAD Observer). Mr. Owens and Dr. McGuire provided regrets for sessions held on April 28 meeting.

1(ii) Approval of Agenda

The agenda was approved as is.

1(iii) Minutes and Action List of November 2016 (New York) Meeting

The minutes of the previous meeting were approved, subject to following changes: • Page 9, 1st paragraph: After 1st sentence, add the following sentence: Mr. Richard Fleck, Deputy Chair

of the IESBA, and Dr. Annette Kohler, IAASB member and Professional Skepticism Working Group (PSWG) Chair, attended by teleconference. Mr. Simko commenced the session by providing a summary of the progress made by the PSWG. Dr. Annette Kohler, Professional Skepticism Working Group (PSWG) Chair, indicated that Mr. Simko’s summary of PSWG’s progress was fair and complete.

• Page 12, 6th bullet: Amend the bullet to read as follows: “Revise the reform recommendation on principal remit by amending the IAESB’s Terms of Reference to read, “to clarify the principal remit of standards development”, rather than “to emphasize the principal remit of standards development, and clarify the relationship between that remit and the nature and scope of related or ancillary activities including those concerning proper application and implementation of its standards.”

1(iv) Report from the Chair

Mr. Austin 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 acknowledged the substantial work undertaken by task forces and working groups since the last meeting and then framed the proposed outcomes of the upcoming meeting as follows, the Board will endeavor to agree: • Exposure Draft on the Revised IES 7, Continuing Professional Development and an accompanying

Consultation Paper; • Approach to maintain Implementation Support Materials and identify specify existing subject areas that

require the Board’s work; • Next steps on work proposed by Professional Skepticism Task Force on a Literature Review and obtain

an update on the work of the Professional Skepticism Working Group; • Next steps of Information and Communications Technology Task Force’s work on a Literature Review;

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• Next steps of Stakeholder Engagement and Communications Working Group’s work on developing a Personal Perspectives Article Series, Standards Development publication and webcast; and Ambassador Toolkit.

He congratulated the following members for being re-appointed to serve on the IAESB for a second term as of January 1, 2017: Dr. Brian McGuire (USA), Mr. Isaac Njuguna (Kenya) and Mr. Greg Owens (USA). He also reported the appointment of Mr. Bernard Agulhas (South Africa) for a new term and the appointment of new members, Professor Bruce Behn (USA) and Ms. Rania Mardini (Lebanon) beginning on January 1st, 2017. He also congratulated Ms. Anne-Marie Vitale (USA) for her re-appointment as Deputy Chair. Mr. Austin indicated that he has offered to serve as IAESB Chair to IFAC for another term of 2 years, starting January 2018.

Mr. Austin and Mr. Greg Owens reported on their March 2017 meeting with Global Accounting Alliance (GAA) Education Directors. Mr. Austin indicated that the invitation and conduct of the meeting were positives signs of the Education Directors’ willingness to engage with the IAESB in areas of mutual interest, such as Continuing Professional Development (CPD), Information and Communications Technology (ICT), as well as competence and skills development for professional accountants working in financial institutions. He also reported that they were very interested in the specifics of some of the projects presented in the 2017-2021 Strategy and 2017-2018 Work Plan and expressed an interest in working collaboratively on these projects. Mr. Austin also indicated that Mr. Allison, Chair of the GAA Education Directors Work Group, accepted his invitation to attend on behalf of the GAA Education Directors the November IAESB meeting in Mexico City.

Mr. Austin summarized the IAESB-IAESB CAG April 25 workshop as productive and useful. He indicated that the Board’s engagement with CAG members through 2 meetings per year should continue as is. At least one of these meetings should be “back-to-back’ with the IAESB. Further emphasis, however, should be placed on being more interactive by keeping CAG members more informed of the Board’s projects and activities between meetings and after the June Steering Committee meeting. Mr. Austin stated that he viewed the CAG as a “critical friend.” He also indicated that the CAG should be more involved with developing Education Forums, possibly in conjunction with the PIOB.

Mr. Austin also reported that he and IAESB representatives had undertaken the following speaking engagements and associated communications activities since the November 2016 meeting:

November • IAESB Update Presentation, IFAC Council, and IFAC Board Meeting (Gunn); • Teleconference meeting with PSWG (Fleck, Kohler, Simko, Gunn, McPeak); • Pathways to Growth: Changing with the Times, PICPA 71st Annual National Convention (Utama); • Professional Skepticism, Robert Zicklin Center for Corporate Integrity 11th Annual Auditing

Conference (Simko); • Review of EU REPARIS Education Community of Practice: Accountancy Education Benchmarking

Study (Owens, McPeak);

December • December 2016 PIOB meeting (Austin, Bowman, Gunn); • Teleconference with IMCP on November 2017 meetings (Ramírez Santa Rita, Aguilar, Tapia,

McPeak, Tavares); • Teleconference with IFAC iMS group (Lee, Owens, McPeak); • Meeting with Patrick Kabuya of the World Bank (McPeak);

January 2017

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• Professional Scepticism and Professional Judgment Workshop, AAA Midyear CPE Workshop (Simko);

• Professional Scepticism Working Group Teleconference (Simko, McPeak); • Teleconference with IMCP (Ramírez Santa Rita, Aguilar, Tapia, McPeak, Tavares); • Steering Committee Teleconference;

February • IAESB Teleconference; • February 2017 PIOB meeting (Austin, Vitale, Bowman, Gunn); • IMA Board of Directors Meeting (McGuire);

March • IFAC Board meeting (Gunn); • GAA meeting (Alison, Lamb, Owens, McPeak); • GAA Education Directors meeting (Owens, Austin); • Teleconference with IMCP (Ramírez Santa Rita, Aguilar, Tapia, McPeak, Tavares); • FRC(UK)-IAESB Teleconference (Gammie, Simko, Gunn); • IAAER-IAESB Teleconference (Street, Simko, Arnold); and • Steering Committee Teleconference.

CURRENT PROJECTS

2. REVISION OF IES 7, CONTINUING PROFESSIONAL DEVELOPMENT

Ms. Susan St. Amant, IES 7 Revision Task Force Chair, provided for discussion copies of a consultation paper on the target audience for IES 7, clean and marked-up versions of the proposed Exposure Draft, an extant version of IES 7, and an Issues paper that identified proposals and questions on the revision of IES 7. The following summarizes the IAESB members’ discussion.

IAESB Discussion of Issues

Clarification of CPD Activities

IAESB members suggested the following changes to Paragraphs 5, A5, A6, A7, A12, A18, and A19 of the proposed IES 7 (See Agenda item 2-3 of the April 2017 meeting) to clarify CPD activities:

• Bullets (g) and (h) of Paragraph 5 were amended by separating formal and informal learning and development activities and by indicating that self-development activities need to be planned;

• Paragraphs A5 and A6 were deleted because responsibilities of member bodies and professional accountants are described in paragraphs 3 and 4 of the proposed IES 7 (See Agenda item 2-9 of the April 2017 meeting);

• Paragraph A7’s description of lifelong learning was repositioned to Paragraph A2 of the proposed IES 7 (See Agenda item 2-9 of the April 2017 meeting)and amended to: explain lifelong learning, align with the three components of professional competence, and recognize its importance in meeting public interest expectations;

• Paragraph A12 was repositioned to Paragraph A17 of the proposed IES 7 (See Agenda item 2-9 of the April 2017 meeting)and amended to include new examples that extend the range of CPD learning and

http://www.iaesb.org/system/files/meetings/files/2-3-IES-7-Exposure-Draft-Clean-Version.pdf

http://www.iaesb.org/system/files/meetings/files/2-9-IES-7-Exposure-Draft-Clean-Version-April-28-2017_0.pdf





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development activities to meet the individual’s learning needs within a planned program of CPD. Many of the existing examples were also amended by including not only activity words that describe the nature of activity to be performed, but also additional description that provides context on how to achieve learning outcomes from the learning and development activity; and

• Paragraphs A18 and A19 were deleted because their content is included in the IFAC’s Statements of Membership Obligations (SMOs) 1-7 (Revised) and the IAESB’s Framework for International Education Standards for Professional Accountants and Aspiring Professional Accountants.

CPD Framework

IAESB members suggested the following changes to Paragraphs 6, 16, 17, A16, and A17 of the proposed IES 7 (See Agenda item 2-3 of the April 2017 meeting) to explain how CPD is relevant to all professional accountants and to clarify the CPD framework:

• Paragraph 6 was repositioned to Paragraph A8 of the proposed IES 7 (See Agenda item 2-9 of the April 2017 meeting) and explains how CPD can lead to effective learning and development for professional accountants;

• Paragraphs 16 and 17 were repositioned to Paragraphs 13 and 14 of the proposed IES 7 (See Agenda item 2-9 of the April 2017 meeting) and amended to indicate that learning outcomes should be relevant to a professional accountant’s role and professional responsibilities for the output-based approach and that learning and development activity undertaken should be relevant to a professional accountant’s role and professional responsibilities for the input-based approach;

• Paragraph A16 was deleted because the rationale for CPD for all professional accountants is provided in Paragraph A7 of the proposed IES 7 (See Agenda item 2-9 of the April 2017 meeting); and

• Paragraph A17 was repositioned to Paragraph A9 of the proposed IES 7 (See Agenda item 2-9 of the April 2017 meeting) to explain why CPD frameworks are needed, what they provide, and what the structure of the CPD framework might include.

Principles and Requirements of Measurement Approaches

IAESB members suggested the following changes to Paragraphs 7, 15, 16, 17, and 19 of the proposed IES 7 (See Agenda item 2-3 of the April 2017 meeting) to set and explain requirements of measurement approaches:

• Paragraph 7 was deleted because it repeats content in Paragraphs 13 and 14 of the proposed IES 7 (See Agenda item 2-9 of the April 2017 meeting);

• Paragraphs 15,16, and 17 were repositioned to Paragraphs 12, 13, and 14 of the proposed IES 7 (See Agenda item 2-9 of the April 2017 meeting) and amended to: a) indicate the range of measurement approaches (e.g., use of the output-based approach, input-based approach, or both), b) require professional accountants demonstrate the achievement of learning outcomes which should be relevant to their role and professional responsibilities for the output-based approach, and c) require professional accountants complete a specified amount of learning and development activity which should be relevant to their role and professional responsibilities for the input-based approach;

• Paragraph 19 was repositioned to Paragraph 17 of the proposed IES 7 (See Agenda item 2-9 of the April 2017 meeting).














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IAESB members indicated that Paragraphs A23 to A28 should be revised to focus on what factors should IFAC member bodies consider in determining the approach for measuring CPD. More specifically, bullets (a) and (b) of Paragraph A23 were viewed as factors for determining the approach for measuring CPD; whereas, Paragraphs A24 to A28 were deleted because do not explain these factors.

IAESB members indicated that Paragraphs A29 to A34 should be revised to clarify issues relating to determining the achievement of learning outcomes. More specifically, Paragraphs A29 and A31 were revised to focus on what professional accountants achieved from having undertaken learning and development activities and on which sources that can establish learning outcomes. Paragraph A32 was repositioned as Paragraph A27 of the proposed IES 7 (See Agenda item 2-9 of the April 2017 meeting) and amended to provide a list of examples of verifiable evidence that can be used to demonstrate the achievement of learning outcomes in an output-based approach. IAESB members indicated that Paragraph A33 should be revised so as not to create implied requirements on member bodies, but rather to focus on factors that should be considered by member bodies and licensing regimes, such as the nature and extent of CPD for learning and development needs and reflective activity of professional accountants. Paragraphs A30 and A34 were deleted because they do not explain what is achieved, who should establish the learning outcomes, or what factors should be considered in determining achievement of learning outcomes.

IAESB members indicated that paragraphs A35 to A40 should be revised to clarify issues relating to completing a specified amount of learning and development activity, but to avoid providing specific anchors as to number of CPD activity hours. More specifically, Paragraphs A35 and A36 were revised to provide examples of requirements that IFAC member bodies may establish without specifying an absolute number of CPD hours and examples of measures of input-based CPD. Paragraph A39 was repositioned as Paragraph A28 of the proposed IES 7 (See Agenda item 2-9 of the April 2017 meeting) to provide a list of examples of evidence that can be used for verification in an input-based approach. It was suggested that Paragraph A40 should be revised by limiting the examples of guidance to one which would cover the extent of CPD that can be obtained from a single learning and development activity but undertaken more than once. Paragraphs A37 and A38 were deleted because they do not clarify issues relating to completing a specified amount of learning and development activity.

IAESB members indicated that Paragraph A41 on combining measurement approaches should be revised to include an example that describes how input-based and output-based measurement approaches can be combined. Paragraph A25 of the proposed IES 7 (See Agenda item 2-9 of the April 2017 meeting) includes an example that evaluates the achievement of important learning outcomes while allowing for a quantifiable measurement of completed CPD.

Other Issues

Monitoring and Enforcement of CPD

IAESB members agreed that the two new requirements on a) verifiable evidence and b) the extent of measuring, monitoring, and enforcing CPD should be included in the proposed IES 7 (See Agenda item 2-9 of the April 2017 meeting). First, Paragraph 15 prescribes that IFAC member bodies specify the nature and extent of verifiable evidence for professional accountants’ CPD. This requirement assists IFAC member bodies by clarifying that professional accountants are responsible to maintain verifiable evidence for CPD undertaken. In addition, the requirement assists with measuring CPD activity by requiring IFAC member bodies to specify the nature and extent of verifiable evidence. Second, Paragraph 17 prescribes that IFAC member bodies measure, monitor, and enforce CPD to be performed on a regular basis. This requirement not only assists IFAC member bodies in improving the effectiveness of these processes, but also supports the cyclical nature of the CPD framework. IAESB members supported that Paragraphs A32 and A39 should be repositioned as paragraphs A27 and A28 of the proposed IES 7 (See Agenda item 2-9 of the April 2017







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meeting) to provide examples of verifiable evidence for output-based and input-based measurement approaches, respectively.

CPD for All Professional Accountants

In addition, IAESB agreed that Paragraph 13 on mandatory CPD should be repositioned to Paragraph 9 (See Agenda item 2-9 of the April 2017 meeting) and revised to not only require all professional accountants to undertake, but also to record CPD that develops and maintains professional competence relevant to their role and professional responsibilities. Paragraph A7 of the proposed IES 7 (See Agenda item 2-9 of the April 2017 meeting) explains why CPD applies to all professional accountants and recognizes the importance of maintaining professional knowledge and skills by linking to the fundamental principle on professional competence and due care from the IESBA Code of Ethics for Professional Accountants. Whereas, Paragraph A14 provides further clarification by indicating that member bodies consider what is relevant for professional accountants in special circumstances, including those on career breaks and those who have retired from full-time practice, but who continue to do work in some capacity other than as a professional accountant.

IAESB members also agreed new paragraphs A1, A2, and A13 should be added to improve clarity of the Introduction and the area of CPD for All Professional Accountants. Paragraphs A1 and A2 define professional competence and lifelong learning; whereas, paragraph A13 clarifies the requirement on CPD for All Professional Accountants by referring to the specialist role of engagement partner in the extant IES 8, Professional Competence for Engagement Partners Responsible for Audits of Financial Statements (2016).

IAESB members also agreed the following editorial changes to improve clarity:

• The paragraphs of the Requirements and relating Explanatory Material sections have been re-organized to recognize the importance of CPD for All Professional Accountants, Promotion of and Access to CPD, Measurement of CPD, and Monitoring and Enforcement of CPD.

• Several smaller editorial changes have been made to improve the clarity of the following paragraphs in the Introduction, Objective, and Explanatory Material sections: Paragraphs 1, 2, 3, 4, 5, 7, 8, A4, A12, A14, A30, and A31. These changes addressed issues that improved the understanding without substantially changing the content of these paragraphs.

Consultation Paper on Target Audience

Following a brief overview of the consultation paper by Ms. St. Amant, IAESB members provided the following comments for consideration: • Provide a more balanced view to the paper by discussing both benefits and challenges of addressing

professional accountants as a target audience; • Improve the conciseness of the discussion and explain the implications on the public interest if CPD

requirements are also addressed to professional accountants; • Explain how the proposal to address CPD requirements to professional accountants can be

operationalized from a monitoring perspective and which entity would have ultimate responsibility for CPD;

• Discuss in greater detail the roles of member organization, regulator, and professional accountant in CPD cycle;





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• Explain why IES 7 and not IES 8 or the other IESs is being reviewed for the issue of addressing the requirements to professional accountants;

• Include in the discussion a more holistic approach of achieving high quality CPD by including perspectives of not only member organizations, but also professional accountants, regulators, government agencies, and CPD providers;

• Recognize that by addressing professional accountants, support is provided to those member organizations who don’t have regulators overseeing CPD quality;

• Discuss the implications on measurement and whether there is a greater need for assessment by PAOs; and

• Review the need for the consultation paper to be issued at the same time as the ED and determine whether this issue can be addressed within the ED.

As a result of this discussion, IAESB members supported the decision to defer the release of the proposed consultation paper because further investigation is needed to better understand the implications of addressing IES 7 requirements to professional accountants and more broadly what are the implications on other IESs. IAESB members suggested to take a more holistic approach by consulting with various types of stakeholders and to consider when to release the consultation paper given the release of the IES 7 ED and other stakeholder interactions. Matters of Due Process Duration of Exposure Period The IAESB approved an exposure period of 90 days for public exposure of the revised IES 7. Vote on Content of the Revised IES 7

Following the discussion on the task force’s proposals to amend the revised draft of IES 7, the IAESB voted to approve the revised version of the exposed IES 7, Continuing Professional Development.

Proposed Way Ahead

In preparing the document for exposure, the revised draft of IES 7 will undergo a Plain English Review and formatting. Any editorial changes resulting from the Plain English Review will be approved by the task force chair. The analysis of respondents’ comments on IES 7’s ED is scheduled to occur at the November 2017 IAESB meeting.

3. IAESB SHAKEHOLDER ENGAGEMENT AND COMMUNICATIONS

Mr. Greg Owens, Stakeholder Engagement and Communication Working Group (SECWG) Chair, provided for discussion copies of: Information papers on the Standards Development Process and on the Ambassador Toolkit, a planning schedule, and an Issues paper that identified proposals and questions on the proposed publications, standards development process, and ambassador toolkit. The following summarizes the Board’s discussion.


Personal Perspectives In general, IAESB members supported the initiative to develop a series of Personal Perspectives articles, but provided the following suggestions for consideration:

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• Need to be strategic and targeted in this initiative with the aim of improving the quality of responses to Exposure Drafts and increasing the usage of Implementation Support Materials;

• Investigate to determine what are the legal and copyright issues; • Address issues relating to what criteria should be used to gauge appropriateness of content and having

a regular frequency of articles; • Diversify the nature of topics covered to appeal to the interests of many stakeholders, including articles

that not only offer contrary points of view, but also feature expert views from within the profession and recognized academics;

• Clarify what are the editorial and translation resources needed to achieve success, identify what are the potential risks involved, and measure interest; and

• Engage the Board’s network of stakeholders including the use of social media to reach out to new audiences.

Standards Development Article IAESB members supported the proposed article that describes the IAESB standard-setting process, but suggested that the text used to describe the graphics was confusing and further clarification was needed. It was suggested that the article emphasize the iterativeness of the process and the connection to the four pillars identified in the IAESB Strategy document. More emphasis should also be placed on the Exposure Draft phase in which public comments are gathered.

Ambassador Role Toolkit In general, IAESB members supported the initiative of using ambassadors to represent the Board and to develop a toolkit for purposes of support, but provided the following suggestions for consideration: • Need to use the toolkit to support and manage the relationship building processes and to ensure that

materials are informative and current so as to support desired messaging; • Recruit former Board members as ambassadors and think outside of the box when targeting areas

such as Latin America; • Keep toolbox simple and flexible, don’t over-engineer; and • Include toolbox as another element in the communication plan to effect change.

Proposed Way Forward

IAESB members directed the SECWG members to continue its work in developing the series of Personal Perspectives articles, Standards Development publication and Webcast, and an Ambassadors toolkit. In addition IAESB members directed the SECWG members to provide an update of their work at the June Steering Committee meeting, and at October IAESB CAG and November IAESB meetings.

4. PROFESSIONAL SKEPTICISM

Mr. David Simko, Professional Skepticism Task Force Chair, provided IAESB members with: an oral update on the work being done by the Professional Skepticism Working Group (PSWG), the International Auditing and Assurance Standards Board (IAASB) subgroup, and the IESBA; a clean and marked-up versions of the document entitled IAESB: Professional Skepticism Literature and Resources Review (See Agenda Item 4-2 of April IAESB 2017 meeting); and an Issues paper that identified questions for discussion. The following summarizes the Board’s discussion.

http://www.iaesb.org/system/files/meetings/files/4-2-Professional-Skepticism-Literature-and-Resources-Review_FINAL_MARKED-UP-Version.pdf

http://www.iaesb.org/system/files/meetings/files/4-2-Professional-Skepticism-Literature-and-Resources-Review_FINAL_MARKED-UP-Version.pdf

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Professional Skepticism Working Group Update

IAESB members supported the proposal for the Task Force to first review the PSWG’s proposed publication and then to forward to the IAESB for comment before the June IAESB Steering Committee and Task Forces June 2017 meeting.

IAASB Update

IAESB members noted the update on IAASB’s work (See Appendix 1) and had no further comments.

IESBA Update

IAESB members noted the update on IESBA’s work (See Appendix 1) and supported the IESBA’s efforts to clarify the linkage between the Code’s fundamental principles and the application of professional skepticism. It was suggested that IPSASB should be engaged to obtain the perspective of professional accountants performing roles in the public sector accounting, reporting, and assurance areas.

Task Force Update on the Literature Review

IAESB members agreed with the coverage of topics that the literature review (See Agenda Item 4-1 of the April 2017 meeting) will investigate, but provided the following suggestions for consideration: • Broaden the sources of input to include literature from public accounting networks, member

organizations, and other professions; • Need to include existing literature reviews to build appropriate foundation and reduce period of

proposed literature review; • Investigate linkages between how professional skepticism can improve professional judgment,

decision-making, and critical thinking; and • Explore how the application of professional skepticism is influenced by behavioral, cultural, and

environmental factors; how it can assessed and measured in terms of achieving learning outcomes that develop skills in applying professional skepticism; and how professional skepticism impacts other roles such as the management accountant and internal auditor.

Stakeholder Engagement and Communications

IAESB members supported Task Force’s proposals to • Enhance the literature review by working with the Stakeholder Engagement and Communications

(SEC) Working Group to collect the following:

o Input on skills, competencies, and behaviors necessary for the development of Professional Skepticism in a Professional Accountant;

o Input on the extent to which Professional Skepticism is covered and developed in education programs;

o Examples of case studies and other learning techniques that are used to build skills to support the application of Professional Skepticism;

• Gather information through the IFAC Global Gateway and to target outreach to certain key stakeholders (e.g., accounting firms, academics).

http://www.iaesb.org/system/files/meetings/files/4-1-Professional-Skepticism-Information-Paper.pdf

http://www.iaesb.org/system/files/meetings/files/4-1-Professional-Skepticism-Information-Paper.pdf

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The IAESB directed the Professional Skepticism Task Force (PSTF) to continue its work on: the literature review, gathering best practices through consultations and coordinating with the SECG activities, investigating the implications of behavorial competence on the IESs, especially in the context of applying professional skepticism and ICT skills development. In addition, IAESB members directed the PSTF to provide an update of their work at the June Steering Committee meeting, and at October IAESB CAG and November IAESB meetings.

5. INFORMATION & COMMUNICATIONS TECHNOLOGY

Ms. Anne-Marie Vitale, Information and Communications Technology (ICT) Task Force Chair, provided a copy of an Issues paper that identified questions on the project’s focus for discussion. The following summarizes the Board’s discussion. IAESB Discussion of Issues

Areas of Focus

IAESB members supported the Task Force’s proposal that the overall focus should be on professional competence and the evolution of the knowledge, skills and behaviors which would be needed to perform a role in ICT. IAESB members also supported the Task Force’s proposal on the five focus areas (See Agenda 5-1 of April 2017 meeting), but suggested the following for consideration:

• Include artificial intelligence, robotics, risk management of development and maintenance of software in the area of digital technologies;

• Include ethical behavior and conduct in the application of ICT; and • Include internal controls for IT operations in business organizations; • Determine whether the proposed focus areas have relevance and what would be the criteria to set

an appropriate level of proficiency in terms of the various roles performed by professional accountants;

• Focus on how ICT can become an enabler in learning and development, what are the risks of ICT to the roles of a professional accountants, and how aspiring and professional accountants through ICT skills development can adapt so as to contribute to increasing the competitiveness of organizations, especially in jurisdictions where there are challenges in accessing educational expertise;

• Review the priority of Communications among the proposed focus areas because of its impact on all professional accountants; and

• Need a structured and holistic approach in deciding on project scope and next steps.

Sources of Information and Stakeholder Outreach

IAESB members supported the Task Force’s proposal on short-term plans for obtaining information from stakeholders, but provided the following suggestions for consideration: • Consult with a wider audience, including the member organizations for professional accountants and

http://www.iaesb.org/system/files/meetings/files/5-1-ICT-Issues-Paper.pdf

http://www.iaesb.org/system/files/meetings/files/5-1-ICT-Issues-Paper.pdf

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accounting technicians, regional organizations, IT providers and users, University IT departments, GAA Education Directors, pathways commission, small and medium enterprises as well as professional accountants, experts, futurists, and expertise from other professions; and

• Consult “good governance” practices and guidance that is published by member organizations of developed countries to inform on infrastructure needs.

Milestones and Timeline

IAESB members supported the Task Force’s proposed milestones and timeline, but provided the following suggestions for consideration:

• Commence literature review before surveying, especially if in-depth interviews are to be performed so as to identify areas where more understanding or context is needed;

• Determine whether other literature reviews or survey findings might inform Board’s initiatives on gathering information; and

• Need to set realistic expectations for consultations, especially in setting the timeline and gathering information that remains relevant given pace of change.


The IAESB directed the ICT Task Force to continue its work on scoping the ICT project through the literature review and survey on the proposed focus areas. In addition IAESB members directed the ICT Task Force to provide an update of their work at the June Steering Committee meeting, and a draft project proposal for discussion at October IAESB CAG and November IAESB meetings.

6. MAINTENANCE OF IMPLEMENTATION SUPPORT MATERIALS

Mr. Isaac Njuguna, Implementation Support Working Group (ISWG) Chair, provided IAESB members with copies of the document entitled, Inventory of IAESB Guidance Materials (January 2017) and Proposed Items for Immediate Review (See Agenda Item 6-2 of April 2017 IAESB meeting), as well as an Issues paper that identified questions and proposals for discussion. The following summarizes the Board’s discussion. IAESB Discussion of Issues

In general, IAESB members supported the working group’s description of the proposed objective, scope, project deliverables, and structure of the ISWG, but provided the following for consideration: • Incorporate into operating framework the ability of the working group to be flexible, nimble, and ensure

speed-to-market while not being weighed down by excessive process; • Monitor usage of IAESB products by IAESB website analytics and findings from post-implementation

date review of IESs to assess demand of Implementation Support materials; • Clarify ISWG’s responsibility in terms of monitoring IAESB guidance materials, providing advice to the

Board on which materials should be maintained, updated, revised, or newly developed, and indicating that the working group does not have a responsibility for performing these activities;

• Identify a key contact person for each product to ensure accountability; • Clarify what is the way forward in addressing high priority products (See red highlighted items of Agenda

Item 6-2) that require maintenance or revision;

http://www.iaesb.org/system/files/meetings/files/6-2-Inventory-of-IAESB-Implementation-Support-Materials-V_January-2017.pdf



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• Identify what steps are needed to address and prioritize products in which a revision of content is required;

• Look for opportunities to work with other organizations to gather information to address identified gaps; and

• Assist with the DWG in the development of principles for drafting Implementation Support materials.


The IAESB directed the ISWG to continue its work in reviewing the guidance materials and to provide an update of its progress at the June Steering Committee meeting, as well as a draft operating framework for discussion at October IAESB CAG and November IAESB meetings.

OTHER MATTERS OF INTEREST

7. IAESB AND OTHER IFAC DASHBOARD REPORTS The IAESB received and noted the Dashboard reports on the activities of the IFAC Boards. IAESB members were asked to forward a list of their speaking engagements to IAESB staff.

Ms. Rachel Grimes, IFAC President, first thanked IAESB members’ for their outstanding contributions as volunteers to the Board’s work, and then provided an update on IFAC activities. She indicated that IFAC is placing a high priority on better understanding the implications and opportunities of a fast-changing ICT area for the accounting profession. Ms. Grimes pointed out that the ICT area has implications for the attractiveness and retention within the profession, career choices for University graduates, as well as for those involved with Education. In addition, she highlighted the following issues that are currently being discussed by IFAC: need to recruit members for the Standard-Setting Boards and the IFAC Board, especially female members; independence issues relating to the Standard-Setting Boards, including the need for an independent Chair and further clarity on who should be represented on the IFAC nominating committee; clarity on the roles of PIOB and Monitoring Group; a review of the Standard-Setting Boards whether they should be combined as one Board; the size of Standards-Setting Boards; what roles (doer versus reviewer) are needed for a Standard-Setting Board to work effectively; and what is an effective funding model for the Standard-Setting Boards. IAESB members expressed their appreciation for Ms. Grimes taking the time to speak with the Board and made the following comments: reducing Board size would impact the diversity of contributions to its deliberation, especially from a cultural, geographic, and expertise perspectives; a plea for more staff resources for the IAESB so that it can do more through its projects; and the need for the Boards to work smarter with technology.

Mr. Austin thanked Ms. Grimes for her update and comments relating to IFAC’s current activities.

8. DRAFTING WORKING GROUP- PROGRESS REPORT

Mr. Gareth Wellings, Chair of Drafting Working Group (DWG), presented an overview of the role of the DWG in finalizing IAESB publications, including how it is involved with the quality control process for both authoritative and non-authoritative publications, who are the DWG members, as well as what is its focus when reviewing the Board’s pronouncements. Mr. Wellings also reported on the DWG’s activities since the last meeting, highlighting its work in finalizing the 2017-2021 Strategy and 2017-2018 Work Plan, providing an initial review of IES 7, and performing a light touch” review of first two Personal Perspectives articles.

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Mr. Wellings indicated that the DWG looks forward over the coming months to work with the IES 7 Task Force in finalizing the revised IES 7 and other Implementation Support materials released by the Board.

FUTURE MEETINGS & OTHER BUSINESS

9. ENVIRONMENTAL SCAN AND EMERGING EDUCATION ISSUES

The IAESB received updates on educational issues in two jurisdictions of Asia: Sri Lanka by Mr. Manil Jayesinghe (See Appendix 2) and Japan by Mr. Yoshinori Kawamura (See Appendix 3). In the context of these presentations IAESB members provided the following comments for consideration: • Greater awareness is needed by developing and developed countries on the transformation occurring

in the role of the professional accountant in business which requires curricula reforms that include a greater emphasis on developing competence to provide strategic and business advice and skills for lifelong learning;

• More emphasis is needed by various actors in communicating the attractiveness and benefits of a career in the accounting profession;

• More focus is needed by the accountancy profession in assisting professional accountants on how to maintain their professional competence through CPD given alarming rate of technological disruptions;

• Greater need to publicize prospects upon qualification, but continually adding to the curriculum can cause a tipping point that can only re-equilibrated by removing subject matter from the curriculum;

• Low pass rates should be reviewed with the lens of what interventions are needed to support aspiring professional accountants;

• Greater awareness is needed to matching proper assessment methods with the nature of subject matter;

• More emphasis should be placed on formative assessment approach for CPD activities given that many are narrowly focused on specific subject matter; and

• More focus on incentivizing study in accountancy programs given government support of science and mathematics programs in countries such as USA.

Both presentations highlighted important areas where action is needed by the accountancy profession and challenged the IAESB to think more broadly when developing policy and standards relating to education, development, and assessment.

10-1. ACCOUNTANCY EDUCATION BENCHMARKING STUDY

Ms. Kalina Shukarova, Senior Financial Management Specialist from the Centre for Financial Reporting Reform of the World Bank Group, presented the findings (See Agenda Item 10-1a of the April 2017 meeting) of a recent report on EU REPARIS Accountancy Education Benchmarking Study. The objectives of the benchmarking study are to: Share good practices of Universities and Professional Accountancy Organizations (PAOs) and develop solutions to shared challenges through a collaborative process; Explore synergies between academic and professional accountancy education as a prerequisite for developing adequate accountancy education systems and ensuring the effective use of country level education resources; Implement a “learning outcomes approach” in accountancy education promulgated by IES 2 and international good practices as a more effective learning experience; and Enable a diagnostic that aims to assist members to engage in a process of international recognition and accreditation of national programs.

http://www.iaesb.org/system/files/meetings/files/10-1a-Benchmarking_study_14-2_pages_digital.pdf

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Six countries participated in the study between March 2015 and May 2016: Albania, Bosnia and Herzegovina, Kosovo, Macedonia FYR, Montenegro and Serbia. The study was a comprehensive assessment of the countries’ 14 Universities and PAOs, which together provide 25 academic and professional accountancy education programs. Curricula content, learning outcomes and proficiency levels from these accountancy programs were analyzed using IESs 2 and 4 as the main benchmark. Supplementary benchmarking was performed for the purposes of comparing syllabi and course content with those of the Association of Chartered Certified Accountants (ACCA) and the Chartered Institute of Public Finance and Accountancy (CIPFA).

IAESB members provided the following comments for consideration: • Use expertise and acquired “know-how experience” from AACSB accredited Universities within the

jurisdiction to assist with mentoring of academic institutions interested in implementing a learning outcomes approach in their education programs;

• Explore global opportunities to incorporate benchmarking processes in jurisdictions such as Africa and South Asia

• Assist PAOs by developing guidance on applying output measures to demonstrate the achievement of the specified IES 8 learning outcomes by engagement partners;

• Promote the benchmarking tool as a global assessment tool that supports ROSC reporting performed by the World Bank;

• Improve the benchmarking tool by including the area of professional skills development; • Review the construction of the learning outcome statements to improve the mapping of the learning

outcomes to curriculum and the use of proficiency levels; • Increase the impact of the benchmarking study by engaging with the IAESB Consultative Advisory

Group; • Use the benchmarking tool as means to facilitate discussions on and develop guidance on improving

accounting education between member organizations and Universities; • Include employers in this conversation to ensure benchmarking tool is measuring learning outcomes

that promote success in performing the various roles of a professional accountant; • Create greater awareness of the IESs as a benchmark or standard for PAOs and Universities to

improve accounting education; • Investigate whether there is link between the adoption of the IESs and the mobility of aspiring

professional accountants between countries; • Assist PAOs by developing guidance on best practices in the applying CPD systems and processes;

and • Explore opportunities to use the findings of this study to support capacity building activities on a global

scale.

10-2. FUTURE MEETINGS The IAESB Chairman reminded members that their next formal meeting would be held in Mexico City on November 1 to 3 and that the IAESB Steering Committee and interested task forces would be meeting in New York, USA on June 20 and 21, 2017.

11. PIOB REPRESENTATIVE’S REPORT

Dr. Aileen Pierce, PIOB representative, congratulated IAESB members on another very good meeting, with the usual high levels of engagement and commitment from members and Technical Advisors. The quality of discussion and contribution of participants was supported by comprehensive Issues papers and other materials, produced by the Task Forces. As is appropriate for an education standards setting board, we

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also benefitted and learned a lot from the great insights into the Sri Lankan and Japanese professional education landscapes, in addition to the very interesting feedback on the use of IESs to benchmark professional education in the western Balkan States.

Dr. Pierce expressed her appreciation for being included at the table when the IAESB met with the IFAC President for the first time. It was gratifying and encouraging to hear the message of ongoing support and appreciation for the IAESB, its composition, and commitment. She congratulated the Board members who engaged openly and constructively in that conversation.

The discussions around the Board’s agenda for this meeting were rich, open, and appropriately cognizant of the public interest. In particular, the discussions earlier in the week at the CAG were well integrated into the Task Force updates.

Finally, Dr. Pierce expressed her appreciation to the IAESB Chair, the Deputy Chair, IAESB staff and the Board as a whole for your courtesy and inclusiveness.

Mr. Austin thanked Dr. Pierce for her comments and her contributions to the IAESB’s deliberations.

12. TERMINATION OF MEETING

Management of Board

Mr. Austin indicated that the Board’s going forward will be supported by the various Working Groups, and changes to the composition and role of the Steering Committee. The Steering Committee acts as the senior leadership of the Board. It oversees implementation of the Strategy, including overall allocation of resources; supports the Chair in managing key relationships (PIOB, IFAC Leadership, CAG, other Standard Setting Boards, SSBs); and provides an informal sounding board for the Chair, as required. For 2017 and 2018, the Steering Committee will comprise Chris Austin (Chair), Anne-Marie Vitale (Deputy Chair), Dave Simko and Greg Owens, supported by James Gunn (Managing Director, SSBs) / David McPeak (Principal, IAESB) and Adrian Pulham (Technical Adviser to the Chair). The Steering Committee will meet by teleconference, email or in person as deemed necessary, to inform internal deliberations of the IAESB and external engagement with key stakeholders: the latter will be discussed with and/or communicated to the whole Board.

The Task Force Group (TFG) comprises the Steering Committee, Task Force and Working Group Chairs and Secretaries, David McPeak (IAESB Principal) and Keith Bowman (CAG Chair). The TFG will maintain an overview of the 2017-18 Work Program, to ensure each workstream is adequately resourced, progress is on track, and to identify and deal with changing circumstances. The TFG will also meet by teleconference as required; the agenda and the key outcomes, will be shared with the full Board by email.

The Drafting Working Group (DWG) is responsible for reviewing all IAESB products intended for publication: Exposure Drafts, Standards, Implementation Guidance, other non-authoritative pronouncements, Personal Perspectives and IFAC Staff Papers. The DWG will apply a proportionate approach to its reviews, in consultation with the Steering Committee; and liaises directly with Task Forces.

The DWG also reviews the need for changes to the existing International Education Standards (IESs) once a year. The DWG is chaired by Gareth Wellings. Current members are Rachel Banfield and David McPeak; there is one vacancy which we plan to fill very soon. The DWG provides oral reports to every Board meeting.

The Implementation Support Working Group (ISWG) is responsible for overseeing the maintenance of IAESB support materials that assist in the implementation of the IESs. The ISWG was established in April 2017. It has established an inventory of extant implementation support materials, and identified those that require updating or replacing as a priority. Specific products will be handled by separate Task Forces, over

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the coming 12-18 months. The ISWG will develop an operating framework to guide its deliberations, including annual reports to the Board.

The ISWG is chaired by Isaac Njuguna and comprises YK Ahn, Blanca Tapia, Edwin Makori (Secretary) and Seung Kyoung Yoo.

The Stakeholder Engagement and Communications Working Group (SECWG) was established in November 2016. It is responsible for overseeing the Board’s external communications approach, in close consultation with the IFAC Communications Team. This includes written products, webinars and Vlogs, and presentations by IAESB Board Members, Technical Advisers and other “Ambassadors”.

The SECWG is chaired by Greg Owens, and comprises Sidharta Utama, Elizabeth Gammie, Rachel Banfield, Suzie Webb, Robert Zwane, Keryn Chalmers and Sarah Jakubowski.

Meeting Achievements

Mr. Austin also thanked everyone for their contributions to the meeting. He indicated that excellent progress had been made in responding to the outcomes identified at the beginning of the meeting. He summarized the achievements of the meeting as follows, the Board: • Approved the content of the Exposure Draft of the revised IES 7, and an exposure period of 90 days; • Concluded that the question of whether or not to address IES 7 to Professional Accountants as well as

to IFAC Member Bodies required wider consideration, since it is relevant for all of the IESs and will be considered by the Drafting Working Group under the area of standards maintenance;

• Endorsed the work of the Professional Skepticism Task Force in three areas: (i) a literature review, (ii) stakeholder engagement in consultation with the SEC Working Group, and (iii) behavioral competence in consultation with the ICT Task Force;

• Endorsed the ICT Task Force’s proposal for information gathering by: (i) a literature review, (ii) stakeholder survey, and (iii) consultation with the Professional Skepticism Task Force;

• Endorsed the Stakeholder Engagement and Communication Working Group’s existing and planned liaison with Task Forces, other Working Groups; and IFAC Communications Team, as well as its work to improve the user-friendliness of the IAESB website as managed by IFAC;

• Endorsed the direction of the ISWG on (i) enhancing or adding to support material, not simply maintaining it, (ii) setting “principles” for how support and guidance material should be written, and (iii) identifying a key contact for each extant guidance products; and

• Was informed by presentations on (i) accounting education issues in Sri Lanka and Japan,(ii) findings from a CFRR report on EU-REPARIS Accountancy Education Benchmarking Study, and (iii) IFAC Update from IFAC President, Rachel Grimes.

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

The meeting closed on Friday, (April 28th, 2017) at 12:20 hours.

Approved by Chairman: ………………………………………

Date: …………………………………………………………..

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ACTION LIST – AS A RESULT OF APRIL 2017 IAESB MEETING

ACTION PERSON(S)

RESPONSIBLE DUE DATE STATUS

1. Update and circulate 2017 CDL

Sonia Tavares / David McPeak

ASAP Done

2. Prepare and release final versions of IES 7 Exposure Draft, Cover Explanatory Memorandum, and Supplementary materials

Susan St. Amant, Daniel Slezak, and David McPeak

June 5, 2017 Done

3. Prepare for June 2017 IAESB Steering Committee and task forces meeting

Chris Austin, Sonia Tavares, and David McPeak

June 20, 2017 Done

4. Develop Agenda items on IAESB Stakeholder Engagement & Communications, Maintenance for Support Materials for IES Implementation, Professional Skepticism, Behavioral Competence, Revision of IES 7, and Information and Communication Technology for the October 2017 in-person CAG meeting

Anne-Marie Vitale, Jill Pate, Susan St. Amant, Daniel Slezak, Isaac Njuguna, Edwin Majori, David Simko, Susan Flis, Bernard Agulhas, Robert Zwane, Greg Owens, Sarah Jakubowski & David McPeak

October 30, 2017

Done

5. Develop Agenda items on IAESB Stakeholder Engagement & Communications, Maintenance for Support Materials for IES Implementation, Professional Skepticism, Behavioral Competence, Revision of IES 7, and Information and Communication Technology for the April 2017 IAESB meeting

Anne-Marie Vitale, Jill Pate, Susan St. Amant, Daniel Slezak, Isaac Njuguna, Edwin Majori, David Simko, Susan Flis, Bernard Agulhas, Robert Zwane, Greg Owens, Sarah Jakubowski & David McPeak

November 1, 2017

Done

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Appendix 1. Professional Skepticism Update

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Appendix 2. Emerging Trends & Issues in Accounting Education – Sri Lanka

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Appendix 3. Accounting Profession and Professional Accounting Education in Japan

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